Take Reasonable Efforts to Avoid Inadvertent Employee Disclosure of Trade Secrets Through Social Media Platforms

Social media websites have become an integral part of business practice as a means of fast and inexpensive communication for businesses and individuals alike to make prospective employment contacts, build brands and expand marketing efforts.  As with any new technology, social media brings with it legal pitfalls, not the least of which is the inadvertent disclosure of confidential business information and trade secrets that can occur with relative ease, speed and permanency attendant with any type of Internet use. 

New Jersey’s newly enacted Uniform Trade Secret Act, N.J.S.A. 56:15-1 et seq. (“UTSA”), broadly defines the scope of what constitutes a trade secret to include any information that confers a competitive advantage when the owner of the trade secret takes reasonable measures to secure its secrecy.  Customer lists, so long as they are not readily ascertainable from a publicly available source, are an obvious example of a commonly understood trade secret, but the UTSA also includes other examples such as formulas, patterns, business data compilations, programs, devices, methods, techniques, designs, diagrams, drawings, inventions, plans, procedures, prototypes and processes.  N.J.S.A. 56:15-2(1). 

While trade secret protection may be easy to obtain, it can just as easily be lost through public disclosure, even if unintentional, when its owner fails to take reasonable efforts under the circumstances to maintain its secrecy.  N.J.S.A. 56:15-2(2).  Businesses need to be aware that their employees’ seemingly harmless communications and contacts on social media sites potentially can lead to loss of trade secret protection.  For example, an employee’s readily-accessible contact list on a professional networking site, such as LinkedIn, identifying customer contacts that may not be readily discernable to the public and which may have been cultivated by the employer through years of effort and expense, could provide the argument that the customer list has been disclosed and is no longer confidential.  Another variation on this theme is a situation where an employee leaves to work for a competitor and, when updating his employment profile, LinkedIn sends an announcement to all contacts announcing that the employee now works for the competitor, potentially violating the employee’s non-compete agreement.  Other social media platforms, such as Twitter and Facebook, where users essentially have a live “feed” to the public and are encouraged to regularly post “status” updates, likewise present similar trade secret disclosure concerns.

Without vigilance and implementation of comprehensive policies for the workplace, employees’ use of social media sites presents a real challenge to maintaining legal protection for a business’ trade secrets.  Some tips for minimizing legal and business risks include the following:

1. Include a comprehensive social media policy in the employee manual and in any employee non-compete and non-disclosure agreements.

2. Conduct training to educate employees on the company’s social media policy and sensitize employees about examples of inadvertent disclosures of trade secret and confidential information through use of social media platforms.

3. Periodically conduct social media monitoring to ensure that the content of employees’ social media sites complies with your company’s social media policy. 

This document should not be construed as legal advice, and readers should not act upon this information and commentary set forth herein without seeking the advice of professional counsel. ©2012 Arla D. Cahill.