The inevitable disclosure doctrine is a way for an employer to prevent a former employee from working for a competitor under the principle that the employee would inevitably disclose their former employer's trade secrets. The doctrine works under the idea that once a trade secret is disclosed, it cannot be regained. Thus, if allowing a former employee to work for a competitor makes a disclosure is inevitable, an employer should be able to prevent it from happening.
The inevitable disclosure doctrine also allows courts to issue injunctions and permanent injunctive relief to prevent an employee to work with a competitor where the employee’s new job duties will involve disclosure of the former employer’s trade secret or will cause the employee to rely upon the former employer’s trade secret.
How Is the Inevitable Disclosure Doctrine Applied?
The courts typically considering the following factors apply the inevitable disclosure doctrine:
- The type of competition between the former employer and new employer
- The employee's new job duties
- Whether the employee will be relying on the former employee’s trade secret in the new role
- Whether employee signed a non-disclosure agreement or non-competition agreement
Does There Need to Be Evidence that the Employee Will Disclose the Trade Secret Information?
No, under the inevitable disclosure doctrine, intent is not the issue. Instead, the inevitable disclosure doctrine holds that even if the employee has no intention of betraying their former employer, the knowledge they have gained from their former employment will naturally give a new employer access to trade secrets. For example, an employee working for Pepsi with knowledge of the company's strategic business plans was prevented from working in a similar capacity at Quaker Oats, the maker of Gatorade. Although the employee had not taken any information illegally, their knowledge of Pepsi's marketing and business plans would inevitably play into their work on Gatorade's marketing and business plans. It would be nearly impossible for the employee to do their job at Quaker without using the trade secrets of Pepsi.
What Does an Employer Have to Show in Order for Courts to Apply the Inevitable Disclosure Doctrine?
To apply the inevitable disclosure doctrine, employers first must prove the existence of trade secrets. If the employer cannot prove they have a viable trade secret, there is no reason to worry about the former employee disclosing it. Once the employer has established the existence of a trade secret, the requirements for applying the inevitable disclosure doctrine vary from state to state.
- Some states simply require you to show that there is a substantial likelihood that disclosure of trade secrets will occur
- Some states require an additional showing of malicious intent or deception
- Some states will not apply the inevitable disclosure doctrine at all
Do All States Have the Inevitable Disclosure Doctrine?
No, not all states have accepted the inevitable disclosure doctrine. For example, California, Louisiana, and Virginia have rejected the doctrine while other states have been supportive of the doctrine. In New York, it has only been used to support injunctive relief, but only when there is a non-compete clause already in place or the employer can show misappropriation.
What Kinds of Remedies Are Available under the Inevitable Disclosure Doctrine?
The only remedy available to a former employer is a permanent injunction against the former employee. The inevitable disclosure doctrine does not entitle the former employer to any monetary damages or court fees.
Can My Employer Prevent Me from Accepting Any Job in the Same Industry?
Generally, the injunctions made under the inevitable disclosure doctrine must only be as broad as necessary. The courts try to balance the employee's need to find work in the industry in which thy are skilled with the employer's need to protect his trade secrets. Often, former employees will be restricted from certain activities in their new employment, but they will not be restricted from the employment itself.
This also depends on what jurisdiction the dispute is arising in, since some states reject the inevitable disclosure doctrine. There are some states, such as New York and California, that only support the employer from preventing an employee from accepting job duties within the same industry if there was a non-compete clause in place.
Do I Need a Lawyer to Help Me Protect My Trade Secrets?
If you want to use the inevitable disclosure doctrine to prevent an employee from disclosing trade secrets, or if you are an employee and are worried you will be prevented from working in your industry because of the inevitable disclosure doctrine, you should consult an intellectual property lawyer. They will be able to explain your rights to your trade secrets and help you take the appropriate action. The inevitable disclosure doctrine can be very complex and differs in its application from state to state. A lawyer will be able to explain the laws that apply in your state.