When Trade Secrets Become Shackles: Fairness and The Inevitable Disclosure Doctrine
99 Pages Posted: 13 Jun 2008
Should an employer be able to enjoin an employee from working for a competitor when the employee did not sign a non-competition agreement? Under the inevitable disclosure doctrine, an employer may obtain such an injunction on the theory that the employee knows so much of the employer's trade secrets, that it is inevitable she will disclose these secrets to the competitor.
The doctrine has faced enormous criticism by virtually all of the legal scholars who have addressed it to date. They question its utility and fear its dangers. The crux of the opposition appears to be that (i) it is not fair to enjoin an individual from earning a living, especially without a non-competition agreement, and (ii) courts are too unpredictable and inconsistent in ruling on these cases.
In this article I take a different view of the doctrine. I recognize its usefulness and its powerful reach, in that it touches on the intersection of employment law, intellectual property trade secret law, and the law of unfair competition. After careful review I suggest that it is the application of the doctrine rather than the doctrine itself that seems to be in disfavor. Like many other types of cases that are fact intensive and decided on a case by case basis, the challenge is to make application of the doctrine more consistent, more predictable, and ultimately more fair.
Accordingly, I propose a model that aspires to accomplish these goals. I make the point that even in cases where there is no non-competition agreement, an injunction may issue on an inevitable disclosure theory. However, these should be rare occurrences, because several important factors in the model must be present to permit the balance to weigh in favor of granting the injunction.
Keywords: trade secrets, inevitable disclosure, employment mobility, non-competition, nondisclosure agreement, misappropriation, noncompete, inevitable, employer, employee
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