Can a former employee with knowledge of a trade secret go and work for a potential competitor?
This the burning question in the recent lawsuit filed by the company who makes Thomas’ English Muffins when one of their top executives, Chris Botticella, hopped on over to Hostess Brands, Inc., famous for its Twinkies. Grupo Bimbo SAB, which owns Thomas’ English Muffins, is concerned that Botticella will spill the beans on the 75-year-old secret to those famous “nooks and crannies” in the breakfast biscuits; the muffins are also famous for toasting on the outside but remaining chewy on the inside.
No, Hostess doesn’t make English muffins or anything resembling them, but Grupo Bimbo doesn’t want to wait to find out whether Botticella will share the recipe with his new employer; the secret recipe contains the perfect amounts of dough, moisture, and baking time — and only seven people in the world know the mystery numbers involved.
Those nooks and crannies are trademarked in the United States, and lawyers for the muffin company aver that “Botticella could produce an English muffin that might look a bit different, but that would nevertheless possess the distinctive taste, texture and flavor character that distinguish the Thomas’ English Muffin and that have been the foundation of the product’s success.”
At the district court level, a judge issued an injunction in favor of Grupo Bimbo prohibiting Botticella from taking the offered position at Hostess until a court decides on the issue; the court apparently lent some credence to Grupo Bimbo’s claims that Botticella had hid his Hostess deal from the company for months and may have copied confidential information to a USB drive before leaving.
For his part, Botticella appealed the ruling; his employment, after all, hangs in the balance, and he’s not sure that Hostess is going to wait around for him to finish fighting his old employer for the right to move on. Botticella maintains that the confidentiality agreement that applied to his employment was valid “only during his employment” and there’s nothing in his contract that prohibits him from working for Hostess.
Obviously, we’d love to see a copy of that employment contract, but it’s a good lesson for you business owners out there who have trade secrets; not only do you need them trademarked, but you also need to make sure that former employees aren’t going to run to a potential competitor and share them.
Plan your employment contracts accordingly!