Beyond Noncompete Agreements: Using Florida’s Trade Secrets Act to Prevent Former Employees From Disclosing Sensitive Information to Competitors
The problem is a familiar one: A business client calls and informs you that an employee with highly valuable, confidential information has resigned and is going to work for a competitor. The client is afraid that the employee will disclose the information to the competitor. Legal advice and assistance — timely and effective — is requested.
While this problem is by no means new, the theft (and potential theft) of confidential information or trade secrets is a growing concern in the fast-paced, competitive, high-tech “information age.” On the eve of the 21st century, employees are more likely to possess specialized, confidential, and proprietary information than their fathers and mothers. Modern employees also change jobs more frequently than their parents, whether it be just to take advantage of new opportunities or to move ahead in their careers. Indeed, employment mobility is a recognized characteristic of “work force 2000.” Under such circumstances, lawyers representing modern businesses must be prepared to deal with potentially devastating employee defections.1
Traditionally, lawyers have attempted to address this problem in advance by advising clients to use “noncompete agreements.”2 However, there is another weapon in the corporate arsenal that lawyers should be aware of — Florida’s Uniform Trade Secrets Act, F.S. Ch. 688 (FUTSA). This article discusses the law of trade secrets in Florida, with special attention to its application to employment relationships. To this end, methods for dealing with threatened and actual disclosure of trade secrets are discussed in detail.
Significantly, the law of trade secrets serves to protect an employer’s confidential information even when an enforceable noncompete agreement or a written confidentiality agreement does not exist. Moreover, an important development in the law of trade secrets, namely the “inevitable disclosure doctrine,” makes this body of law a powerful tool for protecting confidential information. As will be discussed in greater detail below, the inevitable disclosure doctrine allows employers to take preventive action before their trade secrets are disclosed to competitors. As such, the inevitable disclosure doctrine makes sense and a Florida court should adopt this theory when presented with the right set of facts.
When an employee announces that he or she is going to work for a competitor, time is of the essence. Clients typically want their lawyer immediately to obtain “a court order” (a temporary injunction) prohibiting the employee from commencing such new employment. Securing the injunction is key, for once the employee has started to work for the competitor the “cat is out of the bag.”3 Employers are surprised to learn that it can sometimes be difficult to obtain an injunction under these circumstances even when there is a noncompete agreement between the parties.
The difficulty in obtaining injunctive relief arises from Florida’s noncompete statute and the considerable body of Florida case law governing noncompete agreements.4 Prior to the enactment of the new noncompete statute in 1996, an injunction could be obtained only when a former employer could prove “irreparable harm” or offer evidence giving rise to a presumption of irreparable harm by showing that the former employee directly solicited former customers or actually used specific trade secrets or customer lists.5 This can be difficult to do. As such, a former employee could, for all practical purposes, avoid the noncompete agreement by simply claiming that the employee was not using their former employer’s confidential information in the new position with the competitor.
Fortunately for Florida employers, the Florida noncompete statute was rewritten in 1996 in such a way as to make noncompete agreements readily enforceable when designed to protect legitimate business interests. However, the new noncompete statute does not affect those noncompete agreements that were entered into prior to July 1, 1996.6 Moreover, the 1996 amendments, obviously, are of no help where a noncompete agreement does not exist. In such a situation, or in any case when “trade secrets” are involved, F.S. Ch. 688 may provide an independent basis for injunctive relief.
The Trade Secrets Act
FUTSA is an important and sometimes overlooked tool for controlling the dissemination of confidential information through changes in employment relationships.7 FUTSA arises from the Uniform Trade Secrets Act, a uniform law that has been enacted in at least 40 states.8 Florida’s version was enacted in 1988. As the lack of reported decisions indicates, the usefulness of this statute has not been fully appreciated by Florida lawyers.
Even before FUTSA, Florida courts allowed employers to obtain injunctions prohibiting former employees from disclosing trade secrets to their new employer. This principle was firmly established in 1982 in Unistar v. Child, 415 So. 2d 733 (Fla. 3d DCA 1982). Unistar made clear that injunctive relief was available to an employer even if a written noncompete agreement (or a written confidentiality agreement) did not exist. FUTSA simply codified many of the principles referenced in the Unistar line of cases.
