Unfair competition litigators and technology in-house counsel will watch closely as the newest trade secret misappropriation “Battle Royale” plays out between Jawbone and Fitbit in San Francisco Superior Court. Click here to view the complaint.
Jawbone alleges that Fitbit sought to “decimate Jawbone” through its targeted hiring of key company employees who, through a variety of end-of-employment skullduggery (USB devices, sending key company documents to personal emails, manual wiping of system drives to hide the electronic fingerprints of document misappropriation) and current intent to use purloined information for Fitbit’s benefit, have irreparably damaged their former company.
Without comment on the merits of the litigation, review of the detailed complaint reveals that Jawbone’s trade secret protection fitness tracks nicely with industry best practices:
Robust Confidentiality Agreement: Jawbone employees sign fairly detailed Confidential Information Agreements that acknowledge that key company proprietary information may be written, oral or just observed; that confidentiality obligation is emphasized as perpetual. The same Agreement committed the employees to returning any and all company information on departure including “home library” type documents; employees agreed in advance that, upon departure, they would allow company access to personally retained information to enable copying and deletion. On the flip side, the Agreements lack any specific examples of trade secret categories thus conflating merely confidential information with exceptional trade secret status. While this allows litigation “play in the joints” as to the breadth of Jawbone’s trade secrets, it also begs the question as to whether Jawbone truly educates its employees that some information “is not like the other” warranting enhanced trade secret protection including injunctive relief to prohibit its misuse in competitor’s hands.
Employee Handbooks reiterated the culture of confidentiality: Jawbone’s Employee Handbooks parrot the Confidentiality Agreements’ caution against inadvertent disclosures of company information and generally publicize the gravity of information protection particularly in the face of “loose lips” social media behavior.
Standalone Information Technology Agreement: Jawbone delineates the do’s and don’ts of information technology policies in a separate executed document from its Confidentiality Agreements; particularly good practices though difficult to police include its prohibitions on use of personal computers for company work, on sharing company information via texts and against using local file shares as temporary repositories of company information. Jawbone requires that smartphones and tablets be software lock enabled and password protected.
Termination Certifications: The defendant employees signed multiple exit certifications that: reiterated their earlier execution of the Confidentiality Agreements, their continued understanding of types of company proprietary information (a great way to sneak in specific items of sensitive information omitted from prior outdated agreements), and their “certification” of return, without deletion or alteration, of all company materials.
Exit Interviews with Teeth: The complaint reveals that at least one employee was pressed during an exit interview about retaining company materials and finally admitted to retaining a “Market Trends & Opportunities” presentation. Far too many exit interviews are perfunctory “So where are you going? Please sign this” time-wastes representing a blown opportunity to discern what documents might possibly be retained at home or on thumb-drives, what unusual downloading activities may have occurred in one’s final months, will you be performing substantially similar job duties for a competitor, etc. Jawbone seems to have opted for vigorous discussion with some of the flight to Fitbit employees.
Sound and Immediate Forensic Analyses: The complaint discloses findings of apparently immediately-performed forensic analyses on the departing employees work computers including detection of both software designed to wipe downloading activities as well as more ham-fisted manual wiping of system logs. Best practices dictate that such forensic investigation be performed by an independent vendor, not in-house IT. Because time is of the essence, an established protocol for such imaging should be at the ready and the vendor pre-selected.
Thus, because every California trade secret misappropriation plaintiff faces the initial hurdle of demonstrating “reasonable measures” to promote secrecy of allegedly stolen information, Jawbone’s above exemplary practices should propel them into their next more strenuous battles of documenting the actual taking and use of sensitive competitive information by their now former employees at Fitbit.