Customer Lists Are "Trade Secrets"-With Caveats

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Customer Lists Are "Trade Secrets"-With Caveats

Nebraska Revised Statutes sections 87-501 through 87-507, known as the “Trade Secrets Act” (“Act”), contains several provisions applying to employees and employers alike when it comes to “customer lists.”

When an employee is considering leaving an employer, an employer’s customer list may be an appealing piece of information to an employee, especially if the employee is considering competing with his or her former employer.

Employees should avoid this temptation.  In Home Pride Foods, Inc. v Johnson, 262 Neb. 701 (2001), the Nebraska Supreme Court held that customer lists can be included in the definition of “trade secrets” under the Act. A violation of the Act could lead to an injunction and damages for lost profits against a former employee.

However, not all customer lists are considered to be trade secrets under the Act. To be considered to be a trade secret, a customer list usually must contain more information than the “mere identities and locations of customers that anyone could easily identify as possible customers.” Id. at 709. Employers should also take reasonable steps to protect their customer lists in order to ensure their secrecy.

Jeanelle R. Lust
Managing Partner

knudsenlaw.com

November 11th, 2011|Uncategorized|