Breach of Confidentiality Agreement

Introduction

Jennifer Lawson, the defendant, a former Junior Executive Secretary in the Research and Development department for Greene’s Jewelry Wholesale (the company) located in Derry New Hampshire. Mrs. Lawson is being accused of stealing Greene’s trade secret as well as breaching the confidentiality agreement. The defendant has countersued claiming wrongful termination.

Recently, the company started downsizing and eliminated some positions, this led to the defendant being laid off as she had just informed the company of her pregnancy. During her departure, the defendant is said to have taken documents outlining the company’s Ever-Gold trade secret. Immediately after, the defendant accepted a position with Greene’s competitors, Howell Jewelry World. The defendant worked for Howell for a small amount of time before being fired. The defendant now works for Triumph Jewels which is another competitor of the company.

Although the defendant did not sign any non-compete agreements, she did sign a confidentiality agreement where she could not disclose any information learnt about the company. The defendant has a high-risk pregnancy and claims this is the reason for her termination. The defendant received high scores on her yearly evaluations and the only thing that was against her was her habitual tardiness to work. The defendant did not file suit until after the company sued her first for leaking trade secrets.

Facts and Laws

Unlawful Termination

The defendant is claiming that she was unlawfully terminated due to her high-risk pregnancy. For the past three years she has gotten great annual reviews and besides the fact that she was habitually late, there was no other valid reason. Even more troublesome than that is that she gets laid off right after letting the company know of her high-risk pregnancy. This left the defendant unemployed and scared.

The defendant claims that the following law was broken:

The Pregnancy Discrimination Act of 1978, an amendment to Title VII of the Civil Rights act of 1964 to prohibit discrimination due to pregnancy (The Pregnancy Discrimination Act of 1978, nd).

There are other laws that can aid our case:

 New Hampshire is an at will state, this means that either the employee or employer can terminate their relation for any reason, except an illegal one.

Contract Issues

The defendant signed a confidentiality agreement upon accepting the position as a Junior Executive Secretary. This means that any information learnt while at the job or about the company must be maintained in secret. Even after leaving the company, any information must be kept a secret. In Mrs. Lawson’s case, it was the company’s trade secret, the process to create Ever-Gold.

While the defendant did not sign a non-compete agreement, she was expected to maintain secrecy about the process of Ever-Gold. It is believed that the defendant used that knowledge to obtain employment with Howell and even gave them the trade secret. Furthermore, it is assumed that after being fired from Howell, she used that same knowledge as well as any information from Howell to find employment with Triumph.

By breaching her confidentiality agreement, the defendant has the potential for the following violations of contract laws:

1. Breach of Contract: A breach of contract is a failure, without legal excuse, to perform any promise that forms all or part of the contract (Breach of Contract, n.d.).
2. Title 18 U.S.C. § 1832: It is an act that criminalized the theft of trade secrets for commercial or economic purposes.
3. New Hampshire Uniform Trade Secret Act: It criminalizes the theft of trade secrets.

Precedent

While researching I encountered similar cases that could be used for reference like Coca Cola v Williams (Jarvis, 2008). Ms. Williams, a former employee of Coca Cola, conspired with one other to steal the trade secret and sell it to Pepsi through a third party. Ms. Williams snuck files and even a product sample out of her workplace. This case ruled in favor of Coca Cola because of the laws presented.

Similarly, Boston Scientific Corp. v. Lee had a lawsuit for breach of confidentiality contract. Dongchul Lee worked as a senior biomedical systems engineer for Boston Scientific and subsequently left to work for Nevro Corporation, a direct competitor in the spinal cord stimulation device market. Boston Scientific sued Lee, but not Nevro, alleging that Lee’s breached both his confidentiality agreement and brought work product and trade secrets to Nevro. Even though the court rejected the claim, we can learn what caused the claims to be rejected and avoid the same mistakes (Wurst, 2014).

Carbonara vs. Bank of New York Mellon Corporation has the same legal precedent. Ms. Carbonara was suing her employer, Bank of New York Mellon Corporation, for wrongful termination because she was pregnant. Bank of New York Mellon Corporation was restructuring their organization. The bank didn’t lay her off because she was pregnant, she was terminated due to restructuring (Supreme Court, 2014). The court denied her claim due to these facts.

Facts to be Determined

The following facts need to be determined in order to better aid The Company in obtaining a favorable outcome for each of the legal issues presented.

1. Proof of the confidentiality agreement signed by The Defendant. This will support the argument against Ms. Lawson if she violated the agreement.
2. Did Jennifer Lawson’s belongings get searched upon departure If so, someone may be able to confirm the documents with trade secret information.
3. Get a subpoena for the executive who offered Ms. Lawson the employment. This will help determine if she signed paperwork to offer the trade secret.
4. Documentation proving all Junior Executive Secretary positions were eliminated. This will aide in supporting that The Company did not wrongfully terminate The Defendant .
5. Did the Company keep any Junior Executive Secretary or were they transferred to another position? This will determine if Ms. Lawson could have been relocated to another position.

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