September 21, 2016

Ask, Tell, & Do: Three Keys to using Exit Interviews to Protect Against Trade Secret Misappropriation

Departing employees pose one of the biggest risks of misappropriation of a company’s proprietary and confidential information and trade secrets.

When a high-level employee has access to critical company information, conducting an appropriate exit interview requires more than an HR rep checking off boxes on a form. When it comes to protecting trade secrets from misappropriation, here are three keys to a successful exit interview process:

  1. ASK: You should get as much information as possible from and about your departing employees. Try to find out the names of their new employers, where they will be working, and what exactly their job duties will be. This will let you assess whether and the extent to which any information they had access to could be used against your company to its competitive disadvantage. You also should explore with the departing employee all possible repositories of confidential company information. Presumably you already know about the company laptop, but explore the extent to which the employee may have company information on hand-held devices, including smart phones and thumb drives. Find out how often the departing employee used personal email accounts for company business.
  2. TELL: Review with the departing employees – and give them copies of – any agreements with continuing obligations to protect confidential company information. Such obligations may be set forth in offer letters, employment agreements, separate IP agreements, and NDAs. Review how broadly confidential information is defined; this frequently will lead to the employee remembering other information and repositories that had not been considered earlier.
  3. DO: Audit, collect, and inventory any digital devices the departing employees have that contain company information. Work with them to ensure they destroy or return all company data. Obtain written certification that the employees have disclosed, returned, and/or destroyed any company information they have on personal digital devices or personal email accounts. To the extent you have suspicions or cannot afford uncertainty, conduct a forensic analysis of the departing employees’ devices to locate any suspicious data transfers, proactive access of information without an apparent bona fide purpose, emails of data to personal email addresses, etc.

The right outside counsel can play a critical role in developing and executing these very important processes. These three steps for conducting a sufficiently detailed exit interview process is key to mitigating the risk of trade secret misappropriation, especially for high-level departing employees.