© 2000 LANE POWELL SPEARS LUBERSKY LLP D. Michael Reilly
www.lanepowell.com 206.223.7051
Trade Secrecy and Non-Competition Covenants in Washington
By
D. Michael Reilly
INTRODUCTION
American businesses have witnessed an explosion in non-competition and trade secret
disputes in the employment arena. The Wall Street Journal has headlined suits in the web
technology, insurance, photographic imaging, paper products, retail, food products and
petroleum industries. Increasing workforce mobility, escalating competition and the importance
of technology mean that businesses must develop and protect intellectual assets. Moreover,
businesses seeing employees must be wary of stepping into trade secret disputes by virtue of
hiring employees from other companies. The recent litigation Wal-Mart v. Amazon.com, which
this firm handled, concerned many of these issues. The following highlights factors one should
consider when an employee leaves your company, or when you are considering recruiting from
other companies or corporations.
Your Rights As an Employer.
1. THE EMPLOYER/EMPLOYEE RELATIONSHIP.
a. Confidentiality
. The employer/employee relationship gives rise to
“confidences.” E.I. Dupont Power Company v. Masland, 244 U.S. 100, 102 (1917). The duty of
an employee “not to disclose the secrets of his employer may arise from either an express
contract, or may be implied from the confidential relationship existing between the employer and
employee.” Nowogroski, Inc. v. Rucker
, 137 Wn.2d 427, 437 (1999). The nature of the
relationship imposes a duty on employees and former employees not to use or disclose the
employer’s trade secrets. Id.
, 439 at n.3 (“The employment relationship is a confidential
relationship which gives rise to a post-employment duty not to disclose trade secrets.”) An
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