I opened a new pharmacy a couple of years ago. I think that my business model, workflow, strategies, etc are unique in many ways. [PLS is aware of the type of pharmacy and its business model but cannot go into detail]. I have to admit I stole pharmacists and technicians as well as other staffing from other pharmacies by offering better pay and benefits. Now, my competition is luring these people back with pay and benefits that exceed mine. I fear that if they explain my business model, strategies, etc to my competition, that this could seriously impact my business. What can I do?
With the current dearth of employees, your concern is real.
What you are concerned about is that your employees could leave, explain your model and strategies to your competition and see your unique business copied all through your area.
Proprietary information is knowledge that belongs to a business (or other entity) that is 1) the basis for the way the business is run and 2) is not generally known to the public. Thus, proprietary information is often secret within a business.
What you need to do is you must protect this proprietary information from being spread beyond your doors.
Leaking or spreading proprietary information is legally actionable. What you would have to do is 1) discover that the information is now known to another entity 2) see that the other entity is using the information to your detriment and 3) calculate the economic loss you have suffered from this leak.
If the other entity is or should be reasonably aware that the information given to it is proprietary that entity could be sued for your economic loss. However, you have the uphill battle of proving that this entity should not have used information provided to it.
The better—and much easier—route is to have your employees sign a Non-disclosure agreement as well as a non-compete agreement. This should be done by all employees with even a passing knowledge of anything proprietary. (A better idea would simply be to have all employees sign these even if their job has no part of proprietary information; you never know what they might learn or see.)
A non-disclosure agreement is just that. It states that the employee may not tell or share anything proprietary about the business to anyone outside the business. The NDA will then go on to say that the employee could be held legally liable for any economic loss (as well as the entity using the information).
How long does the NDA last? Many courts hold that an NDA may have no expiration, unless one is written into the agreement. Thus, years down the road, the employee is still held to the NDA. One exception that has been carved out by courts is that an NDA becomes void when the proprietary information is made public, but the employee should investigate the circumstances that made the information public before sharing on her own.
Accompanying the NDA is a non-compete agreement. The NCA tells an employee that she cannot go to work for any business where her presence could directly or indirectly affect the pharmacy she just came from. Many courts uphold the NCA as an extension of the NDA.
PLS once had a case where a pharmacist wanted to leave a home infusion pharmacy and go to another home infusion pharmacy. The two pharmacies did different types of infusions and were not in competition. PLS and ultimately a court told the pharmacist that she could not go to the second pharmacy. Pharmacist had an NDA and NCA. Our opinion, and that of the court, was that pharmacist had proprietary knowledge that she might not ultimately be able to withhold from her new employer. The pharmacy had the skills and the equipment; her knowledge could directly affect the pharmacy she had left. In essence, the court ordered her to leave the new employment.
Pharmacists, especially in this crowded market, are looking for ways to provide a service that beats the competition. This may be something in the way of a new business model or strategy not previously known or generally seen. Protect your secrets.