Thomas’s English Muffins (Bimbo Bakeries USA) has stopped a former V.P. from starting his job at competitor Hostess based on the V.P.’s knowledge of the invaluable trade secrets of Thomas’s English Muffins’ “nooks and crannies.” A Pennsylvania judge has ruled that V.P. Botticella cannot start his job until the legal issues are resolved, based on a confidentiality agreement Botticella signed. While some commentators have opined that the confidentiality agreement may not hold up under California law (where Botticella lives and works) if Botticella seeks a change in venue, his own actions do not help his case. Botticella advised senior management that he was retiring, so Thomas allowed him to continue to work for 2 weeks. During that time, he allegedly continued to have access to confidential trade secrets and attended several sensitive meetings. When rumors started to fly that Botticella was going to Hostess, Thomas’ confronted him and filed suit. In order to prevail, Thomas will have to show that it treated the nooks and crannies like trade secrets; e.g. the information was restricted to those who needed to know, it was protected as confidential, and not available for dissemination. But it is not looking good for Botticella. He was one of 10 people in the world that had access to the information, he signed a confidentiality agreement, and he was not honest about where he was going to work.
Even if your trade secrets are not as famous as Thomas’ nooks and crannies, you can prevent their disclosure by former employees with proper protections in place and a well-drafted confidentiality provision. In these circumstances, it is not necessary to have a non-compete agreement, which tend to be harder to enforce (and prohibited in some states like California).