As will be discussed in greater detail below, to obtain relief under FUTSA, the former employer needs to prove: 1) the existence of a “trade secret” and 2) that the former employee has actually misappropriated the trade secret or is “threatening” to misappropriate it. Under the act, injunctive relief, damages, and attorneys’ fees are available to remedy any “misappropriation” of a “trade secret.”9
• What Is A Trade Secret?
In order to invoke the protections of FUTSA, an employer must first show the existence of a “trade secret.” FUTSA defines a “trade secret” as:
information, including a formula, pattern, compilation, program, device, method, technique, or process that:
(a) Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and
(b) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
Unfortunately, there are only a few Florida decisions which interpret FUTSA’s definition of “trade secret.”10 One such decision is Thomas v. Alloy Fasteners, 664 So. 2d 59, 60 (Fla. 5th DCA 1995). There, the Fifth District held (without an extensive explanation of its analysis), that “order edit lists,” which included the manufacturer’s price markup and profit margins, qualified as “trade secrets” under FUTSA. As the court noted, “[t]he value of the lists lay not so much in the fact that the lists contained the names of customers, as in the fact that they revealed [the manufacturer’s] pricing and profit structure. This information would obviously be important for a competitor in deciding by how much it could undercut [the manufacturer’s] prices.” Id. (emphasis added)
On the other hand, in Health Care Management Consulting, Inc. v. McCombes, 661 So. 2d 1223, 1226 (Fla. 1st DCA 1995), the First District held that a “confidential methodology of presenting and interpreting Medicare regulations to clients in the home health industry does not constitute a trade secret.” In reaching its decision, the court stated that “[the former employer’s] expertise, however, while the subject of confidential treatment by [the former employer] cannot be a trade secret because it principally involves the interpretation of public Medicare regulations and, as such, is ‘readily ascertainable by proper means’ through researching the Code of Federal Regulations.” Id.
Although there are few reported Florida decisions discussing FUTSA’s definition of “trade secret,” the issue of “customer lists” has been a fertile ground for litigation in Florida.11 In certain situations, a customer list can qualify as a trade secret. The general rule is as follows: Where “[t]here is no evidence that [the customer lists] are the product of any great expense or effort, that they are distillations of larger lists or that they include information not available from public sources,” they will probably not qualify as trade secrets.12 Unfortunately, the customer list cases are of limited application in many employment scenarios.
The absence of Florida case law is not an insurmountable obstacle when trying to prove the existence of a trade secret. F.S. §699.009 provides that “[s]ections 688.001-688.009 shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this act among states enacting it.” Thus, published decisions from other jurisdictions are helpful when litigating cases in this area.
Whether certain information can be classified as a “trade secret” is a determination that will invariably have to be made on a case-by-case basis. No two scenarios are exactly alike, so it may be difficult to define in advance what will constitute a “trade secret” in the employment context. While the statutory definition of “trade secret” is fairly broad, the few Florida cases on point show that courts will not automatically find that the definition is satisfied in every case. Future Florida cases will no doubt shed light on this issue, but for now practitioners will have to rely on the statutory definitions and the Uniform Trade Secret case law from other jurisdictions.
• What Constitutes Misappropriation?
“Misappropriation” is also statutorily defined. According to F.S. §688.002(2), “misappropriation” means:
(a) Acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means; or
(b) Disclosure or use of a trade secret of another without express or implied consent by a person who:
1. Used improper means to acquire knowledge of the trade secret; or
2. At the time of disclosure or use, knew or had reason to know that his knowledge of the trade secret was:
a. Derived from or through a person who had utilized improper means to acquire it;
b. Acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use; or
c. Derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use; or
3. Before a material change of his position, knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake.
When a former employee discloses a former employer’s trade secret to a new employer, a “misappropriation” as defined by F.S. §688.002(2)(b)2.b–c has almost certainly occurred.
