When employees walk out the door at an energy company, vital trade secrets related to drilling schedules, completion techniques and processes could go with them.
That’s more relevant now than ever because the industry is shedding jobs at a rapid rate.
Mary Goodrich Nix, a shareholder in the business litigation section of Munsch Hardt Kopf & Harr in Dallas, said the Uniform Trade Secrets Act has key provisions that can protect companies, if they take proper steps.
Internal protection plans, limiting that information to need-to-know employees only and requiring non-disclosure and non-compete agreements can be a big help.
“The company has to understand its own trade secrets, know what those are and be very specific internally when it’s developing the trade secrets to define it both in writing and to be clear with employees,” Nix said. “Where I see companies get into trouble is too broadly defining trade secrets. Then, being unable to prove that those are trade secrets when they actually get into a court.”
When a secret does get out, the company can usually go back to see if employees forwarded sensitive documents to their personal email, for example.
One recent case occurred when Aubrey McClendon was forced out of the company he founded, Chesapeake Energy (NYSE: CHK). The company accused McClendon of taking sensitive materials with him to his next venture, which leased in many of the same areas of Ohio. Chesapeake sued McClendon, who countersued.
Companies don’t have many options once a secret gets out. “Either try and shut it down or get money. Even when you shut it down, the people who found out, they already know,” Nix said. “You can just to stop them from using it for some amount of time. You hope that by the time that injunctive relief is over that the information they have is no longer relevant.”