Business clients often come to the firm seeking to enforce non-compete provisions or non-solicitation provisions located in employment contracts or employee handbooks. However, many of our small business clients are unaware of the implications associated with an ex-employee bringing proprietary trade secrets to a competitor after leaving the company. Businesses who have hired an employee who is leaving a competitor must also be aware of those implications. If a competitor or ex-employee misappropriates trade secrets, the business will have a claim against them and, potentially, a claim against the company. At a minimum, the business may be able to obtain an injunction precluding their competitor from using trade secrets obtained from the ex-employee. If you are a business seeking to protect confidential business information taken by former employees, contact Maginnis Law at 919.526.0450 or submit a new case inquiry here. The firm also represents former employees involved in trade-secret situations as well as employers who have been accused of mishandling trade secrets involving employees recently hired.
North Carolina General Statute 66-152 is known as the North Carolina Trade Secrets Protection Act. A trade secret is business or technical information that derives independent actual or potential commercial value from not being generally known by the public or being readily ascertainable from independent development and is the subject of reasonable efforts to maintain its secrecy. Some types of items that qualify as trade secrets include cost history information, price lists, confidential customer lists, pricing formulas, and bidding formulas.
Damages can be ascertained in part from lost profits by the company and/or gains in profit by its competitors who benefitted from those trade secrets. Parties can also obtain an injunction preventing the use of those misappropriated trade secrets. Parties can also recover, in some situations, punitive damages and their reasonable attorney fees.
There also is some overlap between the Trade Secrets Protection Act and the Unfair and Deceptive Trade Practices Act. Courts have found that where trade secrets were misappropriated and it involved unethical or unscrupulous behavior, that the damages could be tripled and attorney fees may be awarded.
Maginnis Law, PLLC is a Raleigh civil litigation firm handling business law cases for clients throughout Wake County, including Cary, Apex, Wake Forest, and Holly Springs. The firm also handles certain business cases throughout the Triangle and the state, including federal court matters in all three North Carolina districts. Contact the firm at 919.526.0450 to discuss your business trade secret matter or submit a new case inquiry here.