A recent article in Wired instructed employees in how to digitally erase all their stuff when they quit their jobs. The problem is that the author drew few distinctions between wiping computers of all personal items–family photographs or videos, personal emails, etc.–and company-related work product. Most franchisors and franchisees will take the position–and rightly so!–that employees’ work product on their company-issued laptops, cell phones, and voicemail accounts is company property.
The corollary to the Wired article is what the employer should shut down when an employee resigns. Whenever an employee resigns their employment, companies must be prepared to take some immediate steps:
1. Unless there are ongoing projects that the employee needs to complete, the company should shut down or limit the employee’s access to confidential and proprietary information;
2. The IT Department needs to monitor the employee’s computer activity to ensure that they are not downloading or sending to personal email confidential or proprietary documents or information, including client lists; and
3. The employee should be reminded of any existing obligations under a confidentiality or non-disclosure agreement, or company policy. While many states have adopted uniform trade secret acts, and the recently passed Defend Trade Secrets Act provides a cause of action if a company’s trade secrets are misappropriated even in the absence of a restrictive covenant, it is helpful to be able to point an employee to concrete obligations in an agreement when they resign their employment.
Post-separation, franchisors and franchisees need to be prepared to enforce their restrictive covenants. If an employee destroys or misappropriates trade secrets when they wipe their company-issued computer clean, companies should be prepared to enforce their rights.