AMP, Inc. v. Fleischhacker - 823 F.2d 1199 (7th Cir. 1987)

Rule:

A trade secret is a plan or process, tool, mechanism, compound, or informational data utilized by a person in his business operations and known only to him and such limited other persons to whom it may be necessary to confide it. It is generally recognized that at the termination of employment, an employee may not take with him confidential, particularized plans or processes developed by his employer and disclosed to him while the employer-employee relationship existed, which are unknown to others in the industry and which give the employer an advantage over his competitors. On the other hand, an employee is free to take with him general skills and knowledge acquired during his tenure with his former employer.

Facts:

AMP Incorporated, manufacturer of electrical connection devices, sued defendants, Molex, a competitor, and James Fleischhacker, a former employee, claiming unfair competition and misappropriation of trade secrets. Fleischhacker had signed a general confidentiality agreement. The lower court entered judgment for defendants, concluding that, although AMP’s general confidential information was a protected business secret, AMP had not shown any likelihood that Fleischhacker had compromised the information.

Issue:

Could Fleischhacker be held responsible for using the general skills and knowledge that he acquired during his tenure with AMP in his new job?

Answer:

No.

Conclusion:

The court affirmed. However, it concluded that the lower court erred as a matter of law when it held that AMP’s general information was protected by the confidentiality agreement or otherwise. Fleischhacker could not be held responsible for using the general skills and knowledge that he used in his new job. AMP had not shown that Fleischhacker actually took or possessed trade secrets. AMP could have imposed a covenant not to compete, but failed to do so.