Parties often use a confidentiality agreement to protect against disclosure of trade secrets. Even without a confidentiality agreement, persons are prohibited from misappropriating other’s trade secrets under Louisiana law. But how much protection does a confidentiality agreement or Louisiana law really afford?
Louisiana courts have repeatedly held that despite a confidentiality agreement and statutory prohibitions against trade secret disclosure, information a former employee is able to recall from memory or based upon experience gained during the course of employment is not trade secret information.
In fact, while employees cannot misappropriate trade secrets, knowledge acquired during employment can be used by the former employee — even in competition against the former employer. Therefore, courts have consistently held that an employer cannot prevent an employee from using the skill and knowledge acquired through experience during the course of employment and the employee may use such skill and intelligence for the benefit of rivals in his former employer’s line of business.
Claims of unfair trade practices for relying on memory or experience will likewise fall on deaf ears. The courts have also held that customer solicitation by former employees is not an unfair trade practice, as long as the solicitation occurs based on their memory, experience, or personal contacts, rather than through the use of confidential information of the former employer.
Considering these limitations, reliance on a confidentiality agreement or Louisiana laws prohibiting trade secret misappropriation and unfair trade practices will not likely give employers the full scope of protection desired. Rather, employers should consider using, in tandem with confidentiality agreements, non-compete and non-solicitation agreements. Additionally, employee access to trade secret information should be kept as limited as possible to keep former employees from relying on their memories to the detriment of their former employers.