Far too often, businesses of all types – not just those in the construction industry –  overlook the importance of implementing employment policies regarding the company’s confidential, proprietary and trade secret information, and ownership of inventions and proprietary information created by employees during the employment.  Of course, it is typical for employees to have access to their employer’s confidential, proprietary, and trade secret information.  It is also commonplace for employees to create new, novel ideas or products during their employment.  In the construction industry, for example, this includes concepts such as construction drawings as well as systems for cost-tracking, custom software for building management, and the like.  What should employers be doing to ensure such developments are protected?  There are a few basic steps that ought to be considered and implemented:

  1. Conduct internal audits of company confidential, proprietary and trade secret information.
  2. Identify and segregate confidential, propriety and trade secret information from other information and appropriately designate information.
  3. Develop and maintain written employee policies that inform employees what information, data, processes, plans, etc. are confidential, proprietary, and/or trade secret, and describe how employees must protect such information.
  4. Require employees to sign nondisclosure agreements, before they have access to sensitive information.
  5. Require employees to sign invention disclosure and assignment agreements.
  6. Require departing employees to sign exit agreements confirming their understanding of the obligation to honor their nondisclosure obligations.
  7. Consider how to prohibit employees from using the company’s trade secrets (such as proprietary vendor or customer lists) after leaving the company. In general, noncompetition agreements in California are not enforceable, but exceptions allow for control over certain categories of such proprietary information and trade secrets.

While companies working in the construction industry might not think it is important to develop policies that protect proprietary information and trade secrets – in contrast to a software company, for example – the fact is that all companies have key information that ought to be identified and protected.  Moreover, obligations to keep client information secure may impose duties on construction companies to have such policies in place with their employees.  The takeaway for companies in the construction industry is that it makes good sense to broadly consider to what degree such policies and practices are necessary – or simply good risk management – and to take action after identifying to what degree such steps are appropriate.

 

Josh Emory is an attorney in the law firm of Dunn DeSantis Walt & Kendrick representing individuals, startups, small to large businesses and employers of all sizes in business and intellectual property representation, including intellectual property and corporate transactional matters as well as business litigation. He can be reached at jemory@ddwklaw.com.

Dunn DeSantis Walt & Kendrick provides a broad spectrum of legal services to businesses of all sizes, from small, local start-ups and non-profits to large, national companies. DDWK’s real estate development and construction practice includes representing all segments of the development and construction industries on both private and public projects.

You can find additional information and resources on the DDWK website.

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