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

Author:Mr William Hamilton
Profession:Holland & Knight LLP
 
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Co-Written By Mr John M. Guard On July 20, 2001, a Florida state trial court judge relied on the doctrine ofinevitable disclosure to enjoin a former employee from aiding or assisting acompetitor against his former employer. At stake in the case was whether along-time engineering employee could, days after leaving the employment of FMCCorporation, establish a relationship with a rival competitor, whichmanufactured a clone of FMC's juice extractor machine (the extractor). Duringhis 10 years of employment, the employee had been involved in the engineeringand design of components for the extractor, research and development relating tothe extractor, and knew specific customer information including pricing andstrategy information.Florida is one of 40 states, including the District of Columbia, that haveadopted the Uniform Trade Secrets Act. The statute provides that "actual orthreatened misappropriation may be enjoined." Fla. Stat. §688.003(1)(emphasis supplied). The language of the statute itself does not clearly definewhat constitutes "threatened misappropriation," and Florida courtshave not precisely defined the term. Courts in approximately 10 other stateshave adopted the doctrine of "inevitable disclosure." Under thisdoctrine, courts have found a threatened misappropriation when an employee takesa position with a new employer that will necessarily require the employee to usehis or her former employer's trade secrets. Florida courts have commented thatit is not necessary for an employer to "let the cat out of the bag"before an injunction can be issued.1In Fountain, the plaintiff/employer was engaged in the sale ofpolyurethane products throughout the United States. The defendant/formeremployee had worked as the chief production supervisor for the plaintiff and hadsigned as a condition of his employment both a nondisclosure and a noncompeteagreement. The defendant left the plaintiff and began working for a competitor.The trial court, under both the nondisclosure and noncompete agreementstemporarily enjoined the defendant from disclosing trade secrets and working forthe 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 aninjunction directed only toward a prevention of disclosure."2In the FMC case, Judge Maloney relied on Fountain along with Pepsicov. Redman to support the issuance of the injunction. Pepsico...

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