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Five Tips To Avoiding Worst Case Scenarios When A Key Employee Leaves A Company With Sensitive Documents

Five Tips To Avoiding Worst Case Scenarios When A Key Employee Leaves A Company With Sensitive Documents

Five Tips To Avoiding Worst Case Scenarios When A Key Employee Leaves A Company With Sensitive Documents

Here’s a scenario I’ve encountered a lot – both as counsel for a company losing a key employee, and as counsel for a key employee heading out the door: 

In her exit interview on her last day at the company, HR has the employee sign a form swearing that, in accordance with the Confidentiality Agreement she signed when she was hired, she has “returned” all company documents – including “confidential” company documents. She hands in her laptop, badge and keys, and leaves.   

A few weeks go by. The employee’s former supervisor finds out that she has gone to work for a competitor. He is livid. He tells Legal. Legal has a computer forensics expert analyze the laptop the employee used. The expert determines that the employee regularly stuck flash drives into the laptop and saved documents on them, and uploaded documents from the laptop into her personal cloud storage account. The employee never returned any flash drives or mentioned the cloud storage in her exit interview. Legal tells the supervisor. The supervisor is enraged. He wants to sue. He wants the competitor to fire her.   

More lawyers get involved. They send a demand letter on the company’s behalf to the employee and her new company saying that they are onto her. They have a computer forensics expert’s report to prove that she did not really return all documents, despite her sworn statement to the contrary. They demand she return all documents immediately – for real this time – or else they will sue. 

The employee is stunned. Now she has to hire a lawyer, and hope that her new company is not so spooked by the demand letter from her old company that she loses her job.  She tells her lawyer that she doesn’t want the documents and has no need for them. During her exit interview with the old company, when she signed that form, she wasn’t thinking about flash drives or cloud storage. But, now that the company mentions it, she recalls that she frequently uploaded documents to flash drives and cloud storage in the course of her work – because, for example, she needed to print a presentation while on the road, or had to transfer a file to a client that was too big to e-mail. The company can have all that. She does not want it. 

The employee’s lawyer relays this message to the company’s lawyers. The company – especially her enraged former supervisor – is not satisfied. What has happened to all of those documents since? Some of those documents are really sensitive and a competitor would love to get its hands on them. How is the company to know that she did not take those flash drives straight to her new company so they could use the company’s confidential information to unlawfully compete? 

More angry letters and threats of lawsuits are exchanged. More money is spent on lawyers and computer experts. You get the picture. 

How can this scenario be avoided? With more thought and deliberation on the front end. Here are five tips for the company that wants to protect its sensitive documents, and the employee who wants a clean and friendly break from that company. 

First, for the company, write a confidentiality agreement and exit interview form that are straightforward and clear. (I am assuming, of course, that this company truly is interested simply in protecting its sensitive documents from getting into the wrong hands, not in laying traps for unwary former employees.) In the exit interview, ask expressly whether the employee may still have documents in places she hasn’t thought of – such as on flash drives, cloud storage or her home computer. If she does, make sure that she returns or destroys them. 

Second, if the company wants added assurance that the employee has returned or destroyed all arguably confidential company documents still lingering on her personal e-mail, personal cloud storage account, or home computer, have her permanently delete the documents right in front of HR or Legal. Then, when she signs the form swearing that she does not have any confidential documents, have her expressly swear that she has checked all e-mails, computers, cloud storage accounts, and external devices still in her possession and confirmed that they do not have confidential company documents stored on them. 

Third, also for the company, when you have evidence that the former employee still has documents, be realistic about what danger that actually poses to the company. For example, if a forensic examination of the former employee’s laptop reveals that, three years ago, she e-mailed to her personal e-mail account a spreadsheet with then-current sales data, consider: is that really still sensitive information? Or is it old news that would not be of interest to any competitor? If it’s old news, why waste legal resources chasing down that former employee? 

Fourth, for the employee, even though you are likely excited to move on to your new gig as soon as possible and get on with your life, take the forms you sign upon exiting your old company and the statements you make to them very seriously. (I am assuming, of course, that this former employee truly wants to return all confidential company documents.) Employees must understand that the forms and statements may be scrutinized later, especially if an employee joins a competitor and/or leaves behind a miffed supervisor. Take the time to ensure that you do not have company documents upon leaving, even if you think the company should not care that you have a particular document. The company may have a different perspective. 

Fifth, in the event that a scenario like the one described above does emerge, be the reasonable one. If, as an employee, you realize that you unwittingly “took” documents, own up to it right away, say that it was unintentional and that you do not want them, and promise to take reasonable steps to eliminate them to the company’s satisfaction. If, as a company, you realize that the employee has documents, if you do not have any other evidence that the employee has plans to use those documents unlawfully or unfairly, you do not necessarily need to come out guns blazing. In other words, while we lawyers love a good fight, many times in these scenarios both companies and former employees can achieve the result they want more quickly and cheaply by staying realistic and working to be reasonable. 

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