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You pick up the phone and it’s one of your top clients, which has just been served with a complaint and notice of a temporary restraining order hearing in three days. The reason: Your client recently hired the former plant manager of one of its main competitors. The competitor is claiming the plant manager is now and/or soon will be divulging trade secrets to your client. After working 48 hours straight, you have determined that no evidence exists that the manager has actually divulged any secrets or that he intends to do so. You are fully confident that you can demonstrate this to the court. Are you ready for the hearing? Almost. You must still be prepared to rebut the plaintiff’s argument concerning “inevitable disclosure.” The Inevitable Disclosure Doctrine is relied upon when a court prohibits a former employee from working for a competitor even though no evidence exists of actual misappropriation of trade secrets. Instead, the court determines that the employee cannot perform his new job without “inevitably” disclosing his prior employer’s confidential and/or trade secret information. In some respects, the doctrine is a Poor Man’s Non-Compete Agreement. In Pennsylvania, this doctrine has never been adopted in any reported case. The closest a court has come to relying upon the doctrine was in Air Products & Chemical Inc. v. Johnson. In that case, a trial court allowed a former employee to work for a competitor but restricted the type of work he could perform. While the trial court used the term “inevitable,” the Superior Court, while upholding the decision, stated it would not use the term or adopt the reasoning of inevitable disclosure. Since the doctrine has not been adopted in Pennsylvania, counsel must, inevitably, look to the case law of other states or districts when it arises in a trade secret case. Only eight states have clearly adopted the Inevitable Disclosure Doctrine. Six states have adopted a very limited version of the doctrine, and three states have rejected the doctrine outright. In seven of the eight states that have adopted the Inevitable Disclosure Doctrine, the two key factors were that the employees had worked for their former employers for a substantial period of several years and the employee’s intent. Even in these cases, the courts have held that the doctrine “should be applied in only the rarest of cases.” The courts looked to the intention of the defendant employer and employee regarding actually disclosing the trade secrets. One court stated that strong evidence and findings that the employee and employer were soliciting the former employer’s customers were more than sufficient to show a threatened or inevitable misappropriation of trade secrets. Another factor courts look to is the nature of the employee’s new job function. A court in Arkansas, in denying a request for a preliminary injunction, found that a former employee could work for a competitor without using confidential information regarding his former principal. Likewise, in Minnesota, a court found that there must be evidence of a substantial threat of impending injury before injunction will issue. Three states — California, Florida and Virginia — have rejected the Inevitable Disclosure Doctrine as an ex post facto covenant not to compete. Although California has adopted the injunctive provision of the Uniform Trade Secrets Act, it has a strong public policy favoring employee mobility. California courts have held that the “doctrine is contrary to California law and policy because it creates an after-the-fact covenant not to compete restricting employee mobility.” In a very thorough opinion, one Florida court strongly criticizes the doctrine and rejects it by saying, “Absent evidence of actual or threatened misappropriation, a court should not allow a plaintiff to use inevitable disclosure as an after-the-fact non-compete agreement to enjoin an employee from working for the employer of his or her choice.” Because misappropriation is an intentional tort, the Florida trial court in Del Monte Fresh Produce Co. v. Dole Food Co. Inc. held that the plaintiff must show more than just mere possession of a trade secret in order to warrant an injunction. The court found that no threat of misappropriation existed because the defendant did not take any documents or other confidential information with him and no evidence existed that he even tried to take such information with him. Rather, the defendant was found to have merely taken with him his knowledge and experience, after he testified that he could not even recall the exact trade secret information with precision. The court highlighted the fact that the defendant and his new employer were very aware of the defendant’s confidentiality obligations with plaintiff. Since this doctrine is only applied in limited circumstances, counsel must focus on several issues when arguing for or against its use by a court. First, obviously, you must determine if your jurisdiction has already accepted, rejected or even addressed the doctrine. Counsel should also check the surrounding venues, as well, to see if other states or circuits have adopted it. Second, when defending a trade secret case, meticulously review every allegation in opposing counsel’s pleadings and declarations. This doctrine will most likely be argued in a temporary restraining order or preliminary injunction setting. Therefore, you must pick apart your opponent’s affidavits and declarations and determine how long the employee worked for his prior employee, what his prior background/experience was, what confidential or trade secret information is in question, what the job similarities and responsibilities are, whether any evidence of prior disclosure exists, and whether any evidence information was taken. Third, specifically compare the two businesses and how they operate. What are the specific trade secrets alleged to be potentially disclosed? Does the new employer need the trade secrets, and how “inevitable” is it that they will be disclosed? Does your opponent plead any evidence or facts that support the claim of inevitable disclosure? Most important, what are the job titles, duties and responsibilities for both the former and current jobs held by the employee? Finally, always request that the court allow expedited discovery so that you can explore your opponent’s claims. The court has wide discretion to manage the timing, sequence and volume of the discovery process. Numerous courts have held that it is appropriate to grant at least limited discovery for purposes of preparing for preliminary injunction proceedings. Proper preparation should allow you to convince the court to ignore this doctrine. If you are interested in submitting an article to law.com, please click here for our submission guidelines.

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