
Although the new employer at trial argued that the employees
were essentially “rogue employees” who had acted without any direction or
knowledge of their new employer, the trial evidence demonstrated a tremendous
failure by the new employer to manage the situation in order to limit its legal
exposure. No effort was made to ensure that the new employees did not possess
and bring with them any trade secret or confidential information of their
former employer. Nor were any efforts undertaken to meaningfully search the new
employer’s computer system to ensure that such information was not being used
by the new employees nor uploaded to the new employer’s computer system.
Minnesota and more than 40 states protect trade secret
misappropriation through the Uniform Trade Secrets Act. Employers
need to be aware that it is an unlawful misappropriation under that statute if
a party (such as a new employer) benignly comes into possession of trade secrets
– even unknowingly – and does not, upon discovery that the trade secrets are in
the company’s possession, take action to cease using the information and to return
that information to its owner. It is, therefore, not an effective defense to
trade secret misappropriation claims for a new employer to merely claim that
they did not direct new employees to bring trade secret or other confidential information
along with them.
To effectively manage legal exposure for misappropriation of
trade secrets and confidential information, all employers should consider
consistently taking the following steps when hiring new employees who were
previously working for a competitor:
·
Ask job offerees if they have signed a
confidentiality agreement and/or noncompete agreement with their existing
employer and, if so, review that agreement.
·
Inform job offerees (and new employees) that
they are expected to comply with the terms of any confidentiality and/or
noncompete agreement with their prior employer and to not bring with them or
use any confidential or trade secret information of their former employer. For
maximum protection, this direction should be made in writing (such as including
it within any employment offer letter).
·
Promptly and seriously investigate any concerns
that may arise about the improper possession or use of trade secret and
confidential information by your employees.
·
Implement serious discipline (including possible
termination) of offending employees.
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