In Bimbo Sues the Muffin Man, I briefly discussed the inevitable disclosure case filed by Bimbo Bakeries against a former manager, who had ran one of its English muffins facilities. To prevent disclosure of its trade secrets, Bimbo asked a judge to keep the former manager from working for a competitor, even though the manager had never signed a non-compete. In a follow-up post, Judge Sides with Bimbo, I provided a link to Judge Barclay’s 37-page opinion in Bimbo Bakeries USA Inc. v. Botticella, which granted the preliminary injunction. Botticella appealed to the 3rd Circuit Court of Appeals, which just issued an opinion upholding the preliminary injunction.
Perhaps the most important aspect of the 3rd Circuit’s ruling was the conclusion that under Pennsylvania law, a disclosure of a trade secret need not be “inevitable” but merely likely:
In other words, the District Court concluded, albeit somewhat paradoxically, that Pennsylvania courts apply the “inevitable disclosure doctrine” to grant injunctions based not on a trade secret’s inevitable disclosure but on its likely disclosure. Cf. Pepsico, Inc. v. Redmond, 54 F.3d 1262, 1269 (7th Cir. 1995) (“[a] plaintiff may prove a claim of trade secret misappropriation by demonstrating that defendant’s new employment will inevitably lead him to rely on the plaintiff’s trade secrets.”) (emphasis added). While we agree with the District Court that Pennsylvania law empowers a court to enjoin the threatened disclosure of trade secrets without requiring a plaintiff to show that disclosure is inevitable, we do not consider that an injunction granted absent such a showing was issued pursuant to the “inevitable disclosure doctrine.”
More specifically, the Court of Appeals stated:
[T]he “proper inquiry” in determining whether to grant an injunction to prevent the threatened disclosure of trade secrets is not whether a defendant inevitably will disclose a trade secret in the absence of injunctive relief, but instead whether “there is sufficient likelihood, or substantial threat, of defendant doing so in the future.”
(citations omitted). The Court rejected the “virtual impossibility” standard, which had been enunciated in a prior 3rd Circuit opinion finding that use of the term was dicta.
Also of interest, the Court recognized that there were competing public interests at play in the case. The court found that the case pitted the public interest in “inviolability of trade secrets” against the public interest “in employees being free to work for whom they please.” Moreover, the court recognized that “[o]f these latter two interests, Pennsylvania courts consider the right of the employee to be the more significant.” Nonetheless, the court of appeals sided with trade secrets. And so, when all the word games were over, a Bimbo by any other name is still a Bimbo.
To read the Law.com story reporting about the case in more detail, click here.