5 Steps Florida Employers Should Take to Protect Trade Secrets

By on July 20, 2021 0

Florida Governor Ron DeSantis recently enacted the Florida Anti-Corporate Espionage Act, which will come into effect on October 1. The new law was created to protect intellectual property in Florida from theft by foreign governments and their agents, but the law also creates important new considerations for employers in their efforts to protect their tightly held trade secrets.

Likewise, the law also emphasizes considerations for employers who hire employees of their competitors. Here’s what Florida employers need to know about this new law and the five steps they should consider taking to put themselves in the best position to protect trade secrets.

Overview

Specifically, the law establishes a new second degree felony for anyone who traffics in trade secrets and specifies that a trade secret can include information or documents stored in electronic form. As a result, any employee who without authorization takes trade secrets or confidential business information from their employer now faces much more serious criminal liability.

In addition to increasing criminal penalties for trade secret trafficking, the law now requires courts in Florida to order restitution when a person steals or traffics a trade secret. The law specifies that restitution must include the “value of the benefit derived from the infringement, including all costs of research and design and other costs of reproducing the trade secret that the person avoided by committing the infringement”.

Therefore, if the development of a trade secret was costly and time consuming, then the return ordered could be substantial and broad in scope. This provides better protection for victims of trade secret theft.

The law also establishes the right of trade secret owners to seek an injunction in a civil court and, “in exceptional circumstances”, the right to recover a reasonable royalty for the use of a trade secret. While similar remedies are already available under the Uniform Trade Secrets Act of Florida and the Valid Trade or Commerce Restrictions Act of Florida, employers can now sue under all three statutes. to end the use of a stolen trade secret and obtain compensation when a trade secret is unlawfully taken or used.

Employers can reduce potential trade secret claims or disputes by taking the following five steps.

1. Create policies and procedures to protect secret business information.

Review existing policies and make any necessary updates to resolve issues related to the use of information stored electronically. Whether new policies are implemented or existing policies are maintained, you must ensure that employees receive notification of company policies and confirm their receipt and understanding of the policies. In addition, you should determine whether confidentiality agreements are necessary for employees who regularly have access to confidential, proprietary information and trade secrets.

2. Restrict access to trade secrets and confidential information.

Create policies and procedures to ensure that company data and information is accessible only to those who are needed and only when needed. You can also prohibit employees from using their personal devices to access company data. This would allow you to restrict the use of USB devices to those that are company issued, encrypted, and will only work on the company computer. From the point of view of data collection, you should also create logs of USB devices issued to employees. If an employee has only used a company-provided device, it will make it easier to retrieve company information when the employee leaves the organization.

3. Work proactively with information technology and human resources staff.

You should work with your human resources and information technology teams to establish specific procedures to manage employee departure. By establishing procedures in advance and ensuring that HR and technology teams know how to implement procedures in the event of a departure, you will limit a departing employee’s ability to take company data. For example, you need to establish a process to immediately disable the employee’s access to the company’s network, data, and email upon termination.
In addition, you should review the company information in the possession of the employee and determine the process for returning the information before the employee leaves.

4. Be careful when hiring employees from other organizations.

If you are hiring employees who were aware of the trade secrets of their previous employer, you should be especially careful to ensure that the employee did not take, use or disclose those trade secrets. The new Florida law creates potential liability for employers who employ people who bring trade secrets with them.

5. Review forensic activity.

When an employee leaves the company, you should consider taking steps to examine the employee’s forensic activity to determine if they were accessing files outside of their normal role; if they were printing excessively, outside of normal business hours or printing highly confidential company information; and if they emailed company information to a personal account.

Likewise, you should examine the employee’s work devices to determine the employee’s access to files stored locally on the devices and whether the employee used flash drives or other external data storage media. on devices. Review and / or review of an employee’s company-supplied device after departure should be performed by a disinterested third-party vendor rather than the employer’s own IT professionals. This will eliminate the ability of the employee or their lawyer to allege that the company tampered with or manipulated the data on the device. Typically, an external vendor will make a copy or “ghost” of the device.

Brett P. Owens is a lawyer with Fisher Phillips in Tampa, Florida. Justin W. McConnell is a lawyer with Fisher Phillips in Orlando, Florida. © Fisher Phillips. All rights reserved. Republished with permission.