The Sixth Circuit recently ruled, in an unpublished opinion, that a former employer could recover against a former employee for breach of a confidentiality agreement, even if the information the former employee took, used, or disclosed did not qualify for trade secret protection.<\/p>\n
In Orthofix<\/em>, the plaintiff company was a medical device company that markets bone growth stimulators to health care providers. \u00a0The defendant employee was a sales person for the plaintiff for twelve years.\u00a0 At the time of his hiring, the defendant employee signed a nondisclosure agreement, which he reviewed with an attorney and on which he specifically underlined the definition of \u201cconfidential information.\u201d\u00a0<\/p>\n In 2012, the defendant employee and another negotiated with the company\u2019s competitor to leave the company to work for the competitor.\u00a0 In the course of doing so, the defendant sent to the competitor \u201cmuch of the information that [the employee] had acquired over twelve years.\u201d \u00a0This information included customer lists and the company\u2019s sales strategies and techniques.\u00a0 On the employee\u2019s departure, the employee retained much of the company\u2019s information, both in tangible form and in his memory, and no one from the company instructed him to destroy the information.<\/p>\n The company sued the employee and alleged breach of the nondisclosure agreement and theft of trade secrets under the Texas Uniform Trade Secrets Act.\u00a0 The district court held that the information at issue did not qualify for trade secret protection and ruled against the company on both the breach of nondisclosure agreement claim and the misappropriation of\u00a0trade secrets claim.<\/p>\n The Sixth Circuit reversed, holding that the employer did not have to show that the information at issue was a trade secret to be entitled to protection under the nondisclosure agreement.\u00a0 The nondisclosure agreement\u2019s definition of \u201cconfidential information\u201d was broader than just trade secrets.\u00a0 The Court\u2019s ruling included tangible information and information that the employee retained in his memory and used in competition against the company.<\/p>\n This decision is an important reminder that the protection of confidential information is not always limited to traditional \u201ctrade secrets.\u201d\u00a0 In this case, the nondisclosure agreement\u2019s definition of \u201cconfidential information\u201d was broader than the strict definition of a \u201ctrade secret\u201d under the Uniform Act.\u00a0 Because such a contract was enforceable under Texas law, the Sixth Circuit ruled that the employee had breached the nondisclosure agreement, even without violating the Uniform Act.<\/p>\n Although the Court found, under the circumstances of the case, that the information the former employee disclosed was protectable, the Court reiterated that protectable \u201cconfidential information\u201d does not include publicly available information or an employee\u2019s general skills.<\/p>\n This decision underscores the importance and value of nondisclosure agreements.\u00a0 Entities holding confidential information should guard it by way of well-drafted nondisclosure and confidentiality agreements with their employees, consultants, vendors, and other entities with whom they do business.<\/p>\n Read Gregory’s bio<\/a>. View all posts by Gregory S. Bombard<\/a><\/span> \u2192\n<\/div>\n Read Michael’s bio<\/a>. View all posts by Michael R. Gottfried<\/a><\/span> \u2192\n<\/div>\n","protected":false},"excerpt":{"rendered":" Michael R. Gottfried, Shannon Hampton Sutherland, and Gregory S. Bombard Orthofix, Inc. v. Hunter, —- Fed. Appx. —–, 2015 WL 7252996, at *1 (6th Cir. Nov. 17, 2015). The Sixth Circuit recently ruled, in an unpublished opinion, that a former employer could recover against a former employee for breach of a confidentiality agreement, even if … <\/p>\n![\"Greg](\"http:\/\/blogs.duanemorris.com\/tradesecretslaw\/wp-content\/uploads\/sites\/18\/2015\/12\/bombardgregory.jpg\")
<\/a>About Gregory S. Bombard<\/h2>\n<\/a>About Michael R. Gottfried<\/h2>\n