Sunday, June 12, 2016
Protect Your NY Business From The Top 3 Risks To Your Confidential Information
1. Accidental Disclosure - The most common way a NY business will lose protection of confidential information is through accidental disclosure. This is most likely because NY businesses fail to outline to employees, independent contractors, consultants and service providers what information must remain confidential.
2. Failure to Create Confidentiality Agreements - Sometimes, a NY business may identify the confidential information that it will need to offer to an employee, independent contractor, consultant or service provider, but not take any additional steps to preserve that confidentiality. If and when that confidentiality is breached, the NY business is left with little to no legal recourse.
3. Theft by Ex-Employees - Some employees who leave a NY business may be tempted to make a copy of confidential information. For example, I recently handled a matter where my client alleged an ex-employee of a NY business used his customer information that was supposed to be kept confidential to solicit him into a risky investment that was, in actuality, a "ponzi" scheme. That obviously left the NY business with significant exposure to liability.
Now that you know the risks, here are some simple steps NY businesses can take to safeguard confidential information and set up repercussions for those who accidentally or intentionally breach confidentiality:
A. Identify Your Confidential Information: Your attorney can help you make a list of confidential files, folders, documents and data that your NY business values as "confidential." This should include customer lists and contact information, any other identifying information, trade secrets and anything else proprietary to your business.
B. Limit Access To That Information: Your confidential information should only be supplied on a "need to know" basis. Once identified, make another list of those who your NY business will supply with that information, including employees, independent contractors, consultants and service providers. Passwords and security software protecting electronic data also work, so long as you continually revise your password and regularly review who can access what.
C. Draft Strong Confidentiality Agreements: Confidentiality agreements are a reminder to your team that actions have consequences. NY businesses should make it known that sharing confidential information, accidentally or intentionally, not only jeopardize the future of the business, but their continued employment. While a confidentiality agreement may not stop all breaches, it will create a legal avenue for NY businesses to seek damages for such breaches.
With some careful planning and the proper legal advice, your NY business can avoid the top 3 risks threatening your confidential information.
*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com.
Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.