The inevitable disaster of inevitable disclosure

University of Cincinnati Law Review

Volumn 67, Issue 3, 1999, Pages 809-856

  Whaley, Susan Street ^a  

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EID: 0033438305     PISSN: 00096881     EISSN: None     Source Type: Journal    
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References (294)

1. See H.R. REP. NO. 104-788, at 5-6 (1996) (reprinted in U.S.C.C.A.N. 4021, 1996). The perpetrator of the theft of intellectual property was often identified as an individual with a trusted relationship with the company, such as an employee or former employee. See id.
2. Economic Espionage Act (EEA) of 1996, 18 U.S.C. § 1831 (1994 & Supp. IV 1998). The Economic Espionage Act created a new crime of misappropriating trade secrets if done with the intent either to benefit a foreign government, instrumentality or agent or to benefit someone other than the rightful owner of the trade secret. See H. Rep. at p.3. The legislative history of the EEA identifies three principal reasons for its passage. See id. at 4-7. First, it generally is recognized that trade secrets are critically important assets of United States businesses and that trade secret theft is a growing problem. See id. at 4-6. Second, the Federal Bureau of Investigation has experienced difficulty prosecuting cases of economic espionage. See id. at 6. Finally, state criminal laws are inadequate. See id. at 6-7. Although most states provide for civil remedies in the event of trade secret misappropriation, many states have not established criminal laws dealing with trade secret theft. See id.
3. See GALE R. PETERSON, TRADE SECRET PROTECTION IN AN INFORMATION AGE § 2.1(B), at 2-9 & n.10 (1997). Forty-two states and the District of Columbia have adopted some form of the Uniform Trade Secrets Act (U.T.S.A.) or a statute generally governing civil trade secret protection. The following is a list of states that have adopted statues patterned upon the U.T.S.A. including the statutory citation and year the statue was first passed, in parenthesis: Alaska-ALASKA STAT. §§ 45.50.910-.945 (Michie 1988); Arizona-ARIZ. REV. STAT. §§ 44-401 to -407 (1990); Arkansas-ARK. CODE ANN. §§ 4-75-601 to -607 (Michie 1981); California-CAL. CIV. CODE § 3426. (West 1985); COLORADO-COLO. REV. STAT. ANN. § 7-74-101 (West 1986); Connecticut-CONN. GEN. STAT. ANN. § 35-50 to -58 (West 1983); Delaware-6 DEL. CODE. ANN. §§ 2001-2009 (1982); District of Columbia-D.C. CODE ANN. § 480501(1981); Florida-FLA. STAT. ANN. §§ 688.001-.009 (West 1988); Georgia-GA. CODE ANN. §§ 10-1-760 to -767 (Harrison 1990); Hawaii-HAW. REV. STAT. §§ 482B-1 to -9 (1989); Idaho-IDAHO CODE §§ 48-801 to -807 (1981); Illinois-765 ILL. COMP. STAT. 1065/1 to /9 (West 1987); Indiana-IND. CODE ANN. §§ 24-2-3-1 to -8 (1982); Iowa-IOWA CODE ANN. §§ 550.1-.8 (West 1990); Kansas-KAN. STAT. ANN. §§ 60-3320 to -3330 (1981); Kentucky-KY. REV. STAT. ANN. §§ 365.880-.900 (Michie 1990); Louisiana-LA. REV. STAT. ANN. §§ 51:1431 to :1439 (West 1981); Maine-ME. REV. STAT. ANN. §§ 1541-1548 (West 1987); Maryland-MD. ANN. CODE § 11-1201 (1989); Minnesota-MINN. STAT. ANN. §§ 325C.01-.08 (West 1980); Mississippi-MISS. CODE ANN. §§ 75-26-1 to -19 (1990); Missouri-MO. ANN. STAT. §§ 417.450-.467 (West 1995); Montana-MONT. CODE ANN. §§ 30-14-401 to -409 (1985); Nebraska-NEB. REV. STAT. §§ 87-501 to -507 (1988); Nevada-NEV. REV. STAT. §§ 600A.010-.100 (1987); New Hampshire-N.H. REV. STAT. ANN. §§ 350-B:1 to -B:9 (1989); New Mexico-N.M. STAT. ANN. §§ 57-3A-1 to -7 (Michie 1989); North Dakota-N.D. CENT. CODE §§ 47-25.1-01 to .1-08 (1983); Ohio-OHIO REV. CODE. ANN. §§ 1333.61-.69 (Baldwin 1994); Oklahoma-OKLA. STAT. ANN. tit. 78 §§ 85-94 (West 1986); Oregon-OR. REV. STAT. §§ 646.461-.475 (1987); Rhode Island-R.I. GEN. LAWS §§ 6-41-1 to -11 (1986); South Carolina-S.C. CODE ANN. §§ 39-8-1 to -11 (Law Co-op. 1992); South Dakota-S.D. CODIFIED LAWS §§ 37-29-1 to -11 (Michie 1988); UTAH-UTAH CODE ANN. §§ 13-24-1 to -9 (1989); Virginia-VA. CODE ANN. §§59.1-336 to -343 (Michie 1986); Washington-WASH. REV. CODE § 19.108.010 (1981); West Virginia-W.VA. CODE § 47-22-1 (1986); and Wisconsin-WIS. STAT. § 134.90 (1985). Michigan, New Jersey, New York, Pennsylvania, Tennessee, Texas, Vermont, and Wyoming do not have civil statutes specifically covering trade secret misappropriation. Several of those states that have followed the U.T.S.A. have adopted the 1979 version with amendments, while other states have adopted the 1985 version with amendments. Yet other states, notably California and Illinois, have adopted portions of both. See id.
4. UNIF. TRADE SECRETS ACT § 2(a) (amended 1985), 14 U.L.A. 449 (1990).
5. See discussion infra Part II, IV.
6. The increasing value of trade secrets in the global and domestic marketplaces, and the corresponding spread of technology have combined to significantly increase both the economic opportunities and methods for conducting espionage. World Wide Threats to National Security: Hearing on Threats to U.S. Nat'l Sec. Before the Senate Select Comm. on Intelligence, 105th Cong. (1998) (statement of Louis J. Freeh, Director, Federal Bureau of Investigation). The development and production of trade secret information is an integral part of virtually every aspect of U.S. trade, commerce, and business. See id. Consequently, the security of trade secrets is essential to maintaining the health and competitiveness of critical segments of the U.S. economy. See id.
7. See discussion infra Part IV.A. Upon examination of other intellectual property regimes, this is not surprising.
8. The theory of inevitable disclosure has increasingly appeared in judicial decisions as a basis for granting injunctive relief to employers who failed to obtain a covenant not to compete from his or her employee. See discussion infra Part III, reviewing PepsiCo, Inc. v. Redmond, 54 F.3d 1262 (7th Cir. 1995), and several other recent "inevitable disclosure" cases.
9. See James L. Dam, Employees Kept From Competing Despite Lack of a 'Non-Compete', LAW. WKLY. USA, Dec. 15, 1997, at 1. See also generally Terrence P. McMahon et al., Inevitable Disclosure, Not So Sure in the West, California's Laws Don't Bar Use of Inevitable Disclosure Theory, NAT'L. L.J., May 12, 1997, at C35; Johanna L. Edelstein, Note, Intellectual Slavey?: The Doctrine of Inevitable Disclosure of Trade Secrets, 26 GOLDEN GATE U. L. REV. 717, 717 (1996).
10. See James L. Dam, Employees Kept From Competing Despite Lack of a 'Non-Compete', LAW. WKLY. USA, Dec. 15, 1997, at 1. See also generally Terrence P. McMahon et al., Inevitable Disclosure, Not So Sure in the West, California's Laws Don't Bar Use of Inevitable Disclosure Theory, NAT'L. L.J., May 12, 1997, at C35; Johanna L. Edelstein, Note, Intellectual Slavey?: The Doctrine of Inevitable Disclosure of Trade Secrets, 26 GOLDEN GATE U. L. REV. 717, 717 (1996).
11. See James L. Dam, Employees Kept From Competing Despite Lack of a 'Non-Compete', LAW. WKLY. USA, Dec. 15, 1997, at 1. See also generally Terrence P. McMahon et al., Inevitable Disclosure, Not So Sure in the West, California's Laws Don't Bar Use of Inevitable Disclosure Theory, NAT'L. L.J., May 12, 1997, at C35; Johanna L. Edelstein, Note, Intellectual Slavey?: The Doctrine of Inevitable Disclosure of Trade Secrets, 26 GOLDEN GATE U. L. REV. 717, 717 (1996).
12. See Lawrence I. Weinstein, Revisiting the Inevitability Doctrine: When Can A Former Employee Who Never Signed A Non-Compete Agreement Nor Threatened To Use Or Disclose Trade Secrets Be Prohibited From Working For A Competitor?, 21 AM.J. TRIAL. ADVOC. 211 (Fall 1997).
13. See, e.g., Wexler v. Greenberg, 160 A.2d 430, 435 (Pa. 1960). Were we to measure the sentiment of the law by the weight of both English and American decisions in order to determine whether it favors protecting a businessman from certain forms of competition or protecting an individual in his unrestricted pursuit of a livelihood, the balance would heavily favor the latter. Id. See also PepsiCo, Inc. v. Redmond, 54 F.3d 1262, 1268 (7th Cir. 1995). Trade secret law serves to protect "standards of commercial morality" and "encourage[] invention and innovation" while maintaining "the public interest in having free and open competition in the manufacture and sale of unpatented goods." Yet that same law should not prevent workers from pursuing their livelihoods when they leave their current positions. Id. (quoting 2 MELVIN F. JAGER, TRADE SECRETS LAW § IL.03, at IL-12 (Clark Boardman Callaghan rev. ed. 1994)).
14. See discussion infra Part IV.
15. 54 F.3d 1262 (7th Cir. 1995).
16. Although technically incorrect, the RESTATEMENT OF TORTS (1939) will be referenced in the test as "RESTATEMENT (FIRST) OF TORTS" to clearly differentiate the RESTATEMENT (THIRD) OF UNFAIR COMPETITION and to clarify discussion.
