Buying silence

American Business Law Journal

Volumn 36, Issue 1, 1998, Pages 151-191

  Dworkin, Terry Morehead ^a   Callahan, Elletta Sangrey ^a  

^a NONE

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EID: 0032269365     PISSN: 00027766     EISSN: None     Source Type: Journal    
DOI: 10.1111/j.1744-1714.1998.tb01018.x     Document Type: Article

References (262)

1. The terms "confidentiality" and "secrecy" are used interchangeably herein, as are "agreement," "clause," "covenant," and "provision." In tandem, terms from each group are intended to describe an agreement by an employee to refrain from disclosing employment-related information without prior approval from his or her employer.
2. Suein L. Hwang, Brown & Williamson Deposes Wigand, Ex-Research Chief, Attacks Credibility, WALL ST. J., July 16, 1996, at B10. Wigand was a research head at Brown & Williamson. The company sued him in Kentucky alleging breach of a confidentiality agreement, fraud and theft. It accused him of stealing company secrets and leaking them to "60 Minutes" and other news organizations. Suein L. Hwang, Brown & Williamson Sues Ex-Executive Over Information Leaks to '60 Minutes,' WALL ST. J., Nov. 21, 1995, at B3. In addition to providing information to the media, Wigand has worked with plaintiffs' attorneys in lawsuits against the tobacco companies. Suein L. Hwang, The Executive Who Told Tobacco's Secrets, WALL ST. J., Nov. 28, 1995, at B1. A judge in Louisville issued a temporary restraining order barring Wigand from violating his confidentiality agreement in 1995. At the same time, Wigand was subpoenaed to be deposed in a case in Mississippi. Id. Wigand sued Brown & Williamson for invasion of privacy after the company allegedly went through his credit card bills and interviewed relatives from a former marriage in order to discredit him. Mark Tran, US tobacco 'intimidation' inquiry, THE GUARDIAN (London) Feb. 7, 1996, at 11. For a summary of Wigand's battle with Brown & Williamson see Alix M. Freedman & Suin L. Hwang, Leaders of the Pact, WALL ST. J., July 11, 1997, at A1, A8. Wigand's battle, thinly disguised, was recently featured in an episode of the Feds on CBS. Kyle Pope, It Isn't Just Guns That Are Smoking In New Crime Shows, WALL ST. J., Mar. 3, 1997, at A1.
3. Suein L. Hwang, Brown & Williamson Deposes Wigand, Ex-Research Chief, Attacks Credibility, WALL ST. J., July 16, 1996, at B10. Wigand was a research head at Brown & Williamson. The company sued him in Kentucky alleging breach of a confidentiality agreement, fraud and theft. It accused him of stealing company secrets and leaking them to "60 Minutes" and other news organizations. Suein L. Hwang, Brown & Williamson Sues Ex-Executive Over Information Leaks to '60 Minutes,' WALL ST. J., Nov. 21, 1995, at B3. In addition to providing information to the media, Wigand has worked with plaintiffs' attorneys in lawsuits against the tobacco companies. Suein L. Hwang, The Executive Who Told Tobacco's Secrets, WALL ST. J., Nov. 28, 1995, at B1. A judge in Louisville issued a temporary restraining order barring Wigand from violating his confidentiality agreement in 1995. At the same time, Wigand was subpoenaed to be deposed in a case in Mississippi. Id. Wigand sued Brown & Williamson for invasion of privacy after the company allegedly went through his credit card bills and interviewed relatives from a former marriage in order to discredit him. Mark Tran, US tobacco 'intimidation' inquiry, THE GUARDIAN (London) Feb. 7, 1996, at 11. For a summary of Wigand's battle with Brown & Williamson see Alix M. Freedman & Suin L. Hwang, Leaders of the Pact, WALL ST. J., July 11, 1997, at A1, A8. Wigand's battle, thinly disguised, was recently featured in an episode of the Feds on CBS. Kyle Pope, It Isn't Just Guns That Are Smoking In New Crime Shows, WALL ST. J., Mar. 3, 1997, at A1.
4. Suein L. Hwang, Brown & Williamson Deposes Wigand, Ex-Research Chief, Attacks Credibility, WALL ST. J., July 16, 1996, at B10. Wigand was a research head at Brown & Williamson. The company sued him in Kentucky alleging breach of a confidentiality agreement, fraud and theft. It accused him of stealing company secrets and leaking them to "60 Minutes" and other news organizations. Suein L. Hwang, Brown & Williamson Sues Ex-Executive Over Information Leaks to '60 Minutes,' WALL ST. J., Nov. 21, 1995, at B3. In addition to providing information to the media, Wigand has worked with plaintiffs' attorneys in lawsuits against the tobacco companies. Suein L. Hwang, The Executive Who Told Tobacco's Secrets, WALL ST. J., Nov. 28, 1995, at B1. A judge in Louisville issued a temporary restraining order barring Wigand from violating his confidentiality agreement in 1995. At the same time, Wigand was subpoenaed to be deposed in a case in Mississippi. Id. Wigand sued Brown & Williamson for invasion of privacy after the company allegedly went through his credit card bills and interviewed relatives from a former marriage in order to discredit him. Mark Tran, US tobacco 'intimidation' inquiry, THE GUARDIAN (London) Feb. 7, 1996, at 11. For a summary of Wigand's battle with Brown & Williamson see Alix M. Freedman & Suin L. Hwang, Leaders of the Pact, WALL ST. J., July 11, 1997, at A1, A8. Wigand's battle, thinly disguised, was recently featured in an episode of the Feds on CBS. Kyle Pope, It Isn't Just Guns That Are Smoking In New Crime Shows, WALL ST. J., Mar. 3, 1997, at A1.
5. Suein L. Hwang, Brown & Williamson Deposes Wigand, Ex-Research Chief, Attacks Credibility, WALL ST. J., July 16, 1996, at B10. Wigand was a research head at Brown & Williamson. The company sued him in Kentucky alleging breach of a confidentiality agreement, fraud and theft. It accused him of stealing company secrets and leaking them to "60 Minutes" and other news organizations. Suein L. Hwang, Brown & Williamson Sues Ex-Executive Over Information Leaks to '60 Minutes,' WALL ST. J., Nov. 21, 1995, at B3. In addition to providing information to the media, Wigand has worked with plaintiffs' attorneys in lawsuits against the tobacco companies. Suein L. Hwang, The Executive Who Told Tobacco's Secrets, WALL ST. J., Nov. 28, 1995, at B1. A judge in Louisville issued a temporary restraining order barring Wigand from violating his confidentiality agreement in 1995. At the same time, Wigand was subpoenaed to be deposed in a case in Mississippi. Id. Wigand sued Brown & Williamson for invasion of privacy after the company allegedly went through his credit card bills and interviewed relatives from a former marriage in order to discredit him. Mark Tran, US tobacco 'intimidation' inquiry, THE GUARDIAN (London) Feb. 7, 1996, at 11. For a summary of Wigand's battle with Brown & Williamson see Alix M. Freedman & Suin L. Hwang, Leaders of the Pact, WALL ST. J., July 11, 1997, at A1, A8. Wigand's battle, thinly disguised, was recently featured in an episode of the Feds on CBS. Kyle Pope, It Isn't Just Guns That Are Smoking In New Crime Shows, WALL ST. J., Mar. 3, 1997, at A1.
6. Suein L. Hwang, Brown & Williamson Deposes Wigand, Ex-Research Chief, Attacks Credibility, WALL ST. J., July 16, 1996, at B10. Wigand was a research head at Brown & Williamson. The company sued him in Kentucky alleging breach of a confidentiality agreement, fraud and theft. It accused him of stealing company secrets and leaking them to "60 Minutes" and other news organizations. Suein L. Hwang, Brown & Williamson Sues Ex-Executive Over Information Leaks to '60 Minutes,' WALL ST. J., Nov. 21, 1995, at B3. In addition to providing information to the media, Wigand has worked with plaintiffs' attorneys in lawsuits against the tobacco companies. Suein L. Hwang, The Executive Who Told Tobacco's Secrets, WALL ST. J., Nov. 28, 1995, at B1. A judge in Louisville issued a temporary restraining order barring Wigand from violating his confidentiality agreement in 1995. At the same time, Wigand was subpoenaed to be deposed in a case in Mississippi. Id. Wigand sued Brown & Williamson for invasion of privacy after the company allegedly went through his credit card bills and interviewed relatives from a former marriage in order to discredit him. Mark Tran, US tobacco 'intimidation' inquiry, THE GUARDIAN (London) Feb. 7, 1996, at 11. For a summary of Wigand's battle with Brown & Williamson see Alix M. Freedman & Suin L. Hwang, Leaders of the Pact, WALL ST. J., July 11, 1997, at A1, A8. Wigand's battle, thinly disguised, was recently featured in an episode of the Feds on CBS. Kyle Pope, It Isn't Just Guns That Are Smoking In New Crime Shows, WALL ST. J., Mar. 3, 1997, at A1.
7. Suein L. Hwang, Brown & Williamson Deposes Wigand, Ex-Research Chief, Attacks Credibility, WALL ST. J., July 16, 1996, at B10. Wigand was a research head at Brown & Williamson. The company sued him in Kentucky alleging breach of a confidentiality agreement, fraud and theft. It accused him of stealing company secrets and leaking them to "60 Minutes" and other news organizations. Suein L. Hwang, Brown & Williamson Sues Ex-Executive Over Information Leaks to '60 Minutes,' WALL ST. J., Nov. 21, 1995, at B3. In addition to providing information to the media, Wigand has worked with plaintiffs' attorneys in lawsuits against the tobacco companies. Suein L. Hwang, The Executive Who Told Tobacco's Secrets, WALL ST. J., Nov. 28, 1995, at B1. A judge in Louisville issued a temporary restraining order barring Wigand from violating his confidentiality agreement in 1995. At the same time, Wigand was subpoenaed to be deposed in a case in Mississippi. Id. Wigand sued Brown & Williamson for invasion of privacy after the company allegedly went through his credit card bills and interviewed relatives from a former marriage in order to discredit him. Mark Tran, US tobacco 'intimidation' inquiry, THE GUARDIAN (London) Feb. 7, 1996, at 11. For a summary of Wigand's battle with Brown & Williamson see Alix M. Freedman & Suin L. Hwang, Leaders of the Pact, WALL ST. J., July 11, 1997, at A1, A8. Wigand's battle, thinly disguised, was recently featured in an episode of the Feds on CBS. Kyle Pope, It Isn't Just Guns That Are Smoking In New Crime Shows, WALL ST. J., Mar. 3, 1997, at A1.
8. Maddox v. Williams, 855 F.Supp. 406 (D.D.C. 1994), aff'd sub nom. Brown & Williamson Tobacco Co. v. Williams, 62 F.3d 408 (D.C. Cir. 1995); Margaret Jacobs, Will Promises of Silence Pass Tests in Court, WALL ST. J., Dec. 14, 1995, at B1. The documents taken by the paralegal, Merrell Williams, are a subject of litigation in Florida and Kentucky. Documents relating to a class action suit involving Phillip Morris were turned over to plaintiffs' counsel by the ex-fiance of a long-time Phillip Morris employee. Suein L. Hwang, Phillip Morris Files Fall Into Hands Of Antitobacco Team, WALL ST. J., Apr. 10, 1996, at A4. The documents, which allegedly substantiate that Phillip Morris manipulated nicotine levels, were stored in Hasty Heep's basement by the employee. Heep told the employee to leave after a fight and then turned the documents over. Id.
9. Maddox v. Williams, 855 F.Supp. 406 (D.D.C. 1994), aff'd sub nom. Brown & Williamson Tobacco Co. v. Williams, 62 F.3d 408 (D.C. Cir. 1995); Margaret Jacobs, Will Promises of Silence Pass Tests in Court, WALL ST. J., Dec. 14, 1995, at B1. The documents taken by the paralegal, Merrell Williams, are a subject of litigation in Florida and Kentucky. Documents relating to a class action suit involving Phillip Morris were turned over to plaintiffs' counsel by the ex-fiance of a long-time Phillip Morris employee. Suein L. Hwang, Phillip Morris Files Fall Into Hands Of Antitobacco Team, WALL ST. J., Apr. 10, 1996, at A4. The documents, which allegedly substantiate that Phillip Morris manipulated nicotine levels, were stored in Hasty Heep's basement by the employee. Heep told the employee to leave after a fight and then turned the documents over. Id.
10. Maddox v. Williams, 855 F.Supp. 406 (D.D.C. 1994), aff'd sub nom. Brown & Williamson Tobacco Co. v. Williams, 62 F.3d 408 (D.C. Cir. 1995); Margaret Jacobs, Will Promises of Silence Pass Tests in Court, WALL ST. J., Dec. 14, 1995, at B1. The documents taken by the paralegal, Merrell Williams, are a subject of litigation in Florida and Kentucky. Documents relating to a class action suit involving Phillip Morris were turned over to plaintiffs' counsel by the ex-fiance of a long-time Phillip Morris employee. Suein L. Hwang, Phillip Morris Files Fall Into Hands Of Antitobacco Team, WALL ST. J., Apr. 10, 1996, at A4. The documents, which allegedly substantiate that Phillip Morris manipulated nicotine levels, were stored in Hasty Heep's basement by the employee. Heep told the employee to leave after a fight and then turned the documents over. Id.
11. Equal Employment Opportunity Comm'n v. Astra U.S.A., Inc., 929 F.Supp. 512 (D. Mass.), modified, 94 F.3d 738 (1st Cir. 1996).
