Trade Secrets and Confidential Information Policy
The business of our Company involves valuable, confidential, and proprietary data and information of various kinds. Such data and information, called "Trade Secrets" herein concern:
• The names and addresses of Company customers and the nature of the Company's relationships (e.g., types and amounts of products acquired from the Company) with such customers;
• The Company's various computer systems and programs;
• Techniques, developments, improvements, inventions, and processes that are, or may be, produced in the course of the Company's operations; and
• Any other information not generally known concerning the Company or its operations, products, suppliers, markets, sales, costs, profits, customer needs and lists, or other information acquired, disclosed, or made known to Representatives or agents while in the employ of the Company, which, if used or disclosed, could adversely affect the Company's business or give competitors an advantage.
Since it would harm our Company and most importantly our clients if any of our Trade Secrets were known to our competitors or non-company personnel, it is the Company's policy that:
1. No Representative should, during or after his/her employment with the Company, use any Trade Secrets for his/her benefit, or disclose to any person, business, or corporation any Trade Secrets without the prior written consent of the Company.
2. Every Representative shall render exclusive and full-time services and devote his/her best efforts toward the performance of assigned duties and responsibilities (which may be changed at any time).
3. Every Representative should refrain from engaging directly or indirectly in any activity that may compete with, or result in a conflict of interest with the Company or that is not likely to be in the Company's best interests.
4. Every Representative should fully and completely disclose to the Company any inventions, ideas, works of authorship, and other Trade Secrets made, developed, and/or conceived by him/her alone or jointly with others, arising out of, or relating to, employment at the Company. All such inventions, ideas, works of authorship, copyrights, and other Trade Secrets shall be the sole property of the Company. The Representative agrees to execute and deliver to the Company such assignments, documents, agreements, or instruments which the Company may require from time to time to evidence its ownership of the results and proceeds of the Representative's services and creations.
5. The Representative understands that he/she owes the highest duty of loyalty with respect to his/her duties. This means that he/she will, among other things, maintain a constant vigil over Company property, never make secret profits at the Company's expense (e.g., service customers of the Company but bill them for personal benefit, or receive kickbacks or special favors from customers, etc.), dress in a proper fashion, not use drugs or alcohol while on the job, and maintain a personal or Company automobile in good condition, together with a valid driver's license.
6. Every Representative shall avoid discussing any matter of a confidential nature, or which constitutes a Trade Secret, with any competitor or its Representatives. This includes discussions regarding customers, pricing, and policies. The Representative is reminded that any such discussions may cause the Company and the Representative personally to have violated anti-trust laws, including the Sherman and Clayton Acts. Sanctions of up to three (3) years imprisonment and fines up to $100,000 have been imposed on those who violate such laws.
7. Upon termination of representative or agent status, or at any time the Company may request, every Representative shall promptly return to the Company all memoranda, notes, records, reports, technical manuals, and other documents (and all copies thereof) in his/her possession, custody, or control relating to Trade Secrets, all of which written materials, and other things shall be and remain the sole property of the Company. The failure to comply with this request shall be grounds for immediate dismissal. In addition, the Company shall not be obligated in any way to pay any severance upon termination to any Representative who fails to comply with the provisions of this paragraph specifically, and this memo generally.
8. Every Representative agrees to comply with the rules, regulations, policies, and procedures of the Company faithfully and to the best of his/her abilities. The Representative understands that the breach of any covenant contained herein may constitute substantial and irreparable harm to the Company, and the Company may seek injunctive relief and other relief which it deems necessary and appropriate under the circumstances to protect its rights and the Representative shall pay all reasonable attorney fees, costs, and expenses incurred by the Company in the enforcement of any such action.
I [name of Representative] _______________________________________have received and read a copy of this Trade Secrets and Confidential Information Policy statement, understand all of its terms and agree to be bound by the provisions contained therein.
____________________ ____________________ ________ _
[Printed Name] [Signature] [Date]
Trade Secret Concerns Checklist
1. All employers must establish policies dealing with trade secrets, confidential information, and other rules of Representative conduct to protect their assets.
2. Understand what constitutes a trade secret.
3. Understand what constitutes confidential information.
4. Customer lists that can be compiled from a telephone directory or other readily available source are generally not trade secrets.
5. Create a climate of confidentiality to protect your trade secrets.
6. Advise Representatives of the seriousness of the problem.
7. Display posters reminding workers of their obligations to protect confidential information and publish such journals, work rules and policy manuals.
8. Distribute memos that Representatives must sign on an annual basis which confirms that the Representative acknowledges the type of information that is confidential and agrees not to convey such information to non-essential third parties.
9. In some states, it is a crime to steal trade secrets.
10. Federal law prohibits stolen information worth more than $5,000 that is transported across state lines.
11. Be extra careful that a terminated or parting Representative does not leave with any valuable or potentially valuable materials (or copies) such as business-generated reports, letters, etc.
12. Utilize restrictive covenants in employment agreements whenever practicable. Such clauses can:
a. Restrict an ex-Representative from working for a competitor of the former employer;
b. Restrict an ex-Representative from starting a business or forming a venture with others that competes against the former employer;
c. Restrict an ex-Representative from contacting or soliciting former or current customers or Representatives of the former employer;
d. Restrict an ex-Representative from using confidential knowledge, trade secrets, customer lists and other privileged information learned while working for the former employer; and
e. Restrict an ex-Representative from any of the above both in geographic and time limitations.
13. To be enforceable, be sure the restriction is reasonable in terms of geographic scope and time limitations.
14. If you desire to impose such clauses on current Representatives, an offer of additional monetary benefits increases the odds that such arrangements may be enforceable.
15. Establish effective exit procedures to learn who a departing Representative will be working for.
16. Act quickly if problems develop -- consult a labor lawyer immediately to determine your rights and options where applicable.
17. To increase the chances that your company will prevail in trade secret litigation, it is advisable to send a cease and desist letter immediately to the ex-Representative and his new company. This may enable you to obtain a preliminary injunction to immediately stop the ex-Representative from competing against your interests provided it is proved that:
a. Trade secrets or confidential information is involved;
b. Substantial economic harm will ensue if the injunction is not granted;
c. Your company has a substantial chance of success at the eventual trial; and
d. Immediate relief is necessary via the injunction to protect your business.
18. If you sit on your rights and not act quickly when a problem is uncovered, the chances of success at the injunction or trial may decrease.