Trade Secrets, Unfair Competition, and “Employment Mobility”

When a company hires a direct competitor’s employees – whether it is an entire division or one executive– it is often followed by allegations of a breach of fiduciary duty, unfair competition, or trade secret misappropriation.  Demands for injunctive relief that prevent or restrict a company from doing business are common in these cases.

Whether the company is a startup has offices around the globe, the stakes are often high for all involved, and emotions can run rampant because deep levels of distrust and anger are involved. The ability of workers to develop their careers or better their livelihoods, the ability for businesses to freely compete for clients, and the rights of companies to protect their methods, processes, customer information and reputation, are often at risk. Whether in defense or prosecution, success depends on knowledgeable and aggressive counsel.

The Trade Secret Litigation and Protection team at Weintraub Tobin has ample experience in defending and prosecuting these types claims. Our attorneys successfully defend and prosecute trade secret misappropriation, unfair competition, and “corporate raiding” cases involving hundreds of millions of dollars in claimed damages.  In these cases, our attorneys regularly obtain and defend against the issuance of injunctive relief.

Our team has walked this road before and knows the terrain.

Notable Cases

  • North American Title V. Liberty Title, et al. – Obtained defense verdict for a title company founder after a 12-week jury trial. The plaintiff claimed that the hiring of dozens of its employees had been caused by breaches of fiduciary duty by its officers and executives and resulted in a massive misappropriation of its trade secrets. The plaintiff sought damages in excess of $20,000,000.
  • Hanger Prosthetics & Orthotics v. Capstone – Assisted with the successful defense of a start-up orthopedic company against trade secret misappropriation and unfair competition claims brought by a large national company.
  • Fafco v. Energy Laboratories, et al. – Obtained injunction in Federal District Court against a former employee and his new employer, enjoining and prohibiting the use of his former employer’s information.
  • Comerica Bank v.Commerical Capital Bank, et al. – Defended 21 former employees accused of misappropriation of trade secrets, conspiracy, and unfair competition. Promptly obtained injunctive relief under counterclaims, and obtained supersedeas relief from the appellate court modifying the injunctive relief ordered by the trial court.
  • Gateway C.C. v. O’Leary – Obtained a preliminary injunction on behalf of a charter school against four former employees who were attempting to start up a competing charter school.
  • LonWays, LLC v. Phinneys – Assisted with obtaining a preliminary injunction in Nevada against former distributors of a multi-level marketing company after a two-day “mini-trial.”

In addition to the above cases, Weintraub Tobin has experience in the following trade secret cases:

  • Served as lead counsel for a design company that was sued for misappropriation of trade secrets and confidential information. Plaintiff requested more than $2 million in damages. After a two-week trial, the jury awarded just $47,000 in damages.
  • Obtained dismissal of a lawsuit against former employee of the plaintiff’s company in a trade secret misappropriation and unfair competition action involving Fortune 100 companies. Dismissal was secured based on favorable evidentiary rulings during a two-month jury trial.
  • Served as lead counsel for the world’s largest food manufacturing company which was sued in state court in Texas for trade secret misappropriation, interference with contract, and related claims. Plaintiff requested more than $330 million in damages. After more than two weeks of trial, the jury awarded approximately $1 million, well below the pre-trial settlement demands.

Counseling

Our attorneys have the experience and know-how to counsel companies in employee acquisitions and departures to reduce the likelihood of such litigation, and develop policies and practices.