McNamee Hosea News & Press


What Are Trade Secrets and How Can I Protect Mine As an Employer?

As an employer, one of your top priorities likely has something to do with protecting a company and taking steps to help it grow. How you go about doing this depends on a number of different factors but one option you may want to consider is to make sure a company's trade secrets are protected.

You may not know if you even have trade secrets that need protecting. After all, most companies think they have something unique that sets them apart, but not all information qualifies as a trade secret. Generally speaking, if you have a product, service, tool or data that is valuable, not publicly available and makes your company distinct from other companies, it may very well be a trade secret.

Trade secrets can be recipes, client lists, formulas, inventions, protection plans, processes or any other information or product not publicly available. The fact that they are secrets or confidential is what gives them value because they can give the holders an edge in the market.

Should a trade secret get out, it could destroy or seriously jeopardize a company's success. This is why so many companies are willing to go to great lengths to protect their information. This isn't always easy to do, especially when employees have access to the materials.

In order to do keep employees from divulging information identified as a trade secret, employers can have them sign a non-disclosure agreement. These agreements are legal documents that restrict the sharing of protected secrets. If a person violates a non-disclosure agreement, he or she can face serious penalties.

However, if the non-disclosure agreement is not properly drafted, signed or executed, the information you want to protect may not actually be protected. Similarly, if the information identified in the agreement doesn't meet the requirements for being a trade secret, it may be at risk of being shared without penalty.

Employers who have questions or concerns about trade secrets, protecting them or enforcing the terms of a non-disclosure agreement would be wise to seek legal counsel. Failure to understand or a misinterpretation of the laws in this area could have costly consequences that put a company's future at stake.

*Source:, "Protecting Trade Secrets," accessed on July 14, 2015