When Trade Secrets Become Shackles: Fairness and the Inevitable Disclosure DoctrineUF Law Faculty Publications
AbstractCritics of the inevitable disclosure doctrine decry the inconsistency with which courts rule on these cases, and the difficulty in predicting case outcomes. They contend that courts are left to "grapple with a decidedly ... nebulous standard of 'inevitability."' Further, they claim the doctrine undermines the employee's fundamental right to move freely and pursue his or her livelihood. Ultimately, both the problem and solution here are about fairness: fairness in the employer-employee relationship, fairness in the application of the law, and fairness in providing protection from unfair competition between competing employers. The crux of the opposition to the doctrine, in whatever form articulated, is that it is not fair to enjoin an individual from earning a living, especially when there is no noncompetition agreement in place, and when the cases and outcomes are inconsistent and unpredictable. Further, there is a judicial motivation to safeguard vigorous competition and prevent companies gaining competitive advantages through breaches of confidence, bad faith, or other wrongful conduct on the part of the departing employee. To this author, inevitable disclosure cases represent the epitome of the delicate balancing act that judges struggle with each day. This Article uses these cases as a case study to suggest a framework within which decision makers may accomplish what others think impossible: fairness, through consistency and predictability, in cases that by their nature are fact intensive and can only be decided on a case-by-case basis. This Article proposes a model that balances four factors: (1) the presence of a restrictive agreement (such as nondisclosure or noncompetition agreements); (2) the degree of competition between the former employer and the new employer, as well as the similarity of roles between the employee's former position and new position; (3) the extent of the employee's knowledge of, and familiarity with, the trade secrets in question; and (4) evidence of dishonesty or bad faith on the part of the employee.
Citation InformationElizabeth A. Rowe, When Trade Secrets Become Shackles: Fairness and the Inevitable Disclosure Doctrine, 7 Tul. J. Tech. & Intell. Prop. 167 (2005), available at http://scholarship.law.ufl.edu/facultypub/93