DUTY OF LOYALTY & TRADE SECRETS

Throughout your career, you’ve likely amassed a large amount of insider information. This is bound to happen when you build a career in one industry and rise up through the ranks. However, while this information may be a vital part of your career, it can become incredibly complicated to ensure you’re handling it properly, especially when you take on new job opportunities. The last thing you want is to risk your name and career by being accused of misappropriation.

The duty of loyalty and trade secrets are not something to take lightly. Bantle & Levy understands how complex this can be and help carefully review your employment documents to ensure you aren’t mistakenly doing anything that could breach your duty of loyalty to an employer.

Duty of Loyalty

Duty of loyalty requires that employees act in the best interests of the company. While all New York employees have a duty of loyalty towards their employer, the responsibilities of directors and officers within a company are especially important. The duty of loyalty is one of the fiduciary duties of directors and officers. Other duties include the duty of care and the duty of honesty.

Trade Secrets

Trade secrets are a type of intellectual property and can include designs, processes, formulas, and more. This information is confidential, and while trade secrets are not registered, they are still protected. However, trade secrets are not protected from independent discovery by others. According to the United States Patent and Trademark Office, for information to be considered a trade secret, it must have the following elements:

• Information that has actual or potential value because it’s a secret,
• Value to others who cannot legitimately obtain the information, and
• Reasonable efforts to maintain its secrecy.

Protections for trade secrets remain as long as all three elements are present. Once one element is no longer there, the information is no longer a trade secret.

How Can Your Duty of Loyalty Be Breached?

Officers and directors can breach their duty of loyalty to their employer by acting in their own interests, rather than that of the company. This can occur when an officer or director makes a self-interested transaction, uses corporate opportunities for personal gain, or divulges the company’s private information. When a conflict of interest does occur, the officer or director must disclose this information. Not only can a breach of duty of loyalty occur while the officer or directory is still with that employer, but it can also happen after they’ve left and are with a new employer.

Hire Executive Representation to Protect Yourself

When you’ve been privy to insider information at a previous company, you can’t be too careful when taking a new position elsewhere. Consulting with executive representation can help you feel confident that you aren’t at risk of breaching your duty of loyalty. Bantle & Levy can help review your employment documents and provide guidance for your future.

At Bantle & Levy, we understand how important it is to ensure that you’re acting within your legal right in any position you take. Contact us today to help protect yourself from claims of misappropriation.