Many companies have confidential information that they want to protect from disclosure to third parties or use by competitors. Often, companies also have agreements with vendors or clients in which the company promises to keep confidential the information that is shared with them.
Whenever a company has its own or a third-party’s confidential information, there is going to be at least one employee (often many employees) that will need access to that confidential information to perform their job.
How does a company maintain protections for its confidential information that is accessible to or used by employees?
A primary step is to ask employees to sign agreements that notify them what information is confidential, and obligating them to keep it confidential. The agreement should be required of any employee who could have access or exposure to confidential information, and should also cover the confidential information of third parties that is provided to the company (if applicable).
Remind employees of their obligations
Companies should periodically remind employees of their obligations to keep confidential information confidential. At separation, regardless of the reason for separation, the employer should again remind the soon-to-be-former employee of their continuing obligation to preserve the confidentiality of the company’s information, including providing them a copy of any confidentiality agreement that they signed.
Enforce confidentiality agreements
Some courts have concluded that companies that usually do not enforce confidentiality agreements, even when aware that employees or former employees have violated the confidentiality provisions, have lost the right to enforce the agreement thereafter. If a company truly believes information is confidential, it needs to enforce confidentiality agreements when it learns a former employee is using or disclosing confidential information. Sending Cease and Desist letters is one step an employer can take. In situations where a serious violation is threatened, companies should consider filing for injunctive relief, asking a court to prohibit the use or disclosure.
Limit disclosures to employees on a need to know basis only
Confidential information comes in a variety of forms (e.g., paper, digital) and subjects (e.g. client lists, research and development of new products, financial information, etc.) Employees who may have a need for one type confidential information to perform their duties seldom need access to all the company’s confidential information. Companies should take steps to limit disclosure of confidential information to only those employees who need to know that particular type of confidential information. This includes telling employees that they cannot internally share confidential information except with those coworkers who need to know it.
Prohibit employees from downloading confidential information to their personal devices
Employees should be prohibited from downloading confidential information onto their personal phones, computers, or other devices, unless necessary to perform their duties. At separation, employees should be required to delete all copies of confidential information from their personal devices.
Consider prohibiting personal cell phones in the workplace
In addition to their use as a data memory device, cell phone cameras can capture pictures of confidential information without downloading directly from the company systems. Depending on the nature of the employee’s job and the confidential information, an employer may want to prohibit employees from having personal cell phones in any working area.
One cautionary note
Recent legislative changes prohibit employers from telling employees or former employees that they cannot disclose or discuss criminal conduct or what they consider to be unlawful employment practices. Confidentiality agreements should make clear that such disclosures or discussions are not prohibited by the agreement or otherwise.
We would be happy to help you create or update your confidentiality agreements, or otherwise assist you in your efforts to protect your confidential information.
The legal issues impacting workplaces are ever changing (Employment Law in Motion!) and since publication, new or additional information not referenced in this blog post may be available. Employers should feel free to call on the Miller Nash team if you have questions or need assistance, and always consult with an attorney for legal guidance.