My, that was fast!
The speed at which former employees set up an operational competing business was found to be suggestive of trade secret misappropriation in Palltronics v. PALIoT Solutions (DTSA lawsuit in Michigan).
A shipping pallet company declared bankruptcy, and sold its assets (including trade secrets) for USD $5 million. Former employees quickly set up a competing company. The purchaser sued them for trade secret misappropriation and breach of contract (confidentiality).
Trade secrets include a special polymer blend, assembly method for the pallet, and a tracking system to follow movement of the pallet.
The employee NDA contracts provided that the employees would not disclose or use the employer’s trade secrets. The court also found that the competing company was set up and operational so quickly that it suggested theft of trade secrets.
The court granted a preliminary injunction, and the case is ongoing. It helped the plaintiff that the trade secrets were specifically identified, and that employment contracts included confidentiality provisions.
