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HR Solutions

Follow-up to "Are they secret?"

02/07/06

 

A few weeks ago an Illinois appeals court pointed out what we did 
a few days ago about trade secrets. If you consider your customers, 
or customer relationships, or technology, secret - you need to act
like these are in fact secret.
 
The case involved a company that made special tubes for filtration, 
and executives jumped ship to work for a customer upon 
learning that the customer was going to make its own product.  
In Arcor, Inc. v. David Haas, et al, No. 1-05-2414, the 
First District Appellate Court was convinced that Arcor's customer
information was sufficiently secret to derive economic value from its disclosure,   
nevertheless Arcor failed to take reasonable steps to keep this information secret. 
 
It was not enough to have employees sign confidentiality agreements. 
 "Had Arcor taken additional measures, such as limiting access to its 
customer information by computer password or keeping track of the hard 
copies of the information, we might hold otherwise."
 
One fact admitted by Arcor: it did not actually maintain a formal customer list!
 
A word to the wise.