Monday, July 31, 2006, 7/31/2006 06:36:00 AM

Virginia's Trade Secrets Act -- Not Every Sin Covered

Trade secrets laws can be pretty flexible. They can't, however, be stretched too far out of shape.

That's what the plaintiff learned in a new case from Judge Alper on the Virginia Circuit Court, Rohrbaugh v. Kreidler, 2006 WL 2032640 (Va. Cir. Ct. July 20, 2006).

The facts are a little tricky, so pay attention: the plaintiff, Rohrbaugh, was an engineer who for years worked for URS Corporation of Washington. In 2003-05, he was in talks with another company, Matrix Settles of Virginia, about working with them. Last August, Matrix formed a new corporate entity, TM/R Engineering, LLC ("TM/R") and told its employees who were aware of the discussions with Rohrbaugh to keep it confidential. Matrix also contracted with another company, Jewell and Associates, to provide technological services and software programs.

While on that job, a Jewell employee, the defendant Bonnie Kreidler was informed by a Matrix employee, that TM/R stood for "Team Matrix Rohrbaugh" which tipped her off regarding Rohrbaugh's potential move from URS to the new company. Kreidler, rather than keeping that information quiet, blabbed to her husband who happened to work for URS, Rohrbaugh's current employer. When URS found out, Rohrbaugh was canned without getting any severance. He also lost his stock options. Then he sued Kreidler, alleging that she should have kept her mouth shut.

Among the many claims asserted was one under the Virginia Uniform Trade Secrets Act against both Kreidlers. The court, though, didn't bite.

On defendants' demurrer -- Virginia's old fashioned name for motion to dismiss -- the court ruled that Rohrbaugh stated no claim under the trade secrets act.
The court bought defendants' contention that neither the meaning of the letters TM/R nor the issue of whether Mr. Rohrbaugh had agreed to join them was a "trade secret" within the meaning of the VUTSA because the complaint lacked allegations that the information was confidential and the information did not confer economic value upon the Kreidlers. Moreover, the court held, "even if the information constituted a 'trade secret,' it was not 'misappropriated' under the statute, which requires that inappropriate means were used to acquire and/or disclose the information." The Complaint did not allege that the Matrix employee specifically informed Mrs. Kreidler of the confidential nature of what TM/R stood for; only "certain staff" were warned.

The court said it would allow plaintiff to amend his complaint, but, as is often the case, that may be more easily said than done.

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