Friday, August 11, 2017

The Reading List (2017, No. 24): Idaho Non-Competes Featured in NYT Article

Non-Compete and Trade Secrets News for the week ended August 11, 2017

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The New York Times Continues to Explore Non-Compete Agreements

Over the past few months, The New York Times has published several stories and editorial pieces concerning non-compete agreements than I ever can recall. The latest, published July 14, takes readers far away from New York to Idaho, where Conor Dougherty explores the change in the law that makes it much more difficult for employees to contest the validity of restrictive covenants. the NYT piece explores the motivations for how the law changed to favor employers and the lobbying efforts behind the legislative efforts.

Idaho's statute is focused on "key employees," which actually includes independent contractors too. The applicable definition is fairly broad and applies automatically to the top 5 percent in terms of wage earnings. But it goes beyond that to include those who "have the ability to harm or threaten an employer's legitimate business interests."

The statute does more. It creates a series of rebuttable presumptions concerning reasonableness. For time, 18 months is presumed reasonable. For territory, it's where the key employee provided services. And for activity scope, reasonableness is presumed if the covenant is limited to the type of employment that the key employee conducted. The upshot of the Idaho law is this: the employee has the unenviable burden of proving a negative, that he or she is incapable of impairing the employer's legitimate business interests.

This sort of burden-shifting approach turns non-compete law on its head. The employer, seeking to restrain trade, always should justify and establish both the legitimate business interest (beyond mere protectionism) and the imminent harm it faces to that interest. The Idaho approach is reminiscent of the way courts have analyzed 14th Amendment challenges to economic legislation through rational-basis review. That standard, which fairly can be called judicial abdication and not judicial review, requires a challenging party to disprove every conceivable basis which might support the law. And in some jurisdictions, a legitimate basis might even be economic protectionism or a pure economic interest.

The dynamism of our economy requires much more engagement by the judiciary to assess, meaningfully, the asserted interest and justification for a non-compete clause. Requiring the employee to bear the burden of proving he or she won't harm the employer will lead courts to embrace covenants that are too protectionist and safeguard against only theoretical or irrationally perceived harm.

Contractual Injunction Clauses

Non-compete agreements contain a number of important terms beyond the restrictive covenants themselves. Clauses pertaining to fee-shifting, jury trial waivers, arbitration, and venue play a big role in determining how a case gets litigated and decided.

One standard clause that receives a lot of intention is the "stipulation" that a breach necessitates an injunction. Put another way, employers try to use these clauses to convince courts that they need not prove the essential elements of an injunction. They, instead, can point to the agreement itself as the basis for equitable relief.

Most courts are not receptive to this argument, finding that contractual clauses (particularly since they're not negotiated) must give way to court rules and procedures concerning injunctions. But not all courts say that. The Court of Appeals of Minnesota in St. Jude Medical, Inc. v. Carter, found an injunction remedies provision valid, relying on a general contract principle that court must enforce unambiguous terms. The problem with this reasoning is that it equates a non-compete with a freely bargained-for, non-adhesive agreement. In reality, a non-compete is not a conventional contract but a restraint of trade. Courts should always assess whether a moving party has met its burden to obtain an injunction, regardless of any contractual stipulations.

A copy of the opinion is available here.

Wal-Mart Trade Secrets Verdict

In April, Wal-Mart was hit with a jury verdict in excess of $12 million for misappropriating technology pertaining to e-commerce software. The trade-secret owner, Cuker Interactive, thereafter moved for entry of a permanent injunction as is available under the Arkansas Trade Secret Act. The district court agreed that such an injunction was available to protect the development time Wal-Mart avoided by misappropriating Cuker's technology. The district court's opinion is an engaged discussion on the availability of injunctive relief even after entry of a damages award.

But Cuker's win was slightly tempered. The court also reduced the damages award by over $2 million based on a limitation-of-liability clause in the contract between Wal-Mart and Cuker. 

Friday, August 4, 2017

The Reading List (2017, No. 23): The "Welcome Back, Ken" Edition

Non-Compete and Trade Secrets News for the week ended August 4, 2017

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This week, I welcome myself back!

I'm happy to be here, really I am. The time away from blogging was great, a much-needed break. What did I do? I went camping (in the rain). I ran a race (the Bix7 in the lovely Quad Cities), and - oh yea - I tried a case in Chicago. Eventful. Not as eventful as Anthony Scaramucci's month, but eventful nonetheless.

Speaking of my trial, it was a doozy. A replevin trial over a stolen shipment of Mexican cheese, which the Chicago Tribune reported on. And, you know your case is good when it merits discussion in Food & Wine magazine. Just so you know, cheese heists appear to be a thing. But I'll take the set of facts I tried over any of these half-baked schemes. And it turned out great a - a replevin judgment about three weeks after we filed the case.

It did get me thinking about remedies, because you know I'm always looking to relate something to non-compete and trade-secrets law. Readers of this blog know that I've written a lot about the ex parte seizure order available under the Defend Trade Secrets Act. That procedure allows for an early court hearing, without notice, through which a federal court can empower a U.S. Marshall to seize stolen items containing protected trade secrets.

This replevin remedy is kind of similar, though there's process afforded. A replevin is simply an interim order that directs the seizure of property. In my case, cheese. But it could in theory be the replevin of a trade secret, too, depending on the facts. In Illinois, at least, replevin is only available for chattels or tangible goods. Again, cheese would be an example. Most trade secrets exist electronically, making the statute in Illinois a somewhat poor fit. Also, most items that a plaintiff would want back are legitimate in and of themselves (a computer, a thumb drive). In a replevin case, the plaintiff must show a superior possessory right to the thing itself - not what may reside on it.

Depending on the facts, a replevin order could issue on an ex parte basis. But in the main, a replevin claim really is an early trial that is akin to a mandatory injunction proceeding, which if successful results in a sheriff seizing property. All that said, don't overlook replevin as a potential remedy in a trade secrets case.

Anyway, on to news and updates.

***

Consideration for Non-Competes in Illinois

Illinois courts continue to debate and discuss the so-called Fifield rule of continued employment. Generally, that case suggests two years of continued employment is required to serve as adequate consideration for a restrictive covenant. The case, however, is more a result of sloppy legal writing than it is a bold pronouncement of what amounts to lawmaking.

In reality, the facts of Fifield weren't particularly compelling and the case wasn't that close. The employee had been working only for a few months before leaving, meaning his tenure was far short of the rough two-year guidepost old Illinois cases had established. And there certainly was no indication he received anything more than the job itself.

