LEGAL
Nicola Billen
Abigail Maino
How can you protect your company’s confidential business information and assets when someone leaves? By Nicola Billen and Abigail Maino
PROTECTING YOUR CONFIDENTIAL BUSINESS ASSETS Your business is unique and has a lot of confidential and highly sensitive information that is vital for its success. Much of this will be held on central IT systems, accessible to employees whilst working for the company. The information might include lists of customers, financial projections, price sensitive information, business plans and strategies, to name but a few. And whilst you are of course content for employees to make use of this data to further the business’ needs, you would not want them using it when they leave, whether for their own benefit or that of your competitors.
PROTECTING SENSITIVE INFORMATION WHEN AN EMPLOYEE LEAVES YOUR BUSINESS
So how can you make sure the information remains protected when someone leaves? And how can you stop a departing employee from taking and sharing it with their new employer so that they gain an advantage over you? A key part of protection and prevention needs to happen right at the outset, when you take on someone new. You need to ensure that your employment contracts go far enough to protect your business, both during and after an individual’s employment.
There are terms implied into every employee’s contract. For example, there is the duty of fidelity to maintain mutual trust and confidence. But it is not enough to rely on these terms, nor to rely on ex-employees doing the right thing in order to safeguard your business. Employment contracts should contain specific terms known as ‘restrictive covenants’, or ‘post-termination restrictions’, to help protect you when someone leaves for a specified period of time. Common terms include: 1. Non solicitation – so the employee cannot poach your customers and clients. 2. Non-compete – which restricts the employee from working for a competitor within a specified geographical area. 3. Non dealing – the employee cannot deal with your customers and clients, regardless of who approaches whom. 4. Non poaching – the employee cannot poach your other employees. In addition to these restrictive covenants, there should also be general confidentiality clauses, which make it clear what information is confidential; the use of which must be restricted while setting out the consequences of any misuse of confidential data.
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