Protecting Trade Secrets Through Employee Surveillance: Risky Business

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The difference between having a trade secret and not can come down to the steps that a company takes to protect its secrets. The Uniform Trade Secrets Act, a version of which has been adopted in 46 states, provides that information qualifies for trade secret protection only if the owner takes steps that are reasonable under the circumstances to protect its secrecy. Employers commonly take the obvious steps to protect their trade secrets – for example, requiring employees to sign confidentiality agreements or restrictive covenants, implementing electronic controls; and let’s not forget sending demand letters and threatening litigation. These steps are obvious and therefore widely observed. But what about proactive monitoring? If you have a trade secret, you ought to keep an eye and ear out to make sure it’s not being used or disclosed. But, be careful; doing so is not without its risks.

With recent (and not so recent) advances in technology, employers have substantial means at their disposal to monitor their employees’ conduct and communications. Available options range from reviewing employees’ email communications and computer usage to monitoring telephone discussions. In general, these tactics are lawful unless specifically prohibited by statute or the employee has a reasonable expectation of privacy under the circumstances.

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