17. See RESTATEMENT (FIRST) OF TORTS §§ 757, 758 (1939).
18. See PAUL GOLDSTEIN, COPYRIGHT, PATENT, TRADEMARK AND RELATED STATE DOCTRINES 123 (4th ed. 1997); see also JERRY COHEN & ALAN S. GUTTERMAN, TRADE SECRETS PROTECTION AND EXPLOITATION 8 (1998) ("The decision of the drafters of the second Restatement of Torts not to include trade secrets corresponded with the growing efforts of another legal reform movement that sought to codify various areas of law by means of uniform acts designed to be adopted by individual states.").
19. See PAUL GOLDSTEIN, COPYRIGHT, PATENT, TRADEMARK AND RELATED STATE DOCTRINES 123 (4th ed. 1997); see also JERRY COHEN & ALAN S. GUTTERMAN, TRADE SECRETS PROTECTION AND EXPLOITATION 8 (1998) ("The decision of the drafters of the second Restatement of Torts not to include trade secrets corresponded with the growing efforts of another legal reform movement that sought to codify various areas of law by means of uniform acts designed to be adopted by individual states.").
20. See Edelstein, supra note 9, at 724.
21. See id. The U.T.S.A. was amended once in 1985.
22. As of 1995, the U.T.S.A. had been enacted by twenty-one states. See id. It is interesting to note the rapid increase in the adoption of the U.T.S.A. from 1995 to 1998. The number of states adopting the U.T.S.A. doubled in just three years. It is anticipated that there will be almost unanimous adoption of the U.T.S.A. by all U.S. states by the year 2000. See COHEN & GUTTERMAN, supra note 16, at 9.
23. See COHEN & GUTTERMAN, supra note 16, at 9. There are some important differences, including a change in the definition of a "trade secret." See PETERSON, supra note 3, § 2-1(A).
24. See GOLDSTEIN, supra note 16, at 123.
25. The law of unfair competition was originally dealt with in the Restatement (First) of Torts. Once the provisions concerning unfair competition were dropped from the Restatement (First) of Torts in 1979, see supra note 16 and accompanying text, there were no Restatement provisions that dealt with unfair competition or trade secrets. The U.T.S.A. was created and adopted by many states in the absence of a Restatement Then, in 1995, the American Law Institute decided to reintroduce unfair competition in a Restatement. Instead of including such provisions in a new Restatement of Torts, the committee decided to start a Restatement of Unfair Competition. This Restatement logically should have been named the First Restatement of Unfair Competition; however, because all of the other Restatements were at that time in their third versions, the committee decided to name it the Restatement (Third) of Unfair Competition. This explanation comes from Kenneth B. Germain, Adjunct Professor of Law at the University of Cincinnati College of Law and partner at Frost & Jacobs, L.L.P., Cincinnati, Ohio, classroom discussion, March 1998.
26. Such that generally now, the law is fairly uniform.
27. See generally COHEN & GUTTERMAN, supra note 16, at 69-70.
28. See RESTATEMENT (THIRD) OF UNFAIR COMPETITION § 39 (1995) (defining a trade secret as "any information that can be used in the operation of a business or other enterprise and that is sufficiently valuable and secret to afford an actual or potential economic advantage over others"). Note that this is a change from the original Restatement of Torts definition which required that a trade secret be information capable of "continuous use in the operation of a business." RESTATEMENT (FIRST) OF TORTS § 757 cmt.b (1939).
29. See U.T.S.A. § 1(4), 14 U.L.A. 438 (1990) defining a trade secret as: information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other perons who can obtain economic value from its disclosure or use, and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
30. See RESTATEMENT (THIRD) OF UNFAIR COMPETITION § 39; U.T.S.A. § 1(4).
31. Novelty is not a requirement for the existence of a trade secret because trade secret protection does not protect against independent creation as patent law does. See PETERSON, supra note 3, § 2.2(B), at 2-24 to 2-25. But, arguably, a minimal amount of novelty is required because matters of public or general knowledge in an industry clearly cannot be appropriated by one company as a trade secret. Information cannot qualify as a trade secret if it is generally known to others in the same field. In order to be unknown, it must at some level be novel. See Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 476 (1974) ("However, some novelty will be required if merely because that which does not possess novelty is usually known; secrecy, in the context of trade secrets, thus implies at least minimal novelty.").
32. The value of a trade secret is not its intrinsic or absolute value, but the value of the secret to a competitor. See PETERSON, supra note 3, § 2.2(C), at 2-25 & n.56.
33. At least, this is the prevailing view. See PETERSON, supra note 3, § 2.2(F)(i), at 2-36 to 2-37. If the standard were absolute secrecy, there never would be litigation over the existence of a trade secret.
34. See PETERSON, supra note 3, § 2.2(H), at 2-67. Although the courts continually caution that the circumstances of each case will vary, several basic requirements for protecting trade secrets can be gleaned from the cases: • reasonable precautions against industrial espionage • marking plans and documents "confidential" • use of "confidentiality" legends, warnings, and agreements • restricting visitors and similar types of plant security • locking up or otherwise securing sensitive information • taking technical precautions, such as dividing the system into steps handled by different individuals or departments • copy protection and embedded codes to track copies • employee exit interviews. Id. (citations omitted).
35. Courts have relied heavily on these criteria in determining whether or not a trade secret exists. See PETERSON, supra note 3, § 2.2(A), at 2-22 & n.44, citing Hurst v. Hughes Tool Co., 634 F.2d 895 (5th Cir. 1981); Pate v. National Fund Raising Consultants, Inc., 20 F.3d 341 (8th Cir. 1994) (by relying on six factors of the Restatement, the court held that information concerning cost saving measures disclosed in a franchise relationship constituted a trade secret).
36. RESTATEMENT (FIRST) OF TORTS § 757, cmt.b (1939).
37. See PETERSON, supra note 3, § 2.2(A), at 2-23.
38. See id. 36. See id. § 2.3, at 2-70 (citing Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 475-76 (1994)): The protection accorded the trade secret holder is against the disclosure or unauthorized use of the trade secret by those to whom the secret has been confided under the express or implied restriction of non-disclosure or non-use. The law also protects the holder of a trade secret against disclosure or use when the knowledge is gained, not by the owner's volition, but by some "improper means" . . . . A trade secret law, however, does not offer protection against discovery by fair and honest means, such as by independent invention, accidental disclosure, or by so-called reverse engineering, that is by starting with the known product and working backward to divine the process which aided in its development or manufacture. Id. (citation and footnotes omitted).
39. See PETERSON, supra note 3, § 2.5, at 2-85 n.229 (citing U.T.S.A. § 1(1)).
40. See id. § 2.6, at 2-85, 2-86 n.231 (citing RESTATEMENT (THIRD) OF UNFAIR COMPETITION § 43).
41. For an example of an improper means of use or disclosure, see E.I. duPont de Nemours & Co. v. Christopher, 431 F.2d 1012 (5th Cir. 1970). In this case, a photographer flew over one of DuPont's new plants as part of an attempt at commercial espionage. See id. The court stated: In the instant case DuPont was in the midst of constructing a plant . . . . To require DuPont to put a roof over the unfinished plant to guard its secret would impose an enormous expense to prevent nothing more than a school boy's trick. We introduce here no new or radical ethic since our ethos has never given moral sanction to piracy. The market place must not deviate far from our mores. We should not require a person or corporation to take unreasonable precautions to prevent another from doing that which he ought not do in the first place. Reasonable precautions against predatory eyes we may require, but an impenetrable fortress is an unreasonable requirement, and we are not disposed to burden industrial inventors with such a duty in order to protect the fruits of their efforts. Id. at 1016-17.
42. See PETERSON, supra note 3, § 7.2, at 7-9 n.18.
43. See id. § 7.2, at 7-9.
44. See generally COHEN & GUTTERMAN, supra note 16, at 12-13.
45. See id. See also, e.g., Sperry Rand Corp. v. Rothlein, 241 F. Supp. 549, 564 (D. Conn. 1965) ("[N]o employer would be willing to spend large sums on research and development of new ideas, methods and processes, if they can be freely taken and used.").
46. See generally, COHEN & GUTTERMAN, supra note 16, at 12-13; see also, e.g., Jeffrey C. Sharer, Noncompetition Agreements in Bankruptcy: Covenants (Maybe) Not to Compete, 62 U. CHI. L. REV. 1549, 1574 (1995).
47. See GOLDSTEIN, supra note 16, at 153.
48. This is the action for corrupting a slave that existed in ancient Rome. See A. Arthur Schiller, Trade Secrets and the Roman Law: The Actio Servi Corrupti, 30 COLUM. L. REV. 837, 838-39 (1930). During this period, slaves formed the largest group of employees. See id. When a competitor of a businessman (master) maliciously enticed the employee (slave) to divulge the master's secrets, by this actio servi corrupti, the owner of a slave was given an action against a third person maliciously enticing a slave to commit a wrong. See id. Double damages were awarded against this third person who maliciously enticed the master-businessman's slave to reveal the trade secrets. See id. at 841. Damages included the diminution in the value of the slave and any other direct and indirect harm. See also GOLDSTEIN, supra note 16, at 153.
49. See ROGER M. MILGRIM, MILGRIM ON TRADE SECRETS 5-4 (1997). The relationship between an employer and an employee is a confidential one. See id. The existence of such a relationship between employer and employee imposes a duty upon the employee not to use or disclose the employer's confidential information to the employer's detriment. See id.
50. See id. at 6-2.
51. See generally PETERSON, supra note 3, at 9-1 to 9-88, 11-1 to 11-22.
52. See 2 MELVIN F. JAGER, TRADE SECRETS LAW § 13.01[1], at 13-2 to 13-3 (1993).
53. See PETERSON, supra note 3, § 11.1(A), at 11-3.
54. See id.
55. A nondisclosure agreement is also called a confidentiality agreement.
56. See Hal Lancaster, How to Loosen Grip Of a Noncompete Pact After Your Breakup, WALL ST. J., Feb. 17, 1998, at B1.
57. See GOLDSTEIN, supra note 16, at 151.
58. See, e.g., Bridgestone/Firestone, Inc. v. Lockhart, 5 F. Supp. 2d 667 (S.D. Ind. 1998).
59. See PETERSON, supra note 3, § 9.6, at 9-80 to 9-81.
60. These covenants are also called restrictive covenants or non-compete agreements.
61. See generally PETERSON, supra note 3, at 9-1 to 9-88.
62. See COHEN & GUTTERMAN, supra note 16, at 168 (stating that it is generally easy to find adequate consideration to support an employee's non-compete agreement when the agreement was entered into at the beginning of the employment relationship). See also Lancaster, supra note 54, at B1 (stating that sometimes employees are unaware that they have signed a noncompete agreement and that employees should seek consideration for signing a noncompete agreement at the beginning of the employment relationship, during the "courtship," because this is the best time to negotiate.) Courts will look more favorably on a non-compete agreement that clearly compensates the employee for signing it. See Suellen Lowry, Note, Inevitable Disclosure Trade Secret Disputes: Dissolutions Of Concurrent Property Interests, 40 STAN. L. REV. 519, 523 (1988). Some urge that employees should be given additional consideration for signing a non-compete agreement such as compensation equivalent to the lost wages during the time the employee agrees not to compete. See, e.g., Lumex, Inc. v. Highsmith, 919 F. Supp. 624, 636 (E.D.N.Y. 1996) (noting that a non-compete clause will be enforced if it contains "fair and reasonable counterbalancing provisions," including allowing work for a competitor, but preventing work on competitive products, specifying a relatively short time [six months] of non-competition, and payment by the former employer of the employee's salary and benefits during the period of non-competition). Or, the employer could offer another form of consideration. The employer, at the time of hiring or later, could ask the employee to give the company the right to hire the employee as a consultant for a short period of time if he resigns or is terminated. See Garry Mathiason, What's In Your Head Can Hurt You, FORTUNE, July 20, 1998, at 153.