12. Jacobs, supra note 3. The advance warning allegedly allowed it to clean up unsanitary conditions and to pass the inspection. The Government Accountability Project, a pro-whistleblower advocacy group, opposed Food Lion's assertion of the agreements. Id.
13. 118 S. Ct. 657 (1998). For a discussion of the case see infra notes 90-100 and accompanying text.
14. Marcia Coyle, Full Faith And Credit Case On Biz Radar, NAT'L L. J., Apr. 7, 1997, at B1; Jacobs, supra note 3; Suzanne Bretz Blum, Of Counsel: Non-Compete Agreements Find Growing Role, CRAIN'S CLEVELAND BUS., July 8, 1996, at 15; Barbara Carton & Ross Kerber, EEOC Battles Pacts that Buy Worker Silence, WALL ST. J., June 13, 1996, at B1.
15. Marcia Coyle, Full Faith And Credit Case On Biz Radar, NAT'L L. J., Apr. 7, 1997, at B1; Jacobs, supra note 3; Suzanne Bretz Blum, Of Counsel: Non-Compete Agreements Find Growing Role, CRAIN'S CLEVELAND BUS., July 8, 1996, at 15; Barbara Carton & Ross Kerber, EEOC Battles Pacts that Buy Worker Silence, WALL ST. J., June 13, 1996, at B1.
16. Marcia Coyle, Full Faith And Credit Case On Biz Radar, NAT'L L. J., Apr. 7, 1997, at B1; Jacobs, supra note 3; Suzanne Bretz Blum, Of Counsel: Non-Compete Agreements Find Growing Role, CRAIN'S CLEVELAND BUS., July 8, 1996, at 15; Barbara Carton & Ross Kerber, EEOC Battles Pacts that Buy Worker Silence, WALL ST. J., June 13, 1996, at B1.
17. See Terry Morehead Dworkin & Elletta Sangrey Callahan, Internal Whistleblowing: Protecting the Interests of the Employee, the Organization, and Society, 29 AM. BUS. L. J. 267, 269-283 (1991). For the purposes of this paper, "whistleblowing" is defined to involve the disclosure of information about acts harmful to the public good. See, e.g., MARCIA P. MICELI & JANET P. NEAR, BLOWING THE WHISTLE 15 (1992). The value of secrecy in general has declined in the last few decades. See, e.g., Cynthia Crossen, Dare We Say It: In This Tell-All Era, Secrets Just Aren't What They Used to Be, WALL ST. J., Mar. 31, 1998, at A1.
18. See Terry Morehead Dworkin & Elletta Sangrey Callahan, Internal Whistleblowing: Protecting the Interests of the Employee, the Organization, and Society, 29 AM. BUS. L. J. 267, 269-283 (1991). For the purposes of this paper, "whistleblowing" is defined to involve the disclosure of information about acts harmful to the public good. See, e.g., MARCIA P. MICELI & JANET P. NEAR, BLOWING THE WHISTLE 15 (1992). The value of secrecy in general has declined in the last few decades. See, e.g., Cynthia Crossen, Dare We Say It: In This Tell-All Era, Secrets Just Aren't What They Used to Be, WALL ST. J., Mar. 31, 1998, at A1.
19. See Terry Morehead Dworkin & Elletta Sangrey Callahan, Internal Whistleblowing: Protecting the Interests of the Employee, the Organization, and Society, 29 AM. BUS. L. J. 267, 269-283 (1991). For the purposes of this paper, "whistleblowing" is defined to involve the disclosure of information about acts harmful to the public good. See, e.g., MARCIA P. MICELI & JANET P. NEAR, BLOWING THE WHISTLE 15 (1992). The value of secrecy in general has declined in the last few decades. See, e.g., Cynthia Crossen, Dare We Say It: In This Tell-All Era, Secrets Just Aren't What They Used to Be, WALL ST. J., Mar. 31, 1998, at A1.
20. See, e.g., Edward Felsenthal, Secret Accords In Civil Cases Are Under Fire, WALL ST. J., June 26, 1996, at B1. The article cites as examples Eli Lilly & Co.'s possible secret deal on a Prozac case, and Exxon Corporation's secret deals with fish processors regarding the 1989 Valdez oil spill. See also Mike France, Corporate Litigation: Playing Hardball Is One Thing . . ., BUS. WEEK, July 1, 1996, at 32.
21. See, e.g., Edward Felsenthal, Secret Accords In Civil Cases Are Under Fire, WALL ST. J., June 26, 1996, at B1. The article cites as examples Eli Lilly & Co.'s possible secret deal on a Prozac case, and Exxon Corporation's secret deals with fish processors regarding the 1989 Valdez oil spill. See also Mike France, Corporate Litigation: Playing Hardball Is One Thing . . ., BUS. WEEK, July 1, 1996, at 32.
22. See, e.g., UNIF. TRADE SECRETS ACT, 14 U.L.A. 433, 455-56 (1990 & Supp. 1995).
23. See MELVIN F. JAGER, TRADE SECRETS LAW § 13.01 (1993). Jager notes: The common law has constantly recognized that public disclosure of a trade secret, without regard to where or to whom it is disclosed, would destroy the legal rights of the trade secret owner. As a result, an entire body of law has arisen which implies confidential relationships and imposes obligations to preserve confidentiality, even in the absence of an express or implied agreement. Id.
24. RESTATEMENT OF TORTS, §757 cmt. b (1939). The RESTATEMENT distinguishes trade secrets from other confidential information as follows: [A trade secret] is not simply information as to single or ephemeral events in the conduct of the business, as, for example, the amount or other terms of a secret bid for a contract or the salary of certain employees, or the security investments made or contemplated, or the date fixed for the announcement of a new policy or for bringing out a new model or the like. A trade secret is a process or device for continuous use in the operation of the business. Id.
25. Peabody v. Norfolk, 98 Mass. 452, 457 (1868).
26. Jet Spray Cooler, Inc. v. Crampton, 385 N.E.2d 1349, 1355 (Mass. 1979) (quoting Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 481 (1974)).
27. See RESTATEMENT OF TORTS § 757 (1939). Prior to the development of the Uniform Trade Secrets Act, § 757 of the RESTATEMENT OF TORTS was "the most widely accepted rule of trade secret law." UNIF. TRADE SECRETS ACT, 10 U.L.A. 369, 370 (1989). Moreover, courts continue to rely on the first RESTATEMENT because the RESTATEMENT (SECOND) OF TORTS omitted coverage of trade secrets. See, e.g., Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470 (1974); Dynamics Research Corp. v. Analytic Sciences Corp., 400 N.E.2d 1274 (Mass. App. Ct. 1980). The authors of the RESTATEMENT(SECOND) declined to include a successor to § 757 because they believed that trade secret law had become separate from torts. See RESTATEMENT (SECOND) OF TORTS § 1 (1979).
28. See, e.g., UNIF. TRADE SECRETS ACT, 14 U.L.A. 433, 455-56 (1990 & Supp. 1995).
29. See, e.g., Nucor Corp. v. Tennessee Forging Steel Serv., Inc., 476 F.2d 386, 392 (8th Cir. 1973); Coulter Corp. v. Leinert, 869 F. Supp. 732, 735 (E.D. Mo. 1994).
30. See RESTATEMENT (SECOND) OF AGENCY §§ 395-96 (1957); see also HENRY H. PERRITT, JR., TRADE SECRETS: A PRACTITIONER'S GUIDE 163-64 (1994); ("A confidential relationship may exist between employers and employees with respect to certain information, even in the absence of a restrictive covenant agreement, during employment as well as after termination."). The Restatement characterizes this fundamental obligation as follows: Unless otherwise agreed, an agent is subject to a duty to the principal not to use or to communicate information confidentially given him by the principal or acquired by him during the course of or on account of his agency or in violation of his duties as agent, in competition with or to the injury of the principal, on his account or on behalf of another, although such information does not relate to the transaction in which he is then employed, unless the information is a matter of general knowledge. RESTATEMENT (SECOND) OF AGENCY, supra, at § 395; see also id. at cmt. a; id. § 396 (b) (duty of nondisclosure continues after termination of employment relationship); id. at § 396 cmt. b (duty of nondisclosure encompasses using confidential information "to the principal's disadvantage, as where he sells it to a third person, or gives it general circulation," as well as competitively).
31. See RESTATEMENT (SECOND) OF AGENCY §§ 395-96 (1957); see also HENRY H. PERRITT, JR., TRADE SECRETS: A PRACTITIONER'S GUIDE 163-64 (1994); ("A confidential relationship may exist between employers and employees with respect to certain information, even in the absence of a restrictive covenant agreement, during employment as well as after termination."). The Restatement characterizes this fundamental obligation as follows: Unless otherwise agreed, an agent is subject to a duty to the principal not to use or to communicate information confidentially given him by the principal or acquired by him during the course of or on account of his agency or in violation of his duties as agent, in competition with or to the injury of the principal, on his account or on behalf of another, although such information does not relate to the transaction in which he is then employed, unless the information is a matter of general knowledge. RESTATEMENT (SECOND) OF AGENCY, supra, at § 395; see also id. at cmt. a; id. § 396 (b) (duty of nondisclosure continues after termination of employment relationship); id. at § 396 cmt. b (duty of nondisclosure encompasses using confidential information "to the principal's disadvantage, as where he sells it to a third person, or gives it general circulation," as well as competitively).
32. See id. § 395 cmt. a.
33. See generally UNIF. TRADE SECRETS ACT, supra note 10, § 7 (b) (noting that the Act does not affect contract-based remedies); id. at cmt. a (excluding from the Act's coverage "covenants not to disclose trade secrets and covenants not to compete that are intended to protect trade secrets"). The comment also distinguishes other legally imposed duties that are "not dependent upon the existence of competitively significant secret information, like an agent's duty of loyalty to his or her principal." Id. See generally RESTATEMENT (SECOND) OF AGENCY, supra note 18, at § 395 (imposing obligation of confidentiality as part of agent's duty of loyalty).
34. See JAGER, supra note 11, § 13.01; PERRITT, supra note 18, at 153; Collins J. Seitz, Jr., Protection of Trade Secrets Through Employment Agreements, 7 DEL. LAW. 46, 46 (1989).
35. See JAGER, supra note 11, § 13.01; PERRITT, supra note 18, at 153; Collins J. Seitz, Jr., Protection of Trade Secrets Through Employment Agreements, 7 DEL. LAW. 46, 46 (1989).
36. See JAGER, supra note 11. Confidentiality covenants are also used by corporations in contracts with vendors and suppliers. Id.
37. See id. § 13.01. For the purposes of this paper, so-called "restrictive" and "anti-compete" covenants are described as "anti-competition" agreements.
38. See infra notes 27-29 and accompanying text.
39. See, e.g., Travenol Lab., Inc. v. Turner, 228 S.E.2d 478 (N.C. Ct. App. 1976) (court interpreting nondisclosure agreement issued injunction to prohibit former employee from sharing information regarding equipment modification with new employer); see also Morgan Chu, David Bridgeford, Remarks, in TRADE SECRETS, RESTRICTIVE COVENANTS & OTHER SAFEGUARDS FOR PROTECTING BUSINESS INFORMATION 301-02 (outlining required elements for injunctive relief, including that "the balance of equities is in plaintiff's favor" and "granting the requested relief is in the public's interests").
40. See, e.g., Travenol Lab., Inc. v. Turner, 228 S.E.2d 478 (N.C. Ct. App. 1976) (court interpreting nondisclosure agreement issued injunction to prohibit former employee from sharing information regarding equipment modification with new employer); see also Morgan Chu, David Bridgeford, Remarks, in TRADE SECRETS, RESTRICTIVE COVENANTS & OTHER SAFEGUARDS FOR PROTECTING BUSINESS INFORMATION 301-02 (outlining required elements for injunctive relief, including that "the balance of equities is in plaintiff's favor" and "granting the requested relief is in the public's interests").
41. See Peter J. Whitmore, A Statistical Analysis of Noncompetition Clauses in Employment Contracts, 15 J. CORP. L. 483, 486-87 (1990). In addition, of course, the usual prerequisites to contract formation must be satisfied. The consideration element is particularly problematic; state law treatment varies considerably. See JAGER, supra note 11, § 15.05 [2][c][iii] (cautioning that "local law should be consulted to determine if the contract [provision relating to confidentiality] must be signed at the time of initial employment, or incident to a significant promotion or other increased benefit to the employee. In some states, continued employment is sufficient consideration."); Arthur J. Schwab, Remarks, in TRADE SECRETS, RESTRICTIVE COVENANTS & OTHER SAFEGUARDS FOR PROTECTING BUSINESS INFORMATION, supra note 25, at 182-90 (describing approaches, state by state); Lawrence F. Carnevale et al., Anti-Compete Pacts Iffy, NAT'L L.J., June 17, 1996, at D1.
42. See Peter J. Whitmore, A Statistical Analysis of Noncompetition Clauses in Employment Contracts, 15 J. CORP. L. 483, 486-87 (1990). In addition, of course, the usual prerequisites to contract formation must be satisfied. The consideration element is particularly problematic; state law treatment varies considerably. See JAGER, supra note 11, § 15.05 [2][c][iii] (cautioning that "local law should be consulted to determine if the contract [provision relating to confidentiality] must be signed at the time of initial employment, or incident to a significant promotion or other increased benefit to the employee. In some states, continued employment is sufficient consideration."); Arthur J. Schwab, Remarks, in TRADE SECRETS, RESTRICTIVE COVENANTS & OTHER SAFEGUARDS FOR PROTECTING BUSINESS INFORMATION, supra note 25, at 182-90 (describing approaches, state by state); Lawrence F. Carnevale et al., Anti-Compete Pacts Iffy, NAT'L L.J., June 17, 1996, at D1.
