If that former employee had been covered by an appropriately restrictive, written employment contract, you could find your remedy in there. But let's not make this too easy. Let's say you had no written employment contract with this employee. Let's also say that you terminated the employee. If this is the case, you aren't likely to find your remedy in contract or employment law. Now what?
Ohio, along with nearly every other state in the US, has enacted a substantially similar version of the Uniform Trade Secrets Act. The concept of a "trade secret" is very broad; much broader than that of a copyright or patent. Furthermore, while the government decides what qualifies as "copyrightable" or "patentable," you (largely) decide what constitutes a trade secret.
Trade secret protection can extend to essentially any "information," so long as that information meets the test for protection. Whether your information is covered depends on two things: if you treat that information as confidential (you protect it as such), and if the "secrecy" of that information is what makes it extra valuable.
Furthermore, trade secret protection extends to information whether or not you could copyright or patent that information. It even applies to information that you may not want to patent or copyright. Think about it: if you send something out for copyright or patent protection, you have to reveal it to the world. You may not want to do that, for obvious reasons. Additionally, if you are going to be changing your customer database every day, the copyright on your database from October 2010 is going to be pretty worthless. Most of the valuable information you use in your business on a day-to-day basis isn't going to be patentable or copyrightable. Even if it is, there won't be any value in obtaining that protection; therefore, most of the information you deem valuable in your organization is going to be best protected under trade secret law.
So if you take reasonable steps to keep your customer list secret (it is on stored on your server, which is password protected, for example), and it is clear that the list would be worth much less to you if all of your competitors had access to it, it is likely your customer list qualifies for trade secret protection. Returning to our example, your former employee is using your customer database to solicit new clients. While you might call this "theft," under Ohio law, this is called "misappropriation." There are quite a few different activities that constitute misappropriation, but in this example, the former employee was under a common law duty to you to maintain the secrecy of the information (or so you would argue). By taking that information with her after she left, she is now misappropriating it.
. In certain circumstances, you may also be able to force the former employee to "take affirmative acts" to protect the information (i.e. returning or destroying all copies).
Depending on how much damage has been done, you may also sue for damages. Damages may include both the actual loss caused by misappropriation and certain damages for unjust enrichment (assuming your former employee has been raking in the dough by using your list). If it would be impossible to calculate these types of amounts, you have the opportunity to persuade a court to award you a reasonable "royalty" for the former employee's use of the information. That royalty would be calculated based on your loss, and/or the former employee's gain. This is kind of like requiring the employee to pay over the money that she made by using your list. In more egregious cases ("willful and malicious"), you might be entitled to punitive damages. You would have a stronger case for this type of claim if the employee had been syphoning your information for weeks before leaving, with the intention of using it to his own advantage after leaving.
You should also be aware that this law applies not just to employees, but also independent contractors, even your vendors and strategic partners.
From India
5Ohio, along with nearly every other state in the US, has enacted a substantially similar version of the Uniform Trade Secrets Act. The concept of a "trade secret" is very broad; much broader than that of a copyright or patent. Furthermore, while the government decides what qualifies as "copyrightable" or "patentable," you (largely) decide what constitutes a trade secret.
Trade secret protection can extend to essentially any "information," so long as that information meets the test for protection. Whether your information is covered depends on two things: if you treat that information as confidential (you protect it as such), and if the "secrecy" of that information is what makes it extra valuable.
Furthermore, trade secret protection extends to information whether or not you could copyright or patent that information. It even applies to information that you may not want to patent or copyright. Think about it: if you send something out for copyright or patent protection, you have to reveal it to the world. You may not want to do that, for obvious reasons. Additionally, if you are going to be changing your customer database every day, the copyright on your database from October 2010 is going to be pretty worthless. Most of the valuable information you use in your business on a day-to-day basis isn't going to be patentable or copyrightable. Even if it is, there won't be any value in obtaining that protection; therefore, most of the information you deem valuable in your organization is going to be best protected under trade secret law.
So if you take reasonable steps to keep your customer list secret (it is on stored on your server, which is password protected, for example), and it is clear that the list would be worth much less to you if all of your competitors had access to it, it is likely your customer list qualifies for trade secret protection. Returning to our example, your former employee is using your customer database to solicit new clients. While you might call this "theft," under Ohio law, this is called "misappropriation." There are quite a few different activities that constitute misappropriation, but in this example, the former employee was under a common law duty to you to maintain the secrecy of the information (or so you would argue). By taking that information with her after she left, she is now misappropriating it.
. In certain circumstances, you may also be able to force the former employee to "take affirmative acts" to protect the information (i.e. returning or destroying all copies).
Depending on how much damage has been done, you may also sue for damages. Damages may include both the actual loss caused by misappropriation and certain damages for unjust enrichment (assuming your former employee has been raking in the dough by using your list). If it would be impossible to calculate these types of amounts, you have the opportunity to persuade a court to award you a reasonable "royalty" for the former employee's use of the information. That royalty would be calculated based on your loss, and/or the former employee's gain. This is kind of like requiring the employee to pay over the money that she made by using your list. In more egregious cases ("willful and malicious"), you might be entitled to punitive damages. You would have a stronger case for this type of claim if the employee had been syphoning your information for weeks before leaving, with the intention of using it to his own advantage after leaving.
You should also be aware that this law applies not just to employees, but also independent contractors, even your vendors and strategic partners.
From India
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
