Articles on Law, Science, and Engineering

PART II: Duties of an Ex-employee

Competing Interests of Employer, Employee & the Public

One of the most valuable assets owned by the ex-employee is the knowledge and information obtained during the course of his previous employment. If ex-employees had unlimited use of such information, however, it would have devastating effects on their previous employers. The law acknowledges that a competitive business requires know-how, and that in order to compete effectively, this know-how must be protected. The law seeks to stimulate the development of know-how by protecting it from unfair appropriation, while allowing competitors who obtain such know-how fairly (through independent development or licensing) to use it.

The law recognizes that there is a tension between the employee's need to use his expertise and the employer's need to protect its proprietary information. If employees are prohibited from using expertise gained on the job in subsequent employment, they would be enslaved by their existing employer. This would also have a detrimental effect on the public because it would prevent employees from forming and conducting their own new businesses, thus stifling competition.

Conversely, if employees were free to appropriate their employer's proprietary information, businesses would be less willing to invest resources to develop methods, technologies, and clients for their products and services. Employers are given a property right in proprietary business information, which the courts protect against misappropriation and unfair use by others, including former employees. This property right extends to trade secrets and other unique assets of the business acquired through employment or consulting relationships as described in Part I.

But the law also recognizes the competing interest of ex-employees to use their knowledge and experience. They are entitled to use general information not obtained in violation of any of the duties outlined in Part I, but they are barred from using trade secrets belonging to their ex-employer or any proprietary information obtained by unfair means. Ex-employees have a duty not to take advantage of an existing confidential relationship created during their employment. In other words, ex-employees have a duty to treat their ex-employers fairly.

Next - What Information is Protected?