Corroon & Black-Rutters & Roberts, Inc. v. Hosch - 109 Wis. 2d 290, 325 N.W.2d 883 (1982)

Rule:

Some factors to be considered in determining whether given information is one's trade secret are (1) the extent to which the information is known outside of his business; (2) the extent to which it is known by employees and others involved in his business; (3) the extent of measures taken by him to guard the secrecy of the information; (4) the value of the information to him and to his competitors; (5) the amount of effort or money expended by him in developing the information; (6) the ease or difficulty with which the information could be properly acquired or duplicated by others.

Facts:

Defendant, Jack Hosch, was employed as a sales insurance agent with plaintiff, Corroon & Black-Rutters & Roberts, Inc. Defendant has signed a covenant not to compete. During his employment, defendant was responsible for procuring and servicing insurance accounts for a large number of Corroon & Black's customers. When the covenant not to compete ended, defendant left plaintiff to work for a competitor. Shortly thereafter, plaintiff’s president learned that numerous agent-of-record letters had been issued in favor of defendant and his new agency. Consequently, plaintiff commenced an action against defendant, alleging that the latter had unlawfully used "privileged and confidential information in the nature of trade or business secrets" from Corroon & Black's files to solicit his former customers. The jury found that the insurance agency's customer list was confidential and that defendant had made unauthorized use of them. The trial court approved the verdict. On appeal, defendant contended that there was no trade secret involved. 

Issue:

1. Under the circumstances, could the plaintiff recover damages from the defendant?  
2. Could the insurance agency's customer list be considered as a trade secret? 

Answer:

1) No. 2) No.

Conclusion:

The court noted that there was no covenant not to compete in effect when defendant began working for a competitor of Corroon & Black. Since the protection of a covenant not to compete was not available to Corroon & Black, the outcome in this case necessarily turned on the question of whether the information taken by plaintiff was a trade secret – an issue which was a question of law for the court. Based on existing jurisprudence, the court held that an insurance agency's customer list was not a trade secret. According to the court, some factors to be considered in determining whether given information was one's trade secret were: (1) the extent to which the information was known outside of his business; (2) the extent to which it was known by employees and others involved in his business; (3) the extent of measures taken by him to guard the secrecy of the information; (4) the value of the information to him and to his competitors; (5) the amount of effort or money expended by him in developing the information; (6) the ease or difficulty with which the information could be properly acquired or duplicated by others. An insurance agency expiration list did not meet the six-factor Restatement definition of a trade secret. Each of the six factors should indicate that a trade secret existed if the information was to be afforded legal protection.