Procedural Posture

Procedural Posture

Plaintiff accounting firm appealed an order from the Superior Court of Santa Clara County (California), which granted summary judgment for defendants, plaintiff’s former employees, in an action for misappropriation of trade secrets, breach of contract and fiduciary duty, and unfair competition.

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Plaintiff accounting firm brought an action against defendants, its former employees, who had obtained names and addresses from a company Rolodex to mail notices of the formation of their own firm. Plaintiff charged defendants with misappropriation of trade secrets, breach of contract and fiduciary duty, and unfair competition. Upon defendants’ motion under Cal. Code Civ. Proc. ยง 437(c), the trial court entered summary judgment against plaintiff. On plaintiff’s appeal, the court reviewed the record, which indicated that defendants had signed an employment agreement designating client names as trade secrets and prohibiting solicitation of clients. However, the court concluded that defendants’ mailing was merely an announcement of a change in employment, and not a solicitation. The court further held that while former employees were not entitled to use trade secrets to announce a change of employment, the names and addresses used by defendants were not trade secrets because the clients were personally known to them, and the addresses were public. Thus, use of the Rolodex did not violate common law unfair competition and was not a breach of the employment contract.


The court affirmed the summary judgment dismissing plaintiff’s action, concluding that defendants’ use of plaintiff’s Rolodex was neither unfair competition nor breach of employment contract prohibiting use of trade secrets and solicitation. Merely announcing change in employment did not constitute solicitation. Client names and addresses were not trade secrets because defendants knew the clients personally.

Ellen Hollington

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