43. See Peter J. Whitmore, A Statistical Analysis of Noncompetition Clauses in Employment Contracts, 15 J. CORP. L. 483, 486-87 (1990). In addition, of course, the usual prerequisites to contract formation must be satisfied. The consideration element is particularly problematic; state law treatment varies considerably. See JAGER, supra note 11, § 15.05 [2][c][iii] (cautioning that "local law should be consulted to determine if the contract [provision relating to confidentiality] must be signed at the time of initial employment, or incident to a significant promotion or other increased benefit to the employee. In some states, continued employment is sufficient consideration."); Arthur J. Schwab, Remarks, in TRADE SECRETS, RESTRICTIVE COVENANTS & OTHER SAFEGUARDS FOR PROTECTING BUSINESS INFORMATION, supra note 25, at 182-90 (describing approaches, state by state); Lawrence F. Carnevale et al., Anti-Compete Pacts Iffy, NAT'L L.J., June 17, 1996, at D1.
44. See Carnevale et al., supra note 26, at D1, D15.
45. See, e.g., ALA. CODE § 8-1-1 (1996); CAL. BUS. & PROF. CODE § 16600 (West 1995); COLO. REV. STAT. ANN. § 8-2-113(2) (West 1996); FLA. STAT. ch. 542.33 (1995); HAW. REV. STAT. § 480-4 (1996); LA. REV. STAT. ANN. § 23:921 (West 1996); MICH. COMP. LAWS § 445.774 (1994); MONT. CODE ANN. § 28-2-703 to -705 (1995); N.C. GEN. STAT. § 75-2 (1995); N.D. CENT. CODE § 9-08-06 (1995); OKLA. STAT. tit. 15, §§ 217-219 (1996); S.D. CODIFIED LAWS ANN. § 53-9-8 to -11 (1996); TEX. BUS. & COM. CODE ANN. § 15.50 (West 1996); Wis. STAT. § 103.465 (1994).
46. See, e.g., Commercial Bankers Life Ins. Co. of Am. v. Smith, 516 N.E.2d 110 (Ind. Ct. App. 1987); Freeman v. Duluth Clinic, Ltd., 334 N.W.2d 626 (Minn. 1983). Generally, enforceability turns on whether the restrictions are "reasonable" in terms of the scope of the activity limited or prohibited, the duration of the restriction, the breadth of the geographical coverage specified, the legitimacy of the employer's need for protection, and the burdens imposed on the employee and the public. See, e.g., Uncle B's Bakery, Inc. v. O'Rourke, 920 F. Supp. 1405, modified, 938 F. Supp. 1450 (N.D. Iowa 1996); Leon M. Reimer & Co. v. Cipolla, 929 F. Supp. 154 (S.D.N.Y. 1996); Orkin Exterminating Co. v. Walker, 307 S.E. 2d 914, 916 (Ga. 1983); Gillespie v. Carbondale and Marion Eye Ctrs., Ltd., 622 N.E. 2d 1267, 1269 (Ill. App. Ct. 1993); Iowa Glass Depot, Inc. v. Jindrich, 338 N.W.2d 376, 382-83 (Iowa 1983); see also Carnevale et al., supra note 26, at D15, D16.
47. See, e.g., Structural Dynamics Research Corp. v. Engineering Mechanics and Research Corp., 401 F. Supp. 1102 (E.D. Mich. 1975) (applying Michigan law); 1st Am. Sys. Inc. v. Rezatto, 311 N.W.2d 51 (S.D. 1981);
48. see also Donald J. Friedman & Peter M. Burrell, Presentation, in TRADE SECRETS, RESTRICTIVE COVENANTS & OTHER SAFEGUARDS FOR PROTECTING BUSINESS INFORMATION, supra note 25, at 77; JAGER, supra note 11, at § 13.01. Further, nondisclosure agreements are evaluated much less critically than restrictive covenants.
49. See Richard L. Armstrong, The Changing Face of Noncompetition and Nondisclosure Covenants, 57 TEX. BUS. J. 962, 968 (1994) (reasonableness requirements regarding time, location, and activity scope are not imposed as to confidentiality agreements). Confidentiality contracts unlimited in time have been enforced. See JAGER, supra note 11;
50. Theodore L. Banks, Outline of Remarks, in TRADE SECRETS, RESTRICTIVE COVENANTS & OTHER SAFEGUARDS FOR PROTECTING BUSINESS INFORMATION, supra note 25, at 41.
51. See Coulter Corp. v. Leinert, 869 F. Supp. 732, 734 (E.D. Mo. 1994) ("A person bound to a covenant not to compete is restricted in his choice of occupation while an individual bound to a confidentiality . . . agreement is merely prevented from disclosing certain information . . . ."); see also Armstrong, supra note 30, at 968.
52. But see Disher v. Fulgoni, 464 N.E.2d 639 (Ill. App. Ct. 1984) (nondisclosure agreement invalidated as overbroad).
53. This is particularly useful in demonstrating that the employer has taken measures to preserve confidentiality, a consideration for determining the status of given information as a trade secret. See, e.g., RESTATEMENT OF TORTS, supra note 12, § 757 cmt. b (one factor relevant to determining whether a trade secret exists is "the extent of measures taken by [the owner] to guard the secrecy of the information"); PERRITT, supra note 18, at 120, 153; Seitz, supra note 21, at 46; see also, e.g., Vacco Indus., Inc. v. Van Den Berg, 6 Cal. Rptr. 602, 605 (Cal. Ct. App. 1992) (outlining steps taken by trade secret owner to keep product plans and designs private).
54. See Seitz supra note 21, at 46.
55. See Friedman & Burrell, supra note 30, at 77.
56. See PERRITT, supra note 18, at 122; see also RESTATEMENT OF TORTS, supra note 12, § 757 cmt. j (noting that violation of § 757 (b) may also constitute a breach of contract, but that an express agreement between principal and agent is not required to hold the latter liable for disclosure). See generally Vacco Indus., Inc. v. Van Den Berg, 6 Cal. Rptr. 2d 602 (Cal. Ct. App. 1992) (evaluating application of restrictive covenant separately from common law and statutory trade secret protection).
57. Many states utilize approaches toward restrictive covenants whereby impermissible clauses (e.g., unreasonable duration) are judicially stricken, but severable portions are enforced. See, e.g., Baxter Int'l, Inc. v. Morris, 976 F.2d 1189 (8th Cir. 1992); Thomas v. Coastal Indus. Servs., Inc., 108 S.E.2d 328 (Ga. 1959). In these jurisdictions, the uclusion of a confidentiality clause in anticompetition agreements also provides a safety net for employers in the event that anti-compete covenants are modified or deleted. See Armstrong, supra note 30, at 968. The prevalence of anti-competition agreements has also been attributed to the current high rate of employee mobility in economic sectors such as finance and sales. See Carnevale, supra note 26, at D1.
58. RESTATEMENT OF TORTS, supra note 12, § 757 cmt. d (1939). See Lachman v. Sperry-Sun Well Surveying Co., 457 F.2d 850 (10th Cir. 1972).
59. UNIF. TRADE SECRETS ACT, supra note 10, Prefatory Note; see also, e.g., Vacco Indus., Inc. v. Van Den Berg, 6 Cal. Rptr. 2d 602, 611 (Cal. Ct. App. 1992) (noting that "[b]y its adoption of the Uniform Trade Secrets Act, California effectively adopted the common law definition" of trade secrets set forth by the RESTATEMENT OF TORTS).
60. UNIF. TRADE SECRETS ACT, supra note 10, § 2(b) cmt.
61. 414 F. Supp. 750 (D.N.J. 1976), rev'd on other grounds, 555 F.2d 1131 (3d Cir. 1977) (the circuit court held that the district court had improperly applied choice of law principles, leading to use of the wrong law and, thus, an improper result).
62. Id.
63. Id.
64. Id. at 762.
65. Id. at 762-63.
66. Id. The court observed that "[t]rade secrets are not privileged and must be disclosed when a substantial need exists." Id. at 762 n.18.
67. See supra note 18.
68. RESTATEMENT (SECOND) OF AGENCY, § 395 cmt. f(1957). Two newspaper columnists who received photocopies of documents taken from a United States senator's office without his permission argued that the senate employees who had removed the materials were not legally liable because of this privilege. See Pearson v. Dodd, 410 F.2d 701, 705 n.19 (D.C. Cir.), cert. denied, 395 U.S. 947 (1969). The court did not determine the validity of this argument but assumed, for the purposes of its analysis, that the employees had acted tortiously. Id.
69. Id.
70. 283 Cal. Rptr. 917, 923-24 (Cal. Ct. App. 1991).
71. Id. at 925.
72. Id. at 924. But cf. Singer v. A. Hollander & Son, Inc., 202 F.2d 55 (3d Cir. 1953) (employee who had established competing business with that of employer, violating duty of loyalty, prevented by unclean hands doctrine from asserting that federal antitrust law made employment relationship invalid).
73. The language of New York's statute describing the attorney-client privilege is characteristic of most states' approaches: "Unless the client waives the privilege, an attorney or his employee . . . who obtains . . . a confidential communication made between the attorney or his employee and the client in the course of professional employment, shall not disclose, or be allowed to disclose such communication . . . ." N.Y. CIV. PRAC. L. & R. § 4503 (McKinney 1992); see also, e.g., ARIZ. REV. STAT. ANN. § 13-4062(2) (1996); CAL. EVID. CODE § 954 (West 1996); COLO. REV. STAT. ANN. § 13-90-107(1)(b) (West 1996); IDAHO CODE § 9-203(2) (1996); IOWA CODE ANN. § 622.10 (West 1996); MD. ANN. CODE art. 10, § 45N (1996); MONT. CODE ANN. § 26-1-803 (1995); N.J. STAT. ANN. § 2A:84A-20 (West 1996); N.M. STAT. ANN. § 38-6-6 (Michie 1996); OKLA. STAT. ANN. tit. 12, § 2502 (West 1996); TEX. GOV'T CODE ANN. § 9, Rule 1.05 (West 1996); UTAH CODE ANN. § 78-24-8(2) (1996); WASH. REV. CODE ANN. § 5.60.060(2)(a) (West 1996); WYO. STAT. § 1-12-101 (1996).
74. See, e.g., Law Offices of Bernard D. Morely, P.C. v. MacFarlane, 647 P.2d 1215 (Colo. 1982) (applying crime-fraud exception); Northwest Publications, Inc., v. City of Saint Paul, 435 N.W.2d 64 (Minn. Ct. App. 1989); McKay v. Board of County Comm'rs, 746 P.2d 124 (Nev. 1987) (cases holding that privilege must yield to open meeting law); In re Jacqueline F., 391 N.E.2d 967 (N.Y. 1979) (guardian's attorney required to disclose his client's address after guardianship revoked); see also MCCORMICK ON EVIDENCE 175-77 (Edward W. Cleary ed., 2d ed. 1972). Confidentiality can be a particular problem for in-house counsel. See Stephen E. Kalish, What does 'in confidence' mean?, BUS. L. TODAY, Mar./Apr. 1997, at 19.
75. See, e.g., Law Offices of Bernard D. Morely, P.C. v. MacFarlane, 647 P.2d 1215 (Colo. 1982) (applying crime-fraud exception); Northwest Publications, Inc., v. City of Saint Paul, 435 N.W.2d 64 (Minn. Ct. App. 1989); McKay v. Board of County Comm'rs, 746 P.2d 124 (Nev. 1987) (cases holding that privilege must yield to open meeting law); In re Jacqueline F., 391 N.E.2d 967 (N.Y. 1979) (guardian's attorney required to disclose his client's address after guardianship revoked); see also MCCORMICK ON EVIDENCE 175-77 (Edward W. Cleary ed., 2d ed. 1972). Confidentiality can be a particular problem for in-house counsel. See Stephen E. Kalish, What does 'in confidence' mean?, BUS. L. TODAY, Mar./Apr. 1997, at 19.
76. See, e.g., Law Offices of Bernard D. Morely, P.C. v. MacFarlane, 647 P.2d 1215 (Colo. 1982) (applying crime-fraud exception); Northwest Publications, Inc., v. City of Saint Paul, 435 N.W.2d 64 (Minn. Ct. App. 1989); McKay v. Board of County Comm'rs, 746 P.2d 124 (Nev. 1987) (cases holding that privilege must yield to open meeting law); In re Jacqueline F., 391 N.E.2d 967 (N.Y. 1979) (guardian's attorney required to disclose his client's address after guardianship revoked); see also MCCORMICK ON EVIDENCE 175-77 (Edward W. Cleary ed., 2d ed. 1972). Confidentiality can be a particular problem for in-house counsel. See Stephen E. Kalish, What does 'in confidence' mean?, BUS. L. TODAY, Mar./Apr. 1997, at 19.
77. 920 F. Supp. 357 (E.D.N.Y. 1996), vacated, 167 F.R.D.6 (E.D.N.Y. 1996) (the lower court decision was reversed to permit intervenors to be heard on the discoverability of the documents in question).
78. Id. at 365. See also Florida v. American Tobacco Co., 12 Toxics L. Rep. (BNA)246 (Fla. Dist. Ct. App. July 23, 1997) (claim of attorney-client privilege did not shield tobacco documents including attorneys' notes on in-house meetings because attorneys had participated in industry-wide conspiracy).
