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Protecting Your Business: Top Tips to Prevent Misappropriation of Confidential Information by Employees – A Blog Post by David Goldenberg

Posted on Jul 2, 2024 in New and Emerging Companies, Blog, Intellectual Property by David Goldenberg

A few thoughts and tips on protecting your company’s confidential information from walking out the door.

In today’s fast-paced business environment, safeguarding your company’s confidential information is more critical than ever. The misappropriation of sensitive data by employees can lead to severe financial losses, reputational damage, and legal consequences. This happens more than many would care to admit.  Below are some tips and practical steps to take to help you prevent the misappropriation of confidential information by employees and protect your company’s most valuable assets.

  1. Implement Robust Confidentiality Agreements

One of the most effective ways to protect your confidential information is to require employees to sign non-disclosure agreements (NDAs) or confidentiality agreements. These legally binding documents should clearly define what constitutes confidential information and outline the consequences of unauthorized disclosure. Ensure that these agreements are comprehensive and tailored to your specific business needs.  For employees at technology companies, these agreements often also deal with assignment of the employees’ work product, and may be called Confidential Information and Invention Agreements (CIIAs) or similar.

  1. Conduct Regular Training and Awareness Programs

Educating your employees about the importance of maintaining confidentiality is crucial. Regular training sessions should cover the types of information considered confidential, the proper handling and storage of such information, and the potential risks and consequences of its misappropriation. By fostering a culture of awareness and responsibility, employees are more likely to adhere to your confidentiality policies.  Training not only puts employees on notice that you value this information, but creates a culture where everyone understands the importance of its protection.

  1. Limit Access to Confidential Information

Not all employees need access to all confidential information. Implement a strict need-to-know policy where access is granted based on an employee’s role and responsibilities. Utilize access controls and permissions to ensure that only authorized personnel can access sensitive data. Regularly review and update these permissions as employees change roles or leave the company.

  1. Utilize Technology Safeguards

Leverage technology to protect your confidential information. Encrypt sensitive data to prevent unauthorized access during transmission and storage. Employ secure communication tools for sharing confidential information internally and externally. Additionally, use monitoring and auditing software to track access and usage of confidential data, helping to identify and address potential breaches promptly.

  1. Establish Clear Policies and Procedures

Develop and enforce clear policies and procedures regarding the handling of confidential information. These should include guidelines on document classification, secure storage methods, data transmission protocols, and procedures for reporting suspected breaches. Ensure that all employees are aware of these policies and understand their role in protecting sensitive information.

  1. Monitor Employee Activity

Regularly monitor employee activity to detect any unusual or unauthorized behavior that may indicate a potential breach. This can include tracking access logs, monitoring emails, and using software to detect abnormal data transfer activities. Promptly investigate any suspicious behavior and take appropriate action to mitigate risks.

  1. Conduct Exit Interviews and Ensure Secure Departures

When an employee leaves the company, conduct a thorough exit interview to remind them of their confidentiality obligations. Ensure that all company property, including devices and documents containing confidential information, is returned. Disable their access to company systems and networks immediately upon their departure to prevent unauthorized access.

  1. Seek Legal Counsel

Finally, seek the guidance of experienced legal counsel to help you develop and implement effective strategies for protecting confidential information. Counsel can assist in drafting robust confidentiality agreements, advising on best practices, and responding to potential breaches.


Protecting your company’s confidential information from misappropriation by employees requires a proactive and multi-faceted approach. By implementing these tips, you can significantly reduce the risk of unauthorized disclosure and safeguard your business’s valuable assets. Remember, prevention is always better than cure, and taking the necessary steps now can save your company from significant legal and financial repercussions in the future.

The VLP Speaks blog is made available for educational purposes only, to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site, you understand and acknowledge that no attorney-client relationship is formed between you and VLP Law Group LLP, nor should any such relationship be implied. This blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.