The Appellate Court of Illinois (Second District) weighed in somewhat in Paul Joseph Salon & Spa, Inc. v. Yeske in affirming the grant of a temporary restraining order. There, the defendant resigned two days before the expiration of the two-year employment period. The court held that, at least when reviewing a TRO, the court did not abuse its discretion in finding the consideration adequate even if it fell just short of the two-year mark. The case is not particularly useful since it's an unpublished decision and given the "quick-look" review afforded TROs. And in fact, the Second District in prior cases never has embraced a bright-line rule of two years' continued employment. It appears the reason why is that the two-year rule only sort of exists and stems from an unforced error in the drafting of the Fifield decision.

A link to the case is available here.

From the Southern District of Illinois, we received another district court memorandum order that rejects any bright-line rule concerning continued employment. This follows a trend of cases from Illinois federal courts. In Apex Physical Therapy, LLC v. Ball, No. 17-cv-119, 2017 WL 3130241 (S.D. Ill. Jul. 24, 2017), the court noted the problem with bright-line rules and inequitable results which could occur. Interestingly, the court stated that "consideration can be comprised of benefits beyond continued employment." As with many of the federal decisions, it is not clear what the employee's agreement said about consideration or what else the employer might have alleged in addition to continued employment.

Injunction Bonds

One overlooked aspect of injunction practice in competition cases is the need for a bond. A bond generally provides the defendant some security in case the court was wrong in issuing a preliminary injunction. To be sure, those orders can inflict economic harm on the defendant. And to complicate the equation, courts must issue those orders on a relatively undeveloped record.

In my experience, plaintiffs who seek an injunction treat the bond requirement as an afterthought. It's one thing to ask for a low or nominal bond. It's quite another to be totally unprepared in contacting a broker, filling out a surety application, and getting the bond issued. Assuming a plaintiff does secure a bond, however, it must recognize that it has responsibilities to continue with the litigation responsibly. Or else, the bond may provided the defendant with a ready source of damages.

Against this backdrop, I was interested by the North Carolina Court of Appeals' opinion in Van-Go Transportation, Inc. v. Sampson County. This is not a non-compete case, but it's about the closest analogue and certainly relevant for the bond discussion. It involved a public contract for the transportation of Medicaid patients seeking health-care services. The incumbent, Van-Go, obtained a temporary restraining order against a competing ride company that prevailed in a request-for-proposal process with a municipality. As a condition of the TRO, the court required Van-Go to post a bond.

After the defendant filed a motion to dismiss, Van-Go voluntarily dismissed its case but also sought a release of the TRO bond. The trial court denied that effort and awarded the bond proceeds among the defendants. The Court of Appeals affirmed that decision, holding that a voluntary dismissal is equivalent to an admission that the TRO was wrongfully obtained in the first instance. The ruling is obviously defense-friendly, and it forces the plaintiff to take a long-view of litigation. In rejecting Van-Go's argument that it discontinued the litigation for "responsible financial business practices," it effectively tells plaintiffs that they must continue a case in which they have secured an injunction at pain of forfeiting a bond.

Depending on the amount of the bond (and the damages a defendant can prove), that may be an acceptable risk for the plaintiff to take. But it's crucial to understand that getting an early injunction comes at a price. The plaintiff may not be able to abandon its case free of charge.

A link to Van-Go Transportation can be found here.

Independent Contractors

The enforcement of non-competes against consultants and independent contractors raises a host of tough questions. After all, the essence of being an independent contractor is freedom and, importantly, freedom to control your own work. Non-competes, by definition, stifle freedom and seem to be at odds with an independent contractor relationship. Still, many companies use non-competes with consultants or sales representatives much as they would with ordinary W-2 employees.

A pair of cases reveals the limitations, though, of shoehorning consultants into the typical employment non-compete framework. The first comes from the Eighth Circuit, where a panel concluded that a company could not restrict an outside sales representative from engaging in competing crop management and fertilizer sales since he had developed his customer contacts through his own labor and without support from the company. The case, Ag Spectrum v. Elder, is a great read on the reasonableness inquiry through its analysis of the company's protectable interest. In particular, the opinion emphasized the resources that the sales representative invested and the absence of any specialized training or assistance that the principal provided. In those circumstances, a customer non-solicitation covenant was unreasonable as applied.

The opinion from the Eighth Circuit panel is available here.

In a similar case, an Ohio federal district court denied an injunction brought by a company that sells, among other things, office chair mats against a former consultant. The non-compete entered into between the company and the consultant broadly prohibited him from competing in the sale of chair mats and other products. The problem for the company is that the consultant's work, following the end of the relationship, involved those other products. And the consultant's services had nothing to do with them. Put another way, the company was trying to prevent competition for work related to products over which its consultant had no involvement.

The opinion, written by Judge Edmund Sargas, reflects a terrific example of judicial engagement - a perspective I often find lacking in non-compete cases. Judge Sargas credited the consultant's prior history in developing the same type of products that he was offering after the end of the relationship, concluding that the consultant in fact did not try to capitalize on anything confidential he learned through his contract arrangement.

Together, both cases demonstrate the difficulty of enforcing non-competes in a more arms-length relationship where the employer simply cannot demonstrate a protectable interest - that is, an interest that stems from a significant investment of time, resources, or information.

***

Much more next week, including an update on the big Wal-Mart trade secrets case and more non-compete coverage in the New York Times.

Friday, June 30, 2017

The Reading List (2017, No. 22): The "Not Precedent Opinions Can Be Interesting" Edition

Non-Compete and Trade Secrets News for the week ended June 30, 2017

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LinkedIn "Solicitations"

From the Appellate Court of Illinois this week, we got treated to a non-precedential Rule 23 order that addresses a fertile area of non-compete litigation. What effect should courts make of LinkedIn invitations to a former employee's co-workers and do those invitations amount to improper "solicitation"?

The court in Bankers Life and Casualty Co. v. American Senior Benefits LLC, 2017 IL App (1st) 160687-U, says no. Justice Simon's order gives a nice summary of similar cases from various jurisdictions and notes that the issue of "solicitation" really turns on the content of the social media post, communication, or invitation to connect. In this particular case, the LinkedIn e-mails were "generic" and mentioned nothing about either the employee's past or current employer. Nor did the e-mails invite former co-workers to leave their job or view an employment opportunity posting.

