Court Issues Injunction Against Employee For Trade Secret Violation

Court Issues Injunction Against Employee For Trade Secret Violation

A Michigan court of appeals case, Actuator Specialties Inc v Chinavare, demonstrated the scope and breadth of the Michigan Uniform and Trade Secret Act remedies when it issued an injunction against an employee prohibiting that employee from working at a competitor after verifying a theft of important trade secret information. It is the first case known in Michigan where a court has issued an injunction against an employee without a non-compete agreement that prohibited the employee for working for a competitor. In the Chinavare case, the employee had copied sensitive trade secret information and brought the information to his new employer. A forensic analysis of the employee’s computer confirmed the downloading of the sensitive information on a USB drive, which was found at the employee’s home. The court of appeals issued an injunction prohibiting the employee from working for the competitor for a three year period in spite of the fact that in this case there was no non-compete agreement. The plaintiff relied solely on the Michigan Uniform and Trade Secret Act in obtaining the injunction relief prohibiting the employee from working for its competitor.

Although we would never recommend forgoing a non-compete agreement for employees who have access to trade secret information, it is good news for employers that when they find themselves without an appropriate non-compete agreement, that in appropriate cases, there is precedent in Michigan for the issuance for an injunction when an employee is found to have taken sensitive trade secret information from the former employer.

If you have a trade secret issue, contact the experienced trade secret at Traverse Legal for a consultation.

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