Confidential customer lists may be trade secrets even if the names are available elsewhere

Good news if you need to protect your customer lists from competitors: You can require employees to sign confidentiality agreements to block taking customer lists to the next job even if it’s theoretically possible for the competitor or someone else to put together the same information from other, publicly available sources.

Recent case: Thomas worked for the same employer for years before accepting a position with a competitor in the same industry.

When he left, his former employer sued, alleging he had taken with him a confidential customer list and given it to his new employer.

Thomas had signed a confidentiality agreement pledging to keep company trade secrets confidential.

Thomas argued the list didn’t constitute a trade secret because the names on it could have been located elsewhere and put together into a list.

Tough Talks D

The court didn’t buy that argument and ruled against Thomas.

It said, “Even if the information was readily available in the industry, it will be protected if the competitor obtained it working for the former employer.”

The company’s lawsuit against Thomas and his new employer will go forward. (A.M. Castle v. Byrne, et al., No. Civ A-H13-2960, SD TX, 2015)

Final note: It’s one thing to lure a competitor’s employee, but another thing entirely to have him turn over trade secrets and other confidential information. Consider making sure new employees don’t solicit their old customers. If there is crossover, determine whether the customer changed vendors without persuasion from the new employee.