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Trade secrets & confidential information #12
by Ross Runkel at LawMemo
Defining a "trade secret" is difficult, and courts don't always agree on what it means.
The general idea is that we are dealing with something unique and secret that gives the employer a business advantage over competitors who don't know about it.
Examples: Secret chemical formula, manufacturing process, pattern for a machine, tool, unique plan, information, customer list.
Excluded from the list is the general knowledge that an employee learns from the employer, even if the employer spent a lot of money to train the employee.
First, it has to be a secret. If the employer allows knowledge to get out into the public domain, then it's no longer a trade secret. If an outsider gets knowledge in an innocent way, he or she can use the information. (Be careful - If there is a patent or copyright, the employer will still have protection.) In order to be a secret, the employer must take reasonable steps to keep it a secret.
Second, It has to be something unique, original, or different from the ordinary information that is generally available to others in the same business.
Employers often enter into express non-disclosure agreements with employees. This helps define what is and what is not a trade secret, and it is one of the ways the employer takes steps to maintain secrecy. Courts usually enforce these agreements if the information is not generally available in the outside world and if the employer has taken steps to keep it a secret.
Non-employees can also be liable for misappropriating trade secrets. If an employee quits and goes to work at another business, and that business obtains the trade secret through that employee with knowledge of where it came from, then that business can be liable to the original employer.
Coming next: Whistleblowing #13: Employment Law 101
