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A Trade Secret By Any Other Name is Still a Trade Secret: Why UTSA Pre-emption Matters

By Tait Graves

Trade secret plaintiffs sometimes couch their claims under other, alternative titles, such as “common law misappropriation,” “unfair competition,” or “breach of confidence.” The tactic is often a deliberate ploy to avoid complying with state Uniform Trade Secrets Act (UTSA) statutes and case law governing trade secret litigation ' a body of law that favors former employees in many respects.

There is good news for attorneys who represent former employees and companies that hire them. A 2003 decision, the first of its kind under California law, holds that the UTSA pre-empts trade secret claims alleged under different names. California is the most prominent UTSA jurisdiction, and the ruling follows on the heels of numerous decisions elsewhere since the late 1990s. By taking advantage of such decisions in the early stages of a trade secret lawsuit, defendants can ensure that claims based on the alleged misuse of nonpublic information are litigated under the UTSA's statutory rules for trade secret claims ' as they should be. As will be explained below ' and using California law for illustrative purposes ' defendants can file two types of motions to seek an early UTSA pre-emption ruling.

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