• Damages and Attorneys’ Fees
If an employer can prove that a former employee misappropriated a trade secret the employer can recover three types of damages: actual damages, “unjust enrichment” damages, or a “reasonable royalty for a misappropriator’s unauthorized disclosure or use of a trade secret.”13 In addition, if the misappropriation was “willful and malicious,” the court may award exemplary damages in an amount not to exceed twice the underlying judgment.14
In addition, while attorneys’ fees are not mandated in all actions brought under FUTSA, when “willful and malicious misappropriation exists, the court may award reasonable attorneys’ fees to the prevailing party.”15
• Injunctive Relief
Assuming the existence of a bona fide trade secret, under what circumstances may an injunction be obtained? Significantly, F.S. §688.003(1) provides that “actual or threatened misappropriation may be enjoined.” (emphasis added) Thus, an employer does not have to wait for the former employee to “let the cat out of the bag” before an injunction can be obtained. In Thomas v. Alloy Fasteners, 664 So. 2d 59, 60 (Fla. 5th DCA 1995), the Fifth District noted “that conspicuously absent from this statute is any requirement that the trade secret first be used before its use can be enjoined. Clearly a threatened misappropriation of trade secrets may be enjoined.” (emphasis in original)
Thus, FUTSA is quite significant for a number of reasons. As noted above, it is not necessary to have a noncompete agreement in place to obtain an injunction prohibiting disclosure of trade secrets. Moreover, a written confidentiality agreement probably will not be required for an employer to obtain an injunction pursuant to F.S. §688.003.16 Third, in a misappropriation of trade secrets case, irreparable harm and inadequate remedy at law are presumed.17 And most importantly, pursuant to FUTSA, “threatened” misappropriation is sufficient to obtain an injunction.
In light of all of this, when a former employee is about to go to work for a competitor, it will be possible for the employer to obtain an injunction under FUTSA that will 1) forever prohibit the employee from disclosing any trade secrets to the competitor, and 2) prohibit the employee from working for the competitor for a “reasonable period” of time.18 To obtain an injunction under FUTSA, the former employer will need to prove: 1) the existence of a trade secret, and 2) that the former employee has actually misappropriated a trade secret or the former employee is “threatening” to misappropriate a trade secret. However, before pursuing a FUTSA claim or defense, litigants should remember that attorneys’ fees are available to protect against abuse of this statute. “If a claim of misappropriation is made in bad faith, a motion to terminate an injunction is made or resisted in bad faith,. . . the court may award reasonable attorneys’ fees to the prevailing party.”19
An Important Development: Inevitable Disclosure Doctrine
A noteworthy development in this area of law is the so-called “inevitable disclosure doctrine.” This doctrine concerns the determination of what constitutes “threatened” misappropriation under the act. FUTSA does not define “threatened” misappropriation and there are no Florida decisions which extensively discuss this term.20 However, decisions from other jurisdictions which have adopted the Uniform Trade Secret Act help to shed light on this issue.21
Under the “inevitable disclosure” theory, some employment situations make it impossible for a former employee to erase their former employer’s trade secrets from their memory. As one court put it, “[a]lthough the employee may have the most innocent of intentions merely a desire for a change of scenery or a chance at higher compensation and may not physically take any documents or technical or marketing information with him, he cannot ‘wipe clean’ the slate of his memory.”22 Thus, no matter how hard the former employee may try to avoid disclosing trade secrets to the new employer, “inevitable disclosure” will occur by virtue of his or her very employment with the competitor.23 Under the inevitable disclosure doctrine, an employer might very well obtain an injunction to prevent threatened misappropriation even when there is no evidence that the former employee has actually disclosed trade secrets to the new employer, when the employee swears not to disclose any trade secrets to the new employer, and there is no evidence whatsoever that the new employer has sought disclosure of the trade secrets.24
• The Redmond Case
The leading recent decision supporting the inevitable disclosure doctrine is PepsiCo, Inc. v. Redmond, 54 F.3d 1262 (7th Cir. 1995). Although Redmond was decided under Illinois law, at the time the decision was issued Illinois, like Florida, had adopted the Uniform Trade Secrets Act. The Illinois statute and the Florida act are substantially the same. Thus, Redmond is a decision that can be cited by Florida lawyers.
In Redmond, a high-ranking marketing executive for PepsiCo defected to Quaker Oats, a competitor in the beverage industry. Prior to his departure from the company, he had signed a fairly broad confidentiality agreement. PepsiCo manufactured a sports drink known as “All Sport,” and Quaker manufactured “Gatorade.” The market for these so-called “sports drinks” and other “new age” drinks was highly competitive. Before leaving PepsiCo, Redmond had been deeply involved in PepsiCo’s marketing and pricing strategies. He was privy to, among other things, PepsiCo’s 1) “strategic plans”; 2) its “annual operating plan,” which included its “pricing architecture”; 3) its “attack plans” for specific markets; and 4) innovations in selling and delivery systems.
