Friday, June 12, 2009, 6/12/2009 09:31:00 AM

Clorox Inevitable Disclosure Motion Denied - California Law Found Applicable - S.C. Johnson, Ironically, Cleans Up

By Todd

The Clorox Co. wanted a federal judge to keep SC Johnson from employing the man it has hired to be its new senior vice president of global product supply.

Timothy Bailey resigned from Clorox in April, and was expected to start work with SCJ the first week of May. The Oakland, Calif. company has now sued SCJ, claiming violations of laws that protect trade secrets. Bailey worked for Clorox from 1996 until April 14, when he resigned as vice president of product supply.

In the suit, Clorox claims that Bailey, by virtue of his position at the company, knows too much confidential information and that he should be barred from working for SCJ until 2011.“Given the nature of the Clorox trade secret information he possesses, and the substantially similar nature of the positions, Bailey inevitably will use Clorox’s trade secret information in working for S.C. Johnson, to Clorox’s irreparable detriment,” the lawsuit claims.

Among the “trade secrets” Clorox says Bailey possesses are knowledge of the company’s global supply relationships, terms of supplier contracts, price-setting strategies, research and development, company strategies and operations leadership.

Like all Clorox employees, the lawsuit states, Bailey agreed not to directly or indirectly disclose company information to people outside the company.“It is inevitable that Bailey will use or rely on the information that he obtained while working for Clorox in connection with his position at S.C. Johnson and, upon information and belief, Bailey and S.C. Johnson have used, disclosed or threatened to use or disclose Clorox’s confidential, proprietary and trade secret information with full knowledge that this information was acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use,” the suit states.

Clorox's motion for a preliminary injunction, stopping Bailey from working for S.C. Johnson, was denied yesterday. The court found that California, not Wisconsin, law applied to the dispute before the court and then went on to note that California law does not respect the "inevitable disclosure" doctrine. That wasn't good for Clorox - because they're essentially legal theory was an "inevitable disclosure" theory. So - Bailey is now working for S.C. Johnson and Clorox is trying to figure out what to do next.


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