The General Knowledge, Skill, and Experience Paradox
63 Pages Posted: 27 Mar 2019
Date Written: March 2, 2019
Can employers use trade secret law to prevent employees from using knowledge and skills they acquired on the job? Courts in all fifty states say no — an employee’s "general knowledge, skill, and experience” cannot be protected as a trade secret. Yet a benchmark principle of trade secret law is that employers can productively share trade secrets with employees so long as they take reasonable measures to preserve secrecy. The result is a paradox that runs to the heart of trade secret law: employers are encouraged to communicate trade secrets to employees, but this information loses protection if it becomes part of those employees’ unprotectable “general knowledge, skill, and experience.”
This article traces the roots of this doctrine in the common law and shows how it has been incorporated, though never actually codified, in statutes, including the Defend Trade Secrets Act of 2016. As originally construed, the General Knowledge, Skill, and Experience Exclusion had a unique purpose: to preserve an employee’s right to improve her skills on the job and to transfer those skills to a different employer — notwithstanding the fact that she may have improved precisely because she was exposed to her employer’s valuable trade secrets. Accordingly, courts declined to protect information that otherwise qualified as a trade secret, and that was imparted to employees in complete confidence, if doing so meant an employee would no longer be able to work in the profession for which she was best suited.
The article further reveals that many courts today misapply and misunderstand this doctrine. Rather than separately assessing whether claimed trade secrets constitute an employee’s unprotectable “general knowledge, skill, and experience,” many courts simply assess whether the information is “generally known” to others outside the company or was previously known to the employee before she took the job — and stop there. Courts therefore miss the category of information that, while technically secret to a company, is nonetheless unprotectable. Such oversights stymie the development of trade secret law and have potentially devastating effects for employee-defendants, who may be prevented from using knowledge and skills in a new job even when they have not signed a non-competition agreement.
Keywords: trade secrets, employment, knowledge skill experience, employee mobility, non-competition contracts, intellectual property law
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