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May 2012 Attorney at Law Magazine

Absolutely crust fallen

As long as a departing employee isn’t bound by a
noncompete agreement, he or she is free to work
wherever he or she chooses, right? Not according
to the U.S. Court of Appeals for the Third Circuit in
Bimbo Bakeries USA, Inc. v. Botticella.
Baker’s secrets
Bimbo Bakeries is one of the four largest baking
companies in the United States. Chris Botticella
worked for Bimbo as its vice president of operations
for California from 2001 through Jan. 13, 2010. He
oversaw a variety of areas, including product quality
and cost, labor issues, and new product development.
While employed by Bimbo, Botticella signed
a “Confidentiality, Non-Solicitation and Invention
Assignment Agreement” but didn’t sign a noncompete
agreement.
In the course of his employment, Botticella had
acquired a broad range of confidential information
about the company. For example, he was one of only
seven people who possessed all of the information
necessary to replicate the company’s popular line of
Thomas’ English Muffins, right down to the secret
behind the muffins’ famous “nooks and crannies”
texture. In March 2009, Botticella signed a confidentiality
agreement with Bimbo.
A battered agreement
On Oct. 15, 2009, Botticella accepted an employment
offer from Hostess Brands, one of Bimbo’s primary
competitors, and signed an “Acknowledgement and
Representation Form.” The form stated Hostess
wasn’t interested in and Botticella wouldn’t disclose
trade secrets from Bimbo. He agreed to start in
January 2010 and continued to have full access to
Bimbo’s confidential and proprietary information in
the meantime. Botticella didn’t inform Bimbo of his
plans to leave until Jan. 4, 2010, and even then he
didn’t disclose his plans to join Hostess.
Bimbo learned of that plan when Hostess made an
announcement on Jan. 12, 2010. The next day,
Bimbo’s vice president for human relations discussed
the situation with Botticella, directing him to vacate
the company’s offices that day.
After his departure, Bimbo hired a computer forensics
expert to investigate Botticella’s use of his company
laptop during December 2009 and January 2010. The
expert found evidence that indicated Botticella had
accessed a number of confidential files during that
time. Minutes after his conversation with the vice
president of human relations, for example, Botticella
accessed 12 files within 13 seconds.
The expert discovered several similar patterns of
access in the weeks leading up to Botticella’s last
day, which he characterized as “inconsistent with
ordinary usage.” His testing also revealed that three
external storage devices had at some time been connected
to the laptop.
Into the mix
Bimbo sued Botticella for misappropriation of trade
secrets. The district court granted a preliminary
injunction preventing him from starting work with
Hostess and from divulging any confidential or proprietary
information.
Botticella appealed the order granting the injunction.
He argued that a court can enjoin a defendant
from starting a new job to protect only a former
employer’s technical trade secrets, and that an
injunction is appropriate only when it would be “virtually
impossible” for the defendant to perform the
new job without disclosing trade secrets.
The Third Circuit held that the law in Pennsylvania
(where the case was filed) is clear that even nontechnical
trade secrets are protected. The court acknowledged
that Pennsylvania courts might enjoin new
employment more readily if technical trade secrets
are involved but declined to adopt an inflexible rule
restricting injunctive relief to such cases.
The court also surveyed previous Pennsylvania cases
on the appropriate standard for enjoining employment.
It found that the state’s appellate-level court
has ruled that the proper inquiry is whether there’s
a sufficient likelihood — or substantial threat — of
the defendant disclosing trade secrets. The “virtual
impossibility” standard didn’t apply. (See “Court
sidesteps earlier ruling” below.)
Proof in the pudding
Turning to the facts at hand, the Third Circuit held that
the district court’s injunction was appropriate because
Bimbo had demonstrated a likelihood of success on its
misappropriation claim. In particular, the court found
that the conclusion that Botticella intended to use the
trade secrets rested on solid evidence.
This evidence included his failure to disclose his
acceptance of a job offer from a competitor, his decision
to remain in a position that received confidential
information and actually receiving such information
after committing to the new job, and his apparent
efforts to copy Bimbo’s trade secret information from
his laptop onto external storage devices.
Stuck in limbo
Although the court indicated that “it was unclear
exactly when [the external storage] devices had been
used,” it still found enough of a likelihood of success
on the merits to support an injunction. Thus, until
trial, Botticella is stuck in limbo. need a loan fast with bad creditbad credit personal loans for