In our March 2013 issue, we reported on a decision in which the Missouri Court of Appeals for the Southern District found that the customer information at issue wasn’t a trade secret (see “Customer list is not a trade secret” on pg. 1). The company claiming its trade secrets had been misappropriated appealed the decision to the Missouri Supreme Court, which didn’t decide whether the customer list was a trade secret but did rule that the company failed to prove that its competitor had in fact stolen any trade secrets. Read further to learn how the Missouri Supreme Court reached its decision and what you can do to protect your confidential customer lists and client information.

Facts

Troy Kennedy began working for Springfield Trust and Investment Company (STIC) in 1992. While his role fluctuated somewhat during his time at STIC, his duties included acting as an executive vice president, a shareholder, an officer, and a director. His primary job duty was to develop new business and act as a relationship manager for business already acquired by STIC.

In 2008, Kennedy entered into an employment contract that was to be in effect from January 1, 2008, to December 31, 2013. The contract contained a three-year noncompete agreement that included prohibitions on soliciting STIC’s clients and working for a competing business within 100 miles of Springfield. The agreement also contained a provision stating that it would be void if STIC was sold.

Central Trust and Investment Company began negotiations to purchase STIC in March 2009. Kennedy was aware of the negotiations and began making preparations to leave STIC, including telling clients he intended to leave and even soliciting their potential business upon his departure. In addition, on the advice of his attorney (but before leaving STIC), he placed written client lists and a cell phone containing the contact information of 200 STIC clients in a safety deposit box. The client lists consisted of 39 pages of documents containing information about STIC’s clients, including names, addresses, telephone numbers, e-mail addresses, and confidential financial information. The record was silent on exactly what the “confidential financial information” was.

Read more...Missouri Employment Law Letter (PDF)