UPDATED (Aug. 8, 2017): The Appellate Court has now published the Bankers Life opinion, apparently agreeing that it sets forth a new rule of law or helps clarify an existing one. The link to the published opinion can be found here.

The Defend Trade Secrets Act and "Inevitable Disclosure"

John Marsh of Bailey Cavalieri has a very insightful post on the Third Circuit's non-precedential order in Fres-Co Systems USA, Inc. v. Hawkins. The case was a typical one in the non-compete field. Sales executive with influence over key accounts bolts for a competitor and then gets sued.

After the district court entered a preliminary injunction in favor of the employer, the Third Circuit reversed and remanded for it to consider the injunction standard more fully. As John notes, however, some of the language in the Third Circuit's order was a little loose (at best) concerning the threat of "irreparable harm" posed by the employee's move to a competitor. In particular, some of the order's reasoning implicitly suggests "inevitable disclosure" may be grounds for enjoining conduct under the Defend Trade Secrets Act. But it never comes right out and says that.

I think there's a danger of reading too much into this non-precedential order. For starters, the court lumped together its irreparable harm analysis for all the substantive legal claims, appearing never to appreciate the limits on injunctive relief under the DTSA. (The court never cites or quotes the limitation at all.) It could have instructed the district court to reconsider the irreparable harm factor in light of the DTSA, but failed to do so. Opportunity missed. That said, the plaintiff moved as well under the Pennsylvania Uniform Trade Secrets Act, which does not contain any DTSA-like limits on injunctive relief. And to be sure, the employee's non-compete would provide a separate grounds on which to analyze irreparable harm.

The Hawkins order is available here.

Trade Secrets Damages

Quantlab Financial prevailed in the Fifth Circuit Court of Appeals, which upheld a jury verdict of $11.2 million stemming from a claim of trade-secrets misappropriation. The case arose before the financial crisis and concerned the then-nascent business of high-frequency trading. The facts sounded a familiar refrain, with the evidence demonstrating large-scale copying and appropriation of trading technology source code and improper computer access by insiders.

The Fifth Circuit's unpublished disposition is located here.

Nevada Changes Non-Compete Statute

Last year, the Nevada Supreme Court in the case of Golden Road Motor Inn v. Islam held that courts could not modify overbroad non-competes, a decision I analyzed at some length. The analysis endures; the rule doesn't. Effective June 3, 2017, Nevada has a new non-compete statute that requires courts to modify overbroad non-competition covenants - a wholesale abrogation of Golden Road Motor Inn. The new law seems to strike a more employee-friendly balance, however, in that it specifically provides that a covenant cannot restrict a former employee if a customer "voluntarily chose to leave and seek services from the former employee." That's a gaping carve-out, sure to invite fact disputes about whether the customer voluntarily left. In other words, Nevada places customer choice above any countervailing employer interest.

Russell Beck's Fair Competition Law blog has an analysis of the new law here.

The Non-Compete PR Crisis

The firm Butzel Long released a Client Alert (really, a white paper) that deconstructed a number of problematic non-compete cases involving low-wage or mid-tier employees. This terrific publication addresses the Jimmy John's, Amazon.com, and Goldfish Swim School cases and offers practical guidance about how these companies could have avoided the nightmare public-relations fallout. I highly recommend this release for any practitioner who works in the non-compete and trade secrets field.

Non-Compete Crackdown in Australia?

The Guardian reports on concerns that the use of non-competes is stifling innovation in Australia, noting the concentration of market power in select industries. The report notes the same general concerns that reform advocates in the United States have, with the most compelling concern being the declining number of start-ups. This concern is all the more acute as the large technology companies continue to expand their reach into non-traditional markets - Amazon's pending acquisition of Whole Foods simply the latest example.

Uber's "Reason to Know" of Trade-Secret Theft

Android Headlines reports that members of Uber's board saw evidence of trade-secret theft concerning Anthony Levandowski's alleged appropriation of LiDAR technology from Google/Waymo. Uber was required to file an accounting with the court disclosing the names of people who may have had access to the files at the heart of Waymo's case. Uber has resisted disclosing a critical due diligence report authored by a firm before it acquired Levandowski's start-up, which likely will color Waymo's theory that Uber had "reason to know" that Levandowski was using Waymo's materials on behalf of Uber. That "reason to know" standard is crucial if Waymo is going to hold Uber liable. This discovery dispute appears to be the make-or-break moment in the biggest trade-secret action of the past several years.

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I will be taking a few weeks off from updating this blog. See you in mid-July!

Wednesday, June 21, 2017

North Carolina's Odd Rule on Appealing Injunctions

Lawyers deal with rules that are substantive and procedural.

For the most part, substantive rules - those governing the merits of a claim - contain some flexibility. That is particularly true in non-compete cases, where the flexibility is a direct reflection on the fact-specific nature of each dispute. Bright-line rules don't work as well because they are subject to manipulation. That is, they run counter to the idea that judges must rule on each case according to the facts presented.

Procedural rules, however, benefit from rigidity. Take the rules concerning time limits on when a party must file a case or respond to discovery. Without bright-line standards, there are no rules for how to conduct the litigation. The whole system becomes a game.

One area of procedural law that is smartly inflexible is appellate jurisdiction.

For many years, courts have noted that clear jurisdictional rules are essential. The Supreme Court, for its part, has worked in recent years to eliminate holes in old case law suggesting that some cases are "practically" or "effectively" final for appeal purposes.

Rules of appellate jurisdiction are crucial in non-compete disputes. Why? Most cases are practically decided at the preliminary injunction stage. In federal court, a grant or denial or injunctive relief affords the litigants a right to appellate review, even if the action itself may result in a damages trial down the road. This basis for appellate jurisdiction - known to lawyers as an "interlocutory" appeal - is crystal clear and provided for by statute.

Not all State court systems follow the federal rules, of course. In Illinois, rulings on temporary restraining orders are immediately appealable. Not so in federal court. One particularly odd rule, though, comes from North Carolina.

There, appeals from interlocutory orders - which preliminary injunctions are, because they are not "final" - are allowed only if they deprive the appellant of a "substantial right that will be lost absent review before final disposition of the case."

North Carolina's rule, as applied to preliminary injunction orders, is hard to square with the common-sense proposition that, above all, jurisdictional rules must be clear to lawyers and litigants.

What, for instance, is a "substantial right"?

