Employer Not Entitled to an Injunction Prohibiting Former Employee from Using Customer Information Committed to Memory

Article by Heath Coffman

In Thoroughbred Ventures, LLC v. Disman, No. 4:18-CV-00318, 2018 WL 3752852 (E.D. Tex. Aug. 8, 2018), plaintiff Thoroughbred Ventures sued its former manager Disman, alleging that Disman breached his employment agreement, which provided that all client contact and background information belonged to Thoroughbred and constituted “Confidential Information” and a trade secret of Thoroughbred.
Thoroughbred sought an injunction preventing Disman from using such information, but there was no evidence that Disman took any customer list, and the court was not going to issue an injunction prohibiting Disman from using information that was committed to memory. The court noted that such an injunction would be proper for a non-competition agreement but not a non-disclosure agreement:

“In the employment context presently under consideration, the Court considers the network of acquaintances one comes to know through employment to be an aspect of the “general knowledge . . . and experience acquired in former employment” that one could utilize in competition with one’s former employer. An agreement prohibiting a former employee in this field from disclosing his acquaintances would therefore be a noncompetition agreement in disguise, and would be unenforceable as such.

The court rejected injunctive relief for Thoroughbred’s Defend Trade Secrets Act and TUTSA act claims on the same basis. It did not matter that Disman learned certain customer information through his position at Thoroughbred. It also did not matter that Thoroughbred invested time and money to cultivate its customer relationships. Rather, the key issue—and the only issue—was whether the information was a secret. Here, the customer information at issue was all readily ascertainable through public sources. Therefore, it was not a trade secret.

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