Trade Secrets and Non-Competes
Among the most-often neglected components of a company’s IP portfolio is its trade secrets. Trade secrets are ideas, processes, data, technology, and other information that only have value if they remain confidential. Sometimes, trade secrets are critical to a company’s success and to its advantage over competitors. Protecting these trade secrets requires practical and legal advice that our attorneys are well equipped to provide.
Among the most important tools for preserving trade secrets is the non-disclosure agreement (the NDA), also known as a confidentiality agreement. NDAs are used in many aspects of day-to-day business, such as when hiring or firing employees, working with vendors, or exploring joint ventures with outside firms. The firm consults closely with its clients to ensure that their sensitive information remains protected at all times, including by structuring clear and thorough NDAs. And in the event an NDA is broken, whether by a departing executive or a former contractor or someone else, our firm is ready to assertively prevent trade secret theft or infringement.
What Remedies Are Available for Breach of an NDA?
In order to limit the harm to abusiness as a result of an NDA breach, your business must take action immediately. Remedies include:
- Injunctive Relief: Courts may order the breaching party to stop the offending behavior immediately, pending a full hearing on the merits.
- Monetary Damages: The non-breaching party may be entitled to recover losses caused by the breach.
- Unjust Enrichment: In cases of misappropriated trade secrets, unjust enrichment damages measure the amount by which the breaching party profited from the stolen information.
- Punitive Damages: If the breaching party’s conduct is particularly egregious, the court may order exemplary damages to punish the bad behavior and discourage similar conduct in the future.
In many cases, it is often more cost-effective to negotiate a settlement, which includes compensatory payments and a promise from the breaching party to cease the offending behavior.
Many employees, contractors, executives, and directors gain access to extremely valuable and confidential information in the course of their jobs. They may also be introduced to important third parties that are critical to the company’s success, such as suppliers, customers, clients, and advisors. Consequently, companies frequently require their personnel to sign agreements containing restrictive covenants. Examples of restrictive covenants include non-competition and non-solicitation agreements to ensure that information gained while working with the company is not unfairly used to compete with the company later or to solicit its employees or customers. Non-competes often involve highly valuable information and the stakes are high. Unfortunately, the law governing these agreements is singularly vague and not uniformly applied.
Our attorneys have stood on both sides of disputes over non-competes and other restrictive covenants to forcibly advocate for our clients. We have represented employers in preventing departing employees from stealing trade secrets and interfering with business operations. We have also represented departing shareholders and executives in defending their right to transition to a new employer or line of business. Call us today!