That issue has led to some strange decisions involving non-compete cases. For instance, the North Carolina appellate courts have found that bona fide non-competition clauses that bar work in an industry rise to the level of a "substantial right." But they also have found that restraints on working with customers (non-solicitation covenants) do not meet this standard. The idea is that these activity-based restrictions do not prevent a person from earning a living. They merely limit it.

But what if the individual's customer contacts are her stock in trade - the way she makes her living? How is an appellate court to make that decision in the context of a jurisdictional inquiry? In fact, a 2015 case called A&D Environmental Services v. Miller noted this very problem. The court dismissed an employee's appeal from a preliminary injunction order, which limited his work with certain customers. The rationale was that the order only limited his right to earn a living but did not prevent him from doing so. In a footnote, the court then stated the problem with this approach: "We do not suggest that an injunction which merely prevents a person from working with a defined group of customers could never affect a person's substantial rights."

Good luck figuring that out when deciding whether to appeal.

I have no idea why North Carolina courts would embrace such an odd jurisdictional regime, where the appellate court must examine the substance of an injunction order to evaluate the "substantial right" argument and then determine whether the appeal from that order was jurisdictionally sound. The court's work, by that point, is already done. Why not rule on the merits? The obvious danger in avoiding the merits is that by the time the case reaches true finality, the non-compete will by over and therefore moot.

Strangely, North Carolina's appellate jurisdiction analysis may actually incentivize employers to seek narrower relief. If an employer, for instance, has two different restraints to enforce, why go for the broader non-compete if you can foreclose immediate appellate review by enforcing through a preliminary injunction only a non-solicitation covenant? This decisional process, of course, depends on the strength of the evidence and what the employer is trying to protect. But the current appellate jurisdiction case law would seem to discourage enforcement of broader, market-based restraints against salespersons whose value to a third-party employer lies in her customer contacts.

To be sure, that is an odd way for appellate courts to handle non-compete cases and injunction orders. Jurisdictional rules - as opposed to substantive ones - are meant to provide firm, clear guidance. North Carolina's framework does anything but.

Friday, June 16, 2017

The Return of the Fourth Justice: My Concurring Opinion in BHB Investment Holdings v. Ogg

My dear readers may not realize that, despite not being a Michigan attorney, I recently sat as the Fourth Justice on the Court of Appeals of Michigan for the case of BHB Investment Holdings, LLC v. Ogg, or as it should be known for eternity the "Goldfish Swim School Case."

For reasons I haven't quite figured out, my concurring opinion is not available online. Nor does the official reporter appear to recognize my contribution to the Court. So I thought I'd repost my concurrence here.



BHG Investment Holdings, LLC
d/b/a Goldfish Swim School of Farmington Hills

v.

Steven Ogg and Aqua Tots Canton, LLC

No. 330045

Court of Appeals of Michigan

February 21, 2017


Vanko, J., concurring in the judgment and ruminating about other stuff.

"You know, we're living in a society !"
-- George Costanza (Seinfeld, multiple episodes)

I have an Uncle Frank (doesn't everybody?), who is as salt-of-the-earth as you can get. He built his own house, tinkers with small engines, and drinks beer at the Moose Lodge on Sundays. Uncle Frank understands things viscerally and intuitively, in a way that speaks to a man's soul. In other words, you can't bullshit the old curmudgeon. When I see him at family gatherings, he always wants to hear what "the bastard lawyers" are up to. But he says it somewhat in jest.

The analysis of this case is no more difficult than asking a simple question: What would Uncle Frank do?

***

I know of two people named Steven Ogg. One is a character actor in TV serial dramas like The Walking Dead and Better Call Saul. The other - the defendant in this case - is a kid who works a job that pays him just enough that one day, if he's frugal, he might be able to buy a used scooter or rent a cheap apartment.

Ogg, a former competitive swimmer, teaches little urchins how to swim at a quaint little place called Aqua-Tots. I mean, seriously, how cute is that name? Unfortunately for Ogg, he used to work at Goldfish Swim School doing basically the same thing. For his work as an instructor, Ogg netted $10.50 per hour. At some point, Goldfish promoted him to a position called "deck supervisor," which sounds more walking around than swimming. For this step up the corporate food-chain, Goldfish upped Ogg's pay by $1.50 per hour. He must have celebrated with a small Slurpee.

Aside from paying Ogg what amounts to minimum-wage work, Goldfish had him sign a one-year non-compete agreement that said he couldn't teach tots to swim within a 20-mile radius. Goldfish later terminated Ogg - apparently deciding he wasn't valued enough. Ogg did what most enterprising young adults do. He found another job.

It was at that point that Goldfish lost its proverbial shit. Ogg did not - it turns out - earn his next meager paycheck by flipping burgers at McDonald's, folding shirts at the Gap, or futzing around with neighborhood landscape projects. He took the job at Aqua-Tots, which technically put him in "breach" of the 20-mile restriction Goldfish had him sign. The record does not reveal any dickering over terms or conventional contract negotiation.

For reasons that confound and amaze, Goldfish decided it was worth the money to sue and keep Ogg from working at Aqua-Tots. It was at this point that the clerk's office should have read the complaint and sent it to my Uncle Frank. He would have called up the courthouse and demanded someone toss the whole file in the shredder. No one would have been worse off had this occurred.

True, this sounds a bit third-world, but these are the times in which we live. Autocrats are celebrated these days. And a hell of a lot of lawyers' fees could have been saved. We'd end up at exactly the same place. Since Goldfish admitted that Ogg hadn't taken anything and hadn't tried to solicit parents of the kids he taught, this third-world approach would have made no difference. I could end my analysis right there.

But I won't. I'll go beyond the framework we should use - WWUFD? - and ruminate some more.

***

The majority's opinion is kind of a boring, hackneyed read. Ultimately, it reaches the right result, but whatever happened to snark and sarcasm? Has it no place in appellate jurisprudence?

I give the majority some credit. It at least engages Goldfish's arguments and tries to reason through its motivations for filing suit. I would like to have seen some acknowledgment that Goldfish filed this suit not because Ogg was some grave competitive threat, but because it wanted to send a message to other competitors to stay away from its employees. In other words, I just would have liked to have seen more skepticism through the process of judicial engagement.

So I shall be that skeptic.

Goldfish claims that by using this non-compete agreement for instructors like Ogg it was trying to protect its "techniques and ways in which we do things in our curriculum." I've seen more specificity in a Trump policy proposal. What exactly is Goldfish talking about? Ogg, again a competitive swimmer, obtained the same kind of training and knowledge that any worker anywhere would gain just by working. Every business has "techniques" and "ways in which [they] do things." That hardly justifies the need to claim secrecy over everything or to prevent the movement of labor.

