Clean onboarding in an era of employee mobility: ten best practices to reduce trade secret and confidential information disputes in the United States

Nicole Phillis

Davis Wright Tremaine LLP, Los Angeles

nicolephillis@dwt.com

Employee mobility litigation has proliferated as employers compete for talent in increasingly fluid labour markets. At the same time, courts have become more skeptical of broad restraints on mobility, particularly in jurisdictions such as California. As a result, many employers are seeking out guidance on how to avoid mobility disputes before they even start.

One of the most effective ways to stem the risk of such disputes is through clean onboarding of employees. Clean onboarding practices protect both the hiring company and the employee by establishing clear expectations, preventing accidental misuse of a prior employer’s information and creating a documentary record demonstrating good-faith compliance efforts.[1]

The following best practices can help organisations implement a defensible and ethical onboarding programme to prevent mobility disputes before they even arise.

1. Establish a clear ‘no third-party confidential information’ policy

The foundation of any clean onboarding programme is an unequivocal policy prohibiting employees from bringing, using or disclosing confidential information belonging to former employers or other third parties.

Employers should communicate that employees were hired for their skills, experience, judgement and publicly available knowledge, not for confidential information acquired elsewhere.

2. Require written employee certifications at the start of employment

To clarify and align expectations regarding the prohibition on importing third-party confidential information, employers can use a clean onboarding certification that expressly states that employees may not use or disclose another company’s customer data, pricing information, business plans, source code, technical specifications, product roadmaps, recruiting strategies or other confidential materials.

A written clean onboarding certification serves multiple purposes. It educates employees regarding their obligations, creates contemporaneous evidence of compliance efforts and reduces ambiguity regarding expectations.[2]

The certification should require employees to affirm:

• They will not use confidential information belonging to a former employer.
• They can perform their job duties without relying on protected third-party information.
• They understand the company’s ethical and legal expectations.
• They will promptly report any concerns regarding confidential information.

3. Identify restrictive covenants and other continuing obligations before employment begins

Many onboarding disputes arise because a new employer fails to understand and/or appropriately vet a new employee’s pre-existing obligations.

Both employees and employers should work together to identify agreements that may affect the employee’s ability to perform proposed duties for the new employer.[3]

Generally speaking, employers should require disclosure of:

• confidentiality agreements;
• non-disclosure agreements;
• intellectual property assignment agreements;
• equity and/or shareholder agreements;
• non-solicitation agreements;
• garden leave arrangements; and
• other contractual restrictions.

Where appropriate, counsel should review the agreements before employment begins so that any restrictions can be addressed proactively rather than through emergency litigation.

4. Confirm the employee can perform the role without prior employer trade secrets

An important but often overlooked onboarding step is analysing whether the employee can realistically perform the anticipated position without relying on proprietary information from a prior employer. This is particularly important for employers who operate in jurisdictions that permit what courts have recognised as the ‘inevitable disclosure doctrine’.

The inevitable disclosure doctrine is the legal theory that allows for an inference of threatened misappropriation where a new employee’s role is so similar to the former role that the employee could not reasonably perform the new role without relying on the former employer’s trade secrets.[4] It is important to note that many jurisdictions do not recognise the doctrine, viewing it as inconsistent with public policies favouring employee mobility.[5]

Regardless of whether operating in a jurisdiction that recognises the inevitable disclosure doctrine, it is a best practice to have new employees represent that their expected job responsibilities can be performed using personal experience, publicly available information, lawful company resources and independently developed work product. This exercise is particularly important when hiring individuals from direct competitors, research-intensive industries, software companies, life sciences organisations or businesses with highly sensitive customer information.

5. Prohibit transfer of documents, files, devices and AI-derived materials

Modern misappropriation disputes often involve electronic data rather than physical documents. Information may be stored across cloud systems, personal devices, messaging applications, removable media or generative AI tools.

Onboarding procedures should expressly prohibit employees from bringing third-party materials into company systems unless authorised by the rightful owner. The onboarding certification should extend beyond traditional documents and encompass electronic files, databases, source code, cloud storage, mobile devices, AI-generated outputs derived from protected information and similar repositories. Clear policies in this area may significantly reduce later disputes regarding how information entered the company’s systems.

6. Implement reasonable technical controls at the earliest stage

Policies alone are rarely sufficient. Operational and technical controls are also critically important to protecting sensitive information and guarding against mobility disputes.[6]

Employers should consider implementing technical controls that reduce the likelihood of unauthorised information entering company environments, including:

• restrictions on access to personal cloud storage;
• monitoring or limiting connection of external media and/or personal email accounts (for example, USB devices);
• segregated environments and/or ‘clean rooms’ for sensitive projects;
• access controls tied to business need;
• data loss prevention technologies; and
• Logging and audit capabilities, particularly for data and file access.

The objective is not surveillance for its own sake, but rather creating reasonable safeguards that support lawful information management practices.

7. Conduct targeted training during onboarding

Training is among the most effective and defensible trade secret protection measures. Effective onboarding training should address:

• what constitutes confidential information;
• what qualifies as a trade secret;
• differences between experience and protected information;
• appropriate handling of competitor information;
• reporting procedures; and
• consequences of policy violations.

Company materials discussing trade secret protection similarly identify policies, training and intellectual property acknowledgments as important components of a broader protection programme.

8. Require employees to review personal devices and storage locations

Many employees unknowingly retain former employer information on personal devices, personal email accounts, cloud-storage platforms or backup systems.

A useful onboarding practice is asking employees to conduct a reasonable review of relevant devices and accounts before beginning work and to disclose the existence of any potentially protected third-party materials. If such materials are discovered, the employee should cooperate with the third party who owns the information to remediate and take care not to access, disclose or use the confidential information for the new employer.

This practice promotes early identification and remediation before information is disseminated throughout company systems.

9. Create clear escalation and reporting channels

Employees frequently encounter situations in which colleagues, managers, recruiters, customers or even business partners request competitive intelligence.

Organisations should establish clear reporting channels so that employees know where to go when faced with such requests.

The onboarding certification should instruct employees to report requests for another company’s confidential information to legal, compliance, ethics or human resources personnel. Prompt escalation can prevent isolated mistakes from becoming company-wide problems.

10. Document the entire onboarding process

Perhaps the most important lesson from employee mobility disputes is that documentation matters.

In many trade secret cases, courts examine whether the parties employed reasonable measures to prevent misuse of confidential information. Organisations that can demonstrate consistent onboarding protocols, written certifications, training records, disclosure reviews and technical safeguards are generally better positioned to establish that they acted responsibly and in good faith.[7]

Documentation also serves another purpose: it helps protect innocent employees by creating a clear record that the company instructed them to avoid improper conduct from the very beginning.

Conclusion

Employee mobility and trade secret protection need not exist in tension. Clean onboarding practices allow organisations to hire talented employees while simultaneously respecting the legitimate rights of former employers. A thoughtful onboarding programme should communicate clear expectations, identify legal restrictions early, educate employees regarding appropriate conduct, implement practical technical safeguards and create a documented record of compliance.

In an environment where trade secret claims increasingly fill the space once occupied by restrictive covenants, a robust clean onboarding programme remains one of the most effective and cost-efficient methods for reducing employee mobility disputes before they begin.