MIAMI BUSINESS LITIGATION: AN EMPLOYEE’S DUTY TO MAINTAIN THE TRADE SECRETS OF ITS EMPLOYER IS NOT ALWAYS IMPOSED ON THE EMPLOYEE

The proponent of a trade secret must prove the information was “the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” Fla. Stat. § 688.02. Simply instructing another not to divulge the information is probably insufficient. Glob. Marine Expl., Inc. v. Republic of France, 696 F. Supp. 3d 1131 (N.D. Fla. 2023) (“Essentially, all GME did to protect its information was tell the FDHR that it didn’t want the coordinates to be publicly divulged. That is not enough.”). However, an employer is necessarily required to implement confidentiality agreements with all employees to satisfy the requirement of undertaking efforts that are reasonable under the circumstances to maintain the information’s secrecy. Employees may owe duties of confidentiality to their employers separate and apart from any written agreement. Lee v. Cercoa, Inc., 433 So. 2d 1 (Fla. 4th DCA 1983) (“Where an employee acquires, during the course of his employment, a special technique or process developed by his employer, the employee is under a duty, even in the absence of an express contractual provision, not to disclose such skills, techniques or processes in his new employment for his own or another’s benefit to the detriment of his previous employer.”).  The Miami business litigation attorneys of the Mavrick Law Firm represent businesses and their owners in breach of contract litigation and related claims of fraud, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment litigation, and other legal disputes in federal and state courts and in arbitration.

It is unwise for employers to solely rely on the common law duty requiring their employees to keep the company’s information secret because courts do not always impose that duty on employees. In fact, courts should be “wary of any trade secret claim predicated on the existence of” an employee/employer relationship despite the common law duty requiring employees to maintain the secrets of their employer’s. Yellowfin Yachts, Inc. v. Barker Boatworks, LLC, 898 F.3d 1279 (11th Cir. 2018). Cases finding the existence of a trade secrets based on an implied duty of confidentiality between an employee and employer arise when the employer made it clear to the employee that there was an expectation and obligation of confidentiality. Bateman v. Mnemonics, Inc., 79 F.3d 1532 (11th Cir. 1996).

Yellowfin Yachts, Inc. v. Barker Boatworks, LLC, 898 F.3d 1279 (11th Cir. 2018) illustrates this point well. In Yellowfin Yachts, Inc., an employee was hired as vice president of sales. The employer presented the employee with an employment agreement that contains a confidentiality clause but the employee never signed it. The employee (along with all other employees) were nevertheless instructed not to disclose the employer’s trade secrets. The employee eventually terminated his employment, went to go work for a competitor, and took hundreds of files with him containing detailed purchasing histories and specifications for all of Yellowfin’s customers. Based on these facts, the court rejected the employer’s trade secret claim. The court determined the employer did not adequately protect its trades secrets and effectively abandoned oversight protections. Yellowfin Yachts, Inc., 898 F.3d 1279 (“In sum, with mere verbal statements that the Customer Information should not be given to outsiders, Yellowfin relinquished the information to Barker, who refused to sign a confidentiality agreement, with no instruction to him as to how to secure the information on his cellphone or personal laptop. In doing so, Yellowfin effectively abandoned all oversight in the security of the Customer Information.”).

The Miami business litigation lawyers of the Mavrick Law Firm also represent clients in Fort Lauderdale, Boca Raton, and Palm Beach. This article does not serve as a substitute for legal advice tailored to a particular situation.