Legislation >Concepts and Terminology
Inevitable disclosure doctrine
Inevitable disclosure doctrine is a type of beforehand relief. It is one of the relief doctrines the court put forward to protect the potential disclosure of trade secrets. The main function is to prohibit laid-off employees from using their specialized knowledge to work for the opponents of the former company. These laid-off employees have acquired commercial secrets of the company and if they turn to the opponents of the former company, they would almost inevitably disclose or use the commercial secrets from the former employer. Thus, the employer can require the court to issue an injunction to prohibit the employee from working for opponents or to mandate their concealing commercial secrets for a certain period. These two measures belong to the prior relief. When the commercial secrets have not been revealed to the public, the right holders can file an application for beforehand relief, which can effectively prevent the occurrence or expansion of losses.
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US: The DTSA, the Inevitable Disclosure Doctrine, and the Memory Rule

Under the inevitable disclosure doctrine, a plaintiff employer may prove a claim of trade secret misappropriation by demonstrating that the ex-employee’s new employment will inevitably lead to reliance on the plaintiff’s trade secrets. Courts typically consider the following factors in determining whether the disclosure of trade secrets is “inevitable”: (1) the level of competition between the former employer and the new employer; (2) whether the employee’s position with the new employer is comparable to the position previously held with the former employer; and (3) the precautions that the new employer has taken to prevent the former employee from disclosing trade secrets of the former employer.

5 Tips For Employers Using 'Inevitable Disclosure' Doctrine

The inevitable disclosure doctrine can be viewed as an evidentiary placeholder, allowing an injunction at a stage when it's not yet possible to show that any actual disclosures have taken place. Because an employer is asking courts to forgo one part of the trade-secret equation, it's helpful to clearly show lots of other evidence, like bad faith activity or actual misappropriation. "Where these cases are going to turn is whether this person was a "good leaver or bad leaver," said Peter L. Altieri of Epstein Becker & Green PC, naming examples like evidence of mass emailing or transferring of files onto external hard drives, or dishonesty during exit interviews.

California Court Rejects "Inevitable Disclosure Doctrine" But Acknowledges Availability of Injunctive Relief for the Almost Indistinguishable "Threatened" Disclosure of Trade Secrets

The so-called "inevitable disclosure doctrine" assumes that if an employee has knowledge of trade secrets, and accepts a similar job with a direct competitor in a highly competitive industry, he or she will "inevitably" disclose the trade secrets in the course of performing his or her new employment duties. On September 12, 2002, the California Court of Appeal for the Fourth Appellate District, in Schlage Lock Company v. Whyte (2002) 101 Cal. App. 4th 1443, issued the first published California decision rejecting the inevitable disclosure doctrine, which the court characterized as a rule that "permits a trade secret owner to prevent a former employee from working for a competitor despite the owner's failure to prove the employee has taken or threatens to use trade secrets."[1] The court found the doctrine incompatible with California Business and Professions Code Section 16600, which broadly prohibits "non-competes." The court reasoned that preventing a former employee from going to work for a competitor through application of the inevitable disclosure doctrine amounts to an "after-the-fact covenant not to compete restricting employee mobility" [Schlage Lock, 101 Cal. App. 4th at 1447].

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Examples

1 The inevitable-disclosure doctrine is one's means in demonstrating a revelation of trade secrets, and some have recently found some renewed judicial support.

2 In the absence of a non-competition agreement, an employer may achieve a similar result under the inevitable disclosure doctrine.

3 Some states inconsistently apply the inevitable disclosure doctrine.