Tuesday, September 6, 2011

Is Any Business Information Truly Confidential Anymore in an Era of Web Proliferation?

In this era of ever-expanding web-based presences for businesses and the increased use of social media sites for job-related reasons, it is becoming much more difficult for employers to protect their important confidential business information and  trade secrets. 
 Businesses have a lot to lose when employees misuse confidential information. If a customer list, the details of a proprietary product, or company financial information gets into the hands of a competitor, a business may lose its competitive edge or its best customers. On the other hand, failure to use the power of the web to disseminate information can also hurt business success.  There is  a significant tension between the interest of a business in protecting the confidentiality of its valuable information and its interest in effectively market  services and products.  Employers must consciously weigh these competing concerns when deciding the best way for their particular business to operate.
Lawsuits concerning employees’ unauthorized taking and use of their employer’s confidential business information – commonly coupled with violations of non-compete obligations – are becoming increasingly common. When pursuing claims for the misappropriation of confidential business information or trade secrets, a company must be able to prove two key points:  (1) the information taken by the employee (most likely shortly before becoming an ex-employee) was indeed confidential; and (2) the employer took adequate steps to ensure that the information was kept confidential.  In today’s workplace, business information that may in the past have been kept relatively private, such as  listings of customers and vendors or detailed descriptions of available products or services, now routinely finds its way out into the public domain  through publication on the Internet.
Two of the most likely ways for this business information to become publicly available are:
  • Inclusion of the information on a company’s website
  • Disclosure in an employee’s LinkedInprofiles, or similar business social media sites
Once such disclosure occurs, even if it’s through the actions of an employee rather than the business itself, it becomes extremely difficult to prove that an employee’s or ex-employee’s dissemination of the information has caused damage to the business. It’s not easy to convince a judge or jury that stolen business information is truly confidential if that very information can be readily identified through a simple Google search or a visit to the employer’s own website.

If an employer wants to control the use of its confidential and proprietary information out in the world, it must begin by controlling the use of that information within the business and by its employees.  More on this complicated subject in a future post.

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