Misappropriation of trade secrets is an unfair business practice in California and is a good strategy to prevent employees or independent contractors from using company confidential information to compete against you.  Why are unfair business practices alleged in the majority of business related lawsuits in Southern California and how can you build the protections of trade secrets into your business strategy?

Non-Compete Agreements are Illegal in California – Trade Secrets are a Viable and Legal Option

Most employers are aware of California’s laws against all forms of non-compete agreements.  The real question is: what steps can employers take to prevent employees from using company confidential or trade secret information to go out on their own and ultimately compete against you?

The establishment of trade secrets is one potential strategy.  There are complex laws which govern how trade secret information is identified, classified and protected here in San Diego.  What information can be established as “trade secret”, and what steps must you take as an employer to identify this to your employees and protect the enforceability of your rights?

The answer generally lies in two tests: the availability of the information outside of your company environment and the value of that information to your competitors as well as your own business.

Common examples of potential trade secret protection would extend to:

• Customer and supplier lists
• Trademarks, logos and other corporate intellectual property
• Unique processes or marketing strategies
• Industry specific or technical knowledge
• Correspondence including e-mails and texts from corporate phones

The Misappropriation of Trade Secrets in an Unfair Business Practice in San Diego and Throughout California

The misappropriation of trade secrets is an unfair business practice in San Diego and throughout California.  There are other factors which affect a sound trade secret strategy, and it is important to ensure all corporate documents including your policies and procedures are regularly reviewed and updated. A well-conceived and executed trade secret strategy protects vital intellectual property, formulas, processes, market strategies and even customer lists.  If an employee or partner takes any established and properly protected trade secret to a competitor or to start their own business, they can be legally liable for unfair business practices.

The Watkins Firm has more than four decades of experience serving the San Diego business community.  The misappropriation of trade secrets is enforceable under California law and we are uniquely positioned to provide sound counsel for our clients and help to protect their business and information that is crucial to business success.

Pro-Tip: “The value of a misappropriation of trade secrets strategy is not only a strategy to consider in California since non-compete agreements are illegal.  The value of this strategy lies in the ability to enforce it when a trade secret is disclosed or used against the company in competition.  One must be able to prove that the information, process or trade secret was unfairly accessed or removed, disclosed or otherwise competitively implemented by the party who took it.  The trade secret was thereby used against the interests of your company without authorization.  The misappropriation of a trade secret opens the violator to exposure of legal remedies including an immediate injunction to cease further actions or competition as well as the recovery of financial damages associated with the misappropriation.

Unfortunately, the types of people who attempt to do these types of things are well known to you: employees, co-owners or shareholders, vendors, or even customers.  How are you supposed to protect your ‘secret recipe’ for success, the unique creations and processes developed by your company, and the strategies that give your company the competitive edge?

The business attorneys at the Watkins Firm have more than 40 years of experience with strategies to protect your corporate interests, including the establishment and enforcement of trade secrets.  We invite you to a discussion.  There are specific steps your organization would need to take to develop, implement and enforce a trade secret strategy, and prevent a current or former employee or business partner from using your company’s trade secret information, processes or intellectual property and deploying it for personal gain or to compete against you.” – Dan Watkins, Founding Partner

If you are interested in additional information regarding corporate protections and the misappropriation of trade secrets we invite you to review our podcast Episode 25 – Unfair Business Practices as well as the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today.