Britton Law, P.A.
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Business litigation spawned by alleged theft of trade secrets

North Carolina businesses may encounter the fairly common issue of informed employees taking trade secrets, customer lists and other proprietary information for use in competition with the company. A business with that potential problem will want to protect itself first by requiring written agreements with employees. These contracts prohibit any competition against the company for a specified time after ceasing employment, and they forbid the confiscation and sharing of trade secrets. The agreement can be a pivotal piece of evidence in business litigation lawsuits brought to protect the company at a later time.

In one recent case, a lab that makes certified pigment dies has sued a competitor on a claim that the competing lab used trade secrets stolen from the plaintiff company by the plaintiff’s former president. The lawsuit accuses that former officer of working for the defendant company and passing proprietary information to it while still serving as plaintiff’s president. The complaint alleges serious interference with its ongoing business relations and operations.

The former president, who is now reportedly in a personal bankruptcy and not listed as a defendant, worked for the plaintiff for over a decade when he abruptly resigned in 2012. He briefly returned in the beginning of 2013. The complaint alleges that from 2011, the individual was secretly working for and passing information on to the defendant. It’s alleged that the defendant is now selling the plaintiff’s same proprietary pigment dyes only with different company names.

The suit states that the former president was under a non-compete contract prohibiting competition for two years after cessation of employment. Although the former president is not a defendant, the non-compete contract he signed will be a vital piece of evidence in proving the plaintiff’s claims against the defendant. The lawsuit is requesting an injunction to prohibit further improper competition and use of the plaintiff’s trade secrets. The same general principles of business litigation generally apply to these facts and issues in North Carolina as well as in all other jurisdictions.

Source: posttrib.suntimes.com, "Former paint company president colored as traitor in lawsuit", Teresa Auch, Aug. 6, 2014

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