Redmond assured PepsiCo (and the court) that he had no intention of using any of PepsiCo’s trade secrets in his new employment with Quaker. Furthermore, Redmond argued that his duties at Quaker would be performed pursuant to a pre-existing operations plan, therefore any knowledge of PepsiCo’s strategies would be irrelevant. He also noted that PepsiCo’s and Quaker’s product distribution systems were totally different.
The federal district court issued a preliminary injunction preventing Redmond from assuming duties related to the pricing or marketing of beverages for Quaker.
The district court concluded. . . that unless Redmond possessed an uncanny ability to compartmentalize information, he would necessarily be making decisions about Gatorade and Snapple by relying on his knowledge of [PepsiCo’s] trade secrets. It is not the ‘general skills and knowledge acquired during his tenure with’ PepsiCo that PepsiCo seeks to keep from falling into Quaker’s hands, but rather ‘the particularized plans or processes developed by [PepsiCo] and disclosed to him while the employer-employee relationship existed, which are unknown to others in the industry and which give the employer an advantage over his competitors.’25
The Seventh Circuit rejected Redmond’s arguments and affirmed the district court’s injunction. As the Seventh Circuit noted, “PepsiCo finds itself in the position of a coach, one of whose players has left, playbook in hand, to join the opposing team before the big game.”26
The breadth of the injunction granted in Redmond is significant. Instead of simply prohibiting Redmond form disclosing PepsiCo’s trade secrets, the injunction prohibited Redmond from “assuming his responsibilities at Quaker through May 1995” (the injunction was entered on December 15, 1994).27 Thus, if Florida’s courts interpret FUTSA in the same way the Redmond court interpreted the Illinois statute, Florida law may provide a basis for totally prohibiting an employee from working for a competitor for a reasonable period of time.28
• Application of the Inevitable Disclosure Doctrine
The inevitable disclosure doctrine is, in practice, applicable in a relatively limited set of circumstances. When applying this doctrine, courts examine a variety of factors, including
the type of work to be performed by the employee, the complexity of the trade secret information, and the degree of competition and comparative level of technical knowledge between the employee’s former and new employers. Complex trade secrets help lead to the conclusion of inevitable disclosure. . . . Implicit in any determination of inevitability will be a finding that the employee has more than a general knowledge of the trade secrets, and that he or she has similar responsibilities in both his old and new jobs.29
Proving an inevitable disclosure theory at the temporary injunction phase of litigation may require lawyers to present evidence going beyond what would normally suffice in a noncompete case. Discovery may have to be completed on an expedited basis so the court will have a fully developed record upon which to conduct its fact-specific “inevitable disclosure” inquiry. Additional guidance in applying the inevitable disclosure doctrine can be found in the cases of La Calhene, Inc. v. Spolyar, 938 F. Supp. 523 (W.D. Wisc. 1996), and Uncle B’s Bakery, Inc. v. O’Rourke, 920 F. Supp. 1405 (N.D. Iowa 1996). Both of these decisions followed Redmond and granted injunctive relief pursuant to the inevitable disclosure doctrine.
• Limitations on the Inevitable Disclosure Doctrine
Like any legal theory, there are important practical limitations on the application of this doctrine. The most obvious limitation is that created by the narrow definition of “trade secret.” Typical “line level,” “rank and file” employees, even in the modern “information age,” usually are not exposed to trade secrets as defined by FUTSA. In most industries, this kind of sensitive information is normally reserved only for highlytrained technicians and upper-management personnel. If an employee has not been exposed to true “trade secrets” (as defined by the statute) no claim can be brought under FUTSA and the inevitable disclosure doctrine will not come into play.
Furthermore, the inevitable disclosure doctrine does not always compel the conclusion that an employee exposed to trade secrets must inevitably disclose them. Much will depend on the nature of the employee’s job (both at the old and the new business), and the nature of the trade secrets at issue.30 Thus, not every employee exposed to trade secrets, even those in technical positions or upper management, should be barred from changing employment by a universal application of the inevitable disclosure doctrine.
