Intellectual Property

Social Media Legal Issues: (Post Number 4): Trade Secrets, Confidential Information, and Your Company’s Social Media Strategy

Protecting your business’ confidential information is critical, and social media has undoubtedly made this process more difficult. The inherent nature of social media is to spread information— not to protect it. But if you—and your employees—understand trade secrets (and other confidential information), as well as who owns “your” social media accounts, you can help protect your business from the damage of inadvertent or wrongful disclosure.

So what is a “trade secret”?
Generally, a “trade secret” is information that (1) is maintained in confidence, (2) has commercial value from not being generally known, and (3) is not readily ascertainable by proper means. The more detailed and difficult the information is to obtain, the more likely it is a trade secret.

For your information to be “maintained in confidence” and to prevent your information from being “readily ascertainable by proper means,” your business must take reasonable steps to ensure the information is not improperly disclosed. The “reasonableness” of the steps taken to protect information largely depends on the type of information, where it is stored, with whom it is normally shared with (and under what protection), and how it is used.

And what is “confidential information”?
Confidential information is a general term to describe any information that you take reasonable steps to protect, including trade secrets. This information can include information that would not qualify as a trade secret, such as information about employees and personnel, as well as financial information.

Though you may want information to remain confidential (and thus believe the information is “confidential information”), it is not confidential information unless you take proper steps to protect it. And if you do not take proper steps to protect your confidential information, it may become “inadvertently disseminated (formerly) confidential information,” which can subject you to liability and damage your business.

What steps do I need to take to protect my confidential information, including trade secrets?
Unfortunately, there exists no uniform standard or “bright line” rule outlining the steps necessary to protect your confidential information. Each business’ situation is unique. Some businesses are able to share trade secrets and other confidential information with actors all over the globe while still maintaining its protected status. However, one thing you can be certain of is that if your employees and third parties who have access to trade secrets don’t know they have access to trade secrets, you will have a difficult time claiming those secrets were properly protected. Accordingly, you should educate your employees about what information your business wants to protect. This should also include a thorough review of your existing contractual relationships (such as vendor or supplier contracts), to decide what third party information you and your employees may be required to protect.

Aside from education, you will want to consider non-disclosure agreements with any parties with whom you share confidential information. Also, you should label confidential documents with a heading, or better yet, a cover page, that clearly explains that the information contained within the document is confidential, that the person(s) is not allowed to read it unless they are authorized, and that if they are not authorized to read it, they should destroy or return it. There are also special considerations for digitally stored and shared documents, such as proper firewall and password protections. Check out this post from Microsoft for more information on protecting your confidential information.

Again, each business’ situation is unique, so contact an attorney to discuss the specific measures needed to protect your information.

What else do I need to know to protect my business’ confidential information in the age of social media?
One of the key considerations your business must address is what accounts can be used to share information about your company, who owns those accounts, and who has access to those accounts.

Your social media policy should outline where information can be shared (i.e. on which accounts and on which platform(s)) about your business and in what form. The policy guidelines should prescribe your specific rules for posting on company accounts, and may include limiting the ability to post to those employees who have been properly trained in the company’s expectations. See Intel’s guidelines for an example of this type of approach. The policy guidelines should also address suggestions for how employees should conduct themselves on their personal accounts, particularly when associating themselves with your business.

A gentle reminder to your employees of what is confidential information and the need to protect that information is also an intelligent consideration in any social media policy. Depending on your strategy and the importance of the information, you should consider a “ban” on sharing confidential information through any social media, as privacy mistakes can be easy to make.

Another consideration for your social media policy, and any employment agreement(s), is to outline who owns your social media accounts and the rules governing access to such accounts. Businesses have run into trouble when employees, especially key employees and founders, use personal or “pseudo-personal” social media accounts to attract business, build a client base, or otherwise market the business. Companies have a real interest in maintaining ownership over such valuable information, which may be a trade secret itself, but exiting employees, especially disgruntled employees, may take those accounts with them or use them to make disparaging remarks on the way out.

It is also a good idea for your HR department to have a policy dealing with how to change your social media passwords when employees who have access to such accounts are leaving your company, particularly (but not only) if those employees were asked to leave.

Another issue your business should consider with respect to exiting employees is updating non-solicitation and non-competition agreements  to account for the age of social media. This will include defining the scope of these agreements to include the use of information gleaned from social media to the extent possible in your jurisdiction. Contact an attorney to discuss drafting this language, as both non-solicitation and non-competition agreements are frequently “tossed out” by judges if they are overbroad or poorly written.

Anything else I should keep in mind when addressing trade secrets, confidential information, and social media?
Assuming your company already takes proper measures to prevent the disclosure of confidential information, you are probably not going to be negatively affected by the rise of the age of social media—many of your practices will carry over online. Therefore, you may encounter some measure of “hype” with regard to the dangers facing your company when you research this issue. However, you must be diligent in educating yourself and your employees about the dangers of the immediacy, permanency, and broad reach of the internet. And you should educate your employees with respect to your current procedures in order to properly carry these practices over to their online activity.

Most importantly, the measures you take to protect your confidential information are unique to your company. Do not assume that dated security measures (“We’ve been protecting our information the same way for years and it has always worked.”), online advice (including this post), or any other “one size fits all” approach to your confidential information will suffice to protect your business.

Should you have any questions regarding trade secrets, confidential information, or any other social media topic, please comment below,  contact us, or subscribe to our free Q&A service. Stay tuned for our next post in the Social Media Legal Issues series, which will discuss copyright, trademark, and other intellectual property issues.


Gideon Dionne

Gideon has fly fished for trout in rivers on three continents.

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