Inevitability of Inevitable Disclosure Under Florida's Uniform Trade Secrets Act

Profession:Holland & Knight LLP
 
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Article by William F Hamilton and John M Guard

On July 20, 2001, a Florida state trial court judge relied on the doctrine of inevitable disclosure to enjoin a former employee from aiding or assisting a competitor against his former employer. At stake in the case was whether a long-time engineering employee could, days after leaving the employment of FMC Corporation, establish a relationship with a rival competitor, which manufactured a clone of FMC's juice extractor machine (the extractor). During his 10 years of employment, the employee had been involved in the engineering and design of components for the extractor, research and development relating to the extractor, and knew specific customer information including pricing and strategy information.

Florida is one of 40 states, including the District of Columbia, that have adopted the Uniform Trade Secrets Act. The statute provides that "actual or threatened misappropriation may be enjoined." Fla. Stat. §688.003(1) (emphasis supplied). The language of the statute itself does not clearly define what constitutes "threatened misappropriation," and Florida courts have not precisely defined the term. Courts in approximately 10 other states have adopted the doctrine of "inevitable disclosure." Under this doctrine, courts have found a threatened misappropriation when an employee takes a position with a new employer that will necessarily require the employee to use his or her former employer's trade secrets. Florida courts have commented that it is not necessary for an employer to "let the cat out of the bag" before an injunction can be issued.1

In Fountain, the plaintiff/employer was engaged in the sale of polyurethane products throughout the United States. The defendant/former employee had worked as the chief production supervisor for the plaintiff and had signed as a condition of his employment both a nondisclosure and a noncompete agreement. The defendant left the plaintiff and began working for a competitor. The trial court, under both the nondisclosure and noncompete agreements temporarily enjoined the defendant from disclosing trade secrets and working for the competitor. The Third District Court of Appeal, upholding the decision, stated "[i]n short, we think that his knowledge of trade secrets would be "so intertwined" with his employment as to render ineffective an injunction directed only toward a prevention of disclosure."2

In the FMC case, Judge Maloney relied on Fountain along with Pepsico v. Redman...

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