Can a company sue to enjoin a former employee from what it deems is the inevitable disclosure of trade secrets?
In determining the answer to this question, all eyes are on Bimbo Bakeries USA, the company that owns Thomas’ English Muffins. Bimbo has filed suit against former executive Chris Botticella in United States District Court for the Eastern District of Pennsylvania. The basis of this suit, says Bimbo, is that Botticella is one of fewer than ten people in the world who knows the secret recipe (i.e., nooks and crannies) for Thomas’ English Muffins, and signed a confidentiality agreement in March 2009 when he was promoted to manage a facility that makes the muffins.
In January 2010, Botticella accepted a position at Hostess Brands Inc., and Bimbo argues that Botticella “will inevitably disclose to Hostess” details of the recipes involved in the confidentiality agreement. Such disclosures would cause irreparable damage to Bimbo, and Bimbo argues that they should not have to sit around and wait to see “nooks and crannies” in Hostess products before seeking relief from the courts.
The inevitable disclosure theory is unsettled at best. California courts in particular reject the doctrine, mandating actual evidence of an improper disclosure prior to awarding damages or an injunction. A decision from Pennsylvania is expected in mid-February. Until then Botticella is under a temporary restraining order from starting his job at Hostess.
A decision is Bimbo’s favor could open doors to a realm of inevitable disclosure litigation. There is no word yet as to whether McDonald’s has initiated any “special sauce” suits to date, but they will likely be interested in the court’s decision here.
The complaint can be viewed here: http://newsroom.law360.com/articlefiles/144146-thomas%20hostess%20bakery%20dispute.pdf
Thanks to Brian Gibbons for his contribution to this post.