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How Can I Prevent Employees from Leaking Ideas?

“Loose lips sink ships.” This common saying describes the fate of businesses whose employees, either inadvertently or on purpose, share ideas with others without permission. Competitors may learn of the ideas or even pay employees for them and then use them against the business with the leak. Fixing or preventing leaks requires two tactics: legal and strategic.

On the legal front, require all employees to sign a confidentiality and non-disclosure agreement upon hire. Tailor the agreement to your industry, so that the definition of confidential information includes common items that might be shared. This could include lists of vendors or customers, software code, prototypes, or even parts used to build a product. The agreement should require employees to turn in documents or other confidential information before they leave the company and may specify that they cannot discuss products in development or other sensitive topics outside the workplace.

Further, seek out intellectual property (“IP”) protection for as many of your confidential ideas as possible, for example, by seeking a patent for a manufacturing process. While IP protections make the ideas public in that people can look at the blueprints or read published material, they come with strong enforcement provisions by way of decades of statutes and court decisions dictating use of IP by non-owners.

On the strategic front, build a business that inspires loyalty in employees by paying them well, treating them fairly, and wishing them well when they leave. Happy, well-paid employees who like their company could be less likely to purposefully leak ideas. Moreover, assign someone in the company to keep tabs on industry news and product releases to detect any competitors who may be using your company’s ideas. If ideas are leaking from your company, you will need to find out as soon as possible so the leak can be fixed.

Idea leaks happen, but taking a few proactive steps can make all the difference. Protect yourself and your business by seeking out an experienced business attorney. Michael Leonard, Esq., of San Diego Corporate Law, named a “Rising Star” for 2017 by SuperLawyers, has the experience and the insight to resolve confidentiality issues or prevent them before they arise. To schedule a consultation, e-mail San Diego Corporate Law or call Mr. Leonard at (858) 483-9200.

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