MIAMI BUSINESS LITIGATION: INEVITABLE TRADE SECRET DISCLOSURE DOES NOT PROVIDE A BASIS FOR INJUNCTION IN FLORIDA

Most trade secret statutes provide the owner of a trade secret with an injunction remedy prohibiting another from disclosing the owner’s trade secret. Florida’s trade secret statute expressly provides that an injunction is permissible when disclosure is actual or threatened. Fla. Stat. § 688.003. (“Actual or threatened misappropriation may be enjoined.”). However, some courts have expanded the injunction remedy to include circumstances where the disclosure is inevitable, rather than actual or threatened. Del Monte Fresh Produce Co. v. Dole Food Co., Inc., 148 F. Supp. 2d 1326 (S.D. Fla. 2001) (“Courts that have adopted inevitable disclosure apply traditional trade secret misappropriation principles to situations where there has been no actual or threatened misappropriation. In an inevitable disclosure case, a court can issue an injunction to prevent an employee from working for the former employer’s competitor if the employer can demonstrate a real and present danger of disclosure.”). The Miami business litigation attorneys of the Mavrick Law Firm represent businesses and their owners in breach of contract litigation and related claims of fraud, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment litigation, and other legal disputes in federal and state courts and in arbitration.

In PepsiCo., Inc. v. Redmond, 54 F. 3d 1262 (7th Cir.1995), PepsiCo sought to enjoin its former employee from disclosing confidential information about PepsiCo’s plans for specific markets to his new employer, the Quaker Oats Company. The former employee signed a confidentiality agreement, but not a noncompete agreement. PepsiCo argued the former employee would “inevitably disclose” its trade secrets to Quaker because the former employee’s new position required him to provide him substantial input on Quaker’s marketing and other business practices. The court agreed and enjoined the former employee from working at Quaker because it was inevitable that the former employee would disclose PepsiCo’s marketing information to Quaker. PepsiCo., Inc., 54 F. 3d 1262 (“[U]nless Redmond possessed an uncanny ability to compartmentalize information, he would necessarily be making decisions about [Quaker’s products] by relying on his knowledge of [PepsiCo] trade secrets.”).

The inevitable disclosure doctrine is not absolute because some courts have constrained it. In North Carolina, the court applied the inevitable disclosure doctrine but cautioned that its application can only be used when the trade secret at issue is clearly identified and has significant value. Merck & Co., Inc. v. Lyon, 941 F. Supp. 1443 (M.D. N.C. 1996). New York appears to have a similar outlook. EarthWeb, Inc. v. Schlack, 71 F. Supp. 2d 299 (S.D. N.Y. 1999) (“[I]n its purest form, the inevitable disclosure doctrine treads an exceedingly narrow path through judicially disfavored territory. Absent evidence of actual misappropriation by an employee, the doctrine should be applied only in the rarest of cases.”).

Most states rejected the inventible disclosure doctrine. Corp. v. Roche Molecular Sys., 72 F. Supp. 2d 1111 (N.D.Cal.1999) (holding that inevitable disclosure doctrine is insufficient for injunctive relief where there was no evidence of intent to disclose and in light of California’s strong policy of employee mobility); H&R Block Eastern Tax Svcs., Inc. v. Enchura, 122 F. Supp. 2d 1067 (W.D. Mo. 2000) (rejecting assumption that exposure to trade secrets creates inference of inevitable disclosure); Bridgestone/Firestone, Inc. v. Lockhart, 5 F. Supp. 2d 667 (S.D. Ind. 1998) (rejecting inevitable disclosure claim where misappropriation was not seriously threatened). Florida, like most other states, rejects the doctrine too.  Del Monte Fresh Produce Co. v. Dole Food Co., Inc., 148 F. Supp. 2d 1326 (S.D. Fla. 2001) (“However, this case is governed either by Florida or California law, and these states have not adopted the -inevitable disclosure] doctrine nor cited PepsiCo with approval.”). Therefore, trade secret owners must prove actual or threatened misappropriation to obtain an injunction.

The Miami business litigation lawyers of the Mavrick Law Firm also represent clients in Fort Lauderdale, Boca Raton, and Palm Beach. This article does not serve as a substitute for legal advice tailored to a particular situation.