Trade Secrets: Another Case of Departing Employee Problems

Business Wire was my source for Trade Secrets Claim by SilvaGas Corp. Headed for Federal Appeals Court:

"ATLANTA--(BUSINESS WIRE)--A leader in the science of converting biomass to energy, Atlanta-based SilvaGas Corporation, then FERCO Enterprises, filed suit in the U.S. District Court for the Northern District of Georgia in 2005 after former employee Mark Paisley left and joined Taylor Recycling/Taylor Biomass LLC."

In the complaint, FERCO alleged not only that the defendants misappropriated its trade secrets, but also that Paisley breached his fiduciary duty to FERCO by surreptitiously working for Taylor while still employed at FERCO.

It is FERCO’s opinion that Paisley took FERCO’s trade secrets with him and used them to create a biomass gasification system similar to FERCO’s within weeks of his resignation from FERCO.

Who was responsible for this mess: the new company or the old one? As anyone reading this blog knows, the old company had the responsibility of protecting its trade secrets. (If you have not been reading this blog about trade secrets, then click "Trade Secrets" next to the word Label below this article.) On the other hand, the new company now faces the costs of defending its hiring decision as well as the possibility of losing profits.

Remember these three things:

1. Hiring employees from competitors will more likely than not result in a lawsuit.
2. Employees departing from the business should always cause a trade secrets audit.
3. If you have an Indiana trade secrets case, feel free to contact me.