Working from Home and an Economic Downturn Are Creating a Perfect Storm for Increased Theft of Trade Secrets.
Employers all across the USA did a massive shift to working from home as the country responded to COVID-19. By all accounts, most of those employees (including the so-called “knowledge workers”) are still working from home. At least one Silicon Valley tech giant has indicated they expect that to continue for the foreseeable future.
Some of those workers have been (or will be) laid off in the ensuing downturn.
According to Adam Samansky and Nicholas Armington of the Mintz Levin law firm https://www.mintz.com/, in their 8/4/2020 Continuing Legal Ed program: Trade Secret Threats Loom Due to Economic Downturn, this is creating a perfect storm.
History Repeats Itself.
Adam and Nick presented data showing that there was a massive increase in the number of trade secret theft lawsuits following the 2007 – 2009 financial crisis.
They make a strong case that our current situation will tempt employees to steal trade secrets as they head out the door, and that working from home will make that theft easier unless employers take proper steps right now.
Building a Defensible Perimeter Around the Trade Secrets.
Companies should already be doing the basics to identify and protect their trade secrets.
Adam and Nick recommend the following practices to reduce the work-from-home threat:
- Ensure data access is in accordance with industry-standard data protection methods, including data audit and traceability.
- Disable the remote user’s ability to write to USB drives from company computers.
- Maintain the data audit logs as evidence for several years, in the event a theft is not discovered right away.
- Allow trade secret discussions only via secure video-conferencing services.
- Implement security protocols that allow employers to monitor employee computers for suspicious activity and to wipe customer data from employee computers before an employee leaves the company.
- Establish expectations regarding discussions of product prototypes.
- Train employees on general data security policies.
Check back next week when I discuss the Basics of Trade Secret Protection.
Please note: the above post contains educational information. It is not intended as legal advice. Engage an attorney who is licensed in your state to get advice on dealing with any specific legal issue.
© 2020 Michael S. Oswald
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