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  • Writer's picturePaul Peter Nicolai

Internal Compilation Of Labor Rates Is A Trade Secret

A company sued two former employees and asked that the Court forbid them from using its internal compilation of its labor rates. The injunction was granted since the Court agreed that the compilation was a trade secret.

 

The company said the defendants misappropriated their trade secrets in violation of the Massachusetts Uniform Trade Secrets Act and the Defend Trade Secrets Act.

 

The Court noted that to the extent bid invitations were marketing emails containing public offers to bid, as Harkins claims, it was unclear that such information constitutes a trade secret. It was also unclear whether reports of Massachusetts permit information (which is public knowledge) constitute trade secrets. 

 

Nevertheless, an internal spreadsheet regarding its labor rates, when those rates were not known outside the company, and it was uncontroverted that the disclosure and distribution of that confidential information was limited to a small number of employees and exclusively on a need-to-know basis through the use of an internal program which limits access to information based on user access credentials, multi-factor authentication, and permission, were trade secrets.

 

The Court said that as a matter of law, an individual who breaches contractual duties to obtain trade secrets has used improper means. 

 

Since it was shown that one former employee convinced a customer to deal with his new employer, the Court found the risk of irreparable harm particularly compelling.

 

It enjoined the defendants from acquiring or divulging the company’s confidential information or continuing to violate obligations under the employment agreement, including enjoining him from soliciting its customers.

 

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