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What is a Trade Secret? ## A trade secret is information that is essential to a company's business, not publicly available, and provides a competitive advantage. According to the Trade Secrets Protection Act (ÄSS) § 2, information qualifies as a trade secret if it has commercial value because it is not generally known and the company has taken reasonable steps to keep it secret. ## How to Protect Trade Secrets from Employees? ## To ensure legal protection, a company must demonstrate that it has actively protected the information: 1. Non-Disclosure Agreements (NDAs): Under the Employment Contracts Act (TLS) § 22, employers and employees can enter into confidentiality agreements. These must be in writing and clearly define the scope of the protected information. 2. Technical and Organizational Measures: Implement strict access controls, such as password protection, encryption, and restricted server access. 3. Internal Policies: Clearly define what constitutes a trade secret in your internal work rules or job descriptions. Employees must be explicitly informed of their obligations. 4. Post-Employment Obligations: TLS § 24 allows for the continuation of confidentiality obligations after the employment relationship ends, provided it is agreed upon in writing and is justified. ## Legal Consequences of Breach ## If an employee breaches a trade secret, the employer may claim damages under the Law of Obligations Act (VÕS). Furthermore, a breach of confidentiality can serve as grounds for extraordinary termination of the employment contract under TLS § 88 (1) 3. Protecting your intellectual property is vital for business sustainability. Do you need assistance drafting robust confidentiality agreements or evaluating your current security protocols? Consult our advanced legal AI assistant at Legal Aid 24 for a personalized analysis of your unique situation and take the first step toward securing your business assets today.