Burr & Forman

12.17.2019   |   Articles / Publications

“Eight Tips to Protect Your Trade Secrets with Effective Restrictive Covenant Agreements,” IPWatchdog

In an article published by IPWatchdog on December 16, 2019, Chip Collins discusses restrictive covenant agreements – a necessary tool for preventing the misappropriation and use of a company’s valuable trade secrets.

According to Collins, trade secret theft is often an inside job, and therefore it is crucial to have employees under at least some form of such an agreement for two reasons. First, both state and federal trade secret statutes require employers to take reasonable steps to protect the secrecy of information sought to be protected under those statutes. Second, restrictive covenant agreements provide employers contractual remedies, over and above the statutory trade secret protections, that can be used to prevent theft and use of a company’s confidential information.

He outlines a number of key provisions for employers to consider including in their employee agreements to aid in combating unfair competition from trade secret thieves, including nondisclosure, employee duties/conflict of interest, noncompetes, customer nonsolicitation, employee nonsolicitation, garden leave, return of materials, and ownership of created IP.

“Noncompete covenants are the most controversial of restrictive covenants, but also the most effective at preventing unfair use of trade secrets if they’re enforceable (and that’s a big ‘if’ in some states),” Collins emphasizes.

It is imperative for companies to protect their valuable trade secrets. Collins suggests employers work with their attorneys to consider which of the foregoing provisions should be included in the company’s employee agreements to ensure that if a former employee goes rogue, the employer has plenty of options for pursuing justice.

For the full article, click here.

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