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Misappropriation of Trade Secrets by Departing Employees or Other Agents

04.02.12
  1. Introduction

This paper discusses a common business tort: misappropriation of trade secrets by departing employees or other agents. A trade secret may be any information that can be used to economic advantage. However, to be entitled to trade secret protection, such information must be maintained as a secret. Valuable proprietary information can be lost when employees or other agents depart to a competitor. Accordingly, protection of such proprietary information must begin at the onset of the employee‘s or agent‘s employment and continue throughout the employment. Protection and enforcement of trade secrets is discussed for various jurisdictions with an emphasis on recent cases in California and Texas.

  1. Misappropriation of Trade Secrets by Departing Employees or Other Agents

Most states have adopted some form of the Uniform Trade Secret Act (UTSA), however, Massachusetts, New Jersey, New York and Texas have not adopted the Act. A few states including Texas and New York refer to the Restatement of Torts.

Preliminary injunctions may be obtained in special circumstances to prevent irreparable harm to the trade secret owner. Examples of recent preliminary junction cases in California and Texas are discussed below.

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