Goldfish even lets the parents observe these "techniques." True, most parents these days dick around on their cellphones while Little Johnny or Jane thrashes around in the water. I mean, what's more important than checking out what Aunt Judy has to say about planting her begonias? But Goldfish wants parents to know these techniques, presumably so they can work with their kids and help them learn. Without this transparency, the whole swim class would be kind of pointless. The curriculum is built on the opposite of secrecy.

The majority also skirts over an obvious point. Goldfish paid Ogg in such a way that undercuts any argument that it "invested" in some proprietary training. So we know that can't be what Goldfish is trying to protect. To be sure, there are a number of municipalities where Ogg earned less than the legal minimum wage. And the 20-mile restriction is awfully significant given that Ogg's pay scale may not have allowed him to cover the cost of driving outside the red zone. If I made as much as Ogg, I'd be eating bologna sandwiches and drinking Natural Light.

I am quite troubled by the majority's statement that it was "reasonable to prevent Ogg from using specific Goldfish methods for a one-year period." That doesn't at all square with its comment that those same instructional methods were not proprietary since they were displayed "in front of hundreds of people daily." The majority seems perfectly willing to accept the contract language for what it is, without evaluating whether the restriction itself protected anything the law deems reasonable. Since when was economic protectionism a legitimate business interest that warranted the court's indulgence?

***

We could have made short work of this case. This whole proceeding is uncomfortable and annoying, like water in the ears or that lingering chlorine smell that won't go away. For its part, I hope Goldfish is embarrassed by this. We should have issued a more straightforward ruling that said its non-compete is categorically unenforceable against retail employees who can't possibly cause damage or further a corporate espionage scheme.

I fear we are entering a new realm in which employers will use restrictive covenants by asserting broad, vague interests that are wholly disconnected from the realities of the environment in which they operate. And by doing so, they can tie up competitors and employee in expensive litigation, the cost of which is disproportionate to any conceivable economic gain they ever could possibly obtain through a victory.

We have a name for this in the law: abuse of process. Uncle Frank has a name for this at the Moose Lodge: a pile of crap.

***

For these reasons, I concur in the judgment and remain deeply skeptical that we live in an ordered, civilized society.

Friday, June 9, 2017

"Misappropriation" Is Where It's At

When I speak on trade secrets law - which is fairly often - I get skewered by some BigLaw types and self-described "experts" for suggesting lawyers need to focus on the element of "misappropriation."

So step back.

If a plaintiff files a lawsuit and argues trade secrets misappropriation, what does it need to prove?

Really stretching you, but here goes...

(1) That it has a trade secret; and
(2) That the defendant misappropriated it.

And that would be it.

My point is this, in a very general sense: As a defendant, I can't control what type of garbage the plaintiff pulls by claiming some very vague concept rises to the level of a trade secret - that is, it's so valuable that its competitors will gain a distinct economic advantage if secrecy is lost.

To parrot the person who currently is renting office space in the White House....trust me, folks. I have seen this so many times, I get physically ill. Misinformed plaintiff, bolstered by bumptious counsel, takes some "information" that couldn't possibly be valuable secret data and claims some monopolistic right to it against a former insider.

I know it's crap, and my client knows it's crap. But the legal system is not set up to get to a merits decision quickly on whether some concept, idea, or document is a "trade secret."

My other (also somewhat general) point is this: So listen, here's what I (and my client) can control. Whether the defendant engaged in an act of "misappropriation." Some know-it-all reading this post will rebut me and say that you can't determine whether there's been an act of misappropriation without knowing the trade secret.

To that, I say go find another practice area. I'll take my chances. Give me a judge or jury that uses common sense and won't be mesmerized by intricate (often contrived) theoretical arguments. All you're left with is trying to prove what your trade secret is and then dancing around the issue of how that involves my client. If my guy did nothing wrong, I'll win and you'll get your ass kicked again.

***

What do I mean by misappropriation? Theft, basically. In plain English, did you take something with you or share something to someone else that breached a confidentiality obligation?

There is a statute, of course, so using the Uniform Trade Secrets Act, I'll condense what the law commissioners have to say. Basically, a plaintiff can prove "misappropriation" in one of three ways:


  1. Improper acquisition. This is just what it sounds like. You acquired a trade secret by violating some duty the law recognizes. This is often a contract - like a non-disclosure agreement - but it also means the general obligation of loyalty employees have to their employers. That means you can't take an engineering drawing, e-mail yourself some business plan, or access a computer to download source code to a thumb drive. Those are all affirmative acts that one engages in to "acquire" information that may be trade-secret level data.
  2. Improper disclosure. This, too, ain't that hard. A "disclosure" means that one with access to a trade secret tells someone else what it is. This could be a new employer, a potential business partner, or a vendor. The idea here is simple - the act of misappropriation involves some third-party, who in turn may be liable to the trade-secret owner if that third-party had reason to know something nefarious was going on.
  3. Improper use. A plaintiff also could try to show improper use of a trade secret. This one is harder to prove, and it's here where the "inevitable disclosure" theory often creeps into litigation. In reality, the catch-phrase "inevitable disclosure" was the wrong way to describe the theory from the beginning - it should have been the "inevitable use" doctrine. This branch of "misappropriation" is the toughest to resolve in discovery, because it often pits varying theories of what exactly the defendant is using against the breadth of what the plaintiff is trying to protect. An example helps. Suppose the plaintiff claims that a new, unreleased product in development constitutes a trade secret. What if the defendant leaves and develops his own product that may share some similar functionality or engineering concept, but that differs in significant ways from what the plaintiff had in development? Aggressive plaintiffs' lawyers always will conjure some narrative to implicate "improper use." But the defendant will usually have the equities and the optics on his side.
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Remember, too, that the available remedies often are directly linked with which branch of misappropriation is at issue. A case involving improper "use" is going to raise the specter of damages, whereas a quick injunction on improper acquisition or disclosure may mean that damages takes a back seat.

All that said, if you're a defendant or a defendant's counsel, focus on misappropriation. Doing so will allow you to shift the narrative and tell an understandable story to the court. You did nothing wrong regardless of what kind of story the plaintiff is telling about the value of its own information.

