trade secret misappropriation

Data mining LinkedIn profilesA Federal Judge recently blocked LinkedIn from restricting another company from using data from LinkedIn’s website. The suit involves Linkedin and hiQ Labs, Inc. The suit also has significant ramifications for job-seekers and employers. See LinkedIn Profiles Used to Alert Employers Which Employees are Job-Hunting.

hiQ Labs Business Depends Upon Access to LinkedIn Profiles

hiQ

Trade Secret Misappropriation DecisionsA lawsuit involving trade secret misappropriation recently brought to mind the definition of a “knee-jerk reaction;” an “automatic and unthinking” response.

Specifically, our law firm filed a lawsuit for breach of contract involving unpaid commissions and other claims on behalf of a former executive. In response, the former employer manufactured filed a counter-claim for trade

Trade Secret ProtectionIn coming post, we will be covering in detail sweeping changes to trade secret law resulting from the recent enactment of the Defend Trade Secrets Act. This statute was signed into law on May 12, 2016, by President Obama with overwhelming bipartisan support (410 to 2 in the U.S. House of Representatives and by a

Trade secretsAliphcom, Inc. d/b/a Jawbone won an early legal battle in a lawsuit filed against five of its former employees and its rival Fitbit, Inc.

Specifically, in a preliminary injunction hearing held on 10/20/2015, the individual defendant were ordered by a federal judge to return any confidential information they took and to allow their computers and

ToolboxWhen it comes to post employment restrictions, non-compete agreements often get all the attention. In fact, such restrictions are a frequent subject of discussion on our law firm’s blog (Noncompete Restrictions: The First Line of Defense for Protecting the Company from Unfair Competition).

However, as explained below, a carefully drafted non-solicitation provision should

shutterstock_84499888Business involves competition. But not all competition is lawful. Two former employees found this out the hard way after a judge determined on May 22, 2015 that they had wrongfully started a competing business while they continued to work for their employer along with misappropriating trade secrets and engaging in other wrongful acts (Nedschroef

Trade Secret MisappropriationUber and Lyft are both internet and mobile application based technology companies offering a peer-to-peer ridesharing platform. Or for less tech-speak, they are involved in what is generally described as the “sharing economy.” However, a recent lawsuit makes clear that sharing has its limits.

Specifically, Lyft is suing a former executive (Lyft v Uber (PDF)), Travis VanderZanden, for breaching his confidentiality agreement and fiduciary duty and after he jumped ship to join Lyft’s chief rival, Uber. According to the complaint filed in the lawsuit, the former executive copied vast amounts of confidential information on his way out the door. Uber has denied that Mr. VanderZanden has “shared” any of this information with Uber. 

These claims and allegations are by no means extraordinary. But they do provide a perfect roadmap for both employers and employees to follow when it comes ending one employment relationship in order to join a competitor. But instead of taking an all-out road trip to address all of those issues, two points stand-out.

How to Get Guarantee Your Former Employer Will Sue You

As to the firs issue, a little background for what not to do if you are an employee about to join a competitor: Lyft’s lawsuit alleges that VanderZanden informed the company’s founders of his plans to resign on August 12 and agreed to meet with the founders on August 15. But VanderZanden cancelled that meeting and suggested they speak after the weekend.

According to the complaint, it was a busy weekend for Mr. VanderZanden. Lyft alleges that he backed up a number of emails and confidential documents to his personal home computer and mobile phone before handing his company computer back. These actions were discovered after Lyft conducted a forensics analysis of VanderZanden’s company-issued laptop. The analysis further revealed that months prior to the departure, Mr. VanderZanden synchronized his personal Dropbox account with his Lyft laptop, copying a “significant number of Lyft’s most sensitive documents” in the process.

So the first issue for both employers and employees is really two sides of the same coin. From an employee’s perspective, assume your digital fingerprints will point to every piece of digital information you touched, e.g., every file, every email, every document, etc. And if those fingerprints suggest you took you former employer’s information to your new employer, be prepared to be sued.

And because these digital fingerprints provide valuable insight, employers need to have a plan in place to preserve this likely treasure trove of digital evidence. This is because the absence of such evidence may eliminate an expensive Don Quixote-like endeavor against the former employee. There is nothing worse than spending A+ resources on a C- employee or situation.

Conversely, the presence of such evidence will be needed to convince a judge that injunctive relief is appropriate and to otherwise support claims against the former employee. As part of your company’s plan, you’ll need to address how to preserve, analyze, and use the digital evidence.

Play a Strong Hand; Bluffing in Litigation Can Be Costly
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Non-compete agreementSticking feathers up your butt, does not make you a chicken.

Tyler Durden, Fight Club

Under Michigan law, one required element for having an enforceable non-compete agreement is a “reasonable competitive business interest.” But, like the chicken quote, business owners can’t expect to just stick the phrase “reasonable competitive business interest” into an