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The federal courts have heightened the specificity with which plaintiffs must plead their cases. A recent misappropriation of trade secrets decision serves as a warning that pre-filing investigations of departing employees’ actions are vitally important.
In U.S. Bank v. Parker, a former employee from the Bank’s wealth management group resigned and joined a competing group. The employee signed a Confidentiality and Non-Solicitation Agreement while at the Bank. As part of that agreement, she was barred from contacting the Bank’s clients to solicit business for her new employer for one year. She was also obligated to immediately return all confidential information concerning the Bank’s clients and business when she resigned.
The Bank filed suit for breach of contract, tortious interference with business, and misappropriation of trade secrets. The Bank alleged “on information and belief” Parker violated her agreement by contacting clients and failing to return the Bank’s confidential information.
The Bank immediately faced problems. Because its complaint failed to allege specific instances of Parker contacting clients or identify the confidential information she misappropriated, the court granted Parker’s Motion to Dismiss the case. The court held merely “believing” Parker may have violated the agreement was too speculative.
Comprehensive trade secret programs, substantive exit interviews, and pre-suit investigations are vitally important to protect confidential business information. With the heightened pleading standards, employers must develop facts supporting misappropriation, and not rely on speculation.
For more information regarding protecting your business and its confidential information, contact Gregory M. Clift at 214.239.2777 or gclift@cdklawyers.com.
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