63. See COHEN & GUTTERMAN, supra note 16, at 168 (stating that it is generally easy to find adequate consideration to support an employee's non-compete agreement when the agreement was entered into at the beginning of the employment relationship). See also Lancaster, supra note 54, at B1 (stating that sometimes employees are unaware that they have signed a noncompete agreement and that employees should seek consideration for signing a noncompete agreement at the beginning of the employment relationship, during the "courtship," because this is the best time to negotiate.) Courts will look more favorably on a non-compete agreement that clearly compensates the employee for signing it. See Suellen Lowry, Note, Inevitable Disclosure Trade Secret Disputes: Dissolutions Of Concurrent Property Interests, 40 STAN. L. REV. 519, 523 (1988). Some urge that employees should be given additional consideration for signing a non-compete agreement such as compensation equivalent to the lost wages during the time the employee agrees not to compete. See, e.g., Lumex, Inc. v. Highsmith, 919 F. Supp. 624, 636 (E.D.N.Y. 1996) (noting that a non-compete clause will be enforced if it contains "fair and reasonable counterbalancing provisions," including allowing work for a competitor, but preventing work on competitive products, specifying a relatively short time [six months] of non-competition, and payment by the former employer of the employee's salary and benefits during the period of non-competition). Or, the employer could offer another form of consideration. The employer, at the time of hiring or later, could ask the employee to give the company the right to hire the employee as a consultant for a short period of time if he resigns or is terminated. See Garry Mathiason, What's In Your Head Can Hurt You, FORTUNE, July 20, 1998, at 153.
64. See COHEN & GUTTERMAN, supra note 16, at 168. The sufficiency of the consideration becomes an issue when the employer asks the employee to sign a non-compete agreement after the employee has already been working for the employer. See id. It is conceivable that an employer might offer money or other incentives to prevent an employee from going to work for a competitor.
65. See PETERSON, supra note 3, § 9.1, at 9-3. Non-competition agreements were treated by the early English courts as against public policy and void. See id. Subsequently, the rule developed that if such agreements were limited to a reasonable time and to a reasonable geographic area, they would be considered valid. See id. Agreements temporally and geographically unlimited, or only temporally limited, remained void and against public policy. See id. Unreasonable covenants remained unenforceable and void "because of the public policy against restraints of trade and the hardships resulting from interference of a person's means of livelihood." Id. at 9-3 to 9-4 (quoting Bob Pagan Ford, Inc. v. Smith, 638 S.W.2d 176, 178 (Tex. App. 1982)). See also Lancaster, supra note 54, at B-1 (referring to non-compete agreements as "contractual handcuffs").
66. Some states pass statutes that define or delimit the boundaries of a reasonable non-compete agreement. See Nina Schuyler, Trading Secrets, 16 CAL. LAW. 27 (Feb. 1996). Negative inducement-non-compete agreements that limit an employee's right to accept certain types of jobs after leaving a company, are prohibited by state law in California. See also McMahon et al., supra note 9, at C35. If a worker with a non-compete agreement takes a job in California, California courts may refuse to enforce the agreement and permit the worker to assume without limitation his or her new job responsibilities, unless the employer can succeed in a request for an injunction under the inevitable disclosure doctrine. Id. (footnote omitted).
67. Usually, non-competition clauses in employment contracts are strictly construed against the employer. See JAGER, supra note 50, § 13.01[2], at 13-11 to 13-12; see also James A. DiBoise & David J. Berger, Getting Around Barriers to Mon-Compete Pacts, NAT'L L.J., Feb. 20, 1995, at C13; E.W. Bliss Co. v. Struthers-Dunn, Inc.,408 F.2d 1108, 1113 (8th Cir. 1969) ("Basically, an employer may not restrict an employee's future employment except by an agreement embodying reasonable terms.").
68. For example, two legitimate business interests have been identified by Massachusetts courts: the protection of good will or the customer relations that an employee develops with a customer for the benefit of the employer, and the protection of trade secrets or confidential information. See Edmund C. Case, Recent Developments in Litigation With Competing, Former Employees, 22 MASS. LAW. WKLY. 1241, Feb. 21, 1994, at 37.
69. See MILGRIM, supra note 47, at 6-10.
70. See PETERSON, supra note 3, § 9.2, at 9-6 to 9-7 (citing Blue Ridge Anesthesia & Critical Care, Inc. v. Gidick, 239 Va. 369, 371-72 (1990)). Virginia's three part test is as follows: (1) Is the restraint, from the standpoint of the employer, reasonable in the sense that it is no greater than is necessary to protect the employer in some legitimate business interest? (2) From the standpoint of the employee, is the restraint reasonable in the sense that it is not unduly harsh and oppressive in curtailing his legitimate efforts to earn a livelihood? (3) Is the restraint reasonable from the standpoint of a sound public policy? Blue Ridge Anesthesia & Critical Care, Inc. v. Gidick, 239 Va. 369, 371-72 (1990).
71. See David A. Schwab, Keeping The "Secret" In Trade Secrets, 15 NO.2 ACCA Docket 8, Mar./Apr. 1997, at 13-14, available in WESTLAW, TP-ALL file. Courts will enforce restrictive covenants only if they do not impose upon the employee any greater restraint than is necessary to protect the business and good will of the employer, therefore, it is implicit that employers be able to prove the trade secret status of the confidentiality of certain business information. See id.
72. See PETERSON supra note 3, § 9.2, at 9-5. It is within this context that an employer can prevent an employee from misappropriating trade secrets.
73. See Dam, supra note 9, at 12.
74. See U.T.S.A. § 2(a), 14 U.L.A. 449 (1990).
75. See id.
76. See id.
77. The drafters of the U.T.S.A. specifically did not provide for an injunction based upon "inevitable disclosure," but instead only for "threatened misappropriation." The first post-U.T.S.A. cases rejected efforts of those who would equate "threatened misappropriation" with "inevitable disclosure." See James A. DiBoise & David J. Berger, When Disclosure in Inevitable, Liability is Not: With the Uniform Trade Secret Act and In Court, the Inevitable Disclosure Theoy Loses Ground, NAT'L L.J., May 20, 1996, at C30. However, this has changed and it is now clear that most courts equate the two and have allowed the theory of inevitable disclosure in U.T.S.A. states. See McMahon et al., supra note 9, at C36.
78. See Dam, supra note 9, at 1. Under the inevitable disclosure theory, the ex-employer seeks an injunction prohibiting employment, not just the disclosure of trade secrets. See id. Although there are several variations, see infra discussion Part IV, the test is usually based on three factors: "(1) whether the former employer and the new employer are competitors; (2) whether the employee's new position is comparable to his or her former position; and (3) the efficacy of steps taken by the new employer to prevent the alleged misappropriation of trade secrets." Edelstein, supra note 9, at 718 n.7; see generally Lowry, supra note 60; PepsiCo, Inc. v. Redmond, 54 F.3d 1262, 1268 (7th Cir. 1995).
79. See Dam, supra note 9, at 13 ("If an employee never signed a non-compete agreement, the 'inevitability argument' can be used to get the same results. However, '[t]hat's the hard way to go.'") (quoting attorney Laurence Reece).
80. See PETERSON, supra note 3, § 9.1, at 9-3 to 9-4. See also discussion of restrictive covenants, supra text accompanying notes 58-68.
81. See PETERSON, supra note 3, § 7.5, at 7-15. In the absence of an express writing specifying the information deemed confidential and a trade secret, an employer must prove that the employee knew or should have known of the confidentiality of the information by relying on (1) the context in which the information is disclosed to the employee, (2) the measures taken by the employer to protect the trade secret status of the information, and (3) industry standards indicating that the particular employee involved could reasonably be expected to know which information should be considered confidentiality and proprietary. Id.
82. See, e.g., PepsiCo, Inc. v. Redmond, 54 F.3d 1262 (7th Cir. 1995), discussed in depth infra Part III; see also other cases discussed infra Part III.
83. These employers, therefore, did not provide extra consideration in the form of compensation for the agreement.
84. See Anthony A. Bongiorno & James J. Marcellino, Noncompetes: Worth Their Weight on Paper?, 25 MASS. LAW. WKLY. 407, Oct. 28, 1996, at 11 ("The inconsistency in the case law is apparent: If an employer expends the time, energy and money to obtain written covenants with its work force, shouldn't the hurdle to enjoin former employees be lower than that of the employer who did not get it in writing?"). See, e.g., PepsiCo, Inc. v. Redmond, 54 F.3d 1262 (7th Cir. 1995); infra text accompanying notes 86-108.
85. 179 N.Y.S. 325 (4th Dept. 1919).
