For the tenth and final installment of our series on actions that employers can take to prevent employee theft or improper disclosure of company data, we’re going to focus on legal action companies can take to enforce their intellectual property rights. There are pre-litigation steps companies can take which oftentimes may be enough to protect against improper use or disclosure of information, but employers should be prepared to immediately deploy a full range of enforcement measures when they discover a significant theft of proprietary and confidential information.
In terms of pre-litigation steps, a letter of continuing obligations reminds the employee of the obligation to keep information confidential even after the employment relationship ends. This letter can help prevent inadvertent disclosures and may dissuade employees who are considering disclosing information from engaging in the prohibited behavior. If you know an employee has your information, a cease-and-desist letter demanding that the employee return all company property, including any confidential or trade secret information, can show a former employee that you are serious about protecting confidential information. Employers can also consider sending a letter to the employee’s new employer putting them on notice that the former employee owes confidentiality obligations to his or her former employer. When deciding whether pre-litigation steps are appropriate, however, seek advice of counsel – sometimes you may need to move right into litigation in order to best protect your information.
If litigation is necessary, you may need to act quickly to obtain injunctive relief and stop the employee from using or disclosing your information. Employers may be able to assert a variety of claims such as breach of contract, Computer Fraud and Abuse Act (“CFAA”) and/or Stored Communications Act (“SCA”) violations, misappropriation of trade secrets, misappropriation of confidential information, and breach of duty of loyalty. Additionally, civil remedies are not the only option. In some cases, criminal penalties may be available under the Economic Espionage Act, the CFAA and the SCA, and other applicable statutes. If the employee’s actions warrant, you may wish to involve law enforcement (federal or local) to help to protect your confidential information and prevent further damage. If you choose this route, you should involve law enforcement as soon as you suspect your confidential information has been compromised.
This concludes our series – we’ve tried to highlight for you measures that help keep information confidential and in the event of disclosure, help defend a company’s interests in its proprietary information. We hope that you’ve found this information and our insights helpful. Despite technological advances and increasing threats to proprietary information, proactive companies can take significant steps to protect against and mitigate the intentional theft and inadvertent disclosure of confidential and trade secret information.