Articles - Employee / Labor Relations

Non-compete and trade secret litigation inherently involves disclosure of confidential information.  Plaintiffs argue that defendants took or used the plaintiff’s confidential information, and they often want the defendants to turn over their files for review.  Defendants often complain that the plaintiffs are engaged in a fishing expedition or that they are entitled to review the plaintiff’s files in order to pressure test the trade secret claims.

As one federal court recently put it, “the public at large pays for the courts and therefore has an interest in what goes on at all stages of a judicial proceeding.”  (A copy of this decision is available in pdf format below.)  In making this observation, the court relied on precedent from the United States Seventh Circuit Court of Appeals.  

The Seventh Circuit, like many other appellate courts across the country, has “insisted that litigation be conducted in public to the maximum extent consistent with respecting trade secrets….”  These courts observe that when parties choose to resolve their disputes in court, “they must accept the openness that goes with subsidized dispute resolution by public (and publicly accountable) officials.”

According to the Seventh Circuit, “[p]eople who want secrecy should opt for arbitration.”  That is not to say that courts will not protect trade secrets.  Courts have a range of options spanning from permitting documents to be filed under seal to allowing redaction of confidential information.  But if a litigant desires true privacy, the Seventh Circuit has a point.  Arbitration is an option that may fit the bill.

Protective orders are orders by courts that allow parties to produce information in lawsuits subject to certain ground rules on how the information may be used or who is allowed to see it.  These orders commonly contain language authorizing the parties to file alleged confidential information under seal so that it is not accessible by the public.  Some litigants expect this protection as a matter of course, but most courts recognize that the parties’ interest in confidentiality is counterbalanced by the public’s interest in free access to judicial records.

Once the parties come to grips with the reality that they will have to exchange confidential information with their opponents in order to prosecute or defend the litigation, the reality sets in that this information could become part of the public record if it is filed with the court.  It is at this time that their attorneys begin exploring the use of protective orders.

BIOGRAPHY

Mike Greco is a partner in the Fisher & Phillips LLP, Philadelphia office. He଩tigates and provides counseling nationwide to employers concerning legal claims and issues arising from the movement of employees between competitor firms. These issues include: covenants not to compete, non-solicitation and non-disclosure agreements, unfair competition, employee raiding, trade secrets, duty of loyalty, Computer Fraud & Abuse Act, Economic Espionage Act, and state trade secrets and unfair competition statutes.

Mike has prosecuted and defended more than 300 employee defection and recruitment matters, obtaining and defeating injunctive relief in at least 27 different state and federal courts, in addition to dozens of arbitration actions before the National Association of Securities Dealers. His experience includes representation of clients in the securities brokerage, health information technology, medical practice, computer sales and distribution, commercial window washing, personnel placement, online retailing, insurance brokerage, insurance, publishing, direct response television, radio, institutional food services, and freight forwarding industries.

In addition to litigating, Mike assists corporate clients in developing and implementing coordinated local and/or national programs to protect their competitive assets against employee defection, and to minimize risks that when hiring employees from competitors. His practical knowledge of how courts have treated various restrictive covenants enables Mike to help employers draft appropriately tailored restrictive covenants.ͩke෡sಥcognized in Pennsylvania Super Lawyers – Rising Stars in 2005, 2006, 2007 and 2010. He is also co-editor of the firm's Non-Compete and Trade Secrets Blog.

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Orginal article can be found at fisher and phillips llp

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