Tuesday, December 05, 2006, 12/05/2006 02:32:00 PM

North Carolina Court Recognizes Potential Trade Secret Claim in Misappropriated Policies and Forms

By Todd
CNC/Access is a corporation with a principal place of business in Burke County, North Carolina. It was founded by a guy named Richard Greer. After the expiration of his noncompete agreement with CNC/Access, Greer started a company called Universal Mental Health Services, Inc. and Universal's principal place of business was also in North Carolina. Both companies provide services and treatment for persons with mental health issues, developmental disabilities, and substance abuse problems.

Richard Greer ultimately received copies of CNC's personnel policies to assist him in preparing Universal's human resources manual. These copies included policies, procedures and forms.

CNC ultimately sued Universal and Greer and one of the claims in that case was for misappropriation of trade secrets. The alleged trade secrets were these human resources materials - the manual, policies, procedures and forms. The defendants moved for summary judgment, presumably arguing that such forms are not documents that business or technical information that have commercial value.

The North Carolina court denied summary judgment to the defendants, reasoning that "there is a genuine issue of material fact as to whether certain CNC policies and forms were trade secrets worthy of the statute's protection."

We have not seen a misappropriation of human resources manual trade secret case before. We'll keep an eye on this one for you. Heck, it's in our backyard.

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