79. See Leonen v. Johns-Manville Corp., 135 F.R.D. 94 (D.N.J. 1990). In a case involving independent counsel Kenneth Starr's attempts to review the notes of the late Vincent Foster's lawyer, the Supreme Court ruled that the privilege survives the client's death. Swidler & Berlin v. United States, 1998 U.S. LEXIS 421 (June 25, 1998)("a posthumous exception in criminal cases appears at odds with the goals of encouraging full and frank communication and of protecting the client's interests"). See also Edward Felsenthal, Supreme Court Questions Argument For Confidentiality in the Foster Case, WALL ST. J., June 9, 1998, at B5.
80. See Leonen v. Johns-Manville Corp., 135 F.R.D. 94 (D.N.J. 1990). In a case involving independent counsel Kenneth Starr's attempts to review the notes of the late Vincent Foster's lawyer, the Supreme Court ruled that the privilege survives the client's death. Swidler & Berlin v. United States, 1998 U.S. LEXIS 421 (June 25, 1998)("a posthumous exception in criminal cases appears at odds with the goals of encouraging full and frank communication and of protecting the client's interests"). See also Edward Felsenthal, Supreme Court Questions Argument For Confidentiality in the Foster Case, WALL ST. J., June 9, 1998, at B5.
81. See, e.g., WYO. STAT. § 1-21-101 (1996); see also MCCORMICKON EVIDENCE, supra note 54, at 212-13.
82. See, e.g., WYO. STAT. § 1-21-101 (1996); see also MCCORMICKON EVIDENCE, supra note 54, at 212-13.
83. Id. at 225.
84. See, e.g., Brillantes v. Superior Court, 58 Cal. Rptr. 2d 770 (Cal. Ct. App. 1996) (holding that state's interest in fraud investigation outweighed privilege); Rocca v. Southern Hills Counseling Ctr. Inc., 671 N.E.2d 913 (Ind. Ct. App. 1996) (permitting disclosure of psychiatric patient's threat to harm a third party); People v. Bhatt, 611 N.Y.S.2d 447 (N.Y. Sup. Ct. 1994) (recognizing exception to privilege in context of Medicare fraud investigations); see also MCCORMICK ON EVIDENCE, supra note 54, at 225.
85. See, e.g., Brillantes v. Superior Court, 58 Cal. Rptr. 2d 770 (Cal. Ct. App. 1996) (holding that state's interest in fraud investigation outweighed privilege); Rocca v. Southern Hills Counseling Ctr. Inc., 671 N.E.2d 913 (Ind. Ct. App. 1996) (permitting disclosure of psychiatric patient's threat to harm a third party); People v. Bhatt, 611 N.Y.S.2d 447 (N.Y. Sup. Ct. 1994) (recognizing exception to privilege in context of Medicare fraud investigations); see also MCCORMICK ON EVIDENCE, supra note 54, at 225.
86. See Terry Morehead Dworkin & Elletta Sangrey Callahan, Employee Disclosures to the Media: When Is a "Source" a "Sourcerer"?, 15 HASTINGS COMM. & ENT. L.J. 357, 388 (1993) (asserting that whistleblowers are privileged to reveal evidence of wrongdoing in the form of trade secrete or other confidential information).
87. See supra notes 10-37 and accompanying text.
88. See RESTATEMENT (SECOND) OF CONTRACTS introductory note (1981).
89. See id. § 178.
90. Id. introductory note.
91. See id.
92. In two well-publicized cases, the United States Court of Appeals for the Fourth Circuit developed a framework for addressing breach of contract actions brought by government agencies against former employees who have allegedly breached confidentiality agreements. Clearly, these cases differ from those involving private sector employees in that the interest competing with freedom of contract is based on the Constitution, rather than policy considerations. Nonetheless, the cases provide another illustration that secrecy promises are not enforceable in all circumstances. Both cases involved attempts by the federal Central Intelligence Agency (CIA) to enforce agreements against its former agents to submit writings critical of the agency for pre-publication review. See United States v. Snepp, 595 F.2d 926 (4th Cir. 1979), rev'd, 444 U.S. 507, 509 n.3 (1980) (the Supreme Court dismissed Snepp's constitutional claims in a footnote, finding only that the CIA could protect vital government interests by imposing restraints on its employees that would be unconstitutional in other contexts United States v. Marchetti, 466 F.2d 1309 (4th Cir.), cert. denied, 409 U.S. 1063 (1972). See also Alfred A. Knopf, Inc. v. Colby, 509 F.2d 1362 (4th Cir. 1975), cert. denied, 421 U.S. 992 (1975). In response to a First Amendment-based argument that such secrecy agreements are unenforceable as prior restraints on free speech, the courts determined that it is reasonable for government agencies to use nondisclosure contracts to preserve confidential data. See Snepp, 595 F.2d at 931-32; Marchetti, 466 F.2d at 1313-16. Constitutional considerations precluded enforcement of the clauses at issue as to unclassified data, however. See Snepp, 595 F.2d at 932; Marchetti, 466 F.2d at 1317. The Fourth Circuit's approach in these cases represented a departure from prior case law. See Diane F. Orrenlicher, Comment, Snepp v. United States: The CIA Secrecy Agreement and the First Amendment, 81 COLUM. L. REV. 662 (1981). The Court of Appeals for the District of Columbia Circuit paid less deference to the First Amendment in a recent challenge to the Voice of America's (VOA) pre-publication policy. See Weaver v. United States Info. Agency, 87 F.3d 1429 (D.C. Cir. 1996), cert. denied, 117 S.Ct. 2407 (1997). A two-to-one majority of the court characterized the VOA's policy as procedural rather than substantive, a characterization adopted by the VOA only after litigation had begun. Id. at 1436-38. Sanctions imposed against an employee who failed to obtain review and clearance of unclassified material were upheld. Id. at 1440-43. Judge Wald, in dissent, characterized the majority's interpretation as a "triumph of judicial inventiveness" and a "credulity-defying exercise." Id. at 1443. He found that "the notion that an article by a part-time employee in the Columbia Journalism Review containing not a shred of classified information could somehow 'jeopardize security or 'disrupt foreign relations' simply has no support in th[e] record." Id. at 1453. For an analysis of the enforceability of confidentiality agreements in the context of First Amendment rights see Brian Stryker Weinstein, In Defense of Jeffrey Wigand: A First Amendment Challenge to the Enforcement of Employee Confidentiality Agreements, 49 S.C. L. REV. 129 (1997).
93. In two well-publicized cases, the United States Court of Appeals for the Fourth Circuit developed a framework for addressing breach of contract actions brought by government agencies against former employees who have allegedly breached confidentiality agreements. Clearly, these cases differ from those involving private sector employees in that the interest competing with freedom of contract is based on the Constitution, rather than policy considerations. Nonetheless, the cases provide another illustration that secrecy promises are not enforceable in all circumstances. Both cases involved attempts by the federal Central Intelligence Agency (CIA) to enforce agreements against its former agents to submit writings critical of the agency for pre-publication review. See United States v. Snepp, 595 F.2d 926 (4th Cir. 1979), rev'd, 444 U.S. 507, 509 n.3 (1980) (the Supreme Court dismissed Snepp's constitutional claims in a footnote, finding only that the CIA could protect vital government interests by imposing restraints on its employees that would be unconstitutional in other contexts United States v. Marchetti, 466 F.2d 1309 (4th Cir.), cert. denied, 409 U.S. 1063 (1972). See also Alfred A. Knopf, Inc. v. Colby, 509 F.2d 1362 (4th Cir. 1975), cert. denied, 421 U.S. 992 (1975). In response to a First Amendment-based argument that such secrecy agreements are unenforceable as prior restraints on free speech, the courts determined that it is reasonable for government agencies to use nondisclosure contracts to preserve confidential data. See Snepp, 595 F.2d at 931-32; Marchetti, 466 F.2d at 1313-16. Constitutional considerations precluded enforcement of the clauses at issue as to unclassified data, however. See Snepp, 595 F.2d at 932; Marchetti, 466 F.2d at 1317. The Fourth Circuit's approach in these cases represented a departure from prior case law. See Diane F. Orrenlicher, Comment, Snepp v. United States: The CIA Secrecy Agreement and the First Amendment, 81 COLUM. L. REV. 662 (1981). The Court of Appeals for the District of Columbia Circuit paid less deference to the First Amendment in a recent challenge to the Voice of America's (VOA) pre-publication policy. See Weaver v. United States Info. Agency, 87 F.3d 1429 (D.C. Cir. 1996), cert. denied, 117 S.Ct. 2407 (1997). A two-to-one majority of the court characterized the VOA's policy as procedural rather than substantive, a characterization adopted by the VOA only after litigation had begun. Id. at 1436-38. Sanctions imposed against an employee who failed to obtain review and clearance of unclassified material were upheld. Id. at 1440-43. Judge Wald, in dissent, characterized the majority's interpretation as a "triumph of judicial inventiveness" and a "credulity-defying exercise." Id. at 1443. He found that "the notion that an article by a part-time employee in the Columbia Journalism Review containing not a shred of classified information could somehow 'jeopardize security or 'disrupt foreign relations' simply has no support in th[e] record." Id. at 1453. For an analysis of the enforceability of confidentiality agreements in the context of First Amendment rights see Brian Stryker Weinstein, In Defense of Jeffrey Wigand: A First Amendment Challenge to the Enforcement of Employee Confidentiality Agreements, 49 S.C. L. REV. 129 (1997).
94. See Equal Employment Opportunity Comm'n v. Astra U.S.A., Inc., 929 F. Supp. 512 (D. Mass.), modified, 94 F.3d 738 (1st Cir. 1996).
95. See also Hamad v. Graphic Arts Ctr. Inc., 72 Fair Empl. Prac. Cas. (BNA) 1759 (D. Or. Jan. 3,1997); Pierce v. St. Vrain Valley Sch. Dist., 994 P.2d 646 (Colo. Ct. App.), cert. granted, 1997 Colo. LEXIS 902 *1 (1997); Green v. Northrop Corp., 59 F.3d 953 (9th Cir. 1995); Labor Secretary Voids Whistleblower Accord, NAT'L L. J., Nov. 1, 1993, at 5 (discussing unpublished opinion by Secretary of Labor Robert B. Reich overturning a secrecy agreement in settlement of a wrongful termination case which prevented the former employee from testifying against his employer, the prime contractor on a nuclear facility; Reich said he would disapprove "any settlement containing terms I find repugnant to law or public policy" such as the one in this case which "could cast doubt on a whistleblower's right to contact government agencies without any restriction."). Id.
96. See also Hamad v. Graphic Arts Ctr. Inc., 72 Fair Empl. Prac. Cas. (BNA) 1759 (D. Or. Jan. 3,1997); Pierce v. St. Vrain Valley Sch. Dist., 994 P.2d 646 (Colo. Ct. App.), cert. granted, 1997 Colo. LEXIS 902 *1 (1997); Green v. Northrop Corp., 59 F.3d 953 (9th Cir. 1995); Labor Secretary Voids Whistleblower Accord, NAT'L L. J., Nov. 1, 1993, at 5 (discussing unpublished opinion by Secretary of Labor Robert B. Reich overturning a secrecy agreement in settlement of a wrongful termination case which prevented the former employee from testifying against his employer, the prime contractor on a nuclear facility; Reich said he would disapprove "any settlement containing terms I find repugnant to law or public policy" such as the one in this case which "could cast doubt on a whistleblower's right to contact government agencies without any restriction."). Id.
97. Other courts have held that the government's right to information should not be hampered by secrecy agreements. See, e.g., Connecticut Light & Power Co. v. Secretary of Labor, 85 F.3d 89 (2d Cir. 1996) (finding settlement offer containing a clause prohibiting employee from participating in judicial or administrative proceedings a violation of the policies embodied in the Nuclear Regulatory Act); EEOC v. Cosmair, Inc., 821 F.2d 1085 (5th Cir. 1987) (holding that requiring employee to release right to file a claim with the EEOC is against public policy); Carol M. Bast, Piercing the Conspiracy of Silence: Are Confidentiality Agreements Enforceable? 1, n.1 (1996)(unpublished manuscript on file with the authors).
98. 94 F.3d at 741.
99. The EEOC was investigating three separate charges, two of which alleged class-wide sexual harassment. 929 F. Supp. at 515. The EEOC claimed the agreements and "the resultant fear . . . caused by" the agreements were preventing potential witnesses from giving evidence. Id. at 516. The EEOC investigation followed a story in BUSINESS WEEK exposing the problems at Astra. Mark Maremont, Abuse of Power, BUS. WK., May 13, 1996, at 86. A little over one month after publication of the story, Astra fired Astra USA President and CEO Lars Bildman, as well as other top executives. Mark Maremont, Day of Reckoning at Astra, BUS. WK., July 8, 1996, at 36.
100. The EEOC was investigating three separate charges, two of which alleged class-wide sexual harassment. 929 F. Supp. at 515. The EEOC claimed the agreements and "the resultant fear . . . caused by" the agreements were preventing potential witnesses from giving evidence. Id. at 516. The EEOC investigation followed a story in BUSINESS WEEK exposing the problems at Astra. Mark Maremont, Abuse of Power, BUS. WK., May 13, 1996, at 86. A little over one
101. The EEOC was investigating three separate charges, two of which alleged class-wide sexual harassment. 929 F. Supp. at 515. The EEOC claimed the agreements and "the resultant fear . . . caused by" the agreements were preventing potential witnesses from giving evidence. Id. at 516. The EEOC investigation followed a story in BUSINESS WEEK exposing the problems at Astra. Mark Maremont, Abuse of Power, BUS. WK., May 13, 1996, at 86. A little over one month after publication of the story, Astra fired Astra USA President and CEO Lars Bildman, as well as other top executives. Mark Maremont, Day of Reckoning at Astra, BUS. WK., July 8, 1996, at 36.
