With increasing frequency, a company’s most valuable assets are not physical, they’re digital. These digital assets—client lists, pricing models, product plans, and proprietary software—live on laptops, phones, and cloud servers for in-office use and in remote work. This reality makes employee departures riskier than ever.
When a key employee walks out the door with confidential data, a routine HR matter can turn into full-blown litigation. With Georgia businesses increasingly facing this scenario, it is critical to understand how best to protect your company.
An Ounce of Prevention
Data security isn’t just an IT issue—it’s a legal risk management issue. Every company should assume that, at some point, a departing employee will have access to sensitive information. Perhaps a departing employee downloads customer or pricing data shortly before departing to work for a competitor. Or a company discovers that a remote employee regularly saves company files to their personal drives or cloud storage accounts.
Preparing now with sound policies, well-drafted agreements, and an established response plan not only reduces the risk of data theft but is also critical if a company needs to enforce its rights in court. Georgia courts are unlikely to entertain claims brought by businesses who failed to take “reasonable steps” to protect their confidential information. On the other hand, businesses that can show they proactively safeguarded their data are far better positioned in litigation.
Some practical preventative steps include:
- Maintaining clear confidentiality and data use policies
- Using secure file-sharing and password protected access controls
- Limiting access of sensitive data within the company on a need-to-know basis
- Conducting structured offboarding that includes device audits and exit certifications
- Implementing automatic alerts for abnormally large data downloads
- Training managers to spot red flags before an employee leaves
A Pound of Cure
Of course, even the most robust protection is no guarantee. If data theft is suspected, time is of the essence. Early action can determine whether stolen information is recoverable or gone forever.
When data theft is suspected, best practices include:
- Preserving evidence immediately—do not let departing employees “wipe” devices
- Sending a prompt demand letter to the departing employee and their new employer, if applicable, asserting your rights and requesting an immediate return of data
- Instructing your IT department or engaging an outside forensic expert to identify irregular file transfers and downloads
- Considering whether to seek immediate legal protection through a temporary restraining order (TRO)
In many cases, swift action can lead to negotiated resolutions before long, expensive litigation begins.
When Litigation Becomes Necessary
If the dispute cannot be resolved informally, Georgia law provides a robust toolkit for responding when a former employee absconds with company data.
Both the Georgia Trade Secrets Act (GTSA) and the federal Defend Trade Secrets Act (DTSA) protect information that derives economic value from not being generally known and that the company takes reasonable steps to keep confidential. These laws allow businesses to seek injunctions, damages, and even attorneys’ fees when their trade secrets are misappropriated.
At the same time, basic employment law principles, such as non-disclosure agreements (NDAs), confidentiality clauses, and fiduciary duties, may provide additional claims or defenses.
The Takeaway for Georgia Business Owners
Preparing now with sound policies, well-drafted agreements, and an established response plan can make all the difference if litigation arises. Companies that recognize the risks and proactively manage their data security will be in the strongest position to protect what truly sets them apart – their information.
BFV regularly assists companies regarding confidential information or responding to potential employee misconduct. Please reach out to BFV counsel Rebecca Hagenson with any questions.
Rebecca Hagenson finds pragmatic solutions for complex challenges. In her role as Counsel at Berman Fink Van Horn, she takes an in-depth approach to understanding a client’s business, delving into each client’s operations to understand its unique challenges and goals to deliver a targeted legal strategy. Rebecca’s practice focuses on complex civil litigation across a wide range of industries.