In addition, the inevitable disclosure doctrine should not, in most instances, support injunctive relief which permanently bars the employee from working for a competitor. The injunction should extend only for a time period sufficient to protect the former employer’s trade secrets. The injunction in Redmond, for example, was only for a six-month period. Such a restriction is certainly less onerous than those imposed by typical noncompete agreements.31 As a practical matter, the length of any injunction will depend on the nature of the trade secret at issue. Certain kinds of information, such as marketing data, becomes outdated relatively quickly, while more technical data may deserve protection for a longer period of time.32
It might be argued that the inevitable disclosure doctrine is not consistent with Florida public policy as it is codified in the noncompete statutes. Florida, like many other states, has a public policy against restraining employees from earning a living.33 According to this argument, the Florida noncompete statute evidences a legislative intent to permit noncompete agreements in those instances defined in the noncompete statute and no other. The inevitable disclosure doctrine, so this argument goes, is merely an attempt to convert access to trade secrets into a noncompete agreement where none exists.
This argument is flawed in that it assumes one section of the Florida statutes (the noncompete statute) expresses the public policy of Florida, while it ignores the public policy expressed in another section of the statutes (FUTSA). It is well settled that “[t]he courts must if possible avoid such construction as will place a statute in conflict with other statutes covering the same general field. It is the duty of the court to construe the statutes in such a manner as to harmonize them and at the same time to give effect to the plain meaning thereof.”34 The legislature knew that Florida law already permitted injunctions against threatened misappropriation of trade secrets when it amended the noncompete statute in 1990 (and again in 1996). Nothing in the text or history of the noncompete statute suggests that the legislature intended to somehow repeal or restrict the plain terms of FUTSA by those amendments.
Furthermore, Illinois, like Florida, has a public policy against restraining employees from earning a living. In fact, the Redmond court recognized this very consideration when it noted that trade secret law “should not prevent workers from pursuing their livelihoods when they leave their current positions.”35 And despite these considerations, the court in Redmond did not find the inevitable disclosure doctrine to be inconsistent with Illinois’ public policy. Similarly, Florida’s courts should find this theory to be inconsistent with Florida’s public policy.
FUTSA can be an important and potentially powerful tool for protecting an employer’s trade secrets. The ability to obtain an injunction prohibiting “threatened” misappropriation makes it a potent option for employers in some circumstances. Although abuse of that protection is conceivable, the possibility of a substantial attorneys’ fee award to the prevailing party should be sufficient to deter employers from using this statute to harass former employees.
The inevitable disclosure doctrine recognizes that an employer confronted with an actual or threatened misappropriation should not have to wait for a former employee to “let the cat out of the bag” before an injunction can be obtained. If presented with the right set of facts, there is no compelling reason that a Florida court should not adopt the well-reasoned approach of the Seventh Circuit in Redmond. The inevitable disclosure doctrine, when properly applied within reasonable limitations, makes sense. For better or worse, protections such as FUTSA are becoming increasingly necessary in our competitive, technology driven world.
1 This problem is not limited to the situation in which a technical “genius” may have had access to the “secret formula” for a product. If, for example, a high-level management employee had access to their employer’s strategic plans, pricing plans, or specialized marketing plans, that employee’s defection to a competitor could very well result in millions of dollars in lost revenue to a competitor. See, e.g., PepsiCo, Inc. v. Redmond, 54 F.3d 1262 (7th Cir. 1995); McMorris, Frances, Judge Restricts Two Executives Despite Lack of Noncompete Pacts, Wall St. J., November 25, 1997, at B-12 (discussing a recent New York case in enjoining two advertising executives from starting a rival advertising business).
2 These kinds of contractual arrangements are referred to by various labels including “restrictive covenants,” “covenants-not-to-compete,” and “noncompe-
tition agreements.” For consistency, this article will use the term “noncompete agreements.”
3 See Capraro v. Lanier Business Products, Inc., 466 So. 2d 212, 213 (Fla. 1985) (“Immediate injunctive relief is the essence of such suits and oftentimes the only effectual relief. It truly can be said in this type of litigation that relief delayed is relief denied.”). Former employers often seek to totally prohibit the former employee from working for the competitor. Many employers feel this is necessary because they believe the former employee cannot or will not keep the former employer’s sensitive information confidential.
