West v. Pennyrich International, Inc.

Is a sales person's identity a trade secret, disclosure of which can be prevented under Texas law?

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The Texas Court of Appeals held that the disclosure and solicitation of Pennyrich's sales force could be enjoined because they constituted a trade secret. Under Texas law, a "trade secret" entitled to protection by injunction may consist of any formula, pattern, device or compilation of information used in one's business, which gives him an opportunity to obtain an advantage over competitors who do not know of it. The Court held that this definition included the sales force of an MLM company, and upheld the rational of the injunction. However, it held that the injunction did not comply with certain formal requirements, and dissolved the injunction based on its non-compliance with those formalities.

Case and case summary are also available online at: http://www.mlmlegal.com/legal-cases/West_v_PennyrichInternationalInc.php

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Published In: Civil Procedure Updates, MLM / Direct Sales Updates, MLM Consulting / Network Marketing Updates

Reference Info:State, 5th Circuit, Texas | United States

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