Protect Your Trade Secrets and Confidential InformationBy James B. Dietz Virtually every company has a valuable component with respect to its operation. It may be a major customer, a key employee, a process or even a particular marketing method for its products or services. The loss of this part of the business can have a catastrophic effect upon continued operations and profitability. Ohio law affords some protection to companies, but those legal provisions may be insufficient to fully safeguard your business. The use of contractual arrangements with employees can provide the additional protection employers need to maintain stability and viability. A “standard” Confidentiality, Non-Solicitation and Non-Compete Agreement with key personnel should be considered by any employer who hires employees in crucial positions within the company. Such an agreement may prohibit the disclosure of confidential information, preclude the solicitation of other workers and customers by a key employee, and prevent the employee from leaving his or her position to work for a competing company. Confidential information can include customer lists, new product concepts, compensation models, or client development strategies. Again, the loss of this information can be extremely detrimental to a company. Of course, the same holds true with the loss of a customer or other key staff member who has been taken away by a former employee. It virtually goes without saying that a key employee, such as a salesman, who leaves the employer to work with a direct competitor, will likely have a significant impact on the loss of sales with the company. A proper contractual arrangement at the time of hiring can likely eliminate all of these occurrences and the disruption of your business. Contrary to the belief of many, these agreements are enforceable and upheld by courts. To the extent that these covenants may be unreasonable, Ohio courts have the ability to modify them to become reasonable. These contracts should contain specific representations by the employee to provide further support for their enforceability. In the absence of such contractual arrangements, Ohio law provides protection to companies from former or current employees who abscond with confidential information or trade secrets. Specifically, Ohio Revised Code Section 1333.62 protects an employer from actual or threatened misappropriation of these secrets or information by a former or current employee. At the beginning of this New Year, each employer should step back and take a good look at the valuable components of its business and take appropriate measures to ensure that they are adequately protected. Ohio law does afford some remedies for the misappropriation of trade secrets and confidential information, as well as relief for those employers injured by such actions. However, this law should not be utilized as a substitute for a proper Confidentiality, Non-Solicitation and Non-Compete Agreement. For more information on these agreements, contact Attorney James B. Dietz at jdietz@fandr law.com or Attorney Leonard Schiavone at lschiavone@fandrlaw.com.
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