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Protecting Trade Secrets During COVID-19

fiduciaryThe economic climate caused by COVID-19 may be putting your trade secrets at risk. Business closures and mass layoffs increase the risk that someone will steal your trade secrets. That is why it is crucial for businesses to take measures to protective measures now.

What is a Trade Secret?

A trade secret is information that holds independent economic value because it is not generally known to the public and which a person takes reasonable measures to keep a secret. Some examples of information that can constitute a trade secret are: customer lists, formulas, computer software, internal market analysis, marketing and advertising plans, and inventions that have yet to be patented.

Protecting Trade Secrets

In the regular course of business, there are several steps that should be taken to provide adequate protection against misappropriation of trade secrets. First, you must identify what your trade secrets are. As stated above, any information that holds independent economic value and which you want to keep a secret may qualify.

The next step is to identify all positions within your business that have access to your trade secrets. Identify the employees who hold these positions, and chart out all persons who have access to your trade secrets.

Finally, once these people are identified it would be wise to ask them to sign a confidentiality or non-disclosure agreement. This will place these people on notice of their obligation to protect your trade secrets, and create a contractual basis for protecting your trade secrets.

Mass layoffs and termination of employees caused by COVID-19 require that additional steps be taken to protect trade secrets. Below are several additional actions that should be taken to protect your trade secrets during the COVID-19 pandemic.

  1. Conduct an Exit Interview

After an employee has been terminated or laid off, an exit interview presents the employer with an opportunity to put them on notice that the businesss trade secrets are confidential, and not subject to disclosure. It also may give an employer some indication if a particular employee is considering stealing a trade secret.

  1. Require Return of all Proprietary Materials

When layoffs are necessary due to COVID-19, it is imperative that businesses require all laid off employees return any proprietary materials or items or devices that may contain the companies trade secrets. Restricting access to this information to only present employees will provide necessary protection.

  1. Cut Off Access to Proprietary Materials

Businesses should be aware of all means employees and former employees can use to access their trade secrets. Access to databases, company email, and other electronic programs should be locked or revoked immediately after a layoff has occurred.

  1. Preserve All Evidence

While taking preventative measures should be a business’s primary line of defense, being able to take legal action when necessary is imperative. If you believe that your trade secrets are being stolen, preserve all evidence.

Getting Legal Help

If you are involved in a dispute concerning unlawful, unfair or fraudulent business practices, it is smart to speak with a top-rated Irvine litigation attorney.  Our team of experienced business litigation attorneys and trial specialists are here to help. Contact Brown & Charbonneau, LLP today by calling 714-505-3000 to schedule your appointment or email us at

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