Tips for Protecting Confidential Information from Former Employees

Losing an employee is always a challenge, but discovering they took confidential information, trade secrets, or client lists on their way out adds another layer of complexity. Misuse and unauthorized access to proprietary information threaten not only your revenue but also your competitive edge and client trust.

Should this happen, swift action is necessary. See below for an outline of steps to take to protect your business, as well as steps for taking action against your former employee:

Proactive Steps to Protect Your Business

The best way to protect your business is to take proactive measures before an employee leaves. To enforce confidentiality or non-solicitation, you must show that measures were taken to secure the information, including:

Protection of Legal Agreements & Proprietary Rights

• NDAs and Contracts: Require employees to sign protective documents before they gain access to sensitive material.

• Mark Items as Confidential: Clearly label proprietary documents, client databases, and pricing models with "Confidential" stampings or metadata tags to provide formal notice.

Restrict Physical and Digital Access

• Digital Security: Implement access restrictions so employees can only access data that is necessary to their specific role within the company.

• Cybersecurity Protocols: Enact protocols such as multi-factor authentication (MFA) and tracking access to sensitive databases.

• Physical Guardrails: Keep hard-copy files locked and restrict access to sensitive areas.

Train Staff and Manage Departures

• Employee Training: Regularly train staff on secure data handling and the company’s ownership of work product.

• Offboarding Plan: Upon an employee’s notice of resignation or termination, shut off system access, email forwarding, and cloud accounts.

• Gather Company Property: Retrieve any computers or tech items, key fobs, drives, and company-issued phones before an employee's exit.

• Exit Interviews: Conduct an exit interview and remind departing staff of their ongoing legal obligations under signed contracts.

What to Do If You Suspect Misconduct

If you suspect a former employee has stolen vital information or solicited clients in violation of a signed legal agreement, you should:

Assess Governing Documents

• To confirm the enforceability of post-employment obligations, review all executed agreements for the former employee, including NDAs, non-competes, non-solicitation clauses, and the company’s employee handbook. 

Double-Check Remaining Access

• Audit all accounts to ensure the former employee no longer has active credentials, remote desktop access, or lingering access to company cloud storage.

Gather and Preserve Evidence

• Preserve the digital footprints, such as database export logs, file downloads, email forwards to personal accounts, and logs indicating when sensitive information was accessed. Also, take steps to preserve the former employee’s company-assigned computer or phone.

Consult an Attorney

Before contacting the former employee or sending formal demands, speak with an experienced business litigation attorney. A legal team can help determine the best course of action. 

If you suspect a former employee has taken or misappropriated your company’s confidential information, contact The Duarte Firm to discuss your legal options.