Friday, June 2, 2017

The Reading List (2017, No. 21): Levandowski's Gone

Non-Compete and Trade Secrets News for the week ended June 2, 2017

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Waymo v. Uber

We know what the lead story is: Waymo's suit against Uber. It seems every week produces new drama in the trade secrets case of the year. Why is it such a deal? We're talking about a technological development - self-driving cars - that may be among the most significant in the past hundred years.

Anthony Levandowski - the star engineer behind Waymo's self-driving car technology - has been fired from Uber. Presumably, his termination is a direct result of Judge Alsup's rulings and orders compelling Uber to account for the 14,000 files Levandowski apparently took before leaving Google. That spelled a clear division in where Uber and Levandowski were headed with this dispute.

For a thorough deconstruction of Levandowski's firing, I highly recommend reading John Marsh's excellent analysis. I couldn't do it better and won't try.

Trade Secrets Injunctions

One of the more vexing procedural questions in trade secrets cases is the extent to which wrongful conduct will be enjoined. To be sure, that was one of the flashpoints of Judge Alsup's ruling that effectively barred Levandowski from working for Uber in any competing capacity. But it didn't strictly limit what Uber could do to develop self-driving technology independent of Levandowski.

On a far more mundane level (all cases are more mundane) is Systems Spray-Cooled, Inc. v. FCH Tech, Inc., No. 16 CV 1085, out of the Western District of Arkansas. There, the court grappled with how much competitive activity to enjoin after two ex-employees had misappropriated certain design drawings and pricing information. The misappropriation finding came as a direct result of the defendants' destruction of hard-drive evidence. Without a governing non-compete, the court was faced with how far to extend a trade-secrets injunction. And here, given the evidence destruction, the court carved a middle ground - barring not only the "use" of certain information (assuming it was still available after the destruction) but also some business activity that arose from the misappropriation itself. The court would not go so far as to prohibit the defendants from working in a competitive industry, but did prevent them from using certain designs to develop competing products.

The price for a broader injunction? A $5 million bond.

David Nosal Heads to Washington?

So what's up with this guy? Besides Levandowski and Sergey Aleynikov, few names have become more household in the trade-secrets arena than David Nosal. The ex-Korn/Ferry executive was convicted under the Computer Fraud and Abuse Act for obtaining the password of a current employee. That allowed Nosal and others to access a database containing valuable information on executive search candidates. (For in-depth coverage, read Professor Orin Kerr's analysis here and a lengthier piece in the Harvard Law Review.)

After Nosal's petition for en banc rehearing was denied by the Ninth Circuit, he appealed his CFAA conviction to the Supreme Court. Representing him? Neal Katyal of Hogan Lovells, the former Solicitor General and premier appellate litigator. Nosal's petition for writ of certiorari was filed May 5.

How much does a typical non-compete case cost?

Aside from "is this thing enforceable?" the question I get asked most is "what's this gonna cost?"

What am I referring to? Non-competes and non-compete suits, of course. No easy answers there, because there are a lot of variables at play. Those variables range from the plaintiff's attorney (competent, middler, or bumptious fool) to the scope of the wrongful conduct alleged. Generally, if the case involves a claim of trade secrets misappropriation with what appears to be some kind of a physical taking of information, the litigation is hard to budget.

But what about a garden-variety non-compete case, about a customer here or there or perhaps even a dispute over the type of work the employee is engaging in? Hard to piece together data, but an unreported case out of Washington noted the prevailing employee spent about $53,000. We know that because the appellate court upheld the fee award. That amount seems about right for a case that does not proceed to trial but instead gets resolved on summary judgment.

The case is Gaddis Events, Inc. v. Wu, No. 75227-8-I, and it's available here.

Friday, May 26, 2017

The Defend Trade Secrets Act Giveth…But Very Little

If you jump to PatentlyO, you’ll read a great column by Dr. Maxwell Goss – a business litigator like me. He offers his thoughts on the scope of “inevitable disclosure” injunctions under the Defend Trade Secrets Act of 2016 (DTSA) and argues that the theory “lives on under the DTSA, albeit in a diminished form.”

This is a pretty hot topic in the area of trade secrets law. Congress passed the DTSA last year and limited the circumstances in which courts could enjoin activity that impacts one’s ability to enter into or maintain an employment relationship.

Dr. Goss outlines this limitation in his discussion, so I won’t repeat it. The upshot is this: under the DTSA, a court can enjoin an employee’s work conduct, or even her ability to work for a competitor at all, if she has engaged in actual or threatened trade secret misappropriation. But it cannot impose limitations on that person’s job merely because she may know of, or have been exposed to, particularly sensitive information.

With the DTSA having recently celebrated its one-year anniversary, we have seen just a trickle of cases to this point. None are all that earth-shattering. Dr. Goss discusses one of the more significant ones—if only because our pool of candidates is so shallow—and it’s the first to discuss the inevitable disclosure theory of misappropriation in some depth.

The case, Molon Motor and Coil Corp. v. Nidec Motor Corp., comes from the Northern District of Illinois (the leading jurisdiction for DTSA filings). Judge Edmond Chang allowed a DTSA claim to proceed based, at least in part, on the plaintiff’s contention that a corporate defendant would inevitably disclose Molon Motor’s trade secrets. Factually, the case follows a painfully familiar paradigm in trade secrets litigation: suspicious pre-termination activity by an ex-employee in accessing and copying sensitive data off a computer system. The complaint offered nothing more. Molon Motor alleged quite simply that, through its hiring of the ex-employee, “Nidec Motor’s use of the trade secrets can be inferred under the ‘inevitable disclosure doctrine.’” (Dkt. Entry 64, at ¶ 67).

In discussing the availability of injunctive relief under the DTSA, Dr. Goss states that “an injunction that does not impact employment may still be based on inevitable disclosure.” This may refer to central fact in the Molon Motor case and which it’s not going to upend anything in the DTSA’s textual limits: the employee isn’t a defendant. Molon Motor only sued its direct competitor.

True, it seeks injunctive relief, but not in a way that would limit the employee’s work with Nidec Motor or even in a manner that would impose stringent conditions on that work. Therefore, the DTSA’s limitations on injunctive relief do not apply at all given the relief Molon Motor seeks. Those limitations speak only of a court’s ability to either (a) “prevent a person from entering into an employment relationship,” or (b) limit the “conditions placed on such employment.”

