Business Risk & Trade Secret Misappropriation

Business risk - Trade Secret Misappropriation

Business risk and trade secret loss is growing by leaps and bounds.  The offense of misappropriating trade secrets according to the Uniform Trade Secret Act (UTSA) is the ‘acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means.’  It also includes the disclosure of the trade secrets when the person misappropriated the trade secret.

Employees should be aware to not misappropriate your employer’s trade secrets.  Disclosing a misappropriated trade secret to others is not protected by the first amendment unless it has already become public knowledge.  Current employees and former employees could be subject to criminal charges, especially when the trade secret was misappropriated and disclosed through electronic means.

An exception would be whistleblowing an employer’s fraud, illegality, or misconduct, or the subject disclosed is of public interest under the general public interest.  Employers should have established policies informing employees of the standards for managing business information. Managing the risk of trade secret misappropriation requires careful employee education.

There is a lot of benefit to establishing a confidential relationship with the employees to enhance an understanding of what the company considers confidential.  Within that stated relationship there should be a declaration of the duty to maintain the information confidential and a definition of the limitations for using the trade secret.

 

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