4 The current noncompete statute is found at Fla. Stat. §542.335. This statute went into effect on July 1, 1996. Prior to that time, the applicable statute was found at Fla. Stat. §542.33. For a discussion of the law governing noncompete agreements in Florida see John A. Grant and Thomas T. Steele, Restrictive Covenants: Florida Returns To The Original “Unfair Competition” Approach for the 21st Century, 70 Fla. B.J. 53 (November 1996).
5 See Sabina v. Dahlia, 650 So. 2d 96 (Fla. 2d D.C.A. 1995) (requiring former employer to plead and prove the “use” of specific trade secrets to obtain an injunction pursuant to Fla. Stat. §542.33); Lovell Farms, Inc. v. Levy, 641 So. 2d 103 (Fla. 3d D.C.A. 1994) (same).
6 There are currently three different statutes governing noncompete agreements, depending on the date that the agreement was entered into. See Grant and Steele, supra note 4 at 53-54. Employers with noncompete agreements pre-dating July 1, 1996, should give serious consideration to the re-execution of their contracts to bring them within the most recent version of the statute. This is permissible because in Florida new consideration is not required for a non-compete agreement; continued employment will be regarded as sufficient consideration. Criss v. Davis, Presser & LaFaye, P.A., 494 So. 2d 525 (Fla. 1st D.C.A. 1986); Tasty Box Lunch Co., Inc. v. Kennedy, 121 So. 2d 52 (Fla. 3d D.C.A. 1960).
7 For a general discussion of FUTSA, see James W. Beagle, New Remedies for the Protection of Intellectual Property: The Uniform Trade Secrets Act, 63 Fla. B.J. 55 (April 1989).
8 See the 1997 supplement to West’s Florida Statutes Annotated for a list of the 40 states that have adopted the Uniform Trade Secrets Act.
9 Fla. Stat. §688.003(1). “Florida courts uniformly recognize their ability to grant injunctive relief to prevent further injury for the misappropriation of trade secrets or protected research. In addition, the Florida Uniform Trade Secrets Act grants injunctive relief for misappropriation of trade secrets.” Board Of Regents v. Taborsky, 648 So. 2d 748 (Fla. 2d D.C.A. 1994) (citations omitted).
10 For further general discussion of the definition of “trade secret” see Beagle, supra note 7.
11 For a more detailed treatment of customer lists in the trade secrets context see Stephen B. Daiker, Taking Steps To Qualify Customer Lists As “Trade Secrets,” 66 Fla. B.J. 22 (October 1992).
12 Templeton v. Creative Loafing Tampa, Inc., 552 So. 2d 288, 289 (Fla. 2d D.C.A. 1989).
13 Fla. Stat. §688.004(1).
14 Fla. Stat. §688.004(2).
15 Fla. Stat. §688.005.
16 See Dotolo v. Schouten, 426 So. 2d 1013 (Fla. 2d D.C.A.), rev. denied, 434 So. 2d 888 (Fla. 1983). In Dotolo, the defendants and the plaintiffs had an informal relationship whereby the plaintiffs manufactured citrus-based pet products and the defendants marketed these products. No confidentiality agreement between the parties existed. When the relationship fell apart, the defendants began copying and selling an imitation of the plaintiffs’ product. Id. at 1015. The circuit court denied the plaintiffs’ motion for a temporary injunction, but on appeal, the Second District reversed. Id. at 1015. Importantly, the court held that in a misappropriation of trade secrets case, irreparable harm and inadequate remedy at law are presumed and “the lack of any express agreement on the part of appellees not to use or disclose appellants’ trade secret is not significant.” Id. It should be noted that this case was decided prior to Florida’s adoption of the Uniform Trade Secrets Act.
18 See PepsiCo, Inc. v. Redmond, 54 F.3d 1262 (7th Cir. 1995).
19 Fla. Stat. §688.005.
20 As noted earlier in the text, in Thomas v. Alloy Fasteners, 664 So. 2d 59, 60 (Fla. 5th D.C.A. 1995), the court held that a threatened misappropriation of certain “order edit lists” including a manufacturer’s price markup and profit margins, could be enjoined pursuant to FUTSA. Also, in Barberio-Powell v. Bernstein Liebstone Associates, Inc., 624 So. 2d 383 (Fla. 4th D.C.A. 1993) the court noted that threatened misappropriation could be enjoined but it did not explain what constitutes threatened misappropriation because it found that no trade secret existed.