Another way to look at it: the claim in Molon Motor is not really based on inevitable disclosure by the person with original access to the trade secrets, but rather inevitable use by those to whom he allegedly distributed them. Therein lies the problem with the inevitable disclosure theory under the DTSA: if there was disclosure, then the conduct amounts to actual misappropriation. The concept of “inevitability” then disappears from the equation when actual use is proven.

So what are we using inevitable disclosure for? A gateway to discovery? Apparently, yes. A suit based on suspicion. Troubling.

After one year, where do we stand with the DTSA? Inevitable disclosure injunctions are nominally available in one of three factual circumstances:

  1. Where the plaintiff seeks to enjoin use of trade secrets in a way that does not independently restrain its former employee’s work activity;
  2. Where an ex-employee is not joining another company but instead starts her own business, such that the relief would not prevent her from entering into an employment relationship;
  3. Where the plaintiff claims inevitable use of trade secrets following a failed business transaction in which the putative acquirer learned of those secrets during due diligence.
At least as of now, plaintiffs can gain federal question jurisdiction under the DTSA and seek broader injunctive relief under a State-law UTSA claim (at least in venues like Illinois, which currently recognize inevitable disclosure injunctions). But in those States (like California or Maryland) that reject the inevitable disclosure doctrine, the DTSA offers no gateway to broader injunctive relief.

Thursday, May 25, 2017

The Reading List (2017, No. 20): Are Prince's Unreleased Songs "Trade Secrets"?

Non-Compete and Trade Secrets News for the week ended May 26, 2017

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The Trade Secret Status of Prince's Unreleased Recordings

Prince's death last year unleashed an unfortunate - and somewhat predictable - wave of litigation in his home State of Minnesota.

One lawsuit involves a claim of trade secrets misappropriation. The nature of the action? A sound engineer's possession of five previously unrecorded Prince songs. Prince's estate sued to enjoin the promotion and distribution of those recordings. The engineer signed a Confidentiality Agreement providing that any recordings were the "sole and exclusive property" of Paisley Park Enterprises, a corporation Prince owned while he was alive. The five songs were recorded and edited between 2006 and 2008, long before Prince's death. Around this time, the engineer had stopped working with Prince.

After Prince's estate learned that the engineer was planning to release one of the recordings, it sued and sought both possession of all recordings and a temporary restraining order barring their release. The court ultimately issued a temporary restraining order in favor of Prince's estate and Paisley Park. But the claim to trade-secret protection over the recordings failed.

Though the recordings themselves were kept secret, that alone was not enough to vest them with trade-secret status under Minnesota law. The court stated that "[n]o other artist or record company could take market share from Paisley Park Enterprises by discovering the contents of the disputed recordings." Though the recordings unquestionably had economic value, that value did not derive from their secrecy; rather, the value came from Paisely Park's exclusive right to sell them to the public.

Here is a link to the district court's opinion.

Stryker Wins Sixth Circuit Appeal

Back in February, I noted the significance of Stone Surgical LLC v. Striker Corp., at least in the sense that the Sixth Circuit appeal from a jury verdict raised an interesting choice-of-law question. The dispute centered on a non-compete with a Michigan choice-of-law clause. But the relevant conduct involved a Louisiana salesman who had Louisiana contacts. Given that State's pro-employee stance towards non-compete agreements, the employee (Ridgeway) had a good argument that applying Michigan law would violate Louisiana public policy.

But the Sixth Circuit - though acknowledging it was a fairly close question - found that Louisiana's interest was not materially greater than Michigan's. In other words, though Louisiana had an interest in protecting its residents from unfair and overbroad non-compete agreements, the court had to weigh the employer's interest in protecting its economic rights against a breach. And on that score, it saw no error in the district court's conclusion that Louisiana's interest was not significantly greater. The Michigan choice-of-law clause applied, and the jury's verdict against Ridgeway was upheld.

Here is a link to the Stone Surgical opinion.

Baseless Suits as a "Deceptive Trade Practice"

Defense strategies for fighting frivolous lawsuits generally are fairly limited. Counsel always have the ability to seek fees under Rule 11 or state-law equivalents if the suit is groundless. Most trade-secret statutes have "bad faith" fee-shifting clauses. Those are a tough sell in most suits. In other cases, business corporation act indemnity provisions may give rise to broad fee-shifting. And, of course, prevailing-party clauses that allow for winners to obtain fees may provide relief.

But are there other grounds for prevailing defendants to seek legal costs? The options are out there. I was interested to read an Order out of the Eastern District of Louisiana in a case called Byram Healthcare Centers, Inc. v. Rauth, No. 16-16854. In that case, the court allowed a defendant to counterclaim against her ex-employer for seeking to prevent her from working for a competitor. The legal basis? The state's Unfair Trade Practices Act, which allows a person to bring an action if she suffers "any ascertainable loss of money or movable property, corporeal or incorporeal, as a result of the use or employment by another person of an unfair or deceptive method..."

The gist of the opinion is that misuse of the judicial process itself can be a deceptive trade practice. Some state-law interpretations of the abuse of process tort would say, in essence, the same thing. But state trade practices statutes often provide for mandatory fee-shifting. This is a very creative use of state law by the employee's counsel to gain leverage in a case where the employer, even on a flimsy case, holds all the leverage simply because it is able to bear the cost of litigation.

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It's pretty hard not to read the New York Times and the Washington Post these days, a journalistic battle that illustrates the profound benefits of competition. But the NYT has gone well past all things Russia and has published a series of pieces concerning non-competition agreements. The latest comes from Paul Krugman in an opinion piece tilted "The Unfreeing of American Workers." This article discusses the shackling of employees due to the unreasonable proliferation of non-competes and the irrational linkage of health care to employment. Krugman even manages to work in a reference to Russia - noting American workers are "yoked to corporate employers the way Russian peasants were once tied to their masters' land."

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The Waymo-Uber driverless car technology fight continues to dominate the news. Jonathan Pollard takes an in-depth look at the latest developments, including Waymo's "loss" at not obtaining a broader injunction to stop Uber from pursuing its competing technology. In his usual candid style, Jonathan thinks Uber's lawyers are getting the better of their counterparts at Waymo.

For background on the man at the center of the trade-secrets case of the year, I recommend the Wall Street Journal profile on Anthony Levandowski and his rather unconventional tenure at Google.

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Russell Beck's Fair Competition Law blog discusses an amendment to the Texas Uniform Trade Secrets Act. The amendment does not allow for a trade-secrets injunction that prohibits a person from using his general skill, knowledge, and experience acquired during employment. That language helps, but it still falls short of what is needed - a clear ban on so-called inevitable disclosure injunctions.

