Until June 2013, Manish Desai worked for Molon Motor and Coil Corporation (“Molon”) as Head of Quality Control. In June of that year, Desai left Molon to take a position with a competitor of Molon, Nidec Motor Corporation (“Nidec”). Molon brought suit against Nidec for trade secret misappropriation and alleged that Desai copied confidential information onto a flash drive before his departure. Based on these allegations, Molon argued not only that Desai unlawfully disclosed its trade secrets but also that “Nidec used and continues to use that information.” Molon brought suit under the federal Defend Trade Secrets Act and the Illinois Trade Secrets Act. The District Court for the Northern District of Illinois allowed Molon’s claims against Nidec to proceed based on the “inevitable disclosure doctrine.” Molon’s complaint made no allegations that Nidec, rather than Desai, misappropriated Molon’s trade secrets. Nonetheless, the court concluded that the competition between the parties and the “similarity” of Desai’s employment at Nidec were “enough to trigger the circumstantial inference that the trade secrets inevitably would be disclosed by Desai to Nidec.”
The court’s analysis in Molon is only one example of the application of the inevitable disclosure doctrine. The inevitable disclosure doctrine permits a “plaintiff [to] prove a claim of trade secret misappropriation by demonstrating that [a] defendant’s new employment will inevitably lead him to rely on the plaintiff’s trade secrets.” The doctrine is often used when an employee stops working for the owner of a trade secret and begins working for a competitor. However, application of the doctrine could inhibit employee mobility and free trade. Because an employer could be held liable merely based on the decision to hire an employee, employees are discouraged from taking on a superior position with a competing employer. This theory of liability also increases the risks involved when a former employee, who may have had access to trade secrets, starts a new company with innovative ideas. For these reasons, the inevitable disclosure doctrine remains controversial, and not all courts have adopted it.