Tag Archives: noncompetition

Do You Have Trade Secrets?

Do you have trade secrets in your business?  If these trade secrets went to a competitor would it hurt your business?

A trade secret gives a business an advantage over its competition.  The secret could be a method, device, business intelligence, or formula that gives a business an advantage over its competition.  By definition a trade secret includes information, including a formula, pattern, compilation, program device, method, technique or process that derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable, by other persons who can obtain economic value from its disclosure or use.

Do you really have a trade secret?  Prove it.

Do you actively protect the trade secret?  Do you use non-competition , non-solicitation, and confidentiality agreements?  Do your employees execute such agreements with you?  How about third parties that may have access to the information?

If you don’t, good luck getting a court to see your side of things.  Federal and state laws can help you protect your secrets and help you stop others from using the secrets, but you have to take reasonable efforts to maintain secrecy.  If you don’t treat a “trade secrete” like trade secrets you will not get paid.  Look up MP Medical Inc. v. Wegman.  If you treat “trade secrets” like trade secrets, you will get paid.  Look up H&R Block v. Paramount Tax Services.

Besides the agreements referred to above, a business must have company policies in place that are documented and are actually followed practices.  Practice, practice, practice.  I cannot say it enough.

Noncompetition Agreements

Many employers require certain employees to sign agreements not to compete with the employer for a period of time (usually a year to two) after leaving employment. These agreements are intended to protect legitimate business interests of the employer, but can stifle economic growth by preventing skilled employees from working where they’re most effective.

Existing Oregon law makes noncompetition agreements unenforceable unless entered into upon initial employment or subsequent advancement. Senate Bill 248 (2007/2008) adds requirements that the employee: (1) be notified at least two weeks before the initial employment that such an agreement will be required; (2) be paid a salary to perform creative, administrative, or managerial work; (3) have access to trade secrets or competitively sensitive information; and (4) be paid at least the median income for a family of four.