As you surely know by now, non-compete and non-solicit agreements, and related provisions in settlement or other types of agreements, will be even more heavily scrutinized in California in 2024. So enough about what you can’t do. This blog will address three things a California employer can still do to protect itself.
Revisit Your Confidentiality Agreement
First, you can have an effective Confidentiality (or Non-Disclosure) Agreement that protects your company’s confidential, proprietary, and trade secret information. However, for such an agreement to be effective, it has to be clear about what you seek to protect. And to be honest, many of the Confidentiality Agreements I see are not. Often a business will use boilerplate language that was used at another business or just taken from the Internet. Big mistake. If your employees cannot clearly understand what information you intend to keep confidential, then there is no way your attorneys are going to be able to effectively protect it.
An effective confidentiality agreement will specifically set forth the information the company wants to protect, such as its client list, customer specifications, a computer program, a policy manual, personnel or vendor contact information, etc. If it isn’t clear to your employees what information is protected under your agreement, then it won’t be clear to a court either.
Take Steps Internally to Protect Confidential Information
Second, make sure to take steps to protect your confidential information. For example, is it on the company’s intranet or document management system for everyone to see and download? If so, password protect it. Or better yet, use your technology to limit who has access to it (and who can forward or copy it). Oh, and yes, you can actually mark it confidential.
Also ensure your policies consistently instruct employees to safeguard confidential information. Remind them that their work emails and devices are not private, and they should not expect privacy on any work provided technology, device, or system.
Duty of Loyalty
Third, there is still a duty of loyalty, and you can have a non-compete or non-disclosure obligation during employment. This could help if your employees are planning to steal your confidential materials or raid your employees while still employed. Any such activities against your business while employed could very well be actionable in a breach of confidentiality case.
Bottomline, all hope is not lost. There are still effective (and relatively simple) steps that California employers can take to protect themselves in 2024 and beyond.