TRADE SECRET MISAPPROPRIATION BY CURRENT AND FORMER EMPLOYEES IN FLORIDA

Trade secrets are a form of intellectual property that are maintained in secrecy. There is no bright line rule that the courts use to determine whether an employee should be enjoined from utilizing a corporation’s trade secrets. The courts must first determine whether the information in question constitutes a trade secret. Courts also look to the reasonable measures taken by the trade secret owner to protect that information. Courts have not been clear on whether skills and knowledge an employee acquired during the course of his employment can be protected as trade secrets. Peter Mavrick is a Palm Beach trade secret lawyer who has extensive experience with trade secret misappropriation.

A trade secret exists if it has economic value because of it secrecy. As a property right, trade secrets cannot be appropriated without the exclusive consent of the trade secret owner. If a trade secret is misappropriated and made readily available to other competing businesses, they can derive economic benefits from that information to the detriment of the trade secret owner.

In Lee v. Cercoa, Inc., 433 So. 2d 1 (Fla. 4th DCA 1983), Florida Fourth District Court of Appeal was confronted with the issue of whether the skills and knowledge a former employee acquired during the course of his employment are trade secrets. In Lee, the employer was engaged in the business of manufacturing and marketing polishing compounds for glass and plastic materials. The former employee worked for two years as a production manager for the employer. As a part of his job, the former employee learned about the combination of certain chemicals and products to formulate polishing compounds. When the employer learned that the employee was going to use the information he acquired during his employment to begin manufacturing his own glass polishing compound, the employer terminated the employee and filed a lawsuit to enjoin the employee from using trade secrets belonging to the employer. The former employee contended there was no valid agreement between him and the employer prohibiting him from disclosing or using such trade secrets. The former employee further contended that the manufactured glass polish compounds were derived from major elements and that those processes were well known to others in that field. The trial court granted the employer’s injunction preventing the former employee from utilizing the corporation’s trade secrets. The former employee then appealed that decision.

As to the former employee’s first argument, the appellate court noted that when an employee acquires special techniques or processes developed by his employer, the employee is under a duty to not use or disclose such secrets. This legal duty does not require any agreement between the employer and employee. The former employee could not use or disclose such trade secrets in his new employment. The appellate court then analyzed the former employee’s second argument that many of the major elements of the employer’s process are the same as those known to others in that field. It was the combination of elements into a complicated production process that qualified as a trade secret, and not merely a variation of a general process known to others.

Ultimately, the appellate court affirmed the trial court’s decision restraining the former employee from utilizing the corporation’s trade secrets. The appellate court went on to further explain that the former employee is only restrained from developing a polishing compound that utilizes the employer’s trade secrets. The former employer was free to develop and produce his own glass polishing compound so long as he does not use the same combination of elements that the employer used for its product.

Peter Mavrick is a Palm Beach trade secret attorney who represents businesses in cases of trade secret misappropriation.

The Miami trade secret litigation attorneys at the Mavrick Law Firm have successfully represented many businesses in trade secret misappropriation in the Miami, Broward, and Palm Beach County areas encompassed by the Third and Fourth District Courts of Appeal, as well as Hillsborough, Sarasota, and other counties encompassed by the Second Circuit Court of Appeal. This article is not a substitute for legal advice tailored to a particular situation. Peter T. Mavrick can be reached at: Website: www.mavricklaw.com; Telephone: 954-564-2246; Address: 1620 West Oakland Park Boulevard, Suite 300, Fort Lauderdale, Florida 33311.