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Remind employees: As Coke verdict shows, stealing secrets can earn jail time

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in Career Management,Employment Law,Human Resources,Workplace Communication

Does your organization have trade secrets that it needs to protect? If so, the recent sentencing of a Coca-Cola employee may help add bite to your confidentiality policy and nondisclosure agreements.

On May 23, an Atlanta court sentenced Joya Williams, a former secretary to Coca-Cola’s global brand director, to eight years in a federal prison for failed scheme to sell confidential Coke marketing plans and product samples to arch-rival Pepsi.

The plot was foiled when a letter Williams sent to Pepsi was turned over to authorities and the FBI investigated. The eight-year sentence handed down by the judge was more severe than the 63- to 78-month sentence recommended by federal prosecutors. The judge said the seriousness of the crime called for a departure from the guidelines, which federal judges are not bound by.

Draft a trade-secret strategy

Employers can use this high-profile case to remind employees about their organization’s trade secrets and their policies to protect them.

This isn’t just a mega-company issue. Last year, two employees at a Michigan auto-parts maker were charged after allegedly trying to steal confidential in-house documents relating to axle components and then selling the information to a competitor.

Advice: Take the initiative to draft a strategy, working with IT, security or other appropriate staff, that aims to safeguard company secrets. By pitching the idea as a risk-reducing, cost-saving enterprise, you'll boost your respect level among the top brass. (For more advice, see our White Paper, Protecting Your Trade Secrets.)

5 ways to keep a secret

1. Draft nondisclosure agreements and/or a confidentiality policy. Employee-specific nondisclosure agreements can help preserve your trade secrets if you have genuine secrets to protect. If not, include a more general organizationwide confidentiality policy in your employee handbook.

Include a confidentiality provision in all contracts with outside entities, including distributors, joint-venture partners, licensees, vendors and temporary employees. If you outsource any product assembly, require strict vendor confidentiality agreements, and use different vendors for different components.

2. Conduct a trade-secret audit. Specifically identify each piece of information that you wish to protect as a trade secret. Label all documents that contain or reflect trade secret information as "CONFIDENTIAL," and treat them as such. Limit copies of the document, and only distribute to employees on a need-to-know basis.

Then, train employees on your policy and procedures, defining what they can and can't say (or do) with proprietary information. Be specific. For example, if you're developing a new product, can your marketing people say this publicly?

This is important because, as a matter of law, if one of your employees voluntarily discloses protected information to a third party, that action instantly destroys your organization's right to protect the information in court as a "trade secret."

3. Review physical security measures. Is your organization doing enough to prevent people, staff or outsiders, from walking off with the goods? Rethink security zones, badges, passwords and locked cabinets. Make visitors sign in and out. Prohibit cameras, camera phones, camcorders and tape recorders.

4. Focus on off-site situations. Closely held secrets and business plans are often most vulnerable at public business events, such as trade shows, conferences and networking meetings. Ask marketing managers to define the trade-secret boundaries for employees before such events.

Example: A sales rep presents a product at a trade show and blabs that an improved version is coming in three months. As a result, sales of the existing product plummet.

Remember: Not all conversations take place in the booth or the conference room. Competitors may overhear juicy gossip in the elevator or in the restroom. Remind employees that they're "on" 24/7 and not to let their guard down.

5. Issue policy reminders. Hold periodic training sessions (or at least shoot out a twice-annual e-mail) to remind employees of your confidentiality policies. Urge employees to change computer passwords monthly.

When employees resign or are fired, require them to return all confidential documents. Obtain their written acknowledgment that they understand and will comply with the confidentiality, nondisclosure or noncompete pacts.

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