| Practical Advice on Protection of Proprietary Info
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09-01-2005
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Helen A. Zamboni
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You've developed a confidentiality and nondisclosure agreement (NDA)
that you require all employees to sign as a condition of employment.
The NDA states that the company owns this information, and that
employees are only entitled to use it in furtherance of the company's
business. The employees agree that upon termination of employment,
they will return all company property, including intangible property
such as customer lists, trade secrets, etc., and will not use it for
any purpose whatsoever.
Under
the NDA, the employees agree that they will sign any new agreement form
the employer deems necessary to protect its confidential and
proprietary information. Your NDA and all subsequent revisions make it
clear that the version most recently signed revokes all prior
agreements dealing with the same subject matter.
So far, so
good. You've put your employees on notice that the company is serious
about preventing disclosure, misappropriation and misuse of the
company's intellectual property and competitively sensitive
information. You can require employees to sign new forms so that you
only have to administer one set of terms and conditions. The company
should have the legal protections it needs.
But do you have
gaps in your business processes that threaten to undo all that your
documents have done? Have you trained your managers about "need to
know"?
Too often, managers take for granted that employees at
certain levels within a company have the right, by virtue of their
positions, to know more than they need to know to perform their job
duties. It's a matter of status. And knowledge is power. By
spreading knowledge of proprietary information to subordinates, a
manager is demonstrating her power and also building loyalty among the
members of her staff.
Managers should evaluate carefully what
company confidential information her employees truly need in order to
perform their jobs before making any disclosures. This is especially
true in sales management.
Salespeople generally have
assigned "territories" (geographic, or based on customer size, or some
other kind of segmentation). A salesperson needs to know about the
customers in his territory. But he probably doesn't need to know about
the customers in his colleagues' territories.
Here's a
scenario to ponder: One of your best salespeople leaves your company,
where he was assigned to the northeast, and joins one of your
competitors. You are quite sure that he did not take any lists or
computer files with him. After all, like many salespeople, he wasn't
tech-savvy and relied on office support to handle his reports. He was
also one of the most ethical salespeople you've ever worked with, and
he left on good terms with your company.
Now his sales
territory is the midwest. While he was working for you, did he have
access to information about your midwestern customers?
Salespeople
are the most mobile employees in any industry. Once they become
familiar with the industry in which they are employed, they move from
company to company with ease. Even if they don't take anything with
them from your company -- a printed customer list, a computer file with
customer information -- they have what is between their ears. It can
be very difficult and expensive to prove that this former employee is
misusing YOUR company's property under these circumstances. In fact,
he may not even realize it himself.
It's best to try to avoid
this altogether. Scrutinize your company's disclosure practices and
tighten them up. An ounce of prevention is worth a pound of cure.
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