3 Ways to Prevent Data Theft by Contractors

Many companies want to hire contract employees but are worried about the potential theft and leaking of sensitive company data.

Even the National Security Agency experienced such a leak from its own former contractor Edward Snowden. Snowden, 29, has identified himself as the primary source of leaked information about NSA surveillance, reports The Washington Post.

Your business may not be as critical to national security as the NSA, but your trade secrets still deserve to be safeguarded from contractor theft. Here are three things you may want to consider:

1. Use Non-Disclosure Agreements.

Non-disclosure agreements (NDAs) are contracts which obligate the party signing the agreement to keep the information that is designated as confidential a secret. NDAs apply not only during a contractor's employment with your business, but also when he leaves.

NDAs can be used to protect trade secrets and inventions even before you have patents or trademarks on your intellectual property.

Subject to some exceptions, NDAs can even protect information that cannot be trademarked, like recipes. So a smart cupcake bakery owner can include proprietary methods or recipes as confidential under the agreement for contractors to sign.

2. Limit Data Access.

Contractors are more like to misuse or steal data to which you've allowed access, so limiting contractors' access to data is a great way to control data theft.

Data theft is often the result of actual theft (e.g., company mobile devices and laptops being stolen) so it is important to limit contract employees access to these devices outside of the office if possible.

You may also want to create separate contractors' accounts to access your business' systems -- accounts that do not have the permissions of a full-time employee and do not have the ability to download and store data.

3. Maintain and Enforce a Data Theft Policy.

While contract employees may be responsible for theft, your entire business could benefit from a data theft policy which outlines the investigation and disciplinary steps after a report of misuse or theft.

In all cases of theft, it is important to alert the police in addition to terminating a sticky-fingered contractor; don't let a former contractor come back to ruin your company because you felt bad about calling the cops.

While you can always sue a former contractor for misappropriating your data, having a solid data theft policy can often scare potential thieves into leaving your data where it belongs.

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Related Resources:

• Be Careful When Hiring a Contractor (FindLaw)
• Independent Contractor Agreements: Top 5 Things They Can Do for You (FindLaw's Free Enterprise)
• How to Hire an Independent Contractor (FindLaw's Free Enterprise)
• Hiring Independent Contractors: Overview (FindLaw)