102. The agreements with at least six current or former employees, were negotiated by Astra's counsel, and the employees received from $20,000 to $100,000 for settling and releasing their claims. The employees agreed "not to file or assist in any way anyone else who files any claim, complaint, or charge nor institute any lawsuit against Astra." 929 F. Supp. at 515.
103. Id.
104. Id. at 516-17.
105. The court found that the waivers of a right to file charges with the EEOC were against public policy. It refused to rule on the allegation that enforcement of sud waivers violated the anti-retaliation provisions of Title VII. Id. at 518-19. In finding irreparable harm, the court cited harm or potential harm to a wide variety of parties including the EEOC, the general public, current employees who had filed charges, and current or former employees who had signed such agreements, and potential class members. Id. at 520. Astra's letters to six EEOC-identified signers and a promise to send similar letters to others the EEOC identified did not cure the problem because Astra had superior information about who else may have signed such agreements. Id.
106. See supra notes 63-66 and accompanying text.
107. 929 F. Supp. at 518 (quoting Town of Newton v. Rumery, 480 U.S. 386, 392 (1987)).
108. Id. at 518; see generally 42 U.S.C. §§ 2000e-2000e-17 (1988 & Supp. V 1994).
109. 929 F. Supp. at 518
110. Id. at 519. The court cites EEOC v. Cosmair, Inc., L'Oreal Hair Care Div., 821 F.2d 1085, 1090 (5th Cir. 1987)(waiver of the right to file charges with the EEOC against public policy); EEOC v. Shell Oil Co., 466 U.S. 54 (1984); and General Tel. Co. v. EEOC, 446 U.S. 318 (1980), all on p. 519. The Cosmair court pointed out that the purpose of filing a charge is not necessarily to seek money; it could also be to inform the EEOC of possible discrimination. Id.
111. 929 F. Supp. at 519 (quoting EEOC v. Cosmair, Inc., L'Oreal Hair Care Div., 821 F.2d 1085, 1090 (5th Cir. 1987)).
112. 929 F. Supp. at 520. The public interest would be advanced because the public "has a manifest interest in ensuring that the EEOC's ability to investigate fully charges of employment discrimination is not thwarted." Id at 520-21. While finding that an employee could not waive the right to file charges with the EEOC because of their important informational value, she or he could waive the right to recover damages. Thus, the agreements were enforceable to the extent that the employees had received monetary compensation in exchange for giving up the right to seek further compensation. Secrecy agreements remained in force regarding the amount paid to the signing employees, proprietary information gained while employees, and revelation of information to other than the EEOC. Id. at 521. In Hamad v. Graphic Arts Ctr. Inc. (72 Fair Empl. Prac. Cas. (BNA) 1759 (D. Or. Jan. 3, 1997)), the court cited the reasoning in Astra in refusing to uphold a settlement agreement which prevented a subpoenaed employee from testifying in another's trial against the employee's employer. Id. at 1760.
113. See, e.g., Uniroyal Goodrich Tire Co. v. Hudson, No. 95-1130, 1996 WL 520789, * 4 (6th Cir. Sept. 12, 1996); Zook v. Brown, 865 F.2d 887 (7th Cir. 1989).
114. Uniroyal Goodrich Tire Co. v. Hudson, No. 95-1130,1996 WL 520789 (6th Cir. Sept. 12, 1996).
115. The company argued that preventing Hudson from using specific information did not inhibit the flow of information in personal injury litigation since the court allowed him to testify in court and in deposition. However, use and disclosure for profit and in violation of the secrecy agreements was prohibited. Id. at *11. The court held that the injunction prevented Hudson only from using confidential information in preparation for his testimony; it did not preclude him from testifying.
116. The trial court found that reading the confidentiality agreements to prevent Hudson's testimony would violate the state's public policy. However, after Hudson gave a deposition, he was enjoined from testifying under a preliminary injunction. The company then obtained a permanent injunction, and Hudson appealed that decision. Id. at *7 n.2. Hudson also appealed a contempt citation. One of his arguments was that he used no confidential information in preparation for his testimony because he only reviewed information supplied by UGTC in response to discovery requests (id. at *15) and that the secrecy agreements pertained only to information obtained in the course of employment. The court disagreed and found that information obtained after employment was covered by the agreement. Id. at *16. The court also disagreed with the argument that Hudson had not profited from the pre-trial review, and therefore had not "used" the information in a prohibited manner. Id.
117. But see Hamad v. Graphic Arts Ctr. Inc. (72 Fair Empl. Prac. Cas. (BNA) 1759 (D. Or. Jan. 3, 1997) (secrecy agreement contained in a settlement which prevented subpoenaed ex-employee from giving testimony against his former employer is against public policy, expressed in federal rules, of encouraging broad discovery).
118. Uniroyal Goodrich Tire Co. v. Hudson, supra note 84, at *23.
119. 118 S. Ct. 657 (1998). Baker is the son of a person killed in a head-on collision involving a GM car. Elwell, a former GM employee, testified in Baker's product liability suit against GM. The jury returned a verdict for Baker of $11.3 million. GM appealed from that verdict. Id. at 662.
120. Elwell worked for GM for thirty years. For 15 of those years he was a member of the Engineering Analysis staff which studied the performance of cars involved in product liability litigation. In that role, he had helped lawyers in defending suits against GM. Id. at 660-61.
121. When Elwell sued for wrongful discharge, GM countersued, claiming that Elwell was divulging privileged information in testifying against GM in product liability lawsuits. Elwell settled for an undisclosed sum of money, and agreed to a permanent injunction which enjoined him from "testifying without the prior written consent of [GMC], either upon deposition or at trial, as an expert witness, or as a witness of any kind, and from consulting with attorneys or their agents in any litigation already filed, or to be filed in the future, involving [GMC] . . . ." Id. at 661. The agreement allowed Elwell to testify if he were ordered to by a court or other tribunal (id. at 662) and did "not operate to interfere with the jurisdiction of the Court in . . . Georgia [where litigation was pending]." Id. at 661 (Supreme Court's emphasis).
122. Baker v. G.M.C., 86 F.3d 819 (8th Cir, 1996). The court found that because the injunction barred Elwell from testifying about even nonprivileged information, it was not entitled to full faith and credit. It also believed that because the injunction was subject to being modified on public policy grounds in Michigan, it was modifiable in other jurisdictions on that ground.
123. The Eighth Circuit found that Missouri's public policy was no less supportive of full faith and credit than it was of full and fair discovery. It cited a Missouri doctrine that said that full faith and credit must be given unless lack of subject matter jurisdiction, failure to give due notice, or fraud in concoction of the judgment could be shown. None of these existed here. Id. at 819. The court was also unpersuaded by the modification argument. It noted that no modification of the injunction had in fact been requested, and that Michigan would require a change in circumstances in order to justify a modification of an injunction. There were none in this case. Id. at 820. GM also appealed the district court's discovery sanction under which GM's affirmative defenses regarding its fuel pump were stricken. The Eighth Circuit found that while GM deserved sanctioning, the imposed sanction was excessive. Id. at 816-17. The court also sustained GM's appeal of the punitive damages award on the ground that the jury received insufficient guidance in determining the award and that it did not apportion the award between compensatory and punitive damages. Id. at 817.
124. See, e.g., Edward Felsenthal, Justices to Hear Case on GM Settlement, WALL ST. J., Mar. 25, 1997, at B3; Marcia Coyle, Full Faith And Credit Case On Biz Radar, NAT'L L. J., Apr. 7,1997, at B1; Edward Felsenthal, Supreme Court Agenda Touches Everyday Life, WALL ST. J., Sept. 29, 1997, at B1. Felsenthal noted that former employees are often key witnesses in corporate litigation, and the Court's ruling could have implications for other cases such as the tobacco litigation. Id. Mar. 25, at B3.
125. See, e.g., Edward Felsenthal, Justices to Hear Case on GM Settlement, WALL ST. J., Mar. 25, 1997, at B3; Marcia Coyle, Full Faith And Credit Case On Biz Radar, NAT'L L. J., Apr. 7,1997, at B1; Edward Felsenthal, Supreme Court Agenda Touches Everyday Life, WALL ST. J., Sept. 29, 1997, at B1. Felsenthal noted that former employees are often key witnesses in corporate litigation, and the Court's ruling could have implications for other cases such as the tobacco litigation. Id. Mar. 25, at B3.
126. See, e.g., Edward Felsenthal, Justices to Hear Case on GM Settlement, WALL ST. J., Mar. 25, 1997, at B3; Marcia Coyle, Full Faith And Credit Case On Biz Radar, NAT'L L. J., Apr. 7,1997, at B1; Edward Felsenthal, Supreme Court Agenda Touches Everyday Life, WALL ST. J., Sept. 29, 1997, at B1. Felsenthal noted that former employees are often key witnesses in corporate litigation, and the Court's ruling could have implications for other cases such as the tobacco litigation. Id. Mar. 25, at B3.
127. Felsenthal, supra note 95, Mar. 25, at B3; Sept. 29, at B10. In their brief petitioners argued that whistleblowers were important in issues of public health and safety, and cited several federal statutes that were passed to protect them. They argued that public policy concerns should cause the Court to not allow the injunction to stand in their case, and cited United States v. Nixon (418 U.S. 693, 709 (1974)) for the proposition that "the public . . . has a right to every man's evidence."
128. Brief for Appellant at 20-21, Baker v. General Motors Corp., 118 S. Ct. 657 (1998).
129. The Court found there was no "roving 'public policy exception' to the full faith and credit due judgments." 118 S. Ct. at 664. However, because the enforcement measures of a judgment did not have the full faith and credit preclusive effect of the judgment itself, Michigan could not determine evidentiary issues in another jurisdiction in a lawsuit brought by parties who were not subject to Michigan's jurisdiction. Id. at 666-68.
130. See, e.g., Edward Felsenthal & Rebecca Blumenstein, Court Says Ex-GM Engineer Can Testify, WALL ST. J., Jan. 11, 1998, at B13 ("In a ruling likely to unleash more whistle-blowers on corporate America, the Supreme Court freed a former General Motors Corp. engineer to testify. . . ."). Jeffrey White, an official of the Association of Trial Lawyers of America, stated, "The court clearly told companies they can't buy the silence of people with important evidence to give." Id. See also Justices Say Product Liability Gag Orders Aren't Binding on Courts in Sister States, 66 U.S.L.W. 1429 (Jan. 20, 1998); Marcia Coyle, GM Cannot Block Expert Testimony, NAT'L L.J., Jan. 26, 1998, at B1.
131. See, e.g., Edward Felsenthal & Rebecca Blumenstein, Court Says Ex-GM Engineer Can Testify, WALL ST. J., Jan. 11, 1998, at B13 ("In a ruling likely to unleash more whistle-blowers on corporate America, the Supreme Court freed a former General Motors Corp. engineer to testify. . . ."). Jeffrey White, an official of the Association of Trial Lawyers of America, stated, "The court clearly told companies they can't buy the silence of people with important evidence to give." Id. See also Justices Say Product Liability Gag Orders Aren't Binding on Courts in Sister States, 66 U.S.L.W. 1429 (Jan. 20, 1998); Marcia Coyle, GM Cannot Block Expert Testimony, NAT'L L.J., Jan. 26, 1998, at B1.
132. See, e.g., Hamad v. Graphic Arts Ctr. Inc., 72 Fair Empl. Prac. Cas. (BNA) 1759 (D. Or. Jan. 3, 1997). The court found that a secrecy agreement contained in a settlement which prevented a subpoenaed ex-employee from giving testimony against his former employer was against the public policy, contained in federal rules, of encouraging broad discovery. Unlike Hudson in the UGTC case, the ex-employee in Hamad was not a paid witness. Cf. Coyle, supra note 99, "Once any court lets the information in, there will be strong momentum for other judges to do the same, even if they would not have done it in the first instance" (quoting D.C. attorney Mark Levy).
133. FLA. STAT. ANN. § 69.081 (West Supp. 1996); N.C. GEN. STAT. § 132-1.3 (1995); OR. REV. STAT. § 30.402 (1995); VA. CODE ANN. § 420.01 (Michie 1996). The main purpose of these statutes is to keep parties from keeping documents from public view when settling lawsuits. Anthony J. Basinski, 'Sunshine' Laws Bar Secret Settlements, NAT'L L. J., Mar. 24, 1997, at B10. Congress is also considering the issue of document secrecy in crafting the tobacco settlement. See, e.g., Mike France et al., So Much For Smoking Out Big Tobacco's Secrets, BUS. WK., July 14, 1997, at 28.
134. FLA. STAT. ANN. § 69.081 (West Supp. 1996); N.C. GEN. STAT. § 132-1.3 (1995); OR. REV. STAT. § 30.402 (1995); VA. CODE ANN. § 420.01 (Michie 1996). The main purpose of these statutes is to keep parties from keeping documents from public view when settling lawsuits. Anthony J. Basinski, 'Sunshine' Laws Bar Secret Settlements, NAT'L L. J., Mar. 24, 1997, at B10. Congress is also considering the issue of document secrecy in crafting the tobacco settlement. See, e.g., Mike France et al., So Much For Smoking Out Big Tobacco's Secrets, BUS. WK., July 14, 1997, at 28.
