Thursday, July 29, 2010, 7/29/2010 08:52:00 AM

Trade Secrets and Muffins – The Appeal

The Third Circuit has upheld the injunction in the English Muffin case blocking an employee who had access to trade secrets at his former employer from starting work with the new employer. Legal Intelligencer has the story here.

We wrote about the case when it began in January here and Todd was quoted shortly thereafter in an article in the National Law Journal.

The facts are fairly simple: Botticella worked for Bimbo Bakeries, makers of Thomas’s English Muffins. He took a job offer from a competitor, Hostess, but didn’t tell anyone at Bimbo. While continuing his work at Bimbo, he remained privy to its confidential information and downloaded a bunch more.

In February, the trial court enjoined Botticella from starting work at Hostess and ordered him to return all confidential information to Bimbo. Rather than proceed toward an April trial, Botticella chose to immediately appeal the preliminary injunction.

The most interesting part of the case, at least to us, relates to application of the so-called “inevitable disclosure” doctrine. That doctrine, although formulated numerous ways, essentially holds that an employee can be enjoined from going to work for a new employer if, in performing his work, he would inevitably find himself in a position of disclosing the trade secrets of the former employer.

The Third Circuit, in affirming the trial court, held that a showing of inevitability was not required, but that, under Pennsylvania law, a preliminary injunction could issue based on a “likely” disclosure only. That showing, in turn, did not require the former employer to demonstrate that it was “virtually impossible” to do the new job without disclosure.

The case now goes back for trial.


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