Protecting Your Business’ Customer Lists

When we think of the valuable items of our businesses, we tend to think of the obvious, physical items. Machinery, tools, vehicles, or inventory may come to mind. Certainly, any special intellectual property, such as a secret recipe, or a special way of handling certain problems that you have developed may also come to mind.

But one of the most obvious items of value to your business may be one that you may have overlooked: your customer lists. Many companies put significant time, energy and resources into finding customers, developing them, nurturing them, and growing them. Many may have special ways of finding them, and their own special techniques for keeping and servicing them.

Customer List Problems

But despite the value of customer lists, you may be surprised at how easy it is to have those lists taken from you. A disgruntled employee or partner can easily escape with your valuable customer database, and siphon off your customers if precautions aren’t taken.

The law is pretty understanding when it comes to trade secrets that constitute intellectual property. The law recognizes that you’ve put time, expense, and trial and error into perfecting how you do business, and the law will generally protect your processes, procedures, or agreements as being valuable trade secrets.

But the law isn’t so understanding when it comes to customer lists. In general, if a list can be culled by others, or your clients are available to the general public, it isn’t protected. For example, if you have developed your list of people from the phone book, you can’t claim your list is a trade secret, because anybody can obtain those names.

If your lists don’t include current, active customers, they may not be protected. For example, an air conditioner business’ list of customers may not be protected because those customers can use any company they want, any time they want, and they have no active contracts or obligations to any one company.

Generally, the more technical or precise your business is, the more chance your list is protected. If you service 18-wheelers, you may have put time and money into identifying companies that have 18-wheelers, thus giving your list protection. But if you are a landscaper, you may not have customer list protection because it’s easy to see who has and doesn’t have a lawn.

Protecting Customer Lists

You can take steps to protect your lists by treating your list as protected. If you shield your customer list from the public, avoid giving it to lower level employees, and document the steps taken to obtain your lists, it’s more likely you’ll get protection. Employees can even sign agreements saying any lists they are privy to, is protected.

Protect all of your business’ assets–even those you may not think about at first. Contact Tampa business attorney David Toback to discuss your needs and discuss how to make sure that what you’ve built remains safe.