TN federal court bars misuse of employer's trade secrets

An East Tennessee federal district court recently issued a preliminary injunction barring a person from using information he stole from his former employer to further his competing business.

Background

Misappropriation of trade secrets claims often turn on whether the information taken is truly a "trade secret." In making the determination, courts consider a number of factors, including the extent to which it's public knowledge, measures taken to preserve its secrecy, the value to its owner and competitors, resources expended in developing the information, and the ease for someone else to acquire it.

Employers often ask courts for a quick ruling before trial in the form of a "preliminary injunction" to preclude a former employee from misappropriating trade secrets. Courts consider the following factors in determining whether to issue the preliminary injunction:

• Likelihood of success on the merits at trial;
• Whether the employer faces irreparable harm in the absence of an injunction;
• Burden on the defending parties if the injunction is issued; and
• Any public harm.

Facts

Billy Maples served as general manager for Knox Trailers, which operates a trailer sales and repair business in Knoxville. In his role, he had access to the company's "Southware" software database, through which it stored a wide variety of digital information customized to its business, including customer and vendor details, pricing information, and customized reports.