86. Id. at 330.
87. See, e.g., National Starch & Chem. Corp. v. Parker Chem. Corp., 530 A.2d 31, 32 (N.J. Super. Ct. App. Div. 1987). In the nine years of his employment with the plaintiff, "Lauria was intimately associated with the development of many sophisticated, highly technical envelope adhesives, through expensive trial and error processes." Id. Lauria later accepted employment as technical manager for a division of the defendant's competing business. The court concluded that "under the circumstances there was sufficient likelihood of 'inevitable disclosure,' with consequent immediate and irreparable harm to National" to warrant preliminary relief pending trial. Id. at 33 (citation omitted); Allis-Chalmers Mfg. Co. v. Continental Aviation & Eng'g Corp., 255 F. Supp. 645, 654 (E.D. Mich. 1966). The course of negotiations, relating to distributor type fuel injection pumps, between Allis-Chalmers and Continental, the nature of the research and development work done by Mr. Wolff on distributor type fueling pumps at Allis-Chalmers, the nature of the type of work Mr. Wolff is to perform at Continental, which includes design and development of distributor type fuel injection pumps, all lead to an inference that there is an inevitable and imminent danger of disclosure of Allis-Chalmers trade secrets to Continental and use of these trade secrets by Continental. The virtual impossibility of Mr. Wolff performing all of his prospective duties for Continental to the best of his ability, without in effect giving it the benefit of Allis-Chalmer's [sic] confidential information, makes a simple injunction against disclosure and use of this information inadequate. Id.; Standard Brands, Inc. v. Zumpe, 264 F. Supp. 254, 261 (E.D. La. 1967). Reily therefore is not now engaged in work that would permit the ready application of the confidential information known to Zumpe. While Standard's witnesses testified that he would inevitably do his best whenever a problem came up because he is an able, ambitious man, the testimony that his disclosure of confidential information would be inevitable rests upon the conclusion that doing his best would entail disclosure of such information. This conclusion does not follow from the evidence presented. Id.; E.I. duPont de Nemours & Co. v. American Potash & Chem. Corp., 200 A.2d 428, 435 (Del. Ch. 1964). As I read this quoted testimony, Hirsch is saying that in situations where he recognizes that a possibly pertinent trade secret of plaintiff is involved, he will confine himself to the use of unrestricted material. I think it is evident even to one unsophisticated in chemical and engineering matters that at least at this stage it is impossible to say that all of plaintiffs trade secrets in those areas are susceptible of consciously being so isolated by Hirsch. One cannot now say that there is no issue as to his ability to avoid drawing on them when he comes to give instructions or suggestions relative to the solution of problems arising in Potash's commercial chloride process operation. Id. The inevitable disclosure theory was clearly enunciated in the early 1980s in FMC Corp. v. Varco Int'l., Inc., 677 F.2d 500 (5th Cir. 1982), in which the United States Court of Appeals for the Fifth Circuit held that the facts of the case, including the employee's placement in a comparable position with a direct competitor without restriction against using or disclosing the former employer's trade secrets, created a realistic fear of irreparable injury. See id. at 505. The court ordered the employee, who was not bound by a nondisclosure or non-compete agreement, not to disclose the trade secrets and ordered the new employer not to put the employee in a position that would "pose[ ] an inherent threat of disclosure or use of [the former employer's] trade secrets." Id.; but cf. DiBoise & Berger, supra note 64, at C13 & n. 14 which quotes IBM Corp. v. Seagate Tech., Inc., 941 F. Supp. 98 (D. Minn. 1992)), one of the first inevitable disclosure cases decided under the U.T.S.A. In Seagate, a Minnesota district court denied the plaintiffs motion for injunctive relief based upon inevitable disclosure, holding that "in the absence of a covenant not to compete or a finding of actual or an intent to disclose trade secrets, employees 'may pursue their chosen field of endeavor in direct competition' with their prior employer." Seagate, 941 F. Supp. at 101 (citation omitted). This decision also recognized the potential unfairness of the inevitable disclosure doctrine stating that "[a] claim of trade secret misappropriation should not act as an ex post facto covenant not to compete." Id. (citation omitted).
88. See generally Dam, supra note 9, at 12-13.
89. 54 F.3d 1262 (7th Cir. 1995).
90. The plaintiff; PepsiCo, Inc., and a co-defendant, Quaker Oats Company, were fierce competitors in the beverage industry, especially with regards to "sport drinks" and "new age drinks." Quaker distributed the leading sports drink, "Gatorade," while PepsiCo distributed the rival "All Sport." In the new age drink area, Quaker recently had purchased a new age drink-maker, Snapple Beverage Corp., while PepsiCo had developed extensive plans to increase its market share in new age drinks. See id. at 1263-64.
91. Redmond became the General Manager of the Northern California Business Unit in June 1993, and was promoted one year later to General Manger of the business unit covering all of California. See id. at 1264.
92. See id. at 1264. See also supra note 92, explaining why the court found this information to be protectable as a trade secret.
93. See PepsiCo, 54 F.3d at 1264.
94. Over time, Redmond kept his dealings with Quaker secret from his employers at PCNA. See id. In October 1994, Quaker offered Redmond the position of Vice President - On Premise Sales for Gatorade; Redmond did not accept, but rather continued to negotiate for more money. See id. On November 8, 1994, Redmond accepted Quaker's offer, but later that day called the Senior Vice President of Human Resources for PCNA and told him that he had an offer from Quaker but had not yet accepted it. See id. Redmond specifically asked whether, in light of his offer, he should make planned calls on certain PepsiCo customers. See id. On the basis of the misrepresentation that he had not yet accepted the offer, PepsiCo advised Redmond to proceed with his calls. Additionally, Redmond misstated his offer to a number of his colleagues, saying that he was leaning "60/40" to accept, when actually he had already accepted. See id. On November 10, 1994, Redmond resigned from PepsiCo. See id. Six days later, PepsiCo sought a temporary restraining order to enjoin Redmond from assuming his duties at Quaker and to prevent him from disclosing trade secrets or confidential information to Quaker. See id. at 1265. The district court granted the order, but dissolved it two days later after determining that PepsiCo had not established irreparable harm. See id.
95. The court found that PepsiCo had demonstrated that Redmond had knowledge of several trade secrets, including: (1) PepsiCo's Strategic Plan, an annually revised document containing PCNA's strategies for manufacturing, production, marketing, packaging, and distribution for the next three years; (2) PCNA's Annual Operating Plan, which guides PCNA's financial goals, marketing plans, and operational changes, and contains confidential information about how PCNA prices its products in the marketplace; (3) PCNA's attack plans, under which PCNA dedicates extra funds to support its brands against other brands in selected markets; and (4) PCNA's trade secrets regarding innovations in its selling and delivery systems. See id. PCNA argued that Redmond would inevitably disclose that information to Quaker in his new position, in which he would have substantial input as to Gatorade and Snapple pricing, costs, margins, distribution systems, products, packaging, and marketing, and, as a result, could give Quaker an unfair advantage against PepsiCo. See id. at 1266.
96. See id.
97. Additionally, Quaker and Redmond argued that Redmond had signed the "Quaker Code of Ethics," which prohibited any unlawful activity. See id. Redmond also stated that if he were faced with a situation that might involve the use or disclosure of PCNA information, "he would seek advice from Quaker's in-house counsel and would refrain from making the decision." Id.
98. See id. at 1267.
99. See id.
100. See id.
101. See id.
102. See id. at 1272.
103. See id. at 1270.
104. The court found this despite the fact that it acknowledged that PepsiCo had not brought a traditional trade secret case in which a former employee had knowledge of a special manufacturing process or customer list and could give a competitor an unfair advantage by use of such process or customer list. See id.
105. Id. at 1269.
106. An essential element of the court's ruling was its finding that PepsiCo had shown "proof of [defendant's] willingness to misuse [PepsiCo's] trade secrets." Id. at 1270. PepsiCo had shown that Redmond did not handle his departure from PepsiCo with the utmost candor and honesty. See id. Redmond even admitted that situations were likely to arise in which he would have to rely on the information that he gained from working at PepsiCo. See id. at 1270-71.
107. See id. at 1268.
108. See id. In so doing, the court noted that there was very little Illinois case law dealing with the doctrine of inevitable disclosure, but addressed the two existing cases by distinguishing them. Because the facts in both Teradyne, Inc. v. Clear Communications Corp., 707 F. Supp. 353 (N.D. Ill. 1989), and AMP, Inc. v. Fleischhacker, 823 F.2d 1199 (7th Cir. 1987), involved facts too weak to apply the theory of inevitable disclosure, and because the plaintiffs in those cases asserted only that skilled employees were taking their general skills elsewhere, the court in PepsiCo distinguished these two cases. See PepsiCo, 54 F.3d at 1268-69.
109. Generally, an employer cannot stop an employee from using his or her general skills and knowledge at another job. See discussion supra note 40 and accompanying text. The rules may be different when an employee has very technical skills or expertise that would be detrimental in the hands of a competitor. See JAMES H.A. POOLEY, TRADE SECRETS: A GUIDE TO PROTECTING PROPRIETARY BUSINESS INFORMATION 31 (1989).
110. See PepsiCo, 54 F.3d at 1269.
111. See id. at 1272. The court of appeals disagreed, however, with the district court's finding that PepsiCo was likely to prevail on its common law cause of action for misappropriation of trade secrets, as the Illinois statute abolished common law cause of action for misappropriation of trade secrets. See id. 109. See McMahon et al., supra note 9, at C35. ("Although the doctrine dates back more than 30 years, PepsiCo opened the flood gates for former employers seeking to rely on this theory." (footnotes omitted)). See also cases discussed infra Part III.C.
112. See, e.g., Medtronic, Inc. v. Sun, Nos. G7-97-1185, C9-97-1186, 1997 WL 729168 (Minn. Ct. App. Nov. 25, 1997) (affirming trial court's determination that two employees' non-compete agreements were reasonable and enforceable when blue-penciled to length of one year, but recognizing that Minnesota courts use a "reasonableness" test for determining the enforceability of non-compete agreements, and not an "inevitable disclosure" test). See also DiBoise & Berger, supra note 64, at C12-C14 (discussing the court's refusal to recognize the doctrine of inevitable disclosure in IBM Corp. v. Seagate Tech., Inc., 941 F. Supp. 98 (D. Minn. 1992)).
113. See, e.g., Merck & Co. v. Lyon, 941 F. Supp. 1443 (M.D.N.C. 1996); Doubleclick, Inc. v. Henderson, No. 116914/97, 1997 WL 731413 (N.Y. Sup. Ct. Nov. 7, 1997). See discussion of these cases infra Part III.C.2. Other courts have recognized the doctrine of inevitable disclosure as a viable theory, but often find that the plaintiff has failed to show that disclosure of the trade secret is inevitable, and therefore decline to award an injunction. See, e.g., Bridgestone/Firestone, Inc. v. Lockhart, 5 F. Supp. 2d 667 (S.D. Ind. 1998); Carboline Co. v. Lebeck, 990 F. Supp. 762 (E.D. Mo. 1997).
