Inevitable disclosure under the DTSA in California

A recent Northern District of California decision weighs in on a divisive question: does the inevitable disclosure doctrine apply to the Defend Trade Secrets Act?

You may be wondering what the inevitable disclosure doctrine is. Essentially, it relates to what you can and can’t do with others’ trade secrets.

Consider the California Uniform Trade Secrets Act. That law stops you from using “improper means” (like theft, misrepresentation, or breaching an NDA) to take another's trade secret.

The inevitable disclosure doctrine takes this one step further. Under it, courts can presume that theft will inevitably occur (even though it hasn’t already). So if you go work for a competitor in a similar position, that doctrine—if allowed—would result in you violating the law.

CUTSA rejects the inevitable disclosure doctrine.

But what about the DTSA?

That's a tougher question. The folks over at Seyfarth’s very good trade secrets blog discussed this issue last year. The gist is that the law appears to maybe not allow it, but federal courts seem to be coming out the other way.

But not this Northern District decision. It refuses to apply the inevitable disclosure doctrine to the DTSA.

One problem though. The court doesn't analyze the statute and appears to be grounded almost entirely on the fact that California courts applying CUTSA have rejected the doctrine.

Which isn't necessarily the ideal way to interpret a federal statute.

Also Preemption

The court also addresses CUTSA’s preemption scope and comes out with mixed results. Yes, it preempts all claims based on an identical nucleus of facts.

But the court does not apply preemption to the destruction of the former employer’s data. Apparently because the former employer represented that this could never constitute misappropriation.

This conclusion may or may not be right. But it's hard not being skeptical with that rationale.