When employees change jobs, everyone is at risk: the employee; the former employer; and the new employer.
And this period of transition is when the risks are at their peak.
Because employees tend to take confidential business information with them on their way out the door — sometimes intentionally or oftentimes inadvertently. As a consequence, former employers risk losing control of their information, risk losing their competitive advantage, and risk suffering significant financial and irreparable harm. In contrast, the former employee and new employer risk being held liable for the resulting harm. And, that liability can include not just paying for the harm, but liability for multiple damages and the former employer’s attorneys’ fees.
Worse, if the information finds its way into the new employer’s products, there is a risk of losing the entire value of those affected products as well.
And if that’s not enough, misappropriation of trade secrets is not just a corporate faux pas; it’s a crime. And criminal liability can exist for both the employee and the new employer.
So how can all three parties limit the risks?
Take nothing when you leave.
That is often not as easy at it seems.
To help, we’ve created two resources based on real-life examples of mistakes we’ve seen repeated many times over the years — all of which could have been avoided.
First, here is a short blog post summarizing the key issues: Leaving your job? Don’t take anything… anything! New employers take note.
Second, here is a short video (The Exit Plan: Being a Good Leaver) covering the common makes people make when leaving a job:
Off-boarding and on-boarding are perhaps the two most critical junctures in the employment lifecycle. Make the most of them.
We put together this blog post and associated checklist to help: A Primer and Checklist for Protecting Trade Secrets and Other Legitimate Business Interests. If covers steps for the on-boarding and off-boarding, as well as everything in between. As you will see, awareness, communication, training, and monitoring are all crucial — especially as the reliability of your other tools, most notably noncompetes, is being eroded.
In addition, employers, send your new hires empty briefcase language (that they must not bring, use, or disclose anything of their prior employer’s or other third party when they come) when you send their offer letter, and instruct them to watch the The Exit Plan: Being a Good Leaver video.
Help new employees prevent problems they may not even realize they’re facing.
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Off-boarding and on-boarding are your first and last opportunities to catch and prevent problems. Opportunity knocks only once.