Lack of secrecy dooms suit to stop former sales reps' use of customer lists

The Illinois Trade Secrets Act (ITSA) prohibits misappropriation of trade secrets and allows recovery of attorneys' fees in suits to enforce the Act. A recent decision by the Appellate Court of Illinois is a cautionary tale for employers wanting to protect customer lists and other information.

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Multimedia Sales & Marketing (MSM) contracts with radio stations to buy and sell airtime to businesses that want to air public service announcements. To acquire new customers, MSM purchases sales leads from third-party sellers. If a sale is made, the customer becomes a renewal customer, and MSM generates a "renewal lead," which contains the customer's name and address.

MSM says it treats sales leads and renewal leads as confidential and maintains the information in a secure database. Sales reps are given hard copies of sales leads, and the copies are collected and destroyed at the end of a particular sales run.

The nature of the business, however, requires MSM to send its purchased sales lead list to radio stations for approval because the stations have restricted customers who don't want MSM to contact them. Further, after a sale, MSM also sends the customer information to the radio station. Notably, while MSM requires its employees to sign confidentiality and nondisclosure agreements (NDAs), it doesn't enter into NDAs with customers or the radio stations.

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