What are the two factors that establish a valid trade secret for San Diego businesses? What determines the legal standing for whether or not information can be considered a “trade secret” for San Diego Business? How can this be used as an effective non-compete strategy?
There are two determining factors based upon California law:
- The information must have “independent economic value” due to being kept secret from the public or others who could obtain economic value from using it or disclosing it.
- You must take “reasonable” steps to protect its secrecy.
Why are we consistently discussing the concepts of trade secrets with our clients? It is generally known that California is not friendly to non-compete agreements, especially from an employer’s point of view. Most employers are concerned about their employees using their company’s customer lists, product recipes and suppliers, processes and internal knowledge and information to leave the company and compete against them. How do you protect yourself?
The answer may lie in the establishment and incorporation of trade secrets into your employment documents as well as Policies and procedures. Business policies, HR handbooks and employment agreements incorporating the concept of trade secrets is a great strategy. The two factors that establish a valid trade secret are also the key to preventing your employees from using what you teach them to compete against you.
There are specific California laws regarding the identification and protection of trade secrets within your LLC, S-Corporation, C-Corporation or California Professional Corporation. The Watkins Firm can help you to develop specific strategies in order to implement and protect the two factors that establish a valid trade secret.
If you are interested in protecting your business and learning more about the strategies of applying trade secrets to your business model, we invite you to contact us or call for a free and substantial consultation at 858-535-1511.