135. FLA. STAT. ANN. § 69.081 (West Supp. 1996); N.C. GEN. STAT. § 132-1.3 (1995); OR. REV. STAT. § 30.402 (1995); VA. CODE ANN. § 420.01 (Michie 1996). The main purpose of these statutes is to keep parties from keeping documents from public view when settling lawsuits. Anthony J. Basinski, 'Sunshine' Laws Bar Secret Settlements, NAT'L L. J., Mar. 24, 1997, at B10. Congress is also considering the issue of document secrecy in crafting the tobacco settlement. See, e.g., Mike France et al., So Much For Smoking Out Big Tobacco's Secrets, BUS. WK., July 14, 1997, at 28.
136. DEL. CT. C.P.R. 9(bb); GA. UNIFORM R. SUPER. CT. R. 21; N.Y. COMP. CODE R. & REGS. tit 22 §216.1; TEX. R.C.P. ANN. R. 76a.
137. See, e.g., Proctor & Gamble Co. v. Bankers Trust Co., 78 F.3d 219 (6th Cir. 1996); Leucadia Inc. v. Applied Extrusion Technologies, Inc., 998 F.2d 157 (3d Cir. 1993); Hammock v. Hoffman-LaRoche Inc., 662 A.2d 546 (N.J. 1995). These cases affirm the presumption that documents filed with the court are open to public access. See also Scot J. Paltrow, Insurance Case Tests Just What Judge Can Seal, WALL ST. J., July 14, 1997, at B1; Andy Pasztor, Merrill Testimony In California Case Ordered Released, WALL ST. J., Aug. 14, 1997, at B10. The Secretary of Labor has also opted for disclosure. See Labor Secretary Voids Whistleblower Accord, supra note 69. Journalists are in the forefront of challenging secrecy in court proceedings. See John Gibeaut, Secret Justice, A.B.A.J., Apr. 1998, at 50.
138. See, e.g., Proctor & Gamble Co. v. Bankers Trust Co., 78 F.3d 219 (6th Cir. 1996); Leucadia Inc. v. Applied Extrusion Technologies, Inc., 998 F.2d 157 (3d Cir. 1993); Hammock v. Hoffman-LaRoche Inc., 662 A.2d 546 (N.J. 1995). These cases affirm the presumption that documents filed with the court are open to public access. See also Scot J. Paltrow, Insurance Case Tests Just What Judge Can Seal, WALL ST. J., July 14, 1997, at B1; Andy Pasztor, Merrill Testimony In California Case Ordered Released, WALL ST. J., Aug. 14, 1997, at B10. The Secretary of Labor has also opted for disclosure. See Labor Secretary Voids Whistleblower Accord, supra note 69. Journalists are in the forefront of challenging secrecy in court proceedings. See John Gibeaut, Secret Justice, A.B.A.J., Apr. 1998, at 50.
139. See, e.g., Proctor & Gamble Co. v. Bankers Trust Co., 78 F.3d 219 (6th Cir. 1996); Leucadia Inc. v. Applied Extrusion Technologies, Inc., 998 F.2d 157 (3d Cir. 1993); Hammock v. Hoffman-LaRoche Inc., 662 A.2d 546 (N.J. 1995). These cases affirm the presumption that documents filed with the court are open to public access. See also Scot J. Paltrow, Insurance Case Tests Just What Judge Can Seal, WALL ST. J., July 14, 1997, at B1; Andy Pasztor, Merrill Testimony In California Case Ordered Released, WALL ST. J., Aug. 14, 1997, at B10. The Secretary of Labor has also opted for disclosure. See Labor Secretary Voids Whistleblower Accord, supra note 69. Journalists are in the forefront of challenging secrecy in court proceedings. See John Gibeaut, Secret Justice, A.B.A.J., Apr. 1998, at 50.
140. See, e.g., Proctor & Gamble Co. v. Bankers Trust Co., 78 F.3d 219 (6th Cir. 1996); Leucadia Inc. v. Applied Extrusion Technologies, Inc., 998 F.2d 157 (3d Cir. 1993); Hammock v. Hoffman-LaRoche Inc., 662 A.2d 546 (N.J. 1995). These cases affirm the presumption that documents filed with the court are open to public access. See also Scot J. Paltrow, Insurance Case Tests Just What Judge Can Seal, WALL ST. J., July 14, 1997, at B1; Andy Pasztor, Merrill Testimony In California Case Ordered Released, WALL ST. J., Aug. 14, 1997, at B10. The Secretary of Labor has also opted for disclosure. See Labor Secretary Voids Whistleblower Accord, supra note 69. Journalists are in the forefront of challenging secrecy in court proceedings. See John Gibeaut, Secret Justice, A.B.A.J., Apr. 1998, at 50.
141. See, e.g., The Boston Select Group, Inc. v. Ristaino, LAWS. WKLY. No. 12-093-96 (May 20, 1996) (employer which was not completely truthful in its verified complaint seeking an injunction could not enforce a secrecy agreement against the employee).
142. 718 F.2d 219, 221 (7th Cir. 1983).
143. See id.
144. Id. at 222.
145. Id. at 223 (emphasis deleted). The court offered alternative applications of the implied promise of good faith to the contract, concluding that the result favored the employee under either interpretation. Id.
146. Id. at 224.
147. See, e.g., Cordis Corp. v. Prooslin, 482 So. 2d 486 (Fla. Dist. Ct. App. 1986) (declining to enforce restrictive covenant against former employee where plaintiff had breached compensation agreement); Edin v. Jostens, Inc., 343 N.W.2d 691 (Minn. Ct. App. 1984) (denying enforcement of restrictive covenant where 23-year employee was induced to delay signing contract, then terminated for failing to execute in timely way). See generally Ma & Pa, Inc. v. Kelly, 342 N.W.2d 500 (Iowa 1984) (although restrictive covenant expressly applicable to termination under any circumstances and discharge not wrongful, equitable factors led to denial of employer's request for an injunction).
148. See supra note 38 and accompanying text.
149. See supra notes 47-49 and accompanying text.
150. See supra notes 39-40 and accompanying text.
151. See supra notes 63-66 and accompanying text.
152. See supra notes 67-100 and accompanying text.
153. See, e.g., Elletta Sangrey Callahan & Terry Morehead Dworkin, Who Blows the Whistle to the Media and Why: Organizational Characteristics of Media Whistleblowers, 32 AM. BUS. L.J. 151, 152-3 (1994).
154. See, e.g., Payne v. Western & Atl. R.R. Co., 81 Tenn. 507, 519-20 (1884) (employers are permitted to "dismiss their employees at will . . . for good cause, for no cause or even for cause morally wrong, without thereby being guilty of moral wrong"). Payne was overruled on other grounds in Hutton v. Watters, 179 S.W. 134 (Tenn. 1915).
155. See Dworkin & Callahan, supra note 8, at 286.
156. See, e.g., Nees v. Hocks, 536 P.2d 512 (Or. 1975) (discharge for refusing to request excuse from grand jury service); Ludwick v. This Minute of Carolina, Inc., 337 S.E.2d 213 (S.C. 1985) (fired for complying with subpoena to testify before state commission).
157. See, e.g., Trombetta v. Detroit Toledo & Intron R.R. Co., 265 N.W.2d 385 (Mich. Ct. App. 1978) (fired for refusing to falsify state pollution control reports); Kaiman v. Grand Union Co., 443 A.2d 728 (N.J. Super. Ct. App. Div. 1982) (discharged for unwillingness to violate state regulations regarding operation of pharmacy within grocery store); Delaney v. Taco Time Int'l, Inc., 681 P.2d 114 (Or. 1984) (dismissed for declining to sign potentially defamatory statement about discharge of former employee); Sabine Pilot Serv. v. Hauck, 687 S.W.2d 733 (Tex. 1985) (fired for refusing to pump ship's bilges into open water).
158. See, e.g., Petermann v. International Bhd. of Teamsters, 344 P.2d 25 (CaI. Dist. Ct. App. 1959) (describing as "patently contrary to the public welfare" a holding where "one's continued employment could be made contingent upon his commission of a felonious act at the instance of his employer"); McClanahan v. Remington Freight Lines, Inc., 517 N.E.2d 390, 393 (Ind. 1988); Sabine Pilot Serv. v. Hauck, 687 S.W.2d 733, 735 (Tex. 1985) (Kilgarlin, J., concurring) ("Allowing an employer to require an employee to break a law or face termination cannot help but promote a thorough disrespect for the laws and legal institutions of our society.").
159. See, e.g., Sheets v. Teddy's Frosted Foods, Inc., 427 A.2d 385 (Conn. 1980); Shores v. Senior Manor Nursing Center, Inc., 518 N.E.2d 471 (Ill. App. Ct. 1988); Boyle v. Vista Eyewear, Inc., 700 S.W.2d 859 (Mo. Ct. App. 1985); McQuary v. Bel Air Convalescent Home, Inc., 684 P.2d 21 (Or. Ct. App. 1984); Harless v. First Nat'l Bank, 246 S.E.2d 270 (W. Va. 1978).
160. See generally Winters v. Houston Chronicle Publ'g Co., 795 S.W.2d 723, 727 (Tex. 1990) (Doggett, J., concurring) (although the claim of the employee whistleblower was denied, the concurring justice observed that "[t]he judiciary should not ignore those unscrupulous employers who wield the powerful weapon of the pink slip to intimidate workers into silence in order to conceal and perpetuate activities in the workplace that endanger the public.").
161. Many states utilize approaches toward restrictive covenants whereby impermissible clauses (e.g., unreasonable duration) are judicially stricken, but severable portions are enforced. See, e.g., Baxter Int'l, Inc. v. Morris, 976 F.2d 1189 (8th Cir. 1992); Thomas v. Coastal Indus. Servs., Inc., 108 S.E.2d 328 (Ga. 1959). In these jurisdictions, the inclusion of a confidentiality clause in anticompetition agreements also provides a safety net for employers in the event that anti-compete covenants are modified or deleted. See Armstrong, supra note 30, at 968. In cases involving restrictive covenants, this approach has been criticized because it raay encourage "[e]mployers [to] covenant for more than is necessary, hop[ing] their employees will thereby be deterred from competing, and rely[ing] on the courts to rewrite the agreements so as to make them enforceable if their employees do compete." Howard Scultz & Assocs. of the Southeast, Inc. v. Broniec, 236 S.E.2d 265, 269 (Ga. 1977). These concerns are inapposite here.
162. See Hamad v. Graphic Arts Ctr. Inc., 72 Fair Empl. Prac. Cas. (BNA) 1759, 1760 (D. Or. Jan 3, 1997) (parties ordered to attempt to draft a confidentiality agreement that would protect the employer's interests but allow the employee to testify when subpoeaned); Equal Employment Opportunity Comm'n vd. Astra U.S.A., Inc., 929 F. Supp. 512, 521 (D. Mass.), modified, 94 F.3d 738 (1st Cir. 1996) (enforcing part of secrecy agreement but allowing employees to give information to the EEOC). Cf. Amex Distrib. Co., Inc. v. Mascari, 724 P.2d 596, 601 (Ariz. Ct. App. 1986); Smart Corp. v. Grider, 650 N.E.2d 80, 83-84 (Ind. Ct. App. 1995); Ehlera v. Iowa Warehouse Co., 188 N.W.2d 368, 371-72 (Iowa 1971); Klick v. Crosstown State Bank, Inc., 372 N.W.2d 85, 88 (Minn. Ct. App. 1985); Karpinski v. Ingrasci, 268 N.E.2d 751, 754-55 (N.Y. 1971) (in each case, the court revised an anticompetition agreement, enforcing it only to the extent reasonably required to protect legitimate interests of the employer).
163. See, e.g., Callahan & Dworkin, supra note 120, at 152-53 (1994).
164. See, e.g., A. JAMES BARNES ET AL., LAW FOR BUSINESS 104 (1994).
165. See, e.g., 1st Am. Sys., Inc. v. Rezatto, 311 N.W.2d 51, 57 (S.D. 1981) (observing that "[n]ondisclosure clauses support the public policy of fair competition by protecting confidential and secret information which stimulates research and development").
166. See JAGER, supra note 11, § 13.01; see also id. § 1.03-.05 (identifying both policies, as well as "the protection of the fundamental right of privacy of the trade secret owner," as supporting trade secret laws); Uniroyal Goodrich Tire Co. v. Hudson, No. 95-1130, 1996 WL 520789 (6th Cir. Sept. 12, 1996).
167. See supra notes 128-130 and accompanying text.
168. See, e.g., United States v. Snepp, 595 F.2d 926 (4th Cir. 1979), rev'd, 444 U.S. 507, 509 n.3 (1980); Equal Employment Opportunity Comm'n v. Astra U.S.A., Inc., 929 F. Supp. 512 (D. Mass.), modified, 94 F.3d 738 (1st Cir. 1996); Hamad v. Graphic Arts Ctr. Inc., 72 Fair Empl. Prac. Cas. (BNA) 1759, 1760 (D. Or. Jan 3, 1997); Uncle B's Bakery, Inc. v. O'Rourke, 938 F. Supp 1450 (N.D. Iowa 1996).
169. JAGER, supra note 11, at § 1.03. Although this description was given in the context of a discussion of trade secrets, Jager uses the term "commercial morality" analogously when discussing nondisclosure agreements. See id. § 13.01[1].
