Inside Views: The Intersection Of Trade Secret Law And Social Media Privacy Legislation

There is no question that social media privacy issues now permeate the workplace. In an attempt to provide further guidance and regulation in this area, since April 2012, a growing number of state legislatures in the United States have passed various forms of social media privacy legislation. In fact, to date, nearly all state legislatures, as well as the United States Congress, have considered or are considering some kind of social media privacy legislation.

The precise impact that these new social media privacy laws have on existing trade secret law is still very much in its infancy. Compounding matters, the plain language of several recently enacted privacy laws directly conflicts with judicial decisions regarding "company vs. employee" ownership of social media content that may otherwise constitute protectable trade secrets, including contact lists and business relationships. Moreover, very few court decisions have yet to interpret any of the new social media privacy laws.

In light of this uncertainty, the following is a summary of several recent cases addressing trade secret claims involving social media issues, as well as some suggested takeaways for employers based on the limited information presently available.

1. Definition of a Trade Secret - Brief Summary

   In the simplest terms, under the Uniform Trade Secrets Act, which is in effect in 48 states, information and data may qualify for statutory protection if the valuable information is a secret, and its owner keeps it a secret. Though there are no bright lines for whether information is a protectable trade secret, it is likely to be found protectable if it is the result of a substantial investment of time, effort, and expense, generates independent economic value for its owner, is not generally known in the relevant industry, cannot easily be accessed by legitimate means, and cannot be independently reverse engineered without significant development efforts and expense. Experience shows that in many cases, the more egregious a defendant's theft of an alleged secret, the more likely the court will find that the stolen data qualifies as a trade secret. Not merely to punish, but also because an employee's theft and subsequent use of the stolen data or information itself tends to show (i) the independent economic value of the stolen information, and (ii) the information was not available publicly.

   Information is kept secret if its owner takes affirmative measures to prevent its...