DPA Law Group guides and represents individuals seeking to change employment or organize a startup company without violating enforceable contractual rights and obligations owed to a current or former employer. We also work with businesses seeking to hire an employee or former employee from a competitor while respecting legitimate the trade secrets interest of third parties.
In general, California law does not allow companies to enforce non-compete agreements with departing employees. This proscription reflects dual policies of promoting the free movement of labor and of encouraging competition. Businesses in California, nevertheless, have the right to prevent a current or former employee, and a former employee's new employer, from taking or using its protectable trade secrets when an employee jumps from one company to another. Conflicts frequently arise, and grey areas can exist, where the right to free movement of labor appears to collide with an employer's asserted right to prevent departing employees from competing unfairly with misappropriated trade secrets.
From the perspective of the employee and its new employer, the alleged conflict between protecting the former employer's trade secrets and the free mobility of labor is exaggerated if not unfairly manufactured by the former employer. In seeking to enjoin and restrict the new employer and its new employee ability to freely compete, the former employer typically relies in material part on the employee's promises under a non-disclosure agreement, proprietary rights invention assignment or related employment agreement not to take or use the employer's trade secrets. The issue from the employee's perspective, however, is often that that which the employer asserts as alleged trade secrets are in whole or in substantial part not protectable trade secrets but general industry knowledge, or, are so poorly and inadequately set forth in the underlying agreement at issue that the given restrictive covenant is not capable of being enforced.
The attorneys in our San Jose, California based litigation group are experienced in analyzing and litigating these issues, and have achieved material success on behalf of former employees to successfully oppose efforts to enjoin their competing against former employers. We also consult with employees who wish to join or start a company that might compete with a current or former employer to assist their lawfully and properly transferring their general knowledge and skills to a new employer while respecting a former employer's trade secret rights.
WHAT IS PROTECTABLE AS A TRADE SECRET?
California law expressly recognizes eight types of information protectable as trade secrets, but does not preclude other information from protection. Therefore, all of the following may be found to be a trade secret:
- formula
- pattern
- compilation
- program
- device
- method
- technique
- process or
- facts, data, communications, knowledge and intelligence
To qualify for legal protection as a trade secret, however, such information must:
- be sufficiently particular to separate it from matters of general knowledge in the trade
- derive independent economic value from not being generally known; and,
- be subject to reasonable efforts under the circumstances to protect and maintain its secrecy.
Intellectual property protected as trade secrets differs from other categories of intellectual property in that, unlike patented inventions or works of authorship protected by copyright laws, trade secrets are not publicly registered or published.
Accordingly, whether or not an technique, process, software or invention or creation might otherwise be patentable or otherwise copyrightable in principle, one may choose to protect such information instead as a trade secret by keeping such information confidential within a company. Trade secret protections may further extend to processes. compilations knowledge or the like that is neither novel nor an original but which nevertheless have economic value to the business that has acquired or assembled the information because methods by which the Company uses such information is protected from disclosure to (and thus use by) competitors.
So it can be said of protectable trade secrets that they:
- Are kept secret or confidential within a company;
- May or may not be patentable or copyrightable;
- But derive economic value to such company possessing them from their not being publicly registered or published.
Matters that are frequently the subject of trade secret include:
- customer lists and preferences
- pricing matrices
- vendor lists, capacities and pricing
- manufacturing formulas and processes
- business methods
- software code
- business strategies and plans
Contact us to learn more about our firm, our trade secret litigation services, and how we can help you. You can reach Drew Piunti or Veronika Short by phone at 888-915-5520 or via e-mail.
