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Protecting confidential corporate information in Illinois

On Behalf of | Jun 24, 2022 | Business And Corporate Law |

Small Illinois corporations may not have many large or valuable physical assets, but almost every business has secrets that the company wants to protect from disclosure to competitors. Illinois law provides two major devices to accomplish this end: the Illinois Trade Secrets Act and nondisclosure or confidentiality agreements between the employer and its employees.

The protections provided by these laws are somewhat overlapping, but using one or both of these methods will provide maximum protection for the company’s secret information. 

The Illinois Trade Secrets Act

The Illinois Trade Secrets Act was passed by the legislature on January 1, 1988, and it provides broad protection for information defined as a trade secret. A trade secret is any information, including but not limited to technical data, and includes any “formula, pattern, compilation, program, device, method, technique, drawing, process, financial data or list of actual or potential customers.”

There must be an economic value from other persons not generally being aware of the information as to who can obtain economic value from it. This definition covers virtually every type of information that an enterprise might want to protect from disclosure to competitors.  

The advantage of a confidentiality agreement

Some businesses may have information that they think falls outside of the definition of the Trade Secrets Act but are nevertheless deserving of protection. They protect such information with a confidentiality or nondisclosure agreement. The principal advantage of a nondisclosure agreement is that the company can define confidential information in any manner that it chooses.

As long as the duration and geographic extent of the agreement are deemed to be reasonable, Illinois courts will enforce the agreement according to its terms. In signing a confidentiality agreement with an employer, the employee agrees to be bound by the agreement’s terms, especially its definition of confidential information. 

The value of speaking with a knowledgeable lawyer

Any business person who has questions about the effectiveness and legality of a confidentiality agreement or the Illinois Trade Secret Act may wish to consult an experienced business attorney such as the lawyers at Petti Murphy & Associates for further advice on how best to protect corporate secrets.