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Drawing the Line Between Trade Secret Theft and Non-Compete Agreements — Chicago’s No. 1 Non-Compete Agreement Lawyers Near Oak Brook

When Google’s ride-sharing company, Waymo, sued Uber for using Waymo’s trade secrets, it used as evidence the lidar (light detection and ranging) sensor Uber was designing for its self-driving vehicles. Waymo saw the design by accident when the manufacturer (who was making the lidar systems for both Uber and Waymo) accidentally sent Waymo a mock-up of Uber’s lidar system. Although Uber claimed the design was fairly standard, Waymo alleged it was too similar to their own to be a coincidence.

According to Waymo, Uber allegedly obtained knowledge of Google’s self-driving trade secrets when they bought Otto, a self-driving truck company. Otto was founded by Anthony Levandowski, who used to work as an engineer for Google to develop their self-driving technology. Just a few months after he started Otto, his company was bought by Uber and Levandowski became an employee of Waymo’s competitor.

Waymo alleged files regarding their self-driving technology went missing from Google’s servers around the time Levandowski quit his job with Google. The fact that he started working for Uber a short time later, and that Uber’s self-driving technology looked suspiciously like their own, was enough to prompt Waymo to suspect that Levandowski leaving Google to start his own company, which was then bought by Uber, was all part of an elaborate plot for Uber to steal trade secrets from Google.

Uber denies knowing Levandowski had stolen trade secrets from Google at the time they bought Otto, and Levandowski has since been fired from Uber, but employers would still be justified in exercising caution when hiring employees with knowledge and experience in a specific area.

California prohibits non-compete agreements throughout the state, including agreements that have been signed in other states and are enforceable in those states. A non-compete agreement is a clause included in an employment contract that prohibits employees from leaving to work for a competitor and taking trade secrets with them. They usually include a time limit and a geographic limit, but over the years employers have increased their reach to the point where even minimum-wage employees are signing contracts that prevent them from taking a similar job with any other company.

On the other hand, California does protect trade secrets, which leaves the question: where do you draw the line? At what point is protecting a worker’s right to seek new employment endangering trade secrets and vice versa?

Despite the fact that Waymo and Uber have reached a settlement agreement over their latest legal dispute (or rather because of the settlement) the question of where to draw the line between protecting workers’ rights and protecting trade secrets remains to be defined. Judge William H. Alsup, who presided over the case, was only joking when he suggested that employers want their workers to have part of their brain removed before they’re allowed to work for a competitor, but his point remains valid. It is expected for employees in highly skilled professions to learn new things and adapt to the needs of their current employer. To expect them to erase all that from their minds the moment they start working for someone else is unreasonable, to say the least.

Because the law takes into account all of the above, it requires employers to specify the alleged trade secrets that were taken and used, and what made them the valued property of the first employer, in order to sue a former worker (and/or their new employer) over misappropriated trade secrets. After this most recent lawsuit between two tech giants, the line remains blurry and employers are advised to proceed with caution.

Our Schaumburg non-compete agreement attorneys have defended high-level executives in a covenant not to compete and trade secret lawsuits. A case in which our firm defended a former Motorola executive was covered in Crain’s Chicago Business. You can view that article by clicking here.

DiTommaso Lubin Austermuehle a firm of Chicago business dispute lawyers handles litigation over non-compete clauses for individuals and businesses of all sizes, including small or closely held businesses for whom competition from an ex-employee can be a serious threat. Our Chicago business lawyers with offices near Kenilworth and Winnetka have substantial experience in restrictive covenant and breach of contract cases, and we are proud of our record of strong results. We have successfully represented a number of doctors in non-compete, partnership, and other business disputes.  We understand the complexities of physician partnership and non-compete agreements.

DiTommaso Lubin Austermuehle a Chicago business litigation law firm represents both plaintiffs and defendants in such cases, and can also help stop litigation before it starts by reviewing contracts to look for covenants and clauses that could create problems later. Our firm has also handled many shareholders and LLC disputes between owners of closely held corporations, and LLCs.

Based in Oakbrook Terrace and downtown Chicago, our Elgin and Aurora non-compete agreement and business dispute lawyers take cases from Winnetka and Highland Park and many other cities throughout Illinois, as well as in Indiana, Wisconsin and the entire United States. To learn more or set up a free consultation, please contact one of our Chicago business dispute lawyers through the Internet or call toll-free at 1-877-990-4990 today.

Vincent L. DiTommaso

DiTommaso Lubin Austermuehle’s Oak Brook and Naperville non-compete agreement litigation attorneys have more than three decades of experience helping clients unravel the complexities of Illinois and out-of-state non-compete and trade secret theft laws. Our Chicago business dispute attorneys also represent individuals, family businesses and enterprises of all sizes in a variety of legal disputes, including disputes among partners, shareholders, and LLC members as well as lawsuits between businesses and consumer rights, auto fraud, and wage claim individual and class action cases. In every case, our goal is to resolve disputes as quickly and successfully as possible, helping business clients protect their investments and get back to business as usual. From offices in Oak Brook, near Glen Ellyn and Aurora, we serve clients throughout Illinois and the Midwest.