North Carolina Business Litigation Report

Don't Keep Your Trade Secrets Secret If You Are Pursuing A Trade Secrets Claim In The Business Court

I’ve written before about trade secrets claims being dismissed by the Business Court and the NC Court of Appeals because the trade secrets were too broadly referenced and not described with “sufficient particularity".  Two of those cases are Akzo Nobel Coatings Inc. v. Rogers, 2011 NCBC 41; and Washburn v. Yadkin Valley Bank and Trust Co. 190 N.C. App. 315, 660 S.E.2d 577 (2008).

And just yesterday came yet another Rule 12 dismissal of an inadequately pleaded trade secrets claim. Judge Jolly of the Business Court shot down the claim because of the insufficiency of the pleading in AECOM Tech Corp. v. Keating, 2012 NCBC 10.

AECOM has the familiar fact pattern of an employee leaving employment with the plaintiff for a position at the defendant, a competitor, with accompanying claims of unfair and deceptive trade practices, tortious interference with contract, and misappropriation of  trade secrets (which was dismissed).

The allegedly stolen "trade secrets" in AECOM were "customer lists, customer contract information, pricing information, and product information,  These descriptions of the trade secrets were deemed to be too "sweeping and conclusory" to put the defendant on notice of what had been stolen and were dismissed.

Most of the claims survived dismissal because the departing employee (Keating) had been an officer of AECOM.  That meant he owed AECOM a fiduciary duty.  Op. ¶16.  The unfair and deceptive practices claim also stuck because the alleged conspiracy between the new employer and Keating to violate his fiduciary duty could constitute constructive fraud, which makes out a UDTPA claim.

Given that getting trade secrets claims dismissed  in the Business Court now (if the trade secrets are not described with sufficient particularity) is as easy as shooting fish in a barrel, I am declaring a boycott on writing about those types of dismissals.

 

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Mack Sperling
Brooks Pierce, LLP
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