It is surprisingly common for employees to take confidential information such as customer lists, pricing information, strategy documents, and other proprietary know-how out the door when they resign or are terminated, and many departing employees try to poach customers and their former coworkers as well. The costly misconception is that these disputes are decided in court months later, when in fact they are usually decided in the first few weeks based on which side moved faster and understood its position better. Jake Bass has significant experience representing employers across Colorado, New York, D.C., New Mexico, and Wyoming when employee departures put a company’s confidential information at risk.

The First Few Days Are Critical In Preventing Data Loss

The evidence that proves a departing employee stole a trade secret—download logs, USB activity, forwarded emails, cloud transfers, and access records—is perishable, and it is routinely overwritten by ordinary IT processes within days or weeks. Equally important is how the data is handled. Simply rooting around a departing employee’s computer can overwrite critical metadata and lead to later accusations that the evidence was tampered with. Bass PLLC coordinates that preservation and review as the first order of business to preserve key data and determine whether those data suggest theft of confidential information.  

When It Comes To Departing Employees, An Ounce Of Prevention Is Worth A Pound Of Cure

Perhaps the best way to reduce the risk of a departing employee is to make sure that employees who have access to sensitive information are subject to restrictive covenant agreements (including noncompete, non-solicit, and nondisclosure agreements or clauses). But restrictive covenant agreements need to be carefully crafted. Clauses that were routine five years ago may be void today—or worse, a source of significant penalties. Colorado, for example, now voids most noncompete agreements for workers who earn less than a minimum salary threshold, and it imposes strict advance notice requirements. Businesses that attempt to enforce invalid noncompet in Colorado can face civil penalties and be forced to pay their employee’s attorney’s fees. Wyoming’s 2025 law similarly voids most newly signed noncompetes outside certain, narrow exceptions, such as for executives, the sale of a business, or trade secret protection. The practical lesson: a one-size-fits-all template pulled from the internet or written by AI is a liability, and every covenant should be calibrated to the jurisdiction, the employee’s role, and the interest being protected.

You Can Win Without A Noncompete

Employers whose covenants fail under current law are not out of options. Trade secret claims under the federal Defend Trade Secrets Act and its state analogues, breach of the duty of loyalty for misconduct committed while still employed—poaching the team, stealing the clients, copying files—and breach of standalone confidentiality obligations all stand on their own. Nonsolicitation provisions covering customers the employee actually served are also enforced far more readily than broad noncompetes, because they protect a narrower and more defensible interest. Often the strongest case is the one built on what the employee took and did, not necessarily on the covenant they signed. Framing the dispute around misappropriation rather than breach of a restrictive covenant can be a useful strategy tool when the restrictive covenants are not clearly enforceable.

The New Employer May Be On The Hook, Too

A competitor that knowingly benefits from a breach—hiring with knowledge of the covenant, receiving the customer list, encouraging the employee raid—faces tortious interference exposure, and naming or credibly threatening to name the new employer changes settlement dynamics considerably. It also matters practically: the new employer, unlike the individual, has money, insurance, counsel, and a reputation to protect, and frequently becomes the voice of reason once its lawyers are involved. Many competitors, once put on notice, will impose their own restrictions on the new hire rather than absorb litigation risk, which can accomplish most of what the former employer wanted without a court order. But the letter needs to be well calibrated, because a demand that overstates the facts to a competitor can support a competitor’s counterclaim.

A Proportionate Response Is Key

Some departures that look like theft are just innocent mistakes. For example, an employee may accidentally carbon copy their personal email address on an email intended for a client out of absent-mindedness, or they might attach a USB to their computer to print a personal document. Escalating too quickly and too aggressively risks handing the departing employee the moral high ground and can invite a counterclaim depending on state law. Customers and the rest of the industry notice too—a scorched-earth response to one departure may leave prospective clients and employees second-guessing whether they want to do business with or work for the aggrieved company. Bass PLLC gives employers a candid early read and calibrates their response to be either forceful or measured as the situation requires.