I wrote about this last week, offering my opinion on a number of different facets to this ill-advised lawsuit. This dispute got mention not just on the nerdosphere, but also mainstream outlets including the Financial Times and the Washington Post.
After the Post published its piece, Cushman & Wakefield (an affiliate of C&W) issued a statement withdrawing the case and apologizing to Ms. Mercado. It also offered to pay her the bonus she had given up in an attempt to avoid triggering the non-compete. Here's the apology:
"Following recent media reports related to the use of restrictive agreements with our janitorial staff, we have completed a review of the circumstances. While we do have restrictions with a select number of salaried managers, we have found that this policy was incorrectly applied in this instance. We are taking action to correct this situation. We sincerely apologize to Ms. Mercado. Restricting the employment of hourly workers is inconsistent with our policies and contrary to our values as an organization.”
There are two ways to view this. First, C&W may have just tried to pull a fast one and then issued an apology when it got caught in a media firestorm. That's probably the most plausible. Second, someone at C&W may have authorized counsel to take action without clearing it through the appropriate channels. That, too, is quite plausible. At least, that's the narrative C&W's statement seems to be trying to sell.
I maintain, as do others, that Ms. Mercado was never a real target. She was a pawn, used as part of a tactical gambit against C&W's competitor. (To continue the dorky chess analogy, she became a passed pawn ready to mate the other side until it resigned.) This happens far too often in non-compete litigation, when one individual gets caught in the crosshairs of a much larger message-sending dispute. Common or not, that is not an appropriate use of legal process.
In the end, it is at least gratifying that this story had a just ending to it. But it never should have been written in the first place.
One noteworthy item. The Fifth Circuit, applying Louisiana law, has taken a narrow view of the preemption doctrine applicable to statutory trade-secrets claims. States that have adopted the Uniform Trade Secrets Act frequently confront the question of preemption. That is, when do other claims based on trade-secrets theft have to give way to just the statutory claim itself? The so-called narrow view is more in line with the text of the statutory preemption clause. In other words, a plaintiff cannot use another tort claim that invokes trade-secrets misappropriation. Common victims include conversion and breach of fiduciary duty. But as the Fifth Circuit held in Brand Services LLC v. Irex Corporation, claims based on misuse of confidential information that is not a trade secret do not fall within the preemption provision.
This is a textual reading of the statute, endorsing a narrow view of preemption and rejecting a more pragmatic approach favored by many courts.