114. See, e.g., Lumex, Inc. v. Highsmith, 919 F. Supp. 624 (E.D.N.Y. 1996). See also discussion infra text accompanying notes 115-27.
115. See, e.g., Novell Inc. v. Timpanogos Research Group Inc., 46 U.S.P.Q.2d 1197 (Utah D. Ct. 1998). See also Dam, supra note 9, at 13 ("The argument can be very useful in cases where there is a non-compete agreement, because, "'[i]t's an additional reason why the agreement is necessary and should be enforced' . . . . This may be the most common use of the argument so far." (quoting attorney's Gary Weiss and Anthony Bongiorno, respectively)).
116. See, e.g., Henderson, No. 116914/97, 1997 WL 731413.
117. 919 F. Supp. 624, 629 (E.D.N.Y. 1996).
118. See id. at 628-29.
119. See id. at 626.
120. See id. at 624.
121. See id. at 629.
122. See id. ("The court finds that the companies in the health fitness industry are very aggressive and dynamic. It is also a 'copy cat' or cloning industry.").
123. See id. ("Time of the introduction of a product is important because a new or innovative machine has a selling advantage. The goal is to be 'first to the market.'" (citation omitted)).
124. See id. ("He interacted with virtually every part of the company, including sales, engineering, marketing, manufacturing and research and development. He attended high level policy designing, marketing and financial meetings.").
125. See id. at 631. ("In his candid manner, he [the employee] readily conceded that it would be possible for him to improve the 'feel' of Life Circuit equipment and introduce other changes that would make Life Circuit more competitive in the market, using confidential information gained in his former employment . . . .").
126. See id. As stated above, the court concluded that disclosure of the trade secrets was inevitable, stating: "Highsmith was privy to the top secret Cybex [former employer] product, business and financial information. He cannot eradicate these trade secrets and this confidential information from his mind." Id.
127. See id. at 636. Additionally, in this case, the employee was to be compensated during the sixth month period, receiving payment for his salary at the time of termination and including payment of premiums for health and life insurance. See id.
128. See id. at 633-34. The situation in this case is different from the facts in PepsiCo in that the Court finds that, up to this time, [the new employer and the employee] acted reasonably and in good faith . . . . However . . . once [the employee] starts to work for [the employer] . . . the Court finds that [the employee] will inevitably divulge [his former employer's] trade secrets and confidential information. Id. See also id. at 636 ("'[E]ven assuming the best of good faith, it is doubtful whether the [employee] could completely divorce his knowledge of the trade secrets from any . . . work he might engage in' with [his new employer].") (quoting Monovis, Inc. v. Aquino, 905 F. Supp. 1205, 1234 (W.D.N.Y. 1994))).
129. For additional cases using the doctrine of inevitable disclosure to determine the enforceability of a non-compete agreement, see Marcam Corp. v. Orchard, 885 F. Supp. 294 (D. Mass. 1995) (though existence of a non-compete agreement was not in dispute, the employer was still required to prove the inevitable disclosure of its trade secrets in confidential business information). See also APAC Teleservices, Inc. v. McRae, 985 F. Supp. 852, (N. D. Iowa 1997). The APAC court examined whether the defendant was likely to inevitably disclose the information and upon finding that it was not likely, determined that the covenant not to compete would therefore not be enforceable. See id. at 861-63. Although the court recognized the existence of the inevitability doctrine and noted that it may be used in the determination of the enforcement of a covenant not to compete, it found that the inevitability standards had not been met by this defendant. See id. Ultimately, the court held that enforcement of the nondisclosure agreement was sufficient protection for the plaintiffs. See id. at 866. The court stated: Having found that [the former employer] has not proven that a threat of inevitable disclosure exists or that the [employee's] job responsibilities at [his new employer's] are in a similar capacity to his former job, [the former employer] is not likely to succeed in proving that the covenant not to compete should be enforced. Id. at 863.
130. 966 F. Supp. 246 (S.D.N.Y. 1997).
131. See id. at 252.
132. See id. at 255-56.
133. See id. at 256. The court here rejected the plaintiffs argument that it need not prove the likelihood of irreparable harm because of the inevitable disclosure doctrine. See id. The plaintiff urged that the employee's access to the information combined with the inevitability of disclosure was sufficient to establish irreparable harm. See id. Interestingly, the plaintiffs cited Lumex for this proposition and for the proposition discussed earlier, supra note 124, that the employee cannot "'eradicate . . . this confidential information from his mind'" and that therefore he would "inevitably and inadvertently use that information in his efforts to benefit [the new employer]." See International Paper Co, 966 F. Supp. at 258 (quoting Lumex, Inc. v. Highsmith, 919 F. Supp. 624, 631 (S.D.N.Y. 1996)).
134. See supra text accompanying notes 120-24.
135. See International Paper Co., 966 F. Supp. at 258. For example, there was no testimony that the defendant would have to disclose the information in order to perform his job.
136. See id.
137. See id. at 259.
138. See id.
139. See cases discussed infra text accompanying notes 138-92.
140. No. 116914/97, 1997 WL 731413 (N.Y. Sup. Ct. Nov. 7, 1997).
141. See id. at *1.
142. See id. at *3.
143. See id. at *2.
144. See id.
145. The defendants here were enjoined for a period of six months from launching any company, or taking employment with any company, which competes with Doubleclick, when defendants' job descriptions or functions at said company or companies included providing any advice or information concerning any aspect of advertising on the Internet See id. at *8. The court rejected the plaintiffs request for a one year injunction based on the speed of changes in the Internet advertising industry and the fact that defendants' knowledge likely would lose its value such that the purpose of the preliminary injunction would evaporate within one year. See id.
146. See id.
147. Id. at *5. The court continued, stating that injunctive relief may be issued when a former employee's new job function inevitability will lead her to rely on trade secrets belonging to a former employer. See id.
148. Id. at *6 (quoting Lumex, Inc. v. Highsmith, 919 F. Supp. 624, 631 (E.D.N.Y. 1996)).
149. See id.
150. See id. at *8.
151. 5 F. Supp. 2d 667 (S.D. Ind. 1997).
152. 990 F. Supp. 762 (E.D. Mo. 1997).
153. 941 F. Supp. 1443 (M.D.N.C. 1996).
154. 46 U.S.P.Q.2d 1197 (Utah D. Ct. 1998).
155. See also Uncle B's Bakery, Inc. v. O'Rourke, 920 F. Supp. 1405, 1433 (N.D. Iowa 1996). The court implicitly recognized the inevitable disclosure doctrine as a separate grounds for an injunction irrespective of covenant not to compete: Because the court finds that Uncle B's Bakery has a reasonable likelihood of success on the merits of a claim that O'Rourke agreed to be bound by the 'Non-Disclosure/Non-Compete' Agreement, the court need not here consider the further question of whether an injunction on O'Rourke's continued employment with Brooklyn Bagel Boys could be based solely on a need to protect trade secrets or confidential information. Id. at n.17.
156. 5 F. Supp. 2d 667 (S.D. Ind. 1998).
157. See id at 670-79. The facts of this case are quite complex. Essential to this discussion is that the employee, Lockhart worked for Firestone for several years and held several different positions. See id. at 670-71. At one point, Lockhart left the company and then later came back to work for them. See id. at 671. He signed both a non-competition agreement and a nondisclosure agreement, and ultimately he left without telling his employer of his intention to resign. See id. at 675-76. The employer, however, learned of his intention to leave and did not allow him back into the office. See id. at 676. The employer then brought suit seeking to prevent the employee from working for a competitor. See id. at 670.
158. See id. at 681. The court found that although PepsiCo, Inc. v. Redmond, 54 F.3d 1262 (7th Cir. 1995), was instructive, a finding of inevitable disclosure was not warranted on this record. See Bridgestone/Firestone, 5 F. Supp. 2d at 681.
159. See id. at 681-82. The court noted that although lack of evidence of harm to the previous employer was not conclusive, it served to corroborate the testimony of the employee and other former co-workers that disclosures had not occurred. See id.
160. See id. at 682.
161. See id. at 682-85.
162. See id. at 689.
163. 990 F. Supp. 762 (E.D. Mo. 1997).
164. See id. at 765-67.
165. See id. at 767, 768.
166. See id. at 767 ("[P]laintiff has not presented evidence to establish that the two-year restriction is reasonable.").
167. Set id. The court compared this fact with the finding in PepsiCo, Inc. v. Redmond, 54 F.3d 1262, 1269 (7th Cir. 1995), that the former employee participated in and drafted the current annual operating plan.
168. The court stated that the plaintiffs did not enact adequate secrecy measures. See Carboline, 990 F. Supp. at 767.
169. See id. at 767-68.
170. 941 F. Supp. 1443 (M.D.N.C. 1996).
171. See id. at 1454.
172. See id. at 1460 (stating "'[o]rdinarily, mere employment by a competitor alone will not create a likelihood of disclosure sufficient to support an injunction'" (quoting Travenol Labs., Inc. v. Turner, 228 S.E.2d 478 (1976))).
173. See id. at 1457 (citing PepsiCo, Inc. v. Redmond, 54 F.3d 1262, 1269 (7th Cir. 1995)). Although the defendant employee argued that North Carolina courts previously had refused to apply the doctrine of inevitable disclosure, citing FMC Corp. v. Cyprus Foote Mineral Co., 899 F. Supp. 1477 (W.D.N.C. 1995), the court dismissed this issue, stating that the court in FMC did not refuse to apply the inevitable disclosure theory, but merely found that the injunction sought was too broad and therefore would not be granted. See Merck, 941 F. Supp. at 1458.
174. See id. at 1461. [The employee] was not entirely forthright in his representations to [the former employer] regarding his employment with [the new employer]. However, it does not appear that he was attempting to hide the truth in order to spirit off trade secrets. Rather, it seems that he wished to obtain a better severance package for himself. Thus, these facts do not disclose that a broad injunction should be issued or one which would limit [the employee's] employment with [the new employer]. However, [his] misrepresentations do provide a basis for questioning his ability to keep his word with respect to the confidentiality agreement he has with plaintiffs. . . . [H]e might also find that the temptation to succeed in his career would be too much for him to ignore
175. See id. at 1460-61 ("[Employee's] former position at [the old employer] and his new position at [the new employer] involve similar responsibilities . . . . Here, each decision made by [the employee] will be against the background knowledge of the nature of [his former employer's information].").
