Your Employees are Using AI. Are Your Trade Secrets Safe?

Artificial intelligence is changing how we work faster than most of us can keep up. Tools like ChatGPT, Claude, and Gemini can draft emails, summarize long documents, and even write code. 

But for business owners, this developing technology comes with a hidden risk. Can employees use ChatGPT for work without compromising your competitive advantage? The short answer is: not without a clear policy. If your team is using public AI systems to get their work done, they might be unintentionally handing over your most valuable business information.

Without a clear AI employee policy, your confidential data—the “secret sauce” that gives you a competitive advantage—could be at risk. 

Here are the dangers of legal risks of using AI in business, how it impacts your trade secret protection here in North Carolina, and why an acceptable use policy for AI is a necessary safeguard for your company in 2026.

How Public AI Tools Can Compromise Your Business Data

The biggest risk isn’t necessarily that your employees are using AI; it’s what they are feeding it. When someone pastes a client list, a snippet of proprietary code, or a confidential strategy document into a free, public version of an AI bot, that information doesn’t just disappear once they get an answer. It travels to external servers for processing and storage.

The terms of service for many of these public AI models often state that they can use the data you provide to “train” their systems. This means your sensitive information becomes part of the AI’s learning material. Your private business data could theoretically be used to answer a question for another user—maybe even a competitor asking the right questions.

This isn’t just a “what if” scenario; it’s already happening. Take Samsung’s 2023 data leak, one of the biggest trade secret leaks to come from AI so far. Employees unknowingly exposed sensitive data, including meeting notes and source code, just by pasting it into ChatGPT. It shows just how quickly confidential information can slip out the door without proper security measures and clear policies in place.

How AI Impacts Trade Secret Protection Laws in North Carolina

What makes your business unique? Maybe it’s your client list, a manufacturing process you perfected, a special recipe, or detailed financial data. This is your proprietary information, and under the law, it can be classified as a trade secret. Both federal law, through the Defend Trade Secrets Act (DTSA), and North Carolina’s Trade Secrets Protection Act (TSPA) provide legal protection for this kind of information.

However, this protection is not automatic. To qualify under the DTSA, you must demonstrate that you’ve taken “reasonable measures” to safeguard your information. Similarly, the TSPA requires trade secrets to be actively protected through efforts deemed “reasonable under the circumstances” to ensure their confidentiality. This is where AI usage can become a significant legal issue.

If your company allows employees to freely paste sensitive data into public AI tools without any policy against it, a court could decide that you failed to take those “reasonable measures.” Essentially, if you haven’t made an effort to protect your information from being scooped up by an AI model, you might lose the ability to legally defend it as a trade secret if it gets stolen or leaked. A lack of policy could unintentionally kill your trade secret protection.

What Should Be Included in an AI Acceptable Use Policy?

The most effective way to address the legal risks of using AI in business is to establish a clear Acceptable Use Policy. This policy should serve as a guardrail for your employees, letting them know exactly how they can (and can’t) use AI tools at work. It’s a must-have for protecting business data in 2026.

A strong policy should address several points:

• Define Confidential Information: Be clear about what counts as proprietary. This can include client lists, financial data, marketing strategies, unreleased product details, and any other sensitive data.
• Prohibit Use of Public AI for Sensitive Data: Explicitly tell employees they cannot put confidential information into public, non-enterprise versions of generative AI tools.
• Specify Approved AI Systems: If you want your team to use AI, tell them which tools are approved. Many AI providers offer enterprise versions with enhanced security and assurances that your data won’t be used for training. Your policy can direct employees to use only these secure systems.
• Outline Guidelines for AI-Generated Content: Establish processes for reviewing and verifying AI-generated content to ensure accuracy and quality. It should also clarify ownership of any content created using company resources.
• Implement Access Controls: Your policy should work hand-in-hand with your technical security measures. Limiting access to sensitive information ensures that only authorized personnel can view it, reducing the chance of an accidental leak through an AI tool.

Putting an AI policy in writing is a clear way to demonstrate your commitment to protecting trade secrets. You are creating a record that shows you are taking those “reasonable measures” to protect your trade secrets.

Take Action to Protect Your Intellectual Property

AI is here to stay, and so is the need to protect your business. Taking proactive steps now ensures your trade secrets remain secure and your competitive edge stays sharp.

At Dozier Miller Law Group, we can help you navigate the legal risks of these new technologies and help you draft a practical Acceptable Use Policy for AI that protects what you’ve built. 

If you’re unsure about how to keep your proprietary information safe or need help strengthening your trade secret protections, get in touch with our business law attorneys today.