Recently, we issued a Request for Proposal (RFP) for staff augmentation services on behalf of one of our clients. After reviewing all responses, we narrowed down the list of potential suppliers, and invited each to present their capabilities. In response to our request to describe a certain process, three of the potential vendors showed us an identical slide! This prompted today’s blog on intellectual property misappropriation.
Businesses need to be cautious about losing their trade secrets and intellectual property to competitors when workers change jobs or assignments and go to work for their competition. In most cases, employees stay within an industry when changing positions. Intellectual property and trade secrets stand to get compromised, as these workers may inadvertently or deliberately share proprietary information in the course of their duties. So, companies may lose their trade secrets or get blamed for infringing upon a competitor’s trade secrets and be sued for aiding and abetting a criminal breach of trust.
Depending upon the State in which they operate, businesses may establish post-termination restrictions on employees including non-competition agreements, provided the law does not render them void. When dealing with agency-supplied contractors, on assignment for short durations, this approach is not feasible. The worker is not “employed” by the host company. In addition, even when companies attempt to impose related restrictions on their staffing suppliers, federal and state laws are unlikely to support any company attempting to restrict the ability of a temporary worker to find future employment. We believe that companies should look elsewhere for protection. In fact, there is absolutely no better way to protect trade secrets than setting up effective onboarding and offboarding practices.
When Onboarding any New Worker:
With an Applicant who works/worked for or with a Competitor:
With Exiting Workers:
As Albert Einstein said, “Imagination is more important than knowledge” and it is important for a company to protect its innovations and creativity from others who would deprive them of their competitive advantage. But then, they also have the duty to not encroach upon others’ property too, inadvertently or by design.
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