Georgia Rejects the Inevitable Disclosure of Trade Secrets Doctrine
By W. Aaron Daniel Count Georgia among the states that has now explicitly rejected the controversial (and confounding) inevitable disclosure of trade secrets doctrine. In Holton v. Physician Oncology Servs, S13A0012 (Ga. May 6, 2013), the Supreme Court of Georgia addressed the doctrine head-on and seemingly put it down for the count. Florida has yet to explicitly reject or accept the doctrine, and so this case could be instructive for the Sunshine State moving forward.
But what exactly is the inevitable disclosure doctrine? There are two versions: “classic” and “light”. The full-calorie “classic” version, explained in Holton:
enables “a trade secret owner to prevent a former employee from working for
a competitor. . . . by demonstrating the employee’s new job duties will inevitably cause the employee to rely upon knowledge of the former employer’s trade secrets.”
Under this “classic” version the trade secret owner need not show actual evidence that the former employee possesses or intends to disclose trade secrets, and it allows for an independent claim where no noncompete or confidentiality agreements exist. And if a noncompete or confidentiality agreement does exist, then the doctrine can extend those covenants beyond the effective duration negotiated by the parties.
This full-bodied version of the inevitable disclosure doctrine provides a powerful tool for trade-secret owners and employers.
The “light” version, as its nomenclature would suggest, is not nearly as powerful. It is not a stand-alone claim untethered from a noncompete, confidentiality agreement, or statute. It simply allows a plaintiff to prove “threatened misappropriation,” a tort and cause of action under the Uniform Trade Secrets Act (which Florida has adopted, see Fla. Stat. 688.001-009), without showing actual possession of trade secrets.
Now, looking at Holton . . . Holton was sued by his former employer, Vantage, when he took a job with a competitor. He had signed a noncompete agreement with Vantage (extending only 1 year after leaving), as well as a confidentiality agreement (with a 2 year duration).
Vantage sought a temporary restraining order and an interlocutory injunction based on Holton’s alleged (1) violations of the noncompete and confidentiality agreements, (2) violations of Georgia’s Trade Secrets Act, and (3) Holton’s inevitable disclosure of trade secrets.
Finding Holton’s disclosure of trade secrets inevitable based on the similar nature of his former and current employment, the trial