Bimbo Knows the Muffin Man . . . and Teaches Him a Lesson in Trade Secrets

Bimbo Knows the Muffin Man . . . and Teaches Him a Lesson in Trade Secrets

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 writes:

     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.

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