176. See id. at 1461. The court also noted that this failure by the former employer may also serve as an indication that the type of confidential information that the employee possessed had limited value. See id.
177. See id. at 1460. This court also stated that it would enjoin threatened misappropriation based on the inevitable disclosure theory when the injunction was limited to protecting specifically defined trade secrets and when the trade secret was clearly identified and of significant value. See id. The court also stated that in such a situation, a showing of bad faith or underhanded dealing by the former employee or new employer would not necessarily be required. See id. To support the issuance of a broad injunction effectively precluding competitive employment, the court stated that it would probably require a showing of bad faith or underhanded dealing and that the competitor lacked comparable levels of knowledge and achievement. See id.
178. And all of the agents and employees of the new employer. See id.
179. See id. at 1465. Note that the injunctions were also limited in that they might be changed once the matter would be finally adjudicated or if the former employer revealed the information publicly.
180. 46 U.S.P.Q.2d 1197 (Utah D. Ct. 1998).
181. See id. at 1199.
182. See id. at 1215.
183. See id. at 1215-16. Finally, a word about the doctrine of inevitable disclosure which [the former employer] urges that I adopt but [employees and new employer] just as vigorously urge that I reject. . . . I treat the matter as a case of first impression. . . . Though no Utah court has resolved whether the doctrine of inevitable disclosure should apply in Utah, this case is an excellent example of why it should. Id.
184. 182. See id. at 1217.
185. See id. at 1216.
186. See id.
187. See id. at 1217. While it is one thing for them to claim they will not use [the former employer's] trade secrets, it is inconceivable to believe that if they are designing a [similar product] that they ever would start down any of the blind alleys that they already know won't work. No one is going to spend money trying that which they already know will end in failure . . . . [I]t is inevitable that [the employees] will not use any of the negative knowledge which they learned while at [the former employer] and that negative knowledge gives them a considerable head start or competitive advantage as they develop competing products for the market. Id.
188. See id.
189. See id. ("Even before he left . . . [the employee] pirated [his former employer's] technology and shipped a copy to Microsoft."). See also id. ("With such [a predatory] intent, it is inevitable that [the employee] would use information gained through his employment with [his former employer] for his own profit").
190. See id. at 1217-18.
191. See id. at 1218.
192. See id.
193. See id. Keeping them from software development would be like prohibiting counsel from practicing law. What else are they to do? The answer for the lawyer is that he or she could leave a law firm and still have opportunities for employment in governmental or corporate law offices. Similarly, there are computer software developers who are busy in the industry but are not deeply involved in clustering; in file management, directory, routing and storage systems; or in cluster interconnect communications systems. That is where these men will need to go. Id. (emphasis added).
194. See id. ("[T]he facts . . . are just too compelling. Defendants cannot be allowed to remain in the same field as [their former employer] without inevitably encroaching on the knowledge which they gained in a fiduciary capacity while at [the former employer]."). The judge did not want to make the injunction permanent because of the fluid nature of the industry. See id. ("This is a fluid industry, with new developments coming at lighting [sic] speed."). Additionally, the judge stated that if during the nine month period the employees wanted to seek employment with a new employer, they would have to advise the new employer of the restrictions contained in this ruling. See id.
195. See discussion supra text accompanying notes 111-14.
196. See discussion supra text accompanying notes 115-35.
197. See discussion supra text accompanying notes 136-92.
198. See discussion supra text accompanying notes 98-107 (examining PepsiCo, Inc. v. Redmond, 54 F.3d 1262, (7th Cir. 1995)); supra text accompanying notes 143-48 (examining Doubleclick Inc. v. Henderson, No. 116914/97, 1997 WL 731413 (N.Y. Sup. Nov. 7, 1997)); supra text accompanying note 157 (examining Bridgestone/Firestone, Inc. v. Lockhart, 5 F. Supp.2d 667 (S.D. Ind., May 7, 1998)); supra text accompanying notes 165-67 (examining Carboline Co. v. Lebeck, 990 F. Supp. 762 (E.D. Mo. 1997)); supra text accompanying notes 171-77 (examining Merck & Co. v. Lyon, 941 F. Supp. 1443 (M.D.N.C. 1996)); supra text accompanying notes 187-90 (examining Novell Inc. v. Timpanogos Research Group Inc., 46 U.S.P.Q.2d 1197 (Utah D. Ct. 1998)).
199. See PepsiCo, Inc. v. Redmond, 54 F.3d 1262, 1268 (7th Cir. 1995).
200. See Wexler v. Greenberg, 399 Pa. 569 (1960), discussed supra note 11; see also JAGER, supra note 50, § 13.01[2], at 13-11 to 13-13 (1993). As observed by one court, "our free economy is based upon competition," and workers cannot be compelled to erase from their minds all of the general skills, knowledge, and acquaintances and the overall experience acquired during employment upon taking another job. Kalnitz v. Ion Exchange Prods., Inc., 276 N.E.2d 60, 62 (Ill. App. 1972) (quoting Revcor, Inc. v. Fame, Inc., 228 N.E.2d 742, 746 (1967)).
201. See discussion supra text accompanying note 29.
202. See JAGER, supra note 50, § 13.01[1], at 13-2 to 13-3. Although the courts protect a trade secret owner's rights against actual wrongful disclosure and use, as a practical matter, once a trade secret is disclosed to or used by a competitor, the harm is already done and may be irremediable. The competitor knows the trade secret. As one court stated, 'It is obvious that an injunction issued only after the actual disclosure has occurred locks the door after the horse is out.' . . . Once the data that constitutes a trade secret is disclosed to others, or others are allowed to use that data, the holder of the trade secret has lost his property interest in the data . . . . The economic value of that property right lies in the competitive advantage over others that . . .[the trade secret owner] enjoys by virtue of its exclusive access to the data, and disclosure or use by others of the date would destroy that competitive edge. Id.
203. See Edelstein, supra note 9, at 717.
204. See id.
205. See general discussion on bargained-for restrictions on employee's mobility, supra text accompanying notes 49-68.
206. See supra text accompanying notes 82-83.
207. See Dam, supra note 9, at 1, 12 stating that this argument has been used with much more frequency and has met with greater success in the last two years. Dam also quotes attorney Michael Epstein: "I'm seeing the theory argued more and more. Many more companies are trying to pounce on it," and attorney James Pooley: "It's being thrown into almost every trade secret case these days." Id. Additionally, as this Comment was being written, several cases were decided in late 1997 and early 1998.
208. See McMahon et al., supra note 9, at C36-C37; see also DiBoise & Berger, supra note 64, at C-12.
209. See discussion supra text accompanying notes 1-7.
210. "The Uniform Trade Secrets Act has been adopted by 44 states since it was drafted in 1980. It says that a court may enjoin 'actual or threatened' misuse of a trade secret. Before the Act, the law in some states was unclear as to whether a court could enjoin misuse that was merely threatened . . . . 'Now there's no question.'" Dam, supra note 9, at 13 (quoting attorney Melvin Jager, the author of a treatise on trade secrets law).
211. See discussion supra text accompanying notes 71-74.
212. See discussion supra text accompanying note 70.
213. See Dam, supra note 9, at 13. ("Courts have gradually expanded the definition of 'trade secrets' . . . . '[N]ow it's being applied to marketing and sales people.' Trade secrets 'now can exist in any business' . . . . 'The secrets may be the prices a company charges different customers, information about customers' buying habits, salés strategies and many other things.'" (quoting attorneys James DiBoise, Gary Weiss, and Michael Carlinsky, respectively)). But see Lowry, supra note 60, at 519-20 (the definition of trade secrets is broad and uncertain, so it is difficult for employers and employees to predict the legal consequences of their respective behavior and plan accordingly).
214. Fora sampling of the type of information that has been found to be a trade secret, see IDS Life Ins. Co. v. Sunamerica, Inc., 958 F. Supp. 1258 (N.D. Ill. 1997) (confidential insurance customer information protectable as a trade secret); see also Lumex, Inc. v. Highsmith, 919 F. Supp. 624, 629-30 (E.D.N.Y. 1996) (new and future products, pricing, income corporate objectives, internal discussions regarding future markets, conceptual product designs, prototypes, competitive analyses comparing company with its market competitors, and marketing themes constitute trade secrets); Roton Barrier, Inc. v. Stanley Works, 79 F.3d 1112, 1117-18 (Fed. Cir. 1996) (nine areas related to the plaintiff's business were trade secrets, including: gross margins, sales data, market analysis information, product profile data, customer lists, a special milling process, lubrication information, fixturing methods, and capitalization requirements).
215. See Dam, supra note 9, at 13.
216. See discussion infra text accompanying notes 221-22.
217. See Dam, supra note 9, at 13 (Courts are "more sympathetic." (quoting attorney Michael Epstein)).
218. See id. ("'Companies tend to be much more dependent on secret information as an asset of the business then they used to be' . . . . As a result, employers are more willing to file a suit to protect secret information, and courts are more willing to issue an injunction." (quoting James Pooley)).
219. See POOLEY, supra note 106, at XI. Ideas mean money in today's world, since industry relies on technology to improve productivity. Your ability to do well or even survive is the resulting highly competitive climate will depend largely on your success in acquiring, protecting, and exploiting a piece of that technology. Your competitive edge also depends on how well you develop and protect your business information . . . . Id. See also Alan Farnham, How Safe Are Your Secrets?, FORTUNE, Sept. 8, 1997, at 114 ("[S]ecrets are alive and kicking, their commercial value showcased in a spate of recent suits . . . each demonstrating the extraordinary lengths to which owners now will go to protect them.").
220. See Schwab, supra note 68, at 28. See also Farnham, supra note 217, at 114 ("Thanks to the computer's power to copy and transmit information, intangible assets can be expropriated more easily than ever, often without arousing immediate suspicion."). See also discussion supra text accompanying notes 2-7 (recognizing general increase in protection of trade secrets).
221. See Lumex, Inc. v. Highsmith, 919 F. Supp. 624 (E.D.N.Y. 1996).
222. See Lancaster, supra note 54, at B1. Lancaster also states that Senior executives, middle managers, and key professionals are being pushed to sign financially punitive non-compete agreements to discourage defections. See id. And more spurned employers are pursuing legal remedies against those who do. See id.
