Originally Published MX January/February
2003
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The inevitable disclosure doctrine is a legal fiction that has been employed to prevent employees of one company from working subsequently for a competing company. The doctrine assumes the possibility of the employee breaching a confidentiality agreement and sharing trade secrets of the previous employer with the new one to be a fact, whether or not such disclosure has occurred or can be proven. The presumption in favor of injury to the former employer is not universal however; several state and federal district courts have recently sided with the employee in such cases.
The following court decisions have rejected the inevitable disclosure doctrine:
Government Technology Services Inc. v. Intellisys Technology Corp. (VA Cir. Ct., October 20, 1999) no. 160265, WL 1499548.
Bayer Corp. v. Roche Molecular Systems Inc. (N.D. Cal. 1999) 72 F. Supp. 2d 1111, 1120.
Globespan Inc. v. ONeill (C.D. Cal. 2001) 151 F. Supp. 2d 1229, 1235.
Del Monte Fresh Produce Co. v. Dole Food Co., Inc. (S.D. Fla. 2001) 148 F. Supp. 2d 1326, 1337.
PSC Inc. v. Reiss (W.D. N.Y. 2000) 111 F. Supp. 2d 252.
EarthWeb Inc. v. Schlack (S.D. N.Y. 1999) 71 F. Supp. 2d 299.
Decisions that have accepted the doctrine include:
Pepsi Co., Inc. v. Redmond (7th Cir. 1995) 54 F. 3d 1262, 1269.
RKI Inc. v. Grimes (N.D. Ill., 2001) 177 F. Supp. 2d 859.
H&R Block Eastern Tax Services Inc. v. Enchura (W.D. Mo. 2000) 122 F. Supp. 2d 1067.
Maxxim Medical Inc. v. Michelson (S.D. Tex. 1999) 51 S. Supp. 2d 773, revd per curiam (5th Cir. 1999) 182F. 3d 915.
Lexis-Nexis v. Beer (D. Minn. 1999) 41 F. Supp. 2d 950, 959.
Novell Inc. v. Timpanogos Research Group Inc. (D. Utah 1998) 46 U.S.P.Q. 2d (BNA) 1197, 1215.
Merck & Co., Inc. v. Lyon (M.D.N.C. 1996) 941 F. Supp. 1443.
Branson Ultrasonics Corp. v. Stratman (D. Conn. 1996) 921 F. Supp. 909.
Surgidev Corp. v. Eye Technology Inc. (D. Minn. 1986) 648 F. Supp. 661.
Bendinole v. Marshalltown Trowel Co. (Ark. 1999) 994 S.W. 2d 468.
E.I. du Pont de Nemours & Co. v. American Potash & Chemical Corp. (Del. Ch. 1964) 200 A. 2d 428.
Strata Marketing Inc. v. Murphy (Ill. App. Ct. 2000) 740 N.E. 2d 1116.
National Starch and Chemical Corp. v. Parker Chemical Corp. (N.J. Super. Ct. App. Div. 1987) 530 A. 2d 31.
Procter & Gamble Co. v. Stoneham (Ohio App. Ct. 2000) 747 N.E. 2d 268.
The law varies and is now applied variously from state to state. Employers should either consult with local counsel or have their general counsel research the law in each state where the company has employees.
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