Trade Secrets: Protecting Your Client Database

What Happened in a Real Case

A company was engaged in wholesale distribution. Its key account manager resigned and, two weeks later, began working for a competitor. Within the first two months, several of the company’s major clients migrated to the competitor — total losses over the year came to approximately five million rubles.

The company came to us asking: is there anything we can do?

We reviewed the documents and found that the trade secret regime had not been properly established. This made legal protection virtually impossible. We have now introduced the correct regime — the next time an employee leaves, the situation will be very different.

What a Trade Secret Regime Is

Federal Law No. 98-FZ “On Trade Secrets” establishes that information is protected as a trade secret only when mandatory conditions are met.

Four mandatory elements:

A list of information constituting trade secrets. This must be approved by an executive order of the company’s head: the client database, pricing policy, contract terms, technologies, etc.
The “Trade Secret” marking. All media carrying the relevant information (documents, files) must be marked with this designation.
Restricted access. Access to the information must be limited — only those employees who need it to do their work.
Employee acknowledgment with signature. Every employee with access to trade secrets must sign a non-disclosure agreement (NDA) or formally acknowledge the trade secret policy in writing.

Without any one of these elements, a court will refuse protection.

What Happens When Trade Secrets Are Violated

If the regime is properly documented, the employer is entitled to:

Claim damages in court. Losses are established by reference to specific contracts lost and reduced revenue in the period following the employee’s departure.

Apply for the removal of information. A court may order the offender to destroy unlawfully obtained data.

Pursue criminal liability. Article 183 of the Criminal Code provides for up to 4 years’ imprisonment for the unlawful disclosure of trade secret information (penalties were increased by Federal Law No. 175-FZ of 24 June 2025).

Practical Measures

Technical protection: restricting file copying and download rights (DLP systems), logging access to the client database.

Contractual protection: in addition to the NDA, companies sometimes try to add a clause banning the employee from joining a competitor for several months after leaving (a non-compete). Non-compete is not a codified concept in Russian law, and a direct ban written into the employment contract itself won’t hold — it conflicts with Article 9 of the Labour Code. Court practice here is genuinely inconsistent, not steadily softening: in one case a court upheld a separate civil-law agreement (outside the employment contract) that paid compensation for the non-compete period, but in another it struck down a no-poaching clause that carried no compensation at all. The practical takeaway: a bare non-compete clause in an employment contract almost certainly won’t survive in court; a separate, paid civil-law agreement has a chance — but even that comes with no guarantee.

Process protection: on an employee’s departure — an immediate handover record, device inspection, and documentation of the move to a competitor.

Frequently Asked Questions

What categories of information can be classified as trade secrets? Any information that has commercial value by virtue of being unknown to third parties: client databases, technologies, pricing policies, contract terms, and strategic plans. The list is approved by an executive order of the company’s head.

What liability does an employee face for disclosing trade secrets? Under Article 183 of the Criminal Code — a fine of up to 1 million rubles or up to 4 years’ imprisonment (3 to 7 years for serious consequences). Civil liability: compensation for losses in full, including lost profits.

How is a trade secret regime correctly introduced? Under Federal Law No. 98-FZ, four steps are required: (1) approve the list of protected information; (2) restrict access to it; (3) mark all relevant media with the “Trade Secret” designation; (4) obtain each employee’s written acknowledgment. Without any one of these steps, a court will refuse protection.

Are non-compete clauses enforceable in Russia? A court will almost certainly not uphold a direct ban written into the employment contract itself — it conflicts with Article 9 of the Labour Code. Courts sometimes recognize a separate, paid civil-law non-compete agreement, but the practice is inconsistent and there are no guarantees.

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Key employees are leaving or you’re concerned about the theft of your client database? Contact us for a consultation — we will introduce a trade secret regime, prepare NDAs, and build a protection system.