What information can an employee take to a new employer? 12-04-01

What information is an employee legally allowed to take with him if he takes employment with a competitor of his current employer? I have extensive knowledge of a certain category which would be valuable to a new employer and would like to know if I can be restrained from utilizing this, if I were to move to the competitor.

Ann Kiernan Replies:

Whether you can take information you learned at one job to another job depends on several factors. First, have you signed a Patent and Confidential Information Agreement or anything similar? If so, you should review that document carefully. It probably spells out what your employer considers to be its trade secrets and other confidential or proprietary information that you cannot use.

Even if you have not signed an agreement concerning trade secrets, under most states' laws you still have a common-law duty not to disclose that information to a new employer.

What is a trade secret? While there is no exact definition, the formulation used by many courts is:

A trade secret may consist of any formula, pattern, device or compilation of information which is used in one's business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it ... Generally it relates to the production of goods, as for example, a machine or formulation for the production of an article. It may, however, relate to the sale of goods or to other operations of the business, such as a code for determining discounts, rebates or other concessions in a price list or catalogue, or a list of specialized customers, or a method of bookkeeping or other office management.
(Restatement of Torts, Sec. 757)

You may want to consult an employment law or intellectual property attorney for specific advice about your situation.

Information here is correct at the time it is posted. Case decisions cited here may be reversed. Please do not rely on this information without consulting an attorney first.