In Al Minor & Assoc., Inc. v. Martin, the Ohio Supreme Court recently held that a confidential client list does not lose its trade secret status just because a former employee was able to memorize it rather than remove a copy of it from the employer. This holding places Ohio squarely with the majority position of the more than 40 states that have adopted the Uniform Trade Secrets Act.
The case arose when Martin left the employ of Al Minor & Associates (“AMA”), where he was a pension analyst for four years. Before leaving AMA, Martin had formed a company with the intention of competing with AMA. He had not signed a non-compete agreement with AMA. When he left AMA’s employ, he took no documents with him, but immediately solicited 15 AMA clients using client information he had memorized. AMA filed suit, seeking an injunction and damages in the form of lost fees. The trial court concluded that the fact that Martin had solicited AMA’s clients from memory did not preclude a finding of trade secret misappropriation. The trial court denied issuing an injunction but awarded damages to AMA in the amount of $25,973.
The Court of Appeals and ultimately the Ohio Supreme Court affirmed the trial court’s decision. In its decision, the Supreme Court traced the history of trade secret protection in Ohio, noting that it arose at common law, was eventually codified by the General Assembly with the adoption of the definition from the Restatement of Torts (First) § 757 (1939), and finally was re-codified with the adoption of the Uniform Trade Secrets Act (“UTSA”).
In analyzing the UTSA, the Supreme Court concluded that the Ohio General Assembly did not intend to distinguish between information that has been reduced to some tangible form and information that has been memorized. The Supreme Court took note of the fact that its decision comported with the majority position among the states that had adopted the UTSA, and agreed with one commentator that
“[t]he modern trend is to discard the written-memorized distinction; and the [UTSA] has abrogated the common law rule which permitted misappropriation of customer lists by memorization.” 1
This decision provides significant aid to Ohio businesses seeking to prevent employees from making off with trade secrets and intellectual property. The decision makes it easier for employers to protect a wider swath of information used by a business that is not generally known to those outside the business, whether it is copied or memorized by the employee. However, employers should continue to use confidentiality agreements with employees (and others) and, to the extent possible, to copyright or patent their trade secrets and intellectual property to provide the employer more protection. Employers should also ensure that their employees do not disclose confidential information or trade secrets of their former employers.