If you are like most companies in the Information Age, your confidential information is critical to your competitive advantage.
What is Your Company’s Confidential Information?
Each company has its own confidential information, often called “trade secrets.” For you, this might be client data, prospect databases, client files, formulas, recipes, or processes that give you an advantage over your competitors.
Minnesota Trade Secret Laws Protect Your Company
“Trade secrets” is the legal term for protecting your company’s confidential information. Like most states, Minnesota adopted the Uniform Trade Secrets Act, which is found in Minnesota Statutes Chapter 325C.
Your Top Risks
1. Accidental Disclosure
The most common way to lose protection of confidential information is accidental disclosure. This includes giving trade secrets, without a confidentiality agreement, to independent contractors, customers, clients, service providers, and other outsiders who work with your business.
2. No Confidentiality Agreements
If your team must share trade secrets with anyone outside your company, there are two reasons they must get a signed confidentiality agreement. First, it is essential to preserving the “trade secret” status of yourconfidential information. Second, if that party uses or shares the information without your consent, you can sue to recover your losses.
3. Theft by Ex-Employees
When some employees plan to leave a company, they may be tempted to make a copy of your confidentialinformation. This is a common tactic for employees who plan to compete after leaving. For example, I have seen employees download the company’s client database, confidential strategy documents, and otherconfidential information. In essence, the employee stole what took the company years and thousands of dollars to develop.
4. Computer Hackers & Thieves
Hackers and thieves steal data from cell phones, laptops, websites, and computer networks. This is a big topic, best left to your information technology experts.
How to Protect Your Information
1. Identify & Label Your Confidential Information
Make a list of the confidential files, folders, documents or computer data in your company. Mark “confidential” on any information that must remain confidential.
2. Use Confidentiality Agreements
Remind your team that sharing your confidential information with anyone outside the company, including contractors who come into the company, will jeopardize the legal protection of your trade secrets. In addition, have employees sign a confidentiality agreement or put a confidentiality provision in your employee handbook.
3. Limit Access to Confidential Information
Some information should be shared with employees only on a “need to know” basis.
4. Protect Data Behind Strong Passwords & Security Software
Most companies have policies protecting their data and someone assigned to protect data. Your IT person can schedule a routine review to look for any new risks.
Note: This article was originally published in Fidelity Bank’s newsletter, March 18, 2014.