SAN FRANCISCO, CA – The complaint alleges that: the two companies entered into an agreement to join forces and bid on a National Park Service contract; the agreement prohibited taking proprietary information and/or soliciting employees; and defendant did both.
Key to the case will be whether there were trade secrets, and second whether they were incorporated into the defendants’ work product. That will likely determine whether the contractual terms are enforced.
While everyone in California seems to know that non-compete clauses are generally unenforceable, what is not common knowledge is that that non-solicitation clauses are hard to enforce as well. The California Supreme Court made clear in a case called Edwards v. Arthur Andersen that employee mobility is critical. The basic rule is: employers can protect trade secrets but not via contractual clauses that make it impossible for employees to work and ply their trade.
The other interesting aspect of the case is that it is filed in federal court. Until recently, trade secret cases were litigated in state court. President Obama signed the Defend Trade Secrets Act (18 U.S.C. § 1836) in 2016, making federal court an option.
|This blog reports on cases filed in and around the San Francisco Bay Area. The statements made are based on the allegations in court-filed documents. Allegations are just accusations, and may or may not be true.|
|The authors of the blog are attorneys at the San Francisco litigation firm, Wood Robbins, LLP. If you have a legal issue, send them an email. If they cannot help you, they will try and point you in the right direction.|