The “inevitable disclosure” doctrine allows a trade secret owner to protect its trade secrets when a former employee has confidential knowledge in her head that she will inevitably disclose if she goes to work for a competitor. Employers typically resort to “inevitable disclosure” arguments when they cannot prove that a former employee has actually used, or is about to use, protected trade secrets, and there is no restrictive covenant agreement (such as a non-solicitation or non-competition agreement) in place to prevent the likely disclosure to a competitor. For example, “inevitable disclosure” can help where a former employee has returned or destroyed all confidential data and papers in her possession but still may know enough in her head to use protected information for the benefit of a competitor.
As noted by the Supreme Court of Georgia, the doctrine effectively allows an employer to create or extend a noncompetition agreement:
The inevitable disclosure doctrine provides that 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. The doctrine enables a trade secret owner to prevent a former employee from working for a competitor by demonstrating the employee’s new job duties will inevitably cause the employee to rely upon knowledge of the former employer's trade secrets. The doctrine may impose a noncompete covenant where one does not exist or, as in this case, extend a covenant not to compete beyond the time negotiated by the parties.
Holton v. Physician Oncology Services, Case No. S13A0012 (decided May 6, 2013) (See link to court's opinion, here.)
Although courts in some jurisdictions outside of Georgia recognize legal claims based upon the “inevitable disclosure” doctrine, the issue has remained unclear in Georgia. Not anymore. In the Holton case, quoted above, the Supreme Court of Georgia held that parties canNOT use the “inevitable disclosure” doctrine as a basis to state a claim for trade secret misappropriation.
Therefore, employers and others looking to protect proprietary information under Georgia law should do so by carefully drafting confidentiality and non-competition agreements. Recent, pro-employer amendments to Georgia’s restrictive covenants law are helpful in this regard because they allow employers to more aggressively draft restrictive covenants that prohibit competition, because employers can be now confident that a court will modify, rather than invalidate, any terms of a restrictive covenant that are found to go too far in restricting a former employee’s ability to compete.