Private Sector Job Losses Heighten Trade Secret Risks: What Employers Should Do

The U.S. labor market is showing clear signs of stress. Employers already have announced nearly 900,000 job cuts in 2025 with projections suggesting that private-sector losses could surpass 1 million by year end. Industries under particular strain include retail, wholesale and logistics, where another 50,000 layoffs are expected before December.

As employers make difficult workforce reductions, the risk that departing employees will take valuable proprietary information with them—and use it to secure new positions or start competing ventures—has never been higher.

Key Takeaway

With unprecedented private sector job losses projected in 2025, employers face heightened risks that departing employees may attempt to use sensitive information in pursuit of their next opportunity. Proactive trade secret protection measures—implemented before layoffs occur—are the best defense against misappropriation and its costly consequences.

The Legal Risk: Trade Secret Misappropriation

• Pressure to Secure New Roles: Departing employees may feel incentivized to leverage confidential know-how to stand out in a competitive job market.
• Ease of Transfer: Portable technologies (cloud accounts, USB drives, personal devices) make it simple to walk out the door with proprietary files.
• Expanding Enforcement: Courts continue to treat trade secret theft as both a civil and, in some cases, criminal matter, with damages that can extend to lost profits, unjust enrichment and attorneys’ fees.

High-Level Protective Measures for Employers

1. Conduct Exit Interviews with Precision

• Remind employees of their ongoing confidentiality obligations.
• Secure attestations that all company information and devices have been returned.

2. Strengthen Access Controls

• Limit access to “need to know” information—especially in sensitive R&D, pricing, customer lists and strategy functions.
• Audit system permissions and cut access promptly upon notice of departure.

3. Update Trade Secret Protocols

• Clearly designate trade secrets as confidential in both digital and paper form.
• Provide refresher training on confidentiality and nondisclosure policies.

4. Leverage Contractual Protections

• Review NDAs, noncompetes (where enforceable), and non-solicitation clauses for enforceability under current law.

5. Prepare to Enforce Rights Quickly

• Establish an internal “rapid response” team including HR, IT and legal to investigate potential misappropriation.
• Seek injunctive relief promptly—courts are more likely to grant injunctions when employers act decisively.

Brownstein’s Intellectual Property team can assist with risk audits, policy updates and rapid response strategies to ensure your business remains protected. Please contact us to learn more.

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This document is intended to provide you with general information regarding trade secret risks. The contents of this document are not intended to provide specific legal advice. If you have any questions about the contents of this document or if you need legal advice as to an issue, please contact the attorneys listed or your regular Brownstein Hyatt Farber Schreck, LLP attorney. This communication may be considered advertising in some jurisdictions. The information in this article is accurate as of the publication date. Because the law in this area is changing rapidly, and insights are not automatically updated, continued accuracy cannot be guaranteed.