Employers who are zealous
about keeping their trade secrets under wraps face their toughest challenge
when a key employee jumps to the competition. Under what circumstances, they
wonder, can the employee actually be stopped from taking that new job? In this
Analysis, Joel Leeman analyzes the latest case on this interesting issue. He
A federal appeals court
recently suggested that it is hard to impede employee mobility, but not as hard
as it once seemed. An employer need not show that the new position would result
in "inevitable disclosure" of its trade secrets. In Bimbo Bakeries v. Botticella, 2010 U.S. App. LEXIS 15314
(3rd Cir., July 27, 2010), the Third Circuit said it is enough if the facts
show a "substantial threat" of misappropriation.
. . . .
The importance of this case
is the lighter burden placed on employers who fear that an ex-employee's new
job will jeopardize their confidential business information. The Third Circuit
corrected a misimpression (fostered by its own precedent) that employers in
that situation must prove that it would be "virtually impossible" for
the likes of Botticella to work for a competitor without disclosing trade
secrets, or that disclosure is inevitable.
Instead, an employer can win
an injunction, as Bimbo did here, by presenting facts demonstrating a
"substantial threat" of trade secret misappropriation. This is a much
easier mark to hit.
Access the full version of Bimbo Knows the Muffin Man . . . and
Teaches Him a Lesson in Trade Secrets with your lexis.com ID. Additional fees
may be incurred. (approx. 4 pages)
If you do not have a lexis.com ID, you can purchase the
Emerging Issues Analysis content through our lexisONE Research Packages