Theft of confidential information and trade secrets can be just as damaging to your business as embezzlement or other employee fraud. Help protect your competitive advantage with these tips.

Buy paper shredders...and use them

Be careful when you are throwing out copies of sensitive or confidential documents. These include: financial statements, proposals, customer information, reports, receipts, bills, invoices, etc. Don't just toss these in the trash. Shred them first. Putting them in the garbage unshredded opens up a range of security issues. If your trash is not disposed of properly, these documents could easily end up in the wrong hands...or blowing down the street past your competitors. In addition, industrial spies have been known to go through garbage looking for confidential data. Make shredding a company-wide practice-insist that your employees dispose of all papers this way.

Have a plan for terminated employees

Don't let a disgruntled ex-employee become a security threat. Have a plan in place to keep a person from leaving your company with confidential documents. Some steps to follow include:

	Have the person leave the company immediately upon termination. Letting an employee hang around a few days to get his or her affairs in order only invites this person to make off with papers and other information that might be valuable to your firm. Have a supervisor stand by while the employee removes personal possessions from his or her desk.
	Make arrangement for immediate return of any confidential company information such as client lists, price lists, etc. Make the timely return of these documents a condition of receiving severance pay.
	Insist that the person turn in keys, both for the business premises and for his or her desk and file cabinet. If he or she doesn't return them, change your locks.
	Remove the person's password from your computer network immediately. This is especially important if the person can dial in to your network from home, and then simply log in and download important information.

Use computer passwords

Require your employees to use passwords to access your computers or your network. This will serve to keep unauthorized people away from important files. Don't let employees get lazy with their passwords - make them change them on a monthly basis. Dissuade people from using features that "remember" passwords - this can make it easy for an unauthorized person to gain access to your system. Insist that users log off your network whenever they're away from their desks, so unauthorized users can't jump in from their workstations.

Have all employees sign non-disclosure agreements

Make sure employees understand that theft of intellectual property is as serious to your business as theft of physical property. Use a non-disclosure agreement, or a non-disclosure clause in an employment contract, to spell out employees' responsibilities regarding confidential or trade secret information. Be sure you define what your company considers to be confidential. This is critical, since it clearly differentiates which information belongs to your company and which belongs to the ex-employee. The agreement also should outline steps the employee must take to maintain confidentiality, such as using computer passwords, not removing sales lists from the premises, not copying documents to disk, etc.

Keep tabs on your documents

Set and enforce strict procedures for access to trade secret and confidential or proprietary information. Create a hierarchy of access among your employees for sensitive information - allow only those who need certain information to see it. For example, a sales rep may need customer contact information for his or her territory. But the rep does not need your entire client list, and does not need access to billing data. Label key electronic documents (such as your customer database) as "read only" so they can not be altered or written to disk.

Don't tempt prying eyes

Don't make it easy for people who aren't supposed to see confidential documents to snoop. Encourage everyone at your business to take certain basic precautions. Never leave documents lying around. File things away when you're done with them or when you're away from your desk. Lock your filing cabinet and your desk when you're away. Close computer files when they are not being used and never leave a file on your screen when you go away from your desk.