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Employment Express

Protecting Confidential Information When An Employee Resigns

The possibility a departing employee might seek to exploit highly confidential information when he resigns is a potential threat to many businesses.  After all, such “trade secrets” may be as valuable to a company as its physical assets, the theft of which would not be tolerated.

Whilst it is possible to look to the Court to protect a business from unfair competition by an ex-employee, the effective management of information security should not be left until the resignation is tendered but should start the moment a new employee is taken on.

The following are key questions employers should consider:-

  1. What information does the employee have access to which would damage your business if known by a competitor or if the employee was to set up on his own?
  2. Is that information protected by appropriate clauses in the employee’s contract of employment?
  3. Is the contract of employment signed and up to date?
  4. Is it made clear to employees what information is confidential and the legal and reputational consequences of breaching that confidentiality?
  5. Should additional IT security measures be put in place to protect certain data and should access to certain information be restricted to key individuals?
  6. When the resignation is tendered, are immediate steps taken to block the employee’s access to the IT network or monitor usage if a notice period is being worked?
  7. More importantly, do you check to see if there is evidence of confidential information being misappropriated prior to resignation, such as the downloading or emailing of documents and databases to personal email accounts? It is the period prior to resignation when confidential information will be at its most vulnerable.
  8. Is the employee reminded in writing of his obligations regarding confidential information when he resigns and, if appropriate, his new employer put on notice of those obligations and any other restrictions to which the employee might be subject?

If these issues are properly addressed an employer stands a far better chance of deterring breaches of confidentiality by departing employees. Equally importantly, the employer greatly improves its prospects of success if legal action is required to prevent the ex-employee and his new employer making use of that confidential information and of recovering damages for losses suffered.

If you have any questions or wish to discuss any issues raised in this blog please contact Simon Lockley.  Simon is a Director with our Dispute Management team and a member of the firm’s Civil Fraud Asset Recovery Unit which provides specialist loss recovery and employment advice to corporate victims of workplace fraud.

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