Tennessee Court Of Appeals Issues New Guidance On Trade Secret Issues

On August 19, 2014, the Tennessee Court of Appeals became the first Tennessee appellate court to address the scope to which Tennessee’s Uniform Trade Secret Act (TUTSA) preempts common law claims related to unfair competition and misuse of confidential information. In Ram Tool & Supply Co., Inc. v. HD Supply Construction Supply, Ltd. the Tennessee Court of Appeals adopted the reasoning and rationale of one the most influential opinions in the country on TUTSA’s preemptive scope: Hauck Manufacturing Co. v. ASTEC Industries, Inc. The Hauck opinion was authored by Judge Collier of the U.S. District Court for the Eastern District of Tennessee at Chattanooga.

We discussed the Hauck decision and other TUTSA issues at length in our September 2013 blog post, “How to Protect Confidential Business Information in Tennessee.” In Hauck, Judge Collier adopted the “same proof” standard for TUTSA preemption. Under this standard, “a claim will be preempted when it necessarily rises or falls based on whether the defendant is found to have ‘misappropriated’ a ‘trade secret’ as those terms are defined in the UTSA.” In the recently decided Ram Tool case, the Tennessee Court of Appeals adopted this “same proof” standard from Hauck to dismiss common law breach of fiduciary duty, breach of duty of loyalty, intentional interference and civil conspiracy claims to the extent such claims were based upon misappropriