Limits On Employees' Confidentiality Obligations And Return Of Company Property

• Published date: 11 January 2024
• Subject Matter: Employment and HR, Intellectual Property, Discrimination, Disability & Sexual Harassment, Employee Rights/ Labour Relations, Trade Secrets
• Law Firm: Buchanan Ingersoll & Rooney PC
• Author: Ms Jaime Tuite and Brianna L. Schmid

Most employers have valuable, confidential property, documents and electronically-stored information that they seek to safeguard through employment agreements, non-disclosure agreements, confidentiality policies, and procedures designed to detect information leaving their secure environments or not returned in a timely manner.

Despite these safeguarding efforts, employees often seek to disclose or take employer information for a myriad of reasons, including:

• Employees use a personal phone to take photos of documents to access easily passwords, information, or documents when working remotely;
• Employees consider filing a whistleblower or discrimination lawsuit and take information to share with their attorney for advice on how best to proceed;
• Employees email presentations to personal email accounts for printing from home or for use in an upcoming interview with a new employer;
• Employees prepare to resign and seek to retain key documents for use with their new employer;
• Employees have old paper files that would normally be destroyed under the employer's retention/destruction policies, but take them for sentimental reasons.

Each of these situations requires employers to act consistently with their agreements, policies, practices, and other communications with their employees ("Employers' Processes"). Employers should have a playbook on how to learn of and respond to confidentiality breaches and removal or retention of Employer property or information from the secure company environment.

Employees taking copies of their employment agreements, wage information, trainings attended, or certifications will generally be treated differently than an employee taking confidential or proprietary information. Additionally, employers should be cognizant of employees at different levels with different responsibilities and access to different types of information, such that Employer's Processes are applied and enforced consistently for similarly-situated employees.

Frequently, employers encountering breaches of employee obligations will:

1. Communicate directly with the employee to stop the conduct,
2. Send a cease and desist letter from counsel,
3. Initiate a court action for breach of contract and other applicable claims, such as conversion or violation of statutory trade secret protection laws (such as the Defend Trade Secrets Act), sometimes for injunctive relief, monetary damages, or as a counterclaim,
4. Report the employee's conduct to appropriate law enforcement, or
5. Assert an after-acquired evidence defense in any litigation brought by the employee.

Despite employers' playbooks and the frequently utilized steps taken to enforce confidentiality and return of property obligations, there are two issues that often arise: (1) the ability of employees to share employer information and retain company property/information for potential litigation or government reporting purposes, and (2) the ability for employers to cut off damages due to employees' breaches of confidentiality and failure...