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Remember:
Trade secrets just that
Published 03/13/01
It
is important to understand that in New Hampshire even without a
confidentiality agreement the law still prohibits misuse of a former
employer’s confidential and proprietary information. Particularly,
New Hampshire statute RSA 350-B, which is entitled the Uniform Trade
Secret Act, clarifies that it is illegal to disclose or use a trade
secret of another without express or implied consent. Under the
Act, a trade secret means information including a formula, pattern,
compilation, program, device, method, technique or process that
is of particular value because of its confidential, proprietary
nature and is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy.
If
a person was actually to disclose or use such information in competition
with his former employer, then even absent a confidentiality agreement
or a non-compete agreement between the employer and him, the employer
may still be able to get a court injunction prohibiting the employee
from using that information.
To
the extent the former employer was damaged, the statute entitles
him to receive damages which could include both the actual loss
to the employer caused by the misappropriation and the unjust enrichment
to the former employee caused by the misappropriation that is not
taken into account in computing actual loss.
The
court also may, as an alternative, consider a reasonable royalty
for the misappropriation. In cases where the former employer is
able to show willful or malicious misappropriation, the court may
award exemplary damages not to exceed twice the amount of the total
damages and unjust enrichment. The court may also award reasonable
attorney’s fees to the prevailing party when it finds:
- the
claim of misappropriation was made in bad faith;
- a
motion to terminate an injunction is made or resisted in bad faith;
or
- willful
and malicious misappropriation exists.
Depending
on the circumstances, it is possible certain federal laws and state
criminal laws of theft may also apply.
In
summary, it would be extremely unwise for a former employee to believe
he can steal a company’s confidential and proprietary information
merely because that employee had never signed a non-compete or confidentiality
agreement.
J.
Daniel Marr is a director and shareholder
at Hamblett & Kerrigan, PA whose legal practice includes counseling
businesses and business persons on a variety of legal issues and
advocating on their behalf. Attorney Marr is also an adjunct professor
at Daniel Webster College where he teaches business law. You can
reach Attorney Marr by e-mail at: dmarr@hamker.com
This information is general
information and may not reflect the most current legal developments,
verdicts or settlements. The information provided should not
be relied upon as an indication of the actual state of the
law or of future developments. The information contained on
the Hamblett & Kerrigan website is for informational purposes
only and does not constitute legal advice. If the information
referenced may be of legal importance to you, you should consult
with an attorney to provide you with legal guidance and opinion
as the the effect of the current law upon your situation. |
