FIRM DEFEATS INJUNCTIONS IN TRADE SECRET CASES

Permitting Clients to Continue To Do Business

The firm has a perfect record in defeating efforts to enjoin its clients from doing business in trade secret misappropriation case.

In the Sacramento area, the firm represented individuals who had left their former employment to start a competing firm.  Plaintiff’s counsel sought an injunction asking the Court to shut our client’s new business down.  The firm fought the effort making arguments that the alleged trade secret did not meet the strict requirements for protection and the relief sought was overly broad.  The court agreed.

In San Diego County, Greg Wood joined another San Francisco firm in the defense of investment advisors who had left their former firm to compete.  The former firm sought an injunction, arguing the customer list was cultivated and warranted trade secret protection.

In that case, the trial court granted plaintiff’s injunction shutting our clients’ marketing and business development efforts down, at least temporarily.  We challenged the injunction at the Court of Appeal and prevailed.  The Court of Appeal ruled that the injunction was overly broad and threw the injunction out.  , soliciting more than just the use of the trade secret but solicitation more generally.  That opinion was ultimately published: The Retirement Group v. Galante (2009) 176 Cal.App.4th 1226, 98 Cal.Rptr.3d 585.

There is a footnote here that warrants making.  The firm is successful representing departing workers starting new businesses because the firm understands the dramatic change in the law that followed Edwards v. Arthur Anderson, a California Supreme Court case that affirmed California’s prohibition of non-compete clauses.  Much of the legal community is still stuck in the past, thinking departing workers are limited to making a professional announcement.  This is no longer true, if it was ever true.  Trade secret protection is a small island in a sea of California law that favors employee mobility, right to make a living and competition.

Departing employees need to be careful.  That small island of legal protection, if not avoided, can still cause a departing employee’s ship to run aground.  Departing employees should talk to us before leaving, so that we can tell them what they can do and what they cannot moving forward.  In some instances, the information the departing employee wants to use really is a trade secret warranting protection, and exposing the employee to damages if misappropriated.

Likewise, employers facing new competition from former employees are best advised to set aside the emotion of it and consult with an attorney about what they can protect and what they can’t before dumping tens of thousands of dollars into attorney’s pockets to seek injunctions (and cases) that will ultimately fail.

In any event, if you have a trade secret issue, chances are the attorneys at Wood Robbins can help.