On October 19, 2022, Tom Wallerstein was quoted in Legal Dive on remote work giving rise to data theft as people feel emboldened to take their skills to competitors. According to the article, the pandemic has arguably fueled employee mobility litigation because remote work has made it easier for employees to take data while at the same time weakening their company loyalty.
General counsel at companies that are on the hiring side need to be as careful as the former company’s legal chief. “Companies that are completely innocent can still be caught up in misappropriation,” Wallerstein said. “If material gets put on the company server or even incorporated into the company’s products or services, the plaintiff company virtually always sues the new company along with their former employee.”
The key for the new company is to have language in its employment agreement prohibiting the new hire from bringing in data from the previous company. “When you hire them, give them an agreement that says, ‘You may not bring any other company’s trade secrets into our company,’” he said.
States are increasingly following California’s lead and passing laws prohibiting companies from issuing employees non-compete agreements, so going after a former employee that you believe has taken company data requires you to approach the matter from a different standpoint.
“Every trade secret defendant says, ‘You’re just trying to stop me from competing and that’s not even legal,’” Wallerstein said. But the issue isn’t non-competition; it’s trade secrets misappropriation. “It’s all part of employee mobility litigation,” he said.
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