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Using Exit Interviews to Protect Trade Secrets: Talk Before They Walk

An exit interview is an interview with an employee who is about to leave the company. Typically, the interview is face-to-face, but it can be in writing. Employers conduct exit interviews to gain information on a variety of topics, such as reasons for leaving, work environment, management, compensation, workloads, training, and potential improvements to the job or company. Employers can (and should) also use exit interviews to protect trade secrets and other confidential information.

Under Michigan’s Uniform Trade Secrets Act (MCL 445.1901, et seq, “MUTSA”), a trade secret is information that, generally speaking, has value because it is not generally known or ascertainable by the public and it is subject of reasonable efforts to maintain its secrecy. Courts can enjoin actual or threatened misappropriation of a trade secret, and they can also award money damages. An employer’s pricing schemes, details of customer contacts, its markups, and employee information are examples of possible trade secrets under the MUTSA.

During an exit interview, an employer should ask about the employee’s new job, particularly if the employee is going to a competitor. The parties should also go over any policies, procedures, or fiduciary duties regarding the company’s confidential information. Finally, and perhaps most importantly, the employer should find out what information, if any, the employee is attempting to take with him or her; and in the event the employee had access to trade secrets or other confidential information, identify all such information and have the employee acknowledge in writing that all confidential information will be returned prior to his or her departure.

If you are an employee, you may not be obligated to participate in an exit interview unless it’s in your employment contract. But even if you’re not obligated, an exit interview can be beneficial because it gives you an opportunity to discuss in advance what information, if any, you’d like to take with you. Often times, disputes (and lawsuits) can be avoided by a proactive discussion.

The above is for informational purposes only and not intended to be a complete or exhaustive summary on MUTSA or best practices for taking or participating in an exit interview. The appropriate or best strategy, including but not limited to whether you should take or participate in an exit interview, will depend on the facts of each case. Thus, readers should not act upon this information without seeking professional advice.

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