170. Proposed whistleblower legislation in the United Kingdom notes that confidentiality underpins the moral, social and economic principles of loyalty and fair dealing." PUBLIC INTEREST DISCLOSURE BILL (Bill 20), Notes on Clauses, Appendix at 12 (1996). Because of this, and the fact that "parties should be held to their promise to keep" confidences, the Bill notes that British courts will uphold a duty of confidence unless the public interest is deemed more important than the duty of confidentiality. Id.
171. Some authors argue that an employee has a moral duty or right to blow the whistle, and that when an organization breaks a legal or moral rule of society, the duty of loyalty loses its moral foundation. Thus, whistleblowing can be viewed as encouraging commercial morality. See, e.g., Nicholas M. Rongine, Toward a Coherent Legal Response to the Public Policy Dilemma Posed by Whistleblowing, 23 AM. BUS. L.J. 280 (1985); Bast, supra note 70, at 9.
172. See RESTATEMENT (SECOND) OF AGENCY, supra note 18, § 395 cmt. a.
173. See id.
174. See id. at cmt. f.
175. See id. § 387.
176. Snepp v. United States, 444 U.S. 507 (1980).
177. A constructive trust was also imposed in the Spycatcher case (2 F.S.R. (1989)) in which the SUNDAY TIMES published an excerpt from an ex-MI5 agent's book before it was published. The ex-agent was under a duty of confidentiality. YVONNE CRIPPS, THE LEGAL IMPLICATIONS OF DISCLOSURE IN THE PUBLIC INTEREST 57 (2d ed. 1994). More recently, Britain's attorney general obtained an injunction to stop former spy George Blake from receiving $146,000 in royalties from his book detailing his years as a secret agent.
178. A constructive trust was also imposed in the Spycatcher case (2 F.S.R. (1989)) in which the SUNDAY TIMES published an excerpt from an ex-MI5 agent's book before it was published. The ex-agent was under a duty of confidentiality. YVONNE CRIPPS, THE LEGAL IMPLICATIONS OF DISCLOSURE IN THE PUBLIC INTEREST 57 (2d ed. 1994). More recently, Britain's attorney general obtained an injunction to stop former spy George Blake from receiving $146,000 in royalties from his book detailing his years as a secret agent.
179. Legal moves against spy, FINANCIAL TIMES, Dec. 17, 1997, at 1. The idea that one should not profit from breaches of duty is similar to that expressed in some state statutes which prohibit felons from profiting from their wrongdoing, primarily through media deals. See, e.g. CONN. GEN. STAT. ANN. § 54-218 (West 1996) (person accused of crime of violence must pay to the Office of Victim Services any money paid to reenact the crime; the money can pay for the accused's defense and to compensate the victim if there is a conviction); OKLA. STAT. ANN. tit. 22 § 17 (West 1996) (person charged, convicted or who has pled to a crime and who enters a contract profiting from the crime forfeits all profits to the court, which holds it in escrow for the victims or to repay the public defender); see also COLO. REV. STAT. ANN. § 24-4.1-201 (West 1996); DEL CODE. ANN. tit. 11, § 9103 (1995); GA. CODE ANN. § 17-14-31 (1996); MD. ANN. CODE art. 27, § 854 (1996); MINN. STAT. ANN. § 611A.68 (West 1996); N.M. STAT. ANN. § 31-22-22 (Michie 1996); S.D. CODIFIED LAWS ANN. § 23A-28A-1 (1996). The constitutionality of some of these laws has been challenged, and they must be carefully drawn to avoid free speech problems. See, e.g., Simon & Schuster, Inc. v. New York State Crime Victims Board, 502 U.S. 105 (1991); Bouchard v. Price, 694 A.2d 670, 675 (R.I. 1997);
180. Michael Higgins, Test of a Second-Generation Law, A.B.A.J., Oct. 1997, at 28. The British also do not think one should be motivated to blow the whistle for monetary gain. It is a bar to protection under a proposed whistleblower protection bill (Bill 20, supra note 137) if the disclosure was made primarily for personal gain. If "the story was sold to a newspaper, the individual will have taken a view on the value of the information and should not be allowed subsequently to claim more from the person whose confidence he has breached for personal gain." Id. Appendix at 15. Case law has similarly so held. See, e.g., W. v. Edgell, 2 W.L.R. 471 (Ch. App. 1990).
181. See, e.g., Zook v. Brown, 865 F.2d 887 (7th Cir. 1989); Uniroyal Goodrich Tire Co. v. Hudson, No. 95-1130, 1996 WL 520789 (6th Cir. Sept. 12, 1996). See generally Thomas Donaldson & Thomas W. Dunfee, Toward a Unified Conception of Business Ethics: Integrative Social Contracts Theory, 19 ACAD. MGMT. BEV. 252, 273 (1994) (the weight of legal authority indicates that motive is relevant to the existence of legal protection for whistleblowers).
182. See, e.g., Zook v. Brown, 865 F.2d 887 (7th Cir. 1989); Uniroyal Goodrich Tire Co. v. Hudson, No. 95-1130, 1996 WL 520789 (6th Cir. Sept. 12, 1996). See generally Thomas Donaldson & Thomas W. Dunfee, Toward a Unified Conception of Business Ethics: Integrative Social Contracts Theory, 19 ACAD. MGMT. BEV. 252, 273 (1994) (the weight of legal authority indicates that motive is relevant to the existence of legal protection for whistleblowers).
183. See Elletta Sangrey Callahan & Terry Morehead Dworkin, Do Good and Get Rich: Financial Incentives for Whistleblowing and the False Claims Act, 37 VILLANOVA L. REV. 273, 318-25 (1992).
184. Most federal legislation that protects whistleblowers was not passed to protect whistleblowers and thus does not address motive. If a person is reporting wrongdoing that is covered by the specific law, he or she will be protected. For example, an employee who reports discrimination under Title VII will be protected. See Dworkin & Callahan, supra note 61; Terry Morehead Dworkin, Legal Approaches to Whistle-blowing, in MARCIA P. MICELI & JANET P. NEAR, BLOWING THE WHISTLE, Table 6-2 (state requirements) (1992).
185. Most federal legislation that protects whistleblowers was not passed to protect whistleblowers and thus does not address motive. If a person is reporting wrongdoing that is covered by the specific law, he or she will be protected. For example, an employee who reports discrimination under Title VII will be protected. See Dworkin & Callahan, supra note 61; Terry Morehead Dworkin, Legal Approaches to Whistle-blowing, in MARCIA P. MICELI & JANET P. NEAR, BLOWING THE WHISTLE, Table 6-2 (state requirements) (1992).
186. See, e.g., Wichita County v. Hart, 917 S.W.2d 779 (Tex. 1996) (Texas statute protects employees acting in "good faith"; "good faith" means 1) the employee believed that the conduct reported was a violation of law and 2) the belief was reasonable in light of the employee's training and experience. The court refused to impose an absence-of-malice standard.).
187. See Callahan & Dworkin, supra note 120, at 151.
188. See id. at 157 n.40 & Appendix A.
189. Pennsylvania, PA. STAT. ANN. tit 43, § 1421 (1989); West Virginia, W. VA. CODE § 6c-1-1 (1988). Wisconsin protects those acting for gain only if the government has offered the award to improve administration or operations. WIS. STAT. § 230.80 (1984).
190. See Callahan & Dworkin, supra note 146, at 278-83. The most important of these reward statutes is the False Claims Act, 31 U.S.C. §§ 3729-33 (1988).
191. Id.
192. See RESTATEMENT OF TORTS, supra note 12, § 757 cmt g.
193. See supra notes 131-133 and accompanying text.
194. MICELI & NEAR, supra note 8, at 14 (1992); Callahan & Dworkin, supra note 146, at 273; Janet P. Near & Marcia P. Miceli, Whistle-Blowing: Myth and Reality, 22 J. MGMT. 507, 515 (1996); Callahan & Dworkin, supra note 120, at 166; see also infra notes 159-164 and accompanying text (discussing role of state and federal legislation in providing evidence of a strong public policy favoring whistleblowing).
195. MICELI & NEAR, supra note 8, at 14 (1992); Callahan & Dworkin, supra note 146, at 273; Janet P. Near & Marcia P. Miceli, Whistle-Blowing: Myth and Reality, 22 J. MGMT. 507, 515 (1996); Callahan & Dworkin, supra note 120, at 166; see also infra notes 159-164 and accompanying text (discussing role of state and federal legislation in providing evidence of a strong public policy favoring whistleblowing).
196. Notwithstanding the position taken here as to the effect of motive on legal protection for whistleblowers, motive clearly makes a difference in terms of how the whistleblower is perceived within the organization. See Michael Lewis, The Good Rat, N.Y. TIMES MAG., Nov. 19, 1995 at 26, 27. This, in turn, determines how he or she will be treated by coworkers and supervisors. See MICELI & NEAR, supra note 8, at 79-89.
197. See RESTATEMENT (SECOND) OF CONTRACTS, supra note 63, § 178(3)(a)-(d).
198. See Callahan & Dworkin, supra note 120, at 156 n.36 (listing state statutes).
199. See id. at 159-60 & nn.52-55.
200. See id. at 153-55. Congress first extended protection to whistleblowers incidentally, in legislation with other objectives such as public health and safety. See id. at 153 & nn. 22-23. More recently, the federal False Claims Act was revised in 1986 specifically to encourage whistleblowing in the private sector. See id. at 155 & nn.30-33.
201. See 31 U.S.C. § 3729 (1988).
202. UNITED STATES SENTENCING COMMISSION, SENTENCING GUIDELINES ch. 8 (1991).
203. See, e.g., Maddox v. Williams, 855 F. Supp. 406, 415 (D.D.C. 1994), aff'd sub nom., Brown & Williamson Tobacco Corp. v. Williams, 62 F.3d 408 (D.C. Cir. 1995). The District Court observed: If the B & W strategy were accepted, those seeking to bury their unlawful or potentially unlawful acts from consumers, from other members of the public, and from law enforcement or regulatory authorities could achieve that objective by a simple yet ingenious strategy: all that would need to be done would be to delay or confuse any charges of health hazard, fraud, corruption, overcharge, nuclear or chemical contamination, bribery, or other misdeeds, by focusing instead on inconvenient documentary evidence and labelling it as the product of theft, violation of proprietary information, interference with contracts, and the like. 855 F. Supp. at 415. See also supra note 69.
204. In several cases, courts have refused employees' requests to enforce secrecy agreements where a societal need to expose the misconduct at issue was presented. These decisions are not precisely apposite to the instant focus, in that the parties seeking to conceal wrongdoing are employees rather than their employers. Nonetheless, they address the weight of the public interest in disclosure. See Pierce v. St. Vrain Valley Sch. Dist., 12 Indiv. Empl. Rts. Cas. (BNA) 1057 (Colo. Ct. App. 1997) (superintendent who resigned after being investigated for sexual harassment not allowed to sue for breach a secrecy agreement because against public policy); Picton v. Anderson Union High Sch Dist., 57 Cal. Rptr. 2d 829 (Ct. App. 1996) (teacher who resigned after accusations of unprofessional conduct with one student and raping another had no breach of contract claim on the basis of disclosure made to state credentialing commission in violation of resignation secrecy agreement); Bowman v. Parma Bd. of Educ., 542 N.E.2d 663 (Ohio Ct. App. 1988) (teacher could not enforce secrecy agreement to keep circumstances of his resignation [child molestation charges] from school board); Allen v. Jordanos' Inc., 125 Cal. Rptr. 31 (Ct. App. 1975) (employee could not enforce agreement not to disclose the reason for his layoff [allegations of theft and dishonesty] so he could collect unemployment and union benefits). Weinstein, supra note 67, argues that enforcement of contract law constitutes state action, and therefore enforcement of confidentiality agreements against disclosures on matters of public concern should be allowed only if the state interests supporting the restriction are substantial enough to outweigh the resulting burdens on First Amendment rights.
205. See, e.g., Wagenseller v. Scottsdale Mem'l Hosp., 710 P.2d 1025, 1036 (Ariz. 1985); Palmateer v. International Harvester Co., 421 N.E.2d 876, 878-79 (Ill. 1981); Phipps v. Clark Oil & Ref. Co., 396 N.W.2d 588, 592 (Minn Ct. App. 1986), aff'd, 408 N.W.2d 569 (Minn. 1987); Pierce v. Ortho Pharm. Corp., 417 A.2d 505, 512 (N.J. 1980); Sabine Pilot Serv., Inc. v. Hauck, 687 S.W.2d 733, 735 (Tex. 1985); Thompson v. St. Regis Paper Co., 685 P.2d 1081, 1089 (Wash. 1984); Wandry v. Bull's Eye Credit Union, 384 N.W.2d 325, 327 (Wis. 1986).
206. Attempts to identify suitable sources of public policy range from requiring the clear applicability of a criminal statute (see Sabine Pilot Serv., Inc. v. Hauch, 687 S.W.2d 733, 735 (Tex. 1985)), to defining the concept to include "what is right and just and what affects the citizens of the State collectively." Palmateer v. International Harvester Co., 421 N.E.2d 876, 878 (Ill. 1981).
207. This framework was first suggested in 1981 (see Note, Guidelines for a Public Policy Exception to the Employment at Will Rule: The Wrongful Discharge Tort, 13 CONN. L. REV. 617 (1981)) and subsequently refined. See HENRY H. PERRITT, JR., EMPLOYMENT DISMISSAL LAW AND PRACTICE 245-46 (2d ed. 1987); Elletta Sangrey Callahan, The Public Policy Exception to the Employment At Will Rule Comes of Age: A Proposed Framework for Analysis, 29 AM. Bus. L.J. 481, 491-95 (1991).
