Are Employees Committing Industrial Espionage?

The Federal Bureau of Investigation has initiated a new campaign to thwart the increased use of  industrial espionage.   According to a recent article in the Wall Street Journal ,  the new campaign will focus on the prevention of  corporate espionage.   The FBI will feature billboards in nine cities, pronouncing, "Protect America's Trade Secrets."

As many businesses can tell you, corporate espionage has been on the increase during the last few years.   From a strategic viewpoint, among the more unscrupulous companies, there is greater benefit in stealing another company's trade secrets than conducting the costly and time consuming research and development on their own.

There is few things worse as is the case with one company that approached Corra Group, where they discovered certain trade secrets that put them at the top of their industrial sector had been compromised through industrial espionage.  As with a good many cases, the theft of proprietary information came from within the company.   Other methods are through hacking into the computer systems, planting a mole, or just plain old burglary.  Despite what is depicted in glitzy Hollywood movies, sometimes breaking into a business is neither as high tech or as difficult as the film would make it out to be.    And, of course,  a good many industries, as headlines prove over and over, have relatively insecure security systems that allow for hacking, data theft and cyber invasions that could seriously compromise the new technology or physical product.

The Vice President who had contacted us was simply horrified.   He  related that it could have been any one of a half dozen former employees.   He was asking us to see where they relocated, to ascertain if they were hired by his competitors on the basis of their recent theft.  He wanted to learn where all six had lighted.   He wanted us to conduct background checks on their past affiliations, corporate associates and the possible companies they did business with.   This kind of research, believe me, is beyond the pale of  employment screening, but in a changing word it is proving increasingly viable.

Of course, much can be prevented by instituting stronger security, better firewalls, and more thorough screening of any employment candidate that would be given access to sensitive data or proprietary information.  Sometimes, with certain employees, it is the first time they have decided to commit to corporate espionage.  With others, it is a more common practice, and careful reference verification may reveal that all was not well at their last place of employment.   Some managers will talk about such thins, but some will be reluctant, fearing lawsuits.  It just depends.

When screening a candidate or a current employee, besides criminal and civil records, it doesn't hurt to conduct their MVR or Motor Vehicle Driving Records.   You may not care if they ran a stop sign, but if you find a couple, few DUI's on their driving record, you may have cause for concern.  While credit checks are restricted in an increasing amount of states, and while most people with bad credit are not necessarily going to commit industrial espionage, background screening is not comprised of just one search or another.  It is a series of searches that when accumulated and examined separately and then overall, that may reveal the red flags of a troubled or suspect personality.   Work habits and behavior around other employees can be indicators.

The trouble with most indicators--they are often ignored.  It is only after the fact that people pay attention to all the little red flags.  Or big ones.   And, believe me, chasing after someone, after they steal, is a lot tougher and a lot more costly than preventing access up front.  So when things don't look right, chances are they are not.   Don't rationalize or ignore the signs.

As I noted earlier, industrial espionage can be cost effective.  If you lack scruples, it is cheaper to steal a good idea than try to produce it yourself.  Look at all the knockoffs on this world, and it is easy to see it is done all the time.   It is a practice in this semi-recession,global economy, post modern world of ours that is not likely to diminish any time soon.   While external theft, burglary is one practiced used, and while cyber attacks and hacking is still another, as I noted earlier, most industrial espionage comes from within.

As a business, you have trade secrets.  You have proprietary information and important databases.   People want them.  Competitors and others who just steal for the thrill of it.  Or for some seemingly higher minded person.   As they say in boxing, "protect yourself at all times."


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Comment by Valentino Martinez on June 12, 2012 at 12:23pm

Timely post, Gordon--because industrial espionage is always a threat--even in places where some would consider protecting in-house knowledge not a big deal. If there are business ramifications it is a big deal.  The entire "classified" - "eyes only" concept is now a political football in the our country's Presidential race today.

Yes, some employees are committing industrial espionage (with the proper motivation) because all employees have access, or can gain access, to proprietary information--some more than others.  In Aerospace and Defense industries the "lockdown" protection of such information is significant, yet some info steal manages to trickle out.

And it's not just "employees" doing the damage.  With the prolific use of "outside" contractors "inside" the problem is magnified. 

Word to the wise:  "protect yourself at all times."


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