I would respectfully disagree with these assertions. Trade Secret is not void just because someone is a former employee. You don't get to walk out the door with the secret recipes. And there are many exceptions to california's ban on non-compete agreements. Non-compete agreements are also very different than non-disclosure agreements.

And on non-compete, Mark and I were just employees, not officers of any sort. Neither of us was a manager with direct reports.

Talk to lawyers. In offices. Not online. Sign a client agreement. Pay them money. Beyond that, you cannot get any reliable advice from anyone here.

Which appears to be exactly the worst case the plaintiff is imaging per the words he was rather unwise to utter in an all hands meeting (http://www.businessinsider.com/smule-ceo-shred-video-lawsuit...):

[...]

And here's the sad truth. You compare a 100-person company with 10, 30, 40 million dollars in the bank to a two-person startup. If it goes to litigation, if we're wrong, we'll win.

Right? We'll win. We'll put a giant law firm on it and we'll do all of the discovery and we'll do all the depositions and we'll win. And if we're right, we'll still win....

(Note: discovery can be very expensive, and depositions tend to take a lot of time in preparation and the actual deposition.)

Which suggests the defendant isn't entirely insane to try to win this in the court of public opinion, a worst case apparently not imagined heretofore.

Indeed, but in general in the US you have to go to real efforts to create and keep secret such recipes. And I find it utterly amazing that California law, last time I checked, doesn't consider customer lists to be protectable trade secrets for salesmen (!!!).

More modern applications:

"Business Information Trade secrets in this category may include: ... Customer lists" http://www.fenwick.com/FenwickDocuments/Trade_Secrets_Protec...

"California court affirms that customer lists can qualify as trade secrets" http://www.lexology.com/library/detail.aspx?g=ea22e316-7210-...

Perhaps you're remembering a recent case about whether LinkedIn contacts could qualify as trade secrets, which tested where to draw the line:

http://blogs.orrick.com/trade-secrets-watch/2014/10/27/new-s...

Again, here are the current California trade secrets statutes:

http://leginfo.legislature.ca.gov/faces/codes_displayText.xh...

"3426.8.This title shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this title among states enacting it."

That's the law. It overturns everything prior. All commonlaw interpretations (the closest legal thing to tradition) before it are void in the face of this new law.

Fyi. California's law is actual a cut-and-past of the Uniform Trade Secrets Act as adopted by basically every other state in the union. See https://en.wikipedia.org/wiki/Uniform_Trade_Secrets_Act.

Here you go:

Yes, the UTSA statute is "the law". But it's not the ONLY law. Where there are gaps, courts look to case law, just like in any other area of law. And the UTSA was drafted with the old common law in mind, continuing much of it, but codifying it. That's why courts DO look at the older common law to inform their interpretations of the UTSA.

This is from page 1 of the Prefatory Note in the 1985 final draft of the UTSA:

"The Uniform Act codifies the basic principles of common law trade secret protection, preserving its essential distinctions from patent law."

With that, I'm done with this thread. We are way off-topic since the lawsuit in the original post doesn't even have a trade secret claim. I'm also done dispensing free legal advice for the night.

I totally dismiss the linked Fenwick PFD. According to my pdf reader that document was last updated on "Tue 05 Apr 2005 04:49:08 PM PDT". It's totally out of date and therefore untrustworthy as to specifics of current CA law. I'm a little shocked that it is still on their server.

You're correct that there's more to it than just keeping something secret:

- It has to also be valuable because of the secrecy, so the number I'm thinking in my head doesn't count. But customer lists typically do have value because of secrecy.

- Trade secrecy can be destroyed if the secret gets out.

There's no reason to argue in the abstract. Here's how California law actually defines "trade secret" -- Civil Code 3426.1(d):

(d) “Trade secret” means information, including a formula, pattern, compilation, program, device, method, technique, or process, that:

(1) Derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and

(2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

http://leginfo.legislature.ca.gov/faces/codes_displayText.xh...

Just imagine for a moment the slippery slope this would create if companies were able to criminalize knowledge on the basis of prior employment. Literally any work process you performed could be considered protected IP. You could work one job and never be employable again.

[1] https://en.wikipedia.org/wiki/Uniform_Trade_Secrets_Act

Imagine the slippery slope if former employees of Coke were allowed to take the recipe over to Pepsi. We wouldn't have any long-lived product lines. (That actually happened. Pepsi called the FBI)

For below: 18 U.S. Code § 1832 - Theft of trade secrets (the really really short version)

"Whoever ... knowingly ... steals, or without authorization appropriates ... or by fraud, artifice, or deception obtains such information ... shall ... be fined under this title or imprisoned not more than 10 years, or both."

On the other hand, I can't believe it'd be against the law for some employees from Coke to quit and start a company that manufactures soda (assuming they didn't actually use Coke's recipe).

OT: Regarding the Coke/Pepsi thing, personally I think food manufacturers (I use the term loosely) should be forced to disclose what's in their products. Though I would strongly agree that this comment has nothing to do with the rest of our previous discussion.

As for free markets, while IP law does create monopolies, the theory is that many protected innovations would never be brought to market without some promise they won't be replicated.

For below: Independent creation is not theft and so the laws do not apply. Copyright and patent bar independent creation, but not tradesecret. No doubt countless production secrets have been independently developed by competitors. When one trys to patent something, these come out of the woodwork as "prior art". But independence is a very hard burden to prove. Any communication from one firm to another, especially the movie a knowledgeable employee from one firm to the other, destroys any notion of independence.

If there is some nuance here that I'm missing, I'd like to know what it is. A finer understanding of this point is probably really important for anyone who works in science.

Russia and China will be more than happy to take your IP :)

https://en.wikipedia.org/wiki/Clean_room_design

http://www.nolo.com/legal-encyclopedia/california-trade-secr...

- "California is unique in that its laws expressly establish that the employer owns trade secrets created by an employee (Cal. Labor Code Sec. 2860)."

- "Federal rules also apply in California. The Economic Espionage Act of 1996 makes the theft of trade secrets a federal crime."