Working in certain roles and industries can mean you will be privy to secret or proprietary information. Under these circumstances, you may be asked to sign specific employment contracts aimed at securing this valuable data, including trade secrets.
If your boss or employer is requesting that you sign an agreement, it is crucial to know what you are agreeing to before signing.
What is a trade secret?
On its face, a trade secret is a factor that is critical to the function and success of your business. However, not just anything rises to the echelon of a trade secret. Three main components comprise a valid trade secret:
- Real or potential financial value that is not generally known
- Competitors want to gain access to it
- Takes effort to keep it a secret
A trade secret should provide an advantage over business competitors, thereby making it desirable for others to discover it.
Employees with knowledge of these aspects may face contractual restrictions on their activities, communications and even future job opportunities to ensure the information remains protected.
What happens when workers disclose trade secrets?
Disclosure or improper use of trade secrets can trigger severe penalties and professional consequences. Employers may be within their rights to pursue financial damages for misappropriation, as well as other civil remedies.
However, simply accusing someone of misappropriating trade secrets does not mean they have done something illegal. There can be disputes over whether the information is, in fact, protected and who actually owns the trade secret.
Protecting yourself as an employee
Employers are typically very serious about protecting the information that differentiates them from their competitors. Therefore, they may present employees with rigid contracts and aggressively pursue any alleged wrongdoing.
You can protect yourself from these actions and the potential penalties for violating an employment agreement. Options include reviewing contracts with an attorney prior to signing them and seeking legal counsel immediately if an employer accuses you of theft of trade secrets.