A federal judge in Chicago recently gave a stinging reminder to businesses that they need to protect their trade secrets. Judge John R. Thorp issued a thorough opinion on Abrasic 90 Inc., d/b/a CGW Camel Grinding Wheels, USA v. Weldcote Metals, Inc., Joseph O’Mera and Colleen Cervencik, even giving the pointers to the losing side about why they lost.
Abrasic 90 thought it had a pretty strong case after the company’s longtime president left the company to start Weldcote Metals to compete with Abrasic 90. The employee walked out the door with a flash drive containing information about the company’s suppliers, pricing and customers. In addition, he hired another Abrasic 90 employee who also brought additional sensitive information with her. Together they used this data as the basis for the new business, including customer targeting.
Normally the removal of sensitive business information or trade secrets would be grounds for a winning lawsuit; nonetheless, the judge said Abrasic 90’s data security “was so lacking that it is difficult to identify the significant shortcoming.” According to the judge, Abrasic 90 failed to:
- Draft and have employees sign confidentiality or non-disclosure agreements
- Train employees about keeping sensitive company information confidential
- Label documents as proprietary or sensitive
- Ask employees to return sensitive documents or material or request that they destroy them
- Keep sensitive business information on a need-to-know basis
Protecting a company’s most important assets
An experienced attorney with a background in intellectual property, employment law and business litigation can be extremely helpful in protecting important company information. This includes both preventing it from going out the door as well as negotiating with or actively prosecuting those employees who leave while in possession of sensitive information.