The answer to the question posed by the title of this article is clearly “yes.” But “to what extent?” and “through what means?” are questions with less settled answers. Recently, New York Commercial Division Justice Shirley Werner Kornreich ruled that there can be no claim under New York law for the misappropriation of information that does not qualify for trade secret protection. Young Adult Inst. v. Corp. Source, 2018 NY Slip Op 30640(U), ¶ 18 (Sup. Ct. N.Y. Co. April 11, 2018). Otherwise, she reasoned, the prerequisites for claiming trade secret misappropriation would have little meaning and the floodgates could open for anticompetitive litigation seeking to prevent the use of information that is within the public domain. The Young Adult ruling, though based on New York common law, is consistent with court decisions in other states applying the preemption provision of the Uniform Trade Secret Act (the UTSA). (New York now stands alone as the only state that has not adopted some variation of the UTSA.)
These cases leave open the tougher questions of whether, to what extent and by what means the law should allow the owner of information that does not rise to the level of a trade secret (“mere confidential information” or “MCI”) to protect that information from use or disclosure by others. Most commonly, many or even most businesses in this country have adopted contracts, policies or procedures that say employees cannot use or disclose information belonging to their employer. These provisions are rarely if ever limited to trade secret information. Rather, they usually prohibit employees from using or disclosing “trade secret, confidential or proprietary information,” with examples or categories that often extend well beyond true trade secrets. The issue, then, is whether someone should be able to protect by contract what cannot be protected by trade secret law. Similarly, to what extent should the owner of MCI be able to protect that information through the assertion of tort claims, such as conversion, breach of fiduciary duty, unfair competition, unjust enrichment and conspiracy?
