STEP 1:  Interview employee’s supervisor:

• What specific trade secrets did the employee have access to?
• Are there any documents, notes, equipment, etc., that the employee has not returned?
• Is the employee working on a project that requires his or her continued employment or consultation?
• Will the employee’s resignation cause any harm to the company?
• What projects did the employee work on?
• Did any previous projects involve working with a competitor?
• Before departure:

o   What was the attitude of the employee?

o   Was the employee taking home more work than usual?

o   Did the employee request to take any documents home?

o   Did the employee use copy machines more than usual?

o   Did the employee work evenings, weekends, or other times when other employees weren’t present?

o   Did the employee begin to associate more with certain employees than others? (This may point to other potential defections.)

STEP 2: Ascertain why employee is leaving (Skip if Firing Employee)

• If the employee has received another offer:

o   From whom did he or she receive the offer?

o   How did the employee receive the offer?

o   Is the employee aware of offers made to other employees?

o   What will the employee’s new job description entail?

o   Is the employee being hired for a specific project?

o   Will the employee’s new job put him or her in a position in which trade secrets may be disclosed?

o   Has the new employer discussed potential trade secret disclosure? What is the new employer doing to ensure nondisclosure?

• If the employee is going to form a “start-up” company:

o   What is the nature of the “start-up”?

o   Has the employee discussed the “start-up” with other employees?

o   Is the employee’s “start-up” an appropriate venture for your company as an investment, joint venture, etc.?

• If the employee is leaving because of dissatisfaction with his or her current position:

o   Why is he or she dissatisfied?

o   What changes would the employee suggest?

o   Are other employees dissatisfied?

o   What are the other employees’ suggestions for change?

o   Will the employee be available as a consultant to finish up projects?

STEP 3:  Review original Confidentiality Agreement and termination documents with employee:

• Impress on the employee the continuing obligation to maintain the confidentiality of the company’s trade secrets.
• Remind the employee that the company’s trade secrets are not only written documents but may also be the employee’s mental impressions.
• Stress the company’s need to enforce the confidentiality of trade secrets and the potential for injunctive relief and damage awards, which can be doubled if misappropriation is willful and malicious.
• Have the employee sign a Termination Certificate and review it with him or her.
• Attach a copy of the Termination Certificate to the Confidentiality Agreement.
• Have the employee sign the Notification to Employee Pursuant to Labor Code §2870.

STEP 4: Return of company property:

• Explain to the employee that “company property” includes sketchbooks, engineering notebooks, keys, badges, business plans, customer lists, laptops, computer disks, flash drives, etc.
• If any company property has not yet been returned, obtain the property then or make specific arrangements for its return.
• Have another employee present during the departing employee’s packing of his or her former office.
• Inventory the items taken by the departing employee from the office.
• Identify, delete, and change all user names and passwords

► Getting Legal Help

AXIS Legal Counsel’s Business and Corporations Practice provides legal advice to numerous businesses with a wide range of business matters. Axis  represent small, medium-sized, and large business clients with a wide variety of business and corporate law matters. We represent early-stage companies as well as established businesses on a wide variety of business law matters, ranging from contracts and transactions, intellectual property, labor/employment law, business financing, mergers and acquisitions, real estate, insurance, business succession planning, and general advice and counsel.  For information on retaining AXIS Legal Counsel to represent your business in connection with any legal matter, contact info@axislc.com or call (213) 403-0100 for a confidential consultation.

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