Protecting sensitive information can help companies maintain their integrity and competitive edge. An employee confidentiality and trade secrets policy is one way to safeguard your sensitive information. Could your organization benefit from one—and what should it include?
What is a confidentiality and trade secrets policy?
A confidentiality and trade secrets policy can be established to protect sensitive information from unauthorized disclosure and misuse. This handbook policy defines what constitutes confidential information and trade secrets, outlines the responsibilities of employees in handling such information, and specifies the consequences of policy violations.
Confidential information might include proprietary processes, business strategies, customer lists, financial data, and any other information that provides a competitive advantage. Trade secrets are a subset of confidential information, specifically referring to practices, designs, formulas, or processes that are not generally known and are subject to reasonable efforts to maintain their secrecy.
Confidentiality and trade secrets policies can vary significantly from state to state, due to differing legal frameworks and requirements. For instance, California’s laws are particularly stringent on non-compete clauses, which can affect the scope of confidentiality agreements, emphasizing employee mobility and the protection of trade secrets without restricting future employment opportunities. In contrast, states like Massachusetts have adopted the Uniform Trade Secrets Act (UTSA), providing a more standardized approach to trade secret protection, including specific definitions and remedies for misappropriation. States like New York have specific statutes that address the duration and enforceability of confidentiality agreements, as well as the types of information that can be protected. These variations mean that companies must tailor their policies to comply with local laws.
Does My Company Need One?
If your company deals in sensitive information, you may benefit from having one. It’s useful for protecting sensitive information from unauthorized access, which reduces the risk of intellectual property theft and competitive disadvantage. It also ensures compliance with laws and regulations related to trade secrets and confidential information, such as the Defend Trade Secrets Act (DTSA) in the United States. Furthermore, a formal policy provides clear guidelines for employees on handling confidential information.
What Should be Included?
Here’s what your policy should include:
- Purpose and scope: Clearly state the reason for implementing the policy, such as protecting sensitive information, complying with legal requirements, and maintaining competitive advantage. Define who the policy applies to, which should include all employees, contractors, and other individuals with access to confidential information.
- Definitions: Provide clear definitions of what constitutes confidential information and trade secrets. This can include business plans, customer data, financial records, intellectual property, proprietary processes, and more.
- Employee responsibilities: Outline the responsibilities of employees in handling confidential information. This includes safeguarding information, not disclosing it to unauthorized individuals, and reporting any suspected breaches of confidentiality.
- Access and disclosure: Specify the conditions under which confidential information can be accessed and disclosed. Define who has the authority to access certain types of information and under what circumstances disclosure is permitted.
- Security measures: Detail the security measures that should be taken to protect confidential information, such as password protection, encryption, secure storage, and restricted access.
- Training and awareness: Include provisions for regular training and awareness programs to ensure that all applicable employees understand the importance of confidentiality and the specifics of the policy.
- Consequences of violation: List the disciplinary actions for violating the policy, which may include termination of employment, legal action, and financial penalties.
Create Your Own Confidentiality and Trade Secrets Policy with SixFifty
Implementing a clear and comprehensive policy is essential for protecting sensitive information, ensuring legal compliance, and promoting a culture of responsibility and vigilance within your organization.
Create your own confidentiality and trade secrets policy with SixFifty. Schedule a demo today.