21 As noted above, Fla. Stat. §699.009 provides that “[s]ections 688.001-688.009 shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this act among states enacting it.” Therefore, decisions from other jurisdictions should be persuasive, although not binding, in Florida.
22 Chu, Morgan & Standish, Gail, When Trade Secrets Walk: Reigning In ‘Threatened Misappropriation’, 2 No. 8 Intell. Prop. Strategist 1 (1996).
23 According to the court in Glaxo Inc. v. Novopharm Ltd., 931 F. Supp. 1280, 1303 (E.D.N.C. 1996), the inevitable disclosure doctrine “bars the employment of a competitor’s former employee who had developed intimate expert knowledge of that competitor’s confidential information in a narrow technological field, on the grounds that it would not be possible for that employee to ‘forget’ or refrain from relying upon the confidential information.”
24 See PepsiCo, Inc. v. Redmond, 54 F.3d 1262 (7th Cir. 1995).
25 Id. at 1269.
26 Id. at 1270.
27 Id. at 1267.
28 Although Redmond has received significant attention from commentators, injunctive relief based on the inevitability of trade secret disclosure is not a totally new development. Cases from other jurisdictions previously recognized this concept, although those cases do not use the term “inevitable disclosure doctrine.” See Chu & Standish, supra note 22 (citing FMC Corp. v. Varco Int’l, Inc., 677 F.2d 500, 504 (5th Cir. 1982) (granting preliminary injunction where “[e]ven assuming the best of good faith, [the individual defendant] will have difficulty preventing his knowledge of [the plaintiff’s trade secrets] from infiltrating his work” at the new employer); Allis-Chalmers Mfg. Co. v. Continental Aviation & Engin. Corp., 255 F. Supp. 645, 654 (E.D. Mich. 1966) (preliminarily enjoining former employee from working on specific product at competitor because “[t]he virtual impossibility of [his] performing all of his prospective duties for [the new employer] to the best of his ability, without in effect giving it the benefit of [the plaintiff’s] confidential information, makes a simple injunction against disclosure and use of this information inadequate”); Air Prods. and Chems., Inc. v. Johnson, 442 A.2d 1114, 11243 (Pa. Super. Ct. 1982) (upholding preliminary injunction prohibiting former employee from performing certain duties because “[i]t would be impossible [for the former employee] to perform his managerial functions in on-site work without drawing on knowledge he possesses of [the plaintiff’s] confidential information”); E.I. duPont de Nemours and Co. v. American Potash & Chem. Corp., 200 A.2d 428 (Del. Ch. 1964) (upholding preliminary injunction prohibiting former employee from engaging in work for competitor relating to the operation and development of certain processes similar to the plaintiff’s trade secret processes); B.F. Goodrich Co. v. Wohlgemuth, 192 N.E. 2d 99 (Ohio Ct. App. 1962) (directing issuance of injunction designed to prohibit former employee from engaging in certain type of work for competitors of former employer).
29 Chu & Standish, supra note 22 (citingMichael A. Epstein, Modern Intellectual Property 3.02’A]’2] at 3-33-34 (Aspen Law & Business 1995)).
30 See Redmond, 54 F.2d at 1269 (citing AMP Inc. v. Fleischhacker, 823 F.2d 1199, 1207 (7th Cir. 1987), and Teradyne, Inc. v. Clear Comm. Corp., 707 F. Supp. 353 (N.D. Ill. 1989)).
31 Two-year restrictive covenants are common, and are specifically permitted by the 1996 version of Florida’s noncompete statute. Fla. Stat. §542.335(1)(d)(1).
32 Chu & Standish, supra note 22.
33 See, e.g., Hapney v. Central Garage, Inc., 579 So. 2d 127 (Fla. 2d D.C.A 1991), rev. denied, 591 So. 2d 180 (Fla. 1991), disapproved on other grounds, Gupton v. Village Key & Saw Shop, Inc., 656 So. 2d 475 (Fla. 1995).
34 49 Fla.Jur.2d, Statutes §173.
35 Redmond, 54 F.3d at 1268.
At the time this article was written Tom Barber was a member of the general litigation department at Carlton, Fields, Ward, Emmanuel, Smith & Cutler, Tampa. He currently is an assistant state attorney in the 13th Judicial Circuit. He received his B.A. from the University of Florida and his J.D. from the University of Pennsylvania.