Employee trade secret theft is a serious problem, and getting worse. According to an analysis of federal court cases filed over a 58-year period, 85 percent of trade secret theft was committed by employees or business partners. In addition, the cases doubled from 1988 to 1995 and again from 1995 to 2004, with a trajectory to double once more by 2017. It was reported in 2013 that suits brought against former employees over restrictive covenant agreements increased 60 percent over the prior decade. Numerous studies, such as this one, peg the annual cost of trade secret theft at hundreds of billions of dollars.
Employee trade secret theft has become such a serious concern that it has caught the attention of federal lawmakers, with federal trade secret protection legislation being introduced in both houses of Congress last year. Although that legislation failed to go anywhere, there is speculation new federal trade secret protection legislation will resurface this session.
Frequently, harm is sustained by employers which could have been avoided. Here are our recommendations on what you can do to keep your company from unnecessarily being victimized by an employee trade secret thief:
Taking these steps will not guarantee protection from employee trade secret theft but it will position your company well to keep it to a minimum and mitigate any harm which might result.