208. This framework was first suggested in 1981 (see Note, Guidelines for a Public Policy Exception to the Employment at Will Rule: The Wrongful Discharge Tort, 13 CONN. L. REV. 617 (1981)) and subsequently refined. See HENRY H. PERRITT, JR., EMPLOYMENT DISMISSAL LAW AND PRACTICE 245-46 (2d ed. 1987); Elletta Sangrey Callahan, The Public Policy Exception to the Employment At Will Rule Comes of Age: A Proposed Framework for Analysis, 29 AM. Bus. L.J. 481, 491-95 (1991).
209. This framework was first suggested in 1981 (see Note, Guidelines for a Public Policy Exception to the Employment at Will Rule: The Wrongful Discharge Tort, 13 CONN. L. REV. 617 (1981)) and subsequently refined. See HENRY H. PERRITT, JR., EMPLOYMENT DISMISSAL LAW AND PRACTICE 245-46 (2d ed. 1987); Elletta Sangrey Callahan, The Public Policy Exception to the Employment At Will Rule Comes of Age: A Proposed Framework for Analysis, 29 AM. Bus. L.J. 481, 491-95 (1991).
210. See, e.g., Callahan, supra note 168, at 493-94.
211. See supra note 168 and accompanying text.
212. See supra note 158 and accompanying text.
213. Near & Miceli, supra note 156, at 519. The connection between job responsibilities and informing is being raised in a different context in attempts by Independent Council Kenneth Starr to obtain testimony from White House Secret Service guards. The Justice Department objects to allowing the guards to testify, arguing that the possibility of disclosure of private affairs will endanger presidents because the presidents will keep the guards at an unsafe distance to protect privacy. See, e.g., Albert R. Hunt, Secret Service Privilege: A Matter of Life or Death, WALL ST. J., June 4, 1998, at A19; Phil Kuntz, Agency Is Divided Over Starr's Bid To Question White House Guards, WALL ST. J., Feb. 13. 1998, at A12.
214. Near & Miceli, supra note 156, at 519. The connection between job responsibilities and informing is being raised in a different context in attempts by Independent Council Kenneth Starr to obtain testimony from White House Secret Service guards. The Justice Department objects to allowing the guards to testify, arguing that the possibility of disclosure of private affairs will endanger presidents because the presidents will keep the guards at an unsafe distance to protect privacy. See, e.g., Albert R. Hunt, Secret Service Privilege: A Matter of Life or Death, WALL ST. J., June 4, 1998, at A19; Phil Kuntz, Agency Is Divided Over Starr's Bid To Question White House Guards, WALL ST. J., Feb. 13. 1998, at A12.
215. Near & Miceli, supra note 156, at 519. The connection between job responsibilities and informing is being raised in a different context in attempts by Independent Council Kenneth Starr to obtain testimony from White House Secret Service guards. The Justice Department objects to allowing the guards to testify, arguing that the possibility of disclosure of private affairs will endanger presidents because the presidents will keep the guards at an unsafe distance to protect privacy. See, e.g., Albert R. Hunt, Secret Service Privilege: A Matter of Life or Death, WALL ST. J., June 4, 1998, at A19; Phil Kuntz, Agency Is Divided Over Starr's Bid To Question White House Guards, WALL ST. J., Feb. 13. 1998, at A12.
216. See MICELI & NEAR, supra note 8, at 15. In the social psychology literature, an act of whistleblowing, in order to be valid, must involve giving information about wrongdoing to a recipient who can respond effectively. Id. See infra note 196 and accompanying text.
217. To the extent that the speed with which misconduct is addressed is important, an in-house report, rather than one made to an external outlet such as a government agency, is likely to facilitate the expedient correction of wrongdoing. See generally infra notes 191-202 and accompanying text (recommending preference for in-house disclosures).
218. Lawmakers are generally reluctant to suppress information if it is not truly secret. See, e.g., RESTATEMENT (SECOND) OF AGENCY, supra note 18, at § 395 ("an agent is subject to a duty to the principal not to use or to communicate information confidentially given him... or acquired by him . . . unless the information is a matter of general knowledge."). See generally 31 U.S.C. § 3730(e)(4)(A) (1988) (unless the relator was the "original source" of the information, no recovery is available under the False Claims Act for information previously revealed or already possessed by the government).
219. Cf. Multiform Desiccants, Inc. v. Sullivan, 95-CV-028E(F), 1996 U.S. Dist. LEXIS 17561, at *10 (W.D.N.Y. Nov. 26, 1996) (refusing to grant an injunction preventing employee from disclosing trade secrets and confidential information during the pendency of the action because the court found that the employee had already disclosed such information in his new employment, noting that "it would be a meaningless act for this Court to rule that Sullivan shall not do what he so obviously has already done"). In a famous British incident, the "Spycatcher" litigation, a retired MI5 agent wrote a book about the security service that was published in the United States and distributed in other countries. The government was not allowed to enjoin English newspapers from reproducing or commenting on the book because it was already in the public domain. Attorney-General v. Guardian Newspapers Ltd. (No. 2) [1990] 1 AC 109. The House of Lords refused to uphold injunctions against publication. YVONNE CRIPPS, THE LEGAL IMPLICATIONS OF DISCLOSURE IN THE PUBLIC INTEREST 56 (2d ed. 1994). The SUNDAY TIMES was held Liable because it published an excerpt prior to publication in the U.S. and therefore before the material had passed into the public domain. Id. at 57. The most important of the related cases are published as 2 FLEET STREET REPORTS (1989).
220. Cf. Multiform Desiccants, Inc. v. Sullivan, 95-CV-028E(F), 1996 U.S. Dist. LEXIS 17561, at *10 (W.D.N.Y. Nov. 26, 1996) (refusing to grant an injunction preventing employee from disclosing trade secrets and confidential information during the pendency of the action because the court found that the employee had already disclosed such information in his new employment, noting that "it would be a meaningless act for this Court to rule that Sullivan shall not do what he so obviously has already done"). In a famous British incident, the "Spycatcher" litigation, a retired MI5 agent wrote a book about the security service that was published in the United States and distributed in other countries. The government was not allowed to enjoin English newspapers from reproducing or commenting on the book because it was already in the public domain. Attorney-General v. Guardian Newspapers Ltd. (No. 2) [1990] 1 AC 109. The House of Lords refused to uphold injunctions against publication. YVONNE CRIPPS, THE LEGAL IMPLICATIONS OF DISCLOSURE IN THE PUBLIC INTEREST 56 (2d ed. 1994). The SUNDAY TIMES was held Liable because it published an excerpt prior to publication in the U.S. and therefore before the material had passed into the public domain. Id. at 57. The most important of the related cases are published as 2 FLEET STREET REPORTS (1989).
221. See supra note 158 and accompanying text.
222. See, e.g., Vacco Indus., Inc., v. Van Den Berg, 6 Cal. Rptr. 2d 602 (Ct. App. 1992). Similar analysis was used in United States v. Snepp, 595 F.2d 926 (4th Cir. 19791 rev'd, 444 U.S. 507 (1980), where, in addition to his First Amendment-based arguments the defendant claimed that he should be relieved of his contractual prepublication review obligation because the CIA had also violated the employment agreement. See infra note 182-87 and accompanying text.
223. See 6 Cal. Rptr. 2d 602 (Ct. App. 1992).
224. See supra notes 105-10 and accompanying text.
225. See 6 Cal. Rptr. 2d 606 n.4.
226. See id. The court explained its decision not to rely on the employment contract as follows: An examination of the employment agreement reflects that it also contained a "non-competition" commitment in the event of employment termination. However, we do not consider that agreement here. First, it was signed by Van Den Berg as an employee and differs in significant ways from the subsequent and clearly relevant non-competition agreement signed by him os a selling shareholder; second, it is of questionable validity under [a state statute limiting enforceability of restrictive covenants]; and finally, it was not argued by the parties and apparently was not considered by the trial court. Id. (emphasis supplied); see also id. at 609 (applicable noncompetition agreement falls within statutory ban on restrictive covenants as restraints of trade because it involved sale of all of defendant's shares of Vacco Industries' stock).
227. Id. at 610. See also Cordis Corp. v. Prooslin, 482 So. 2d 486, 490 (Fla. Dist. Ct. App. 1986) ("In the non-competition and trade secret context, an employer's breach of the employment contract is a relevant factor in determining whether the employer is entitled to a temporary injunction, [citations omitted], at least where the breach involves a dependent covenant." (emphasis supplied)). The Vocco Industries court used similar reasoning to dispose of Van
228. See id.
229. United States v. Snepp, 095 F.2d 926 (4th Cir. 1979), rev'd, 444 U.S. 507 (1980).
230. See supra note 68.
231. See Snepp, 595 F.2d at 934. Id.
232. Id. The court also held that the CIA had not violated the clause under which Snepp claimed he was entitled to a hearing. See id.
233. Id.
234. Prepublication restrictions, however, can affect the general information flow to the public by chilling speech before it happens. Weaver v. United States Info. Agency, 87 F.3d 1429, 1455 (D.C. Cir. 1996) (Wal, J., dissenting), cert, denied, 117 S.Ct. 2407 (1997).
235. See supra note 63.
236. See supra notes 120-42 and accompanying text.
237. See supra notes 159-68 and accompanying text.
238. See sipapra notes 170-75 and accompanying text.
239. MlCELI & NEAR, supra note 8, at 15.
240. See supra notes 120-30 and accompanying text.
241. The societal disadvantage to this course of action is that it deprives public agencies of evidence of wrongdoing. Another disadvantage is that it censors speech before it becomes public; it is, in essence, a prior restraint on speech. "[A] free society prefers to punish the few who abuse rights of speech after they break the law than to throttle them and all others beforehand." Southeastern Promotions, Ltd. v. Conrad, 420 U.S. 546 (1975). This, however, is mainly a concern in the public sector. Balanced against societal disadvantages is earlier intervention to correct the wrongdoing, any savings resulting from not investigating unsubstantiated claims, and savings realized from the government not having to correct the problem.
242. See Dworkin & Callahan, supra note 8, at 300.
243. See id.
244. See id. at 306.
245. Several state statutes take such an approach. See, e.g., IND. CODE § 4-15-10-4 (1987); ME. REV. STAT. ANN. tit. 26, § 832 (West 1983); N.H. REV. STAT. ANN. §275-E:2:(II) (1988); N.J. REV. STAT. § 34:19-4 (1986); N.Y. LAB. LAW § 740(3) (McKinney 1984); UTAH CODE ANN. § 67-21-3(1) (all requiring initial internal report, but allowing external disclosure after the employer has had a reasonable opportunity to correct the situation complaint of). The proposed U.K. whistleblower legislation contains a similar approach. Bill 20 supra note 137, at § 2(1)(d).
246. See IND. CODE § 20-12-1-8 (1987); OHIO REV. CODE ANN. § 4113.52 (West 1988).
247. See Dworkin, supra note 147, at Table 6-2.
248. See, e.g., Witchita County v. Hart, 917 S.W.2d 779 (Tex. 1996). Thus, a person who recklessly disregarded the truth (or, obviously, one who had fabricated information) would not qualify as having acted in good faith.
249. For example, the financial rewards of the False Claims Act are based on recoveries from defendants, and thus are available only if the information leads to a successful prosecution or settlement. See 31 U.S.C. § 3730 (1988). Other federal statutes have been interpreted to require a good faith belief in the accuracy of the information disclosed. See Dworkin, supra note 147 at Table 6-1.
250. See Dworkin, supra note 147, Table 6-1 and 6-2.
251. See, e.g., Witchita County v. Hart, 917 S.W.2d 779 (Tex. 1996); Mitchie v. Bums Int'l Security Servs., Inc. 597 F. Supp. 575 (E.D. Mich. 1984).
252. See Dworkin, supra note 147, Table 6-2.
253. Id.
254. See id. at 241 and Table 6-2, column 2. Three states (Connecticut, Pennsylvania, and West Virginia) also protect employees who report violations of codes of conduct or ethics, and seven (Maine, Minnesota, Montana, New Hampshire, New Jersey, New York, and Utah) protect employees who refuse to carry out or participate in an activity which violates the law.
255. See id. Ohio's statute is the most restrictive in this regard. It protects whistleblowing about a violation of a law, rule or regulation which the employer has the authority to correct and the employee believes is a criminal offense likely to cause imminent risk of physical harm or hazard to public health or safety, or is a felony. OHIO REV. CODE ANN. § 4113.52 (West 1988). The proposed U.K. whistleblower legislation also only protects serious whistleblowing. Bill 20, supra note 137, § 1.
256. Dworkin, supra note 147, at 233-37 and Table 6-1.
257. See 29 U.S.C. § 660 (1985).
258. See, e.g., Equal Employment Opportunity Comm'n v. Astra U.S.A., Inc., 929 F. Supp. 512 (D. Mass. 1996), modified, 94 F.3d 738 (1st Cir. 1996); Uncle B's Bakery, Inc. v. O'Rourke, 920 F. Supp. 1405 (N.D. Iowa 1996).
259. Dworkin & Callahan, supra note 8, at 275-80.
260. Id. at 281-83.
261. It is also consistent with court interpretations of the federal laws which incidentally protect whistleblowers. Under these laws, courts have allowed the whistleblower to go enternally or internally in an effort to encourage reporting. See id at 269-74.
262. Gartside v. Outram, 26 L.J. Ch. 113 (1856).