Turning The Tables: Employer Sues Former Employees For Stealing Trade Secrets

Written exclusively for Chubbworks

A county jury deliberated just over two days before finding a leading Texas businessman, and six of his colleagues, guilty of breach of fiduciary duty, and "willful and malicious conspiracy" to steal trade secrets.

According to testimony, the defendant sold his energy sector business to a global energy product supplier in 2015, and continued to operate the business under the new owners. After retiring from his position, he founded a competing business, and began colluding with the plaintiff's employees to steal trade secrets and intentionally recruit employees from his former employer to help his current business.

Evidence presented in the trial included various documents and communications describing exactly what the individuals involved would steal from the plaintiff and how they would carry out the theft. Testimony also described discussions that identified which employees they would try to recruit.

Jurors awarded damages to the plaintiff in the amount of almost nine million dollars, which included individual punitive damage awards against many of the defendants. "Texas jury returns nearly $9M verdict against Toby Eoff and others involved in conspiracy against energy giant" www.prnewswire.com (Feb. 27, 2023).


Commentary and Checklist


As the above case illustrates, employees can be held liable for failing in their fiduciary duty to their employer under the law. In addition, the Uniform Trade Secrets Act can help protect organizations that operate in the states which have enacted it.

In what other ways can organizations help limit trade secret theft?

·  Train your employees on your trade secret policies

·  Designate what information needs trade secret protection

·  Mark documents that contain trade secret information

·  Store trade secret information in a secure location

·  Have well-protected computers, servers, and back-ups

·  Limit visitors to your organization's premises

·  Make sure you have contracts with third-parties to protect your organization's information

·  Use extra caution when doing business with international organizations




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