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With the rise and exponential spread of a novel coronavirus inflicting hundreds of thousands of people the world over with coronavirus disease 2019 (COVID-19), 21 states, 47 counties and 14 cities, including California, Illinois, Michigan, New York, Ohio and Wisconsin, have issued “shelter in place” or “stay at home” orders affecting at least 200 million Americans. It seems likely that similar orders from other state and local governments will follow. These governmental orders require the closure of business locations that are non-essential, and for many businesses, employees are now working from home on a scale never before experienced. Among the challenges these businesses immediately face is ensuring that their trade secrets remain protected and confidential while, at the same time, ensuring that their employees can continue to work effectively from their homes.

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In order to qualify as a trade secret, the company possessing the secret must show that it instituted reasonable measures to ensure that the information remains a trade secret. Accordingly, employers must strike a balance between giving employees who are working at home enough access to trade secrets to allow them to adequately perform their jobs, while also taking sufficient steps to keep the secret protected. Whether the trade secret is given to the employee in hard copy or electronic form, risk of exposure can come from many sources, including lost or misplaced documents or devices, hackers, careless family members, or dumpster divers looking for valuable and confidential information.

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As some employers downsize and many employees move to competing corporations, there is no doubt that future trade secret litigation will involve challenges to the status of claimed trade secrets due to failures to maintain adequate protection during the time of COVID-19. Companies must act now, as the failure to protect trade secrets during this critical time will have ramifications long after the pandemic has subsided and business returns to normal. To avoid this happening to your business, you must take proper steps to ensure that your trade secrets remain safe, secured and protected:

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The novel coronavirus pandemic has created a paradigm shift in the way that companies are conducting business, and it can be difficult to manage the many different issues that now require immediate attention. In many instances, though, trade secrets are among a company’s most valuable assets, and protecting those secrets from disclosure must remain essential business for all companies, whether or not employees are working remotely. If you have any questions about protecting your trade secrets or the policies and procedures that you should have in place while your employees work remotely, please contact one of our attorneys who specialize in this area.

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Steven Block 312.998.4242 <a href="mailto:Steven.Block@ThompsonHine.com">Steven.Block@ThompsonHine.com</a>

Matthew David Ridings, CCEP 216.566.5561 <a href="mailto:Matt.Ridings@ThompsonHine.com">Matt.Ridings@ThompsonHine.com</a>

Natalie Gabrenya 312.998.4263 <a href="mailto:Natalie.Gabrenya@ThompsonHine.com">Natalie.Gabrenya@ThompsonHine.com</a>

We have assembled a firmwide multidisciplinary task force to address clients’ business and legal concerns and needs related to the COVID-19 pandemic. Please see our <a href="https://www.thompsonhine.com/services/covid-19-task-force">COVID?19 Task Force web page</a> for additional information and resources.

This advisory bulletin may be reproduced, in whole or in part, with the prior permission of Thompson Hine LLP and acknowledgment of its source and copyright. This publication is intended to inform clients about legal matters of current interest. It is not intended as legal advice. Readers should not act upon the information contained in it without professional counsel.

This document may be considered attorney advertising in some jurisdictions.

As More Employees Work Remotely, Protecting Trade Secrets Must Remain Essential Business

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