Court Dismisses Case Filed Under the Defend Trade Secrets Act

Earlier this year, we notified you about the passage of the Defend Trade Secrets Act of 2016 (DTSA) and how it affects employers.  On August 8, 2016, a U. S. District Judge in the Southern District of Florida dismissed one of the first cases filed under the DTSA, M.C. Dean, Inc. v. City of Miami Beach, Florida, Case No. 16-CV-21731 (S.D. Fla.) 

M.C. Dean filed suit against the City of Miami and an electricians union seeking the return of information relating to its employees. M. C. Dean alleged the employee information constituted a trade secret under the DTSA and the disclosure of that information to the union by the City constituted a misappropriation of that information.

M.C. Dean's employee information originally was given to the general contractor for the project on which M.C Dean was a subcontractor. Certain of that information was disclosed to the City as part of the project. The union served an Open Records request on the City seeking the employee information and the City gave the information to the union. The Complaint did not allege that the agreement between M.C. Dean and the general contractor included any obligation by the general contractor to protect the secrecy of the employee information.

Granting the Defendants' Motion to Dismiss the Complaint, the Court concluded that the allegations in the Complaint failed to establish that M.C. Dean took reasonable steps to protect the secrecy of the information claimed to be a trade secret or that the City had any duty to protect the secrecy of information.

This decision highlights how critical it is for businesses to identify and inventory their trade secrets and implement the necessary precautions to protect their secrecy. These protections include the use of confidentiality agreements and policies governing the access and use of the trade secrets.

For more information on this case or how you can protect your trade secrets contact Jane Schlicht or your Hinshaw attorney.

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