223. See Dam, supra note 9, at 13 ("'People today tend to have five or six jobs in a career . . . . That's why this issue is coming up more and more.'" (quoting attorney Anthony Bongiorno)). See also Morgan Chu & Gail Standish, When Secrets Walk: Reining In 'Thareatened Misappropriation', THE INTELLECTUAL PROPERTY STRATEGIST, May 1996, at 1 ("[I]n today's job market . . . company rosters are much more fluid, and any particular worker is much less likely than, say, his counterpart of three decades ago, to stay with one employer for his entire career.").
224. See id. See also Farnham, supra note 217, at 120 ("[J]ob-hopping [is] now virtually an Olympic sport . . . .").
225. But See Novell Inc. v. Timpanogos Research Group Inc., 46 U.S.P.Q.2d 1197, 1218 (D. Utah 1998), in which Judge Schofield candidly and clearly discussed and considered the consequences of this theory on the employees' lives and careers; see also discussion supra text accompanying notes 188-92.
226. See, e.g., PepsiCo, Inc. v. Redmond, 54 F.3d 1262 (7th Cir. 1995); Novell, 46 U.S.P.Q.2d 1167.
227. At least when considering the reasonableness of restrictive covenants, courts look at the legitimacy of the employers' interests. In inevitable disclosure analyses, courts seldom look closely at the real need of the employers.
228. See generally Schwab, supra note 68.
229. See, e.g., Merck & Co. v. Lyon, 941 F. Supp. 1443 (M.D.N.C. 1996); Novell, 46 U.S.P.Q.2d 1197. But see discussion infra text accompanying notes 251-52 (revealing that even preventing an employee from working on a product can effectively render that employee immobile and unable to compete).
230. See Schuyler, supra note 63, at 27. Although on its face this argument makes sense, courts have not held the doctrine of inevitable disclosure to a traditional meaning of "inevitability." Precisely what inevitability means is unclear. See discussion infra text accompanying notes 258-59.
231. See Lowry, supra note 60, at 520. [T]he inherent flexibility of the current approach may subtly favor the interests of employers. Courts have extended trade secret protection to information that is nearly impossible for employees to ignore if they want to conscientiously fulfill their new employment duties. . . . In balancing the competing interests of employers and employees, the current national atmosphere of concern about American economic strength and competitiveness may lead courts to be overly protective of companies with reputations for innovation when balancing the equities of a given case. Id.
232. See McMahon et al., supra note 9, at C36-C37.
233. See David J. Berger et al., Inevitable Disclosure Law Remains Unsettled: Cases Since PepsiCo Have Split Over When Workers Necessarily Act On A Prior Job's Secrets, NAT'L L.J., May 12, 1997, at C38 ("The relative paucity of precedent concerning this doctrine increases the guesswork - and the risk - for workers seeking competitive employment. . . . The theory has become . . . a harsh weapon for companies trying to prevent workers from joining competitors.").
234. See Bongiorno & Marcellino, supra note 81, at 11 (questioning the inconsistency in the case law: "If an employer expends the time, energy and money to obtain written covenants with its work force, shouldn't the hurdle to enjoin former employees be lower than that of the employer who did not get it in writing?").
235. See Edelstein, supra note 9, at 732 ("Companies seeking to prevent former employees from working for competitors have been urging adoption of the inevitable disclosure theory . . . in an effort to avoid the judicial disfavor and scrutiny applied to traditional non-compete agreements. This virtually transforms a confidentiality agreement into a non-compete agreement." (footnote omitted)).
236. See supra note 108.
237. Note that the court in Merck acknowledged that the employer's failure to obtain a non-compete agreement would disfavor the employer. See supra text accompanying notes 174-77.
238. See supra note 148.
239. See supra note 192.
240. Prohibiting an employee from working on a particular product may be as damaging as prohibiting the employee from working at all. For example, in Lumex, Inc. v. Highsmith, 919 F. Supp. 624 (E.D.N.Y. 1996), supra notes 115-27, as a result of the injunction, the employee may not be able to work for anyone in the industry on the product about which he has the most knowledge and expertise.
241. See Ecolab, Inc. v. Gartland, 537 N.W.2d 291, 294 (Minn. Ct. App. 1995) ("The court dislikes and closely scrutinizes non-compete agreements, because they partially restrict trade.").
242. See DiBoise & Berger, supra note 64, at C12. This doctrine is of particular concern in California and the Silicon Valley. See id. California state law contains a prohibition against restrictive covenants. See McMahon et al., supra note 9, at C35. Section 16600 of the California Business and Professions Code provides that a contract that restrains a person from engaging in a lawful profession, trade or business, with certain limited exceptions, is to that extent void. See id. at C36. California courts routinely have based rejections of employers' requests for injunctions against former workers joining competitors on § 16600. See id. Many have argued that the inevitable disclosure doctrine violates § 16600 because it permits an injunction that precludes a former employee from performing at least some job functions for the new employer, and thus functions as an ex post facto covenant not to compete. See id. Second, the doctrine would violate the U.T.S.A., which requires the plaintiff to prove an intent to disclose trade secrets before threatened misappropriation may be established. See id. Finally, the adoption of the doctrine would so stifle employee mobility as to damage California's high-tech economy and discourage the formation of start-up companies. See id. But see also id. at C36-C37 for several counter-arguments to the above. See also infra text accompanying notes 252-54 for more discussion of the discouragement of economic growth and start up companies.
243. See Lancaster, supra note 54, at B1 ("The best time to negotiate [a noncompete agreement] is during the courtship, 'when everyone is happy and begging you to come over . . . .'" (quoting Alan Sklover, a New York attorney who specializes in executive compensation and severance negotiations)).
244. See PETERSON, supra note 3, at § 7.6.
245. See DiBoise & Berger, supra note 64, at C12. See also McMahon et al., supra note 9, at C36-C37; supra discussion in text and accompanying notes 220-22.
246. See generally supra note 223 and accompanying text; supra notes 188-92.
247. See E.W. Bliss Co. v. Struthers-Dunn, Inc., 408 F.2d 1108, 1112-13 (8th Cir. 1969). This protection given to trade secrets is a shield, sanctioned by the courts, for the preservation of trust in confidential relationships; it is not a sword to be used by employers to retain employees by the threat of rendering them substantially unemployable in the field of their experience should they decide to resign. This shield is not a substitute for an agreement by the employee not to compete with his employer after the termination of employment. Basically, an employer may not restrict an employee's future employment except by an agreement embodying reasonable terms. Id. (citing opinion of Judge Learned Hand in Harley & Lund Corp. v. Murray Rubber Co., 31 F.2d 932, 934 (2d Cir. 1929)).
248. See Edelstein, supra note 9, at 717; see also Lowry, supra note 60, at 519; DiBoise & Berger, supra note 64, at C13 ("In effect, the inevitable disclosure theory tips the balance between protection of trade secrets and the right to change jobs strongly in favor of the former employer . . . .").
249. See Lowry, supra note 60, at 538 ("Jobs are central to people's subsistence, to their status, and perhaps to their definition of themselves as persons. For most people, occupation is the most important form of wealth, rather than land or other property. . . . [In our society,] '[t]he loss of a job, or the right to pursue a profession, or the opportunity to continue one's education, may be far more hurtful than a term in jail.'") (quoting Kanter, Work in a New America, in INDIVIDUAL RIGHTS IN THE CORPORATION 4 (A. Westin & S. Salisbury eds., 1980).
250. This is especially true when employers are dealing with the employees who have the specialized knowledge of trade secrets. See Edelstein, supra note 9, at 732 (citing Interview with Michael A. Glenn, Attorney at Law, specializing in intellectual property and Adjunct Professor of Law at Golden Gate University School of Law in San Francisco, Cal, (Sept. 15, 1995)). Again, the concern over employee mobility is especially relevant in California. See Schuyler, supra note 63, at 28 ("You are going to see it used more and more at the higher end of the workforce against employees who hold information that is valuable to the competition." (quoting James DiBoise)). Most jobs at which these employees would want to work and in which they would be most productive would be with competitors. See Edelstein, supra note 9, at 733 ("If employees cannot work in the same competitive area as their current employment, their options for other employment will be significantly limited . . . . If employees change jobs but remain in the same profession or trade, they may find it impossible to avoid drawing upon the skills and experience developed at previous jobs. Disclosure may be nearly inevitable even though employees do not intend to appropriate their former employer's trade secrets.").
251. See Edelstein, supra note 9, at 733 (citing Wexler v. Greenberg, 399 Pa. 568, 579 (1960)).
252. See, e.g., supra notes 125-26 and accompanying text (discussing Lumex, Inc. v. Highsmith, 919 F. Supp. 624 (E.D.N.Y. 1996)); supra notes 175-77 and accompanying text (discussing Merck & Co. v. Lyon, 941 F. Supp. 1443 (M.D.N.C. 1996)).
253. See, for example, Novell Inc. v. Timpanogos Research Group Inc., 46 U.S.P.Q.2d 1197, 1217-18 (D. Utah 1998), in which despite the fact that the employees were not prevented from working in the computer software field, they were prevented from working in the valuable area of clustering technologies. Presumably, this was an area of great expertise to these employees and they are now unable to use their general knowledge and skills despite the fact that their former employer failed to obtain a non-compete agreement. See id. at 1218.
254. See Edelstein, supra note 9, at 733 (quoting Wexler v. Greenberg, 399 Pa. 568, 579 (1960)).
255. See Schuyler, supra note 63, at 28. Critics like DiBoise add that the doctrine is a blow to competition and economic growth. He refers to a book, Regional Advantage: Culture and Competition in Silicon Valley and Route 128 (Harvard University Press, 1994), in which author Annalee Saxenian attributes the tremendous growth of Silicon Valley to the mobility of employees and the decline of Route 128 to the prevalent use of noncompete clauses in employment contracts. Id.
256. See McMahon et al., supra note 9, at C37.
257. See supra notes 82-196 and accompanying text.
258. See supra notes 110-11 and accompanying text.
259. See supra note 196 and accompanying text.
260. In fact, in researching for this Comment, I did not find any commentary on this point.
261. According to Webster's dictionary, "inevitable" means: "1. incapable of being avoided or evaded . . . [and] 2. certain to occur or to confront one." WEBSTER'S THIRD NEW INTERNATIONAL DICTIONARY OF THE ENGLISH LANGUAGE 1157 (Philip Babcock Gove et al. eds., 1981).
262. See PETERSON, supra note 3, at 1-3.
263. See supra notes 204-25 and accompanying text (regarding the changes that have led to the increased adoption of inevitable disclosure).
