Summary
The Vermont Supreme Court affirmed summary judgment for defendants in an action involving alleged misappropriation of a customer list under the Vermont Trade Secrets Act, breach of fiduciary duty, breach of the covenant of good faith and fair dealing, and tortious interference. The court held that the customer list was not a trade secret because the plaintiff had not taken reasonable measures to maintain its secrecy. It also held that the at-will employment relationship did not support the asserted good-faith and fair-dealing claim.
Topics
Practice areas
Questions Presented
- Whether summary judgment was improper because a genuine issue existed as to whether the Lodge's customer list was readily ascertainable and therefore eligible for protection under the Vermont Trade Secrets Act.
- Whether the absence of reasonable efforts to maintain the customer list's secrecy defeated trade-secret protection as a matter of law.
- Whether the Vermont Trade Secrets Act displaced a common-law claim based on defendants' alleged duty not to solicit the Lodge's customers.
- Whether an unmodified at-will employment relationship supports a claim for breach of the implied covenant of good faith and fair dealing based on an employee's abrupt departure and unfinished work.
Holdings
- The trial court erred in holding as a matter of law that the Lodge's customer list was not a trade secret because it was readily ascertainable; the readily-ascertainable inquiry is highly factual and lacked a general benchmark.
- The customer list was not a trade secret because Dicks presented no evidence that he made reasonable efforts to maintain its secrecy.
- The Vermont Trade Secrets Act displaces conflicting common-law tort and restitutionary remedies for misappropriation of a trade secret, so plaintiff could not pursue a common-law remedy on the same customer-solicitation theory.
- An unmodified at-will employment agreement does not support recovery for breach of the implied covenant of good faith and fair dealing based on an employee's decision to leave or the timing of the departure.
Key quotations
“These cases demonstrate that in a trade secret case "no general and invariable rule can be laid down," but rather we must look to the conduct of each party and the particular information at issue.” (1284)
“Because plaintiff has adduced no evidence that he took reasonable efforts to maintain the secrecy of the customer information, we hold, as a matter of law, that this customer list is not a trade secret.” (1285)
“An at-will employment agreement is flexible, "terminable at any time, for any reason or for none at all."” (1286)
Factual background
James Dicks had owned the Lodge at Mount Snow since 1971 and relied heavily on recurring senior-citizen bus tours during the nonwinter months. In 1991, Cary and Brenda Jensen began managing and marketing the Lodge's bus-tour business without an employment agreement, using public sources, mass mailings, and telephone solicitations to develop bookings. In 1997, they left to open a competing lodge and solicited Lodge customers, including customers who canceled existing Lodge reservations and rebooked with defendants. The Lodge's customer information was not subject to a confidentiality agreement, restricted access, locking, or other identified security measures.
Procedural history
James Dicks sued Cary and Brenda Jensen after they left their management positions at the Lodge at Mount Snow, opened a competing lodge, and solicited Lodge customers. The Windham Superior Court granted summary judgment to defendants on the trade-secret claim, treated the fiduciary-duty and good-faith claims as substantially coextensive with the tortious-interference claim, and entered a verdict for defendants after trial on the tort claim. The Supreme Court of Vermont affirmed, relying on the absence of reasonable secrecy measures and the at-will nature of the employment relationship.