Articles

How well does an employer really know a new employee when they are first hired? Should the employer be willing to turn over its most important information such as proprietary formulations, software source codes, detailed business plans, new product development information, customer lists and contacts, etc., to a new employee without any concern about how that information may be used? What happens when a new employee incorporates information into his or her work that the employee obtained from past employers or others who may claim a proprietary interest in the information? Does the employee claim personal ownership in any inventions or proprietary information?

In answering the questions set forth above, it should become obvious that when hiring new employees, or for that matter when dealing with longer term employees, consideration should be given to the protection of the employers confidential and proprietary information and how that information is used by its employees. Consideration should also be given to the potential use of third party proprietary information, and inventions and proprietary information in which the employee claims an interest, in the performance of work for the employer by employees.

Illinois law provides that an employee has a fiduciary duty to his or her employer with regard to, among other things, the use of the employers proprietary and confidential information. Generally, the employee may use such information only for the benefit of the employer unless otherwise specifically authorized by the employer. Employers often reinforce the obligations of the employee by including confidentiality provisions in employment agreements or by having the employee sign a confidentiality agreement for the benefit of the employer.

Unfortunately, a simple confidentiality provision in an employment agreement or a separate confidentiality agreement may not be enough. In addition to having each employee agree to maintain the confidentiality of the employers confidential and proprietary information and to use such information only for purposes approved by the employer it may also be appropriate to have the employee confirm in writing the following:

The employee will not, in the course of employment with the employer, use or disclose the confidential and proprietary information of their past employers or others in violation of any duty the employee may have to protect the confidentiality of any such information.

The employee will protect, and not disclose or improperly use, third party proprietary information that he or she may have received as an employee of the employer, and regarding which the employer may have an obligation of confidentiality to the third party.

All work performed by the employee as part of his or her employment shall be the property of the employer and the employee will assign any rights he or she may have in such work to the employer unless, pursuant to the Illinois law, the employee has the right to claim rights in the work.

The employee should provide the employer with a list of all inventions and proprietary information in which the employee claims personal property rights.

The Firm has developed appropriate agreements incorporating the issues set forth above that are designed to protect the proprietary information and business of its clients.

Momkus McCluskey, LLC has an active intellectual property practice. The Firm offers comprehensive legal services to its clients with regard to trade secrets, confidential and proprietary information, and other intellectual property matters. If you have questions about any of the information presented in this memorandum or regarding any other intellectual property issues please give us a call at (630) 434-0400.