264. See supra notes 25-27 and accompanying text.
265. Therefore, of the cases discussed in Part III of this article, Lumex, Inc. v. Highsmith, 919 F. Supp. 624 (E.D.N.Y. 1996), represents what would be an improper procedural analysis under the proposed "degrees of disclosure" approach. See supra notes 115-36 and accompanying text. For other cases that would be procedurally incorrect, see supra note 127. It is also important to note that courts may "blue pencil" a restrictive covenant and reduce its length of time or alter another restriction in order to make the non-compete reasonable. See supra note 110. If this is done, then there is no need for the degrees of disclosure analysis to be applied.
266. See PETERSON, supra note 3, § 9.2, at 9-6, 9-7 (reviewing the Virginia test).
267. These factors are drawn from the various inevitable disclosure cases. To review how the court in each of the cases discussed in this article utilized different factors and different combinations of factors, see supra note 196 and accompanying text. See also Victoria A. Cundiff, Hiring Competitors' Employees: A Trade Secrets Perspective, N.Y.L.J., Nov. 17, 1997, at S2 (advising employers seeking to hire new employees on the factors to consider in order to avoid trade secret problems).
268. For cases analyzing the competitiveness of two employers, see supra note 87 and accompanying text (examining PepsiCo v. Redmond, 54 F.3d 1262, 1263-64 (7th Cir. 1995)); supra note 120-and accompanying text (examining Lumex, 919 F. Supp. at 629, 631); supra note 134 and accompanying text (examining International Paper Co. v. Suwyn, 966 F. Supp. 246, 258 (S.D.N.Y. 1997)); supra note 157 and accompanying text (examining Bridgestone/Firestone, Inc. v. Lockhart, 5 F. Supp. 2d 667, 681-82 (S.D. Ind. 1998)); supra note 172 and accompanying text (examining Merck & Co. v. Lyon, 941 F. Supp. 1443, 1461 (M.D.N.C. 1996)).
269. See Cundiff, supra note 265, at S7. Are the companies truly competitive? While Microsoft and a niche applications software development company both make software, there may not in fact be substantial, or even any, overlap in the software the two companies are creating. There may thus be very little risk that trade secrets will be lost in a move. This fact . . . should certainly reduce the risk that an inevitability injunction will be granted. Id. Cundiff emphasizes that the companies should be truly competitive. See id. A move from No-Name Rental Co. to Hertz may be less risky than a move from Hertz to Avis . . . . Similarly, a high-tech employee's move to a company that has little ability to invest in new technology may not pose an imminent risk, at least to technology related secrets. Id.
270. For example, is being first to the market critical? See Cundiff, supra note 265, at S7. See also supra note 134 and accompanying text (comparing the industry at issue in International Paper Co., 966 F. Supp. 246, with the industry in Lumex, 919 F. Supp. 624).
271. For cases analyzing the value of the information as a factor, see supra notes 132, 135 and accompanying text (examining International Paper Co, 966 F. Supp. at 256); supra note 166 and accompanying text (examining Carboline Co. v. Lebeck, 990 F. Supp. 762, 767 (E.D. Mo. 1997)); and supra note 184 and accompanying text (examining Novell Inc. v. Timpanogos Research Group, Inc., 46 U.S.P.Q.2d 1197, 1216 (D. Utah 1998)).
272. See, e.g., supra note 21 and accompanying text (examining Lumex, 919 F. Supp. 624); supra note 134 and accompanying text (examining International Paper Co., 966 F. Supp. 246); supra note 192 and accompanying text (examining Novell, 46 U.S.P.Q.2d 1197, 1218).
273. For cases analyzing the similarity of the two positions, see note 135 and accompanying text (examining International Paper Co., 966 F. Supp. at 258); and supra note 173 and accompanying text (examining Merck & Co., 941 F. Supp. at 1461).
274. Also, the court should consider the amount of discretion involved in each position. See Cundiff, supra note 265, at S12. How much discretion will the employee have in the new position? An employee who is truly being hired simply to implement a pre-existing plan that cannot be readily changed may be unable to do much damage. An employee who is actually going to be developing a competitor's strategic or product plan may be far more dangerous. Id. (citations omitted).
275. For example, a court should not grant an injunction on the basis of unavoidable disclosure when an employee leaves a position in strategic planning to work in a divisional sales office with a dissimilar and unrelated job description.
276. Although usually in a very limited manner, some cases have analyzed the amount of knowledge that an employee may have when she leaves her employer. See supra note 122 and accompanying text (examining Lumex, 919 F. Supp. at 631); supra note 146 and accompanying text (examining Doubleclick, Inc. v. Henderson, No. 116914/97, 1997 WL 731413, at *6 (N.Y. Sup. Ct. Nov. 7, 1997)); supra note 157 and accompanying text (examining Bridgestone/Firestone, Inc. v. Lockhart, 5 F. Supp. 2d 667, 681-82 (S.D. Ind. 1998)); supra note 165 and accompanying text (examining Carboline Co., 990 F. Supp. at 767); supra notes 183, 186 (examining Novell, 46 U.S.P.Q.2d at 1216, 1217).
277. See, e.g., PepsiCo, Inc. v. Redmond, 54 F.3d 1262, 1266 (7th Cir. 1995) (in which Redmond, played a role in creating a strategic plan, and was then being hired to a position in which he could defeat that very plan).
278. See Cundiff, supra note 265, at S7. Does the employee have high-level or in-depth knowledge of the ex-employer's secrets? An employee who simply saw the same generalized information available to virtually everyone else at the company will be less likely to pose an inherent risk of use or disclosure than the employee who actually drove the research process or signed off on the strategic plan. Id.
279. Only one case has examined the options of an enjoined employee. See supra notes 188-92 and accompanying text (discussing Novell, 46 U.S.P.Q.2d at 1218). See also supra note 223.
280. See supra notes 247-51 and accompanying text.
281. This specifically addresses the concern discussed earlier, supra note 259 and accompanying text, regarding the nebulousness of the term "inevitable." This standard ensures that the disclosure is truly inevitable. A finding that the disclosure is inevitable (under this analysis, "unavoidable") will no longer be influenced by an employee's good or bad faith.
282. For a review of opinions regarding the impossibility of the eradication of information from the mind, see supra note 102 and accompanying text (reviewing PepsiCo, 54 F.3d 1262); supra note 124 and accompanying text (reviewing Lumex, 919 F. Supp. 624); supra note 131 and accompanying text (reviewing International Paper Co. v. Suwyn, 966 F. Supp. 246 (S.D.N.Y. 1997)); supra note 146 and accompanying text (reviewing Doubleclick, Inc. v. Henderson, No. 116914/97, 1997 WL 731413, at *6 (N.Y. Sup. Ct. Nov. 7, 1997)).
283. Lumex, 919 F. Supp. 624. See generally supra notes 115-27.
284. Novell, 45 U.S.P.Q.2d 1197.
285. See supra note 127 and accompanying text.
286. Additonally, it is possible that the court may decide that its analysis of the five factors reveals that a disclosure of the trade secret is not even likely. In such a case, the court should end its analysis and deny the relief sought by the former employer. Bridgestone and International Paper present cases in which the evidence did not reveal an unavoidable disclosure, a likelihood of disclosure or even a chance of disclosure. Although some concerns about possible disclosure were mentioned in these cases, the evidence did not rise to a level that revealed inevitability and there was no bad faith on the part of the either employee, therefore there was not even a likelihood or chance of disclosure.
287. See Cundiff, supra note 265, at S12. ("There may be danger in numbers. That was the theory underlying Dow Chemical's complaint earlier this year that in hiring 14 members of a Dow team of scientists in a specialized area of plastics, G.E. was effectively acquiring Dow's trade secrets.") See also Shell v. Unocal, a recently filed case discussed in Shell Sues Unocal, NAT'L L.J., Oct. 13, 1997 at B4. The complaint, filed in state district court in Houston, alleges the hiring away of a team of eight Shell geoscientists will result in the inevitable disclosure to Unocal of Shell's proprietary information, especially knowledge of its drilling activity in the deep water of the Gulf of Mexico. Though Shell does not require non-compete agreements, each of the eight scientists had signed an employment agreement that included a nondisclosure covenant. Id.
288. See Cundiff, supra note 265 at S12 (One employee has previously been in the position of testifying ("'Loyalty and ethics had their price; insofar as [I am] concerned, [the new employer] was paying the price.'") (citing B.F. Goodrich v. Wohlgemuth, 117 Ohio App. 493 (1963)). A court should also examine whether there are stock options, a bonus program, or provisions in the employment agreement that may indicate that the employee is being paid for more than just his or her general skills. See Cundiff, supra note 265, at S12.
289. Cf. supra note 98, 103 and accompanying text (discussing PepsiCo, Inc. v. Redmond, 54 F.3d 1262 (7th Cir. 1995)).
290. For cases discussing bad faith, see supra notes 98, 103 and accompanying text (examining PepsiCo, 54 F.3d 1262); supra note 147 and accompanying text (examining Doubleclick, Inc. v. Henderson, No. 116914/97, 1997 WL 731413, at *6 (N.Y. Sup. Ct. Nov. 7, 1997)); supra note 157 and accompanying text (examining Bridgestone/Firestone, Inc. v. Lockhart, 5 F. Supp. 2d 667, 682 (S.D. Ind. 1998)); supra note 172 and accompanying text (examining Merck & Co. v. Lyon, 941 F. Supp. 1443, 1461 (M.D.N.C. 1996)); and supra note 187 and accompanying text (examining Novell Inc. v. Timpanogos Research Group Inc., 46 U.S.P.Q.2d 1197, 1217 (D. Utah 1998)).
291. This also meshes with the commercial morality aspect of trade secret law. See generally E.I. du Pont de Nemours & Co. v. Christopher, 431 F.2d 1012 (5th Cir. 1970) (discussing standards of commercial morality which underlie the protection of trade secrets).
292. "Realism by the new employer, the former employer, and the employee should help strike the appropriate balance in a given case." Cundiff, supra note 265, at S2.
293. Although an argument can be made that even absent his bad faith, Redmond would not have been able to ignore the information in his head in his new role at Quaker. See PepsiCo, Inc. v. Redmond, 54 F.3d 1262 (7th Cir. 1995).
294. See supra notes 168-77 and accompanying text (discussing Merck & Co. v. Lyon, 941 F. Supp. 1443 (M.D.N.C. 1996)).