As companies face increasing competitive and financial pressures, management is understandably consumed with running the day-to-day operations of the business and working to achieve business objectives and maximize the bottom line. As a result, it is not uncommon for companies to find themselves in situations where important assets are overlooked or taken for granted. Yet, those same assets can be lost or compromised in a moment through what is often benign neglect.
Authoritative sources estimate that companies lose hundreds of millions of dollars (if not billions) as a result of trade secret theft. At the same time, companies sometimes find themselves, through poor controls, exposed when they inadvertently obtain others’ trade secrets.
In the rush to deliver results, some companies take shortcuts in the hiring and departure process that often leave them exposed to claims for trade secret misappropriation, aiding and abetting breaches of loyalty, and intentional interference with contractual relationships or business expectancies with customers or employees.
California’s strong public policy against certain employee noncompetition agreements and post-termination restrictions on employee mobility means strong trade secret protections are essential for California employers to protect against the unlawful use or disclosure of valuable company information and related competitive issues when key employees join competitors. Accordingly, while non-competes may be void in California, prudent companies conducting business in California will ensure that their trade secret protection practices are state of the art, including their onboarding and offboarding process.
In this second video of a two-part series (see part one here), we illustrate some best practices when interviewing a competitor’s employees, as well as handling your own employees’ departures, regarding the protection of trade secrets and other confidential information in California. During the video, a prospective candidate offers to share during his employment interview his current employer’s trade secrets regarding sensitive business and customer information for the Southern California market. You will also see how the employer handles the exit interview of that employee.
When watching the video below, consider the following:
- How does the interviewer avoid the applicant’s disclosure of trade secret and other confidential information and focus the candidate on general skills and knowledge?
- How does the prospective employer condition its offer of employment?
- How does the current employer try to protect its trade secret and other confidential information with departing employees?
- What type of policies and procedures do the current employer and prospective employer put in place to better protect themselves?
Click below to discover some of the best practices illustrated in the video and in general to protect trade secrets.