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Trade Secrets: It’s All in Your Head

Posted by Frank Steinberg | Mar 03, 2008 | 0 Comments

Most employees know that their employers will become — how can we put this delicately? — "annoyed" if written customer  lists are used to woo away customers when the employment relationship ends.  But what happens when a former employee does not physically take a written list, but can recreate all or part of it from memory?

That's the question recently considered by the Supreme Court of Ohio in Al Minor & Associates, Inc. v. Martin.  The case was considered under both the Uniform Trade Secrets Act and another Ohio statute.  The short answer is that memorized information can be the basis of a claim that a trade secret has been violated.

It's worth noting that New Jersey is among a small minority of states that has not adopted the Uniform Trade Secrets Act.  New Jersey relies upon common law trade secret protection.  So what's a trade secret in NJ?  It's something that is (a) secret, (b) valuable, and (c) confers a competitive advantage in the marketplace.  There's nothing in NJ's definition of a trade secret that would exempt memorized information from trade secret protection.  One federal district judge recently assumed (without deciding the issue) that this would be the case.

It's also worth remembering that in NJ, customer lists of service businesses generally are protectable as trade secrets.  Customer lists of manufacturing and retail business, on the other hand, generally are not.  As with much of unfair competition law, however, the applicability of particular legal concepts is highly fact sensitive, and the wise business person will not rely upon broad "rules" for guidance in a specific situation.

About the Author

Frank Steinberg

Frank is the founder and principal of Steinberg Law, LLC. A Jersey boy born and bred, he focuses on employment litigation and counseling, business litigation,  and aviation law. Following law school and a clerkship in the federal district court Frank spent his early career with large litigation ...

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