Eric Ostroff has an excellent practical piece for lawyers who represent clients in trade-secrets suits. The gist: as an ethical matter, they probably need to encrypt e-mails that refer to the trade secrets. The American Bar Association's opinion on encryption only formalizes what a lot of us have been discussing for sometime, particularly given law firms' obvious status as targets for hackers.

Dechert has a lengthy analysis, in case summary form, of the Ninth Circuit's opinion in United States v. Liew. This matter arose of the conviction of Walter Liew under the Economic Espionage Act arising out of his theft of certain trade secrets of DuPont and his apparent agreement with the Chinese government to supply it with certain technology for titanium dioxide. Confirming the correctness of my decision never to eat Oreo cookies, titanium dioxide is the pigment that makes the center of the Oreo white. Almost as troubling as what Liew did.

Michael Starr of Holland & Knight discusses the Molon Motor case, about which I wrote last week, and its preliminary ruling that an inevitable disclosure claim withstood a defense motion to dismiss. Despite some scuttlebutt, Molon Motor does nothing to pierce the DTSA's ban on inevitable disclosure claims in the employment context. We lawyers tend to overread cases from time to time. The upshot is this: inevitable disclosure claims, even in States that recognize the theory, are incredibly hard to pursue and by no means give an employer a clear path to injunctive relief. Without some evidence of bad-faith conduct giving rise to an actual threat, they almost always fail.

Friday, May 19, 2017

The Reading List (2017, No. 19): The NYT (Again), More Uber, and One Year of the Defend Trade Secrets Act

Non-Compete and Trade Secrets News for the week ended May 19, 2017

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After two weeks, a lot to catch up on...

Abuse of Non-Competes

The big newspaper story on non-competes came in the Saturday New York Times, which discussed the proliferation of non-compete agreements across a range of industries and job positions. The article highlights lawyers' seemingly insatiable appetite to pursue opportunistic litigation at the expense of workers' careers - presumably just to meet their own individual billable-hour budgets. Lawyers are not mouthpieces for their clients' irrational behavior. They have obligations to the court and their adversaries - even if 90 percent of the dolts out their practicing law believe it or not. I certainly hope many of my professional colleagues would read this article and then look at themselves in the mirror for a change.

On a related topic, Jason Shinn has a great post in his Michigan Employment Law Advisor that discusses the need to address non-compete overreaching through enhanced fee-shifting opportunities. Jason feels that a bad-faith fee-shifting clause, akin to what trade-secret law generally allows, would help deter opportunistic non-compete cases. I agree, but of course would like to see a more flexible standard that looks at the objective speciousness of the suit (or threat to sue) rather than one focused on the plaintiff's state of mind.

Waymo/Uber Trade Secrets Litigation

The big litigation story, once again, involves the trade-secrets suit between Google (really, its Waymo unit) and Uber over driver-less car technology. At the epicenter is Anthony Levandowski, who on his way out of Google downloaded 14,000 documents to his personal computer. That is the heart of Waymo's trade-secret claim, even though Levandowski himself is not a defendant in the case. Last Thursday, Judge Alsup issued an Order of Referral - a rare step in civil trade secrets cases - in which he referred the matter to the United States Attorney for possible criminal investigation.

Judge Alsup also entered an order on Waymo's application for interim relief. The order grants partial injunctive relief in Waymo's favor, but does not halt Uber's self-driving car operation. The trade secrets aspect of the order is a tough read, because much of the analysis is redacted. However, the court did bar Levandowski from working on the LiDAR technology. As the court notes, Uber had already removed Levandowski from this work so the balance of harms in granting the narrow(er) injunction tilted heavily in Waymo's favor.

The Defend Trade Secrets Act - Year 1 in Review

We recently passed the one-year anniversary of the Defend Trade Secrets Act's enactment. And predictably, there is no shortage of first-year developments. Greenberg Traurig published a lengthy piece which has some interesting commentary specific to California suits. It also provides a nice comparison of the DTSA and the state-law Uniform Trade Secrets Act.

Paul Mersino of Butzel Long in Detroit wrote a nice one-year summary piece in Crain's Detroit. Paul litigated and prevailed on one of the first applications for an ex parte seizure order -  the most noticeable feature of the DTSA.

A Latham & Watkins Client Alert outlines "5 Lessons Learned as the Defend Trade Secrets Act Turns One." This commentary focuses mainly on the activity to date concerning ex parte seizure order applications, as well as the litigation surrounding acts of misappropriation that pre-date the statute's enactment but continue on past it.

The most interesting anniversary post, though, comes from the PatentlyO Blog, which breaks down the analytics concerning one year of DTSA claims. Notably, the Northern District of California and the Northern District of Illinois have the highest concentration of DTSA suits. The author, Professor David Opderbeck, surmises the prevalence of financial institutions in Chicago may be the cause for Illinois' surprise appearance on the list. It certainly isn't our boom in population growth...

Illinois Inevitable Disclosure Opinion

Maxwell Goss published a guest column on PatentlyO about a new case in the Northern District of Illinois called Molon Motor and Coil Corp. v. Nidec Motor Corp., No. 16 C 03545. Goss concludes that Judge Chang's opinion in Molon Motor may open the door a bit for courts to recognize "inevitable disclosure" under the Defend Trade Secrets Act. That would appear to run counter to the text of the DTSA, which generally prohibits injunctive relief prohibiting a person from entering into an employment relationship and which bars limitations on employment based solely on what the person knows. Goss tries to reconcile Judge Chang's opinion with the DTSA's limitations on injunctive relief by claiming that the court did not deal with a motion for preliminary injunction and instead dealt with a motion to dismiss.

I think there's a danger of overreading the Molon Motor opinion. Rather than deconstructing the procedural posture of the case, it seems much more straightforward to just recognize that the plaintiff filed suit under both the DTSA and the Illinois Trade Secrets Act. At least as of now, a state-law claim can proceed under the inevitable disclosure theory. The court's commentary concerning the DTSA is limited to a separate issue in the case - whether the act of misappropriation occurred before the law went into effect. It simply never analyzes the limitation on the injunctive relief available under the federal claim.

Eventually, it will be interesting to see if Illinois courts re-evaluate the inevitable disclosure doctrine. If not, we'll have an odd mix of federal and state claims where inevitable disclosure injunctions are available under one type of claim but not under another - without any real meaningful distinction in the statutory language enabling such injunctions.