Are your trade secrets actually secret?

As an employer, there are likely certain business practices, tools or products that are unique to your company and valuable to its success. These can be trade secrets, which warrant legal protections. However, not all information qualifies as a trade secret.

This is the distinction at the center of a legal dispute between an olive oil distributor and a former employee who left to work at a rival company.

According to the distributor, the former employee shared trade secrets with his new employer, allowing the new employer to supply goods to the same clients in the same market. The supplier filed a lawsuit citing theft of trade secrets.

The rival company, however, filed a motion to dismiss the lawsuit arguing that among other issues, the information in question is not protected and is not confidential. Much of the information, including customer and supplier lists, is available to the public, according to the motion.

A federal judge recently dismissed the lawsuit after he determined that it was based on allegations not supported by facts. He also stated that it is expected that a new company would sell to the same stores as competitors by virtue of entering the same market, which disputes the allegation that the rival company entered the same stores using trade secrets. However, he gave the supplier another month to file an amended complaint.

What employers and business owners here in Florida can take away from this case is a reminder that protecting confidential business information takes more effort than filing motions in court. You need to take action to identify and secure trade secret materials in the first place, and then collect sufficient evidence to support claims that someone violated legal protections.

Failure to take these steps can be a costly mistake for any business. To avoid a similar situation, it can be wise to have legal guidance whether you need to identify trade secrets or enforce confidentiality agreements.