As we head into a BYOD era, security should be a primary concern for employers. Many companies invest heavily in the development of their trade secrets and other intellectual property and rely on their IP portfolio to give them a competitive advantage over other businesses. In general, California law affords protection to those trade secrets (learn more here), but certain steps must be taken in order to obtain a legal shield. For example, your company must demonstrate that the trade secret is in fact “secret.” An Orange County intellectual property lawyer can help walk you through this process.

In addition to requiring confidentiality and non-disclosure agreements from all employees, companies should consider adopting and enforcing policies that address the potential for proprietary information to end up on an employee’s personal device and that the employee may leave the company with that device. Such a policy could include notifying an employee that if the employee elects to use their own device, their internal email and voicemail may be searched and monitored.

Furthermore, employers should consider requiring employees to password protect all devices and prohibit employees from using public WiFi networks to conduct business on their devices (due to the ease of intercepting traffic on those networks). Require employees, upon termination of their employment, to return (not delete) all company documents and information and temporarily relinquish to the company any devices that may have been connected to the company’s systems. With the devices in hand, permanently remove the company’s information and disconnect access to the company’s systems and email servers from the device.

For more information on how to protect your business’s trade secrets or intellectual property portfolio and other confidential information in the digital age, contact the Orange County trade secret lawyers at Hardin & Associates today.

While many states will allow reasonable non-compete clauses in employment contracts, California expressly forbids them, save for a few limited circumstances. California Business and Professions Code section 16600 states in part that, “Every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.”

The one exception to this California rule is when a business owner sells his or her interest in (or “goodwill” of) the business to another, the parties may agree that the selling owner can be restrained from carrying on a similar business within a specified geographical area, so long as the buyer actually carries on the business that is being bought. Even under these circumstances, the restrictions must be reasonable. Geographic restrictions or business characterizations that are defined too broadly will be in danger of being struck down by the courts when it comes time to enforce its provisions.

Also keep in mind that this exception only applies to those with an ownership interest in a business. Non-compete clauses will always be considered null-and-void in California when in comes to employees. Terminating an employee for refusing to sign a non-compete clause would likely be grounds for a wrongful termination suit.

Contractual clauses which protect “trade secrets” are still valid and enforceable in California, so long as the business reasonably defines their trade secrets and do not use the term to try and get around the prohibition against non-compete clauses. Former employees can be prevented from using specific information they gathered from their previous position to gain an unfair advantage for a competing business – but they cannot be prevented from working for a competing business altogether.

If you are a business owner or an employee, and you have questions about non-compete clauses, trade secrets or restraint of trade issues, contact a qualified and experienced business litigation attorney for assistance with any questions you may have. The attorneys at Hardin & Associates have substantial experience analyzing non-compete agreements.

Contact them today to learn more.

Is your employer’s non-compete valid?

A recent decision from a federal district court in Northern California shows what a fine line it is between valid and invalid non-competes. In this case, a company sought a preliminary injunction against a former employee who had joined a competing company. In addition to alleging a claim for trade secret misappropriation, the company accused theex-employee of breaching his employment agreement which contained a non-compete/non-solicitation provision. The provision at issue was an agreement by the employee that he would not solicit any customer “who purchased or leased products or services from [the Company] at any time during the 12 calendar months immediately preceding the termination of this agreement for any reason and for or with whom employee had contact, responsibility or access to confidential information related to” the customer.

The employee opposed the motion for preliminary injunction by arguing that the “non-compete” provision in his employment agreement was unenforceable under the California Business and Professions Code section 16600, which states that “covenants not to compete are generally unenforceable” in California.

The company argued that the “non-compete” was enforceable because it was limited to only seeking to prevent its former employees “from using [the Company’s] confidential information to solicit customers.” However, the Court found that the subject provision was much broader and rejected the argument, holding that the non-compete agreement was unenforceable under California law. California courts tend to be very strict about enforcing the state’s public policy against non-competes. If an employer seeks to enforce a non-compete agreement against you, make sure that experienced Orange County employment lawyer reviews your document.

For more information on non-compete agreements in California, contact the skilled trade secret lawyers at Hardin & Associates today.