Critical Importance of Realistically Identifying and Protecting Trade Secrets and Confidential Information

California employers often face an upward battle when it comes to protecting against competitive activity by former employees. In addition to expressly precluding noncompete contracts under California Business and Professions Code (“B&P”) Section 16600, California imposes hurdles to pursuing claims against former employees for taking business information that is confidential but does not rise to the level of a trade secret. Moreover, the California Code of Civil Procedure further limits employers from bringing a trade secret claim under California’s Uniform Trade Secrets Act (“UTSA”) unless the employer can, as a threshold matter, identify the purported trade secrets with “reasonable particularity.”

This impedes companies from using the mechanisms of discovery to learn what an employee has taken in order to validate a claim for trade secret misappropriation; allegedly misappropriated trade secrets must be known at the outset of litigation or the case will get dismissed. Therefore, it is important for companies to identify and properly monitor for potential misappropriation so that they are well positioned to bring a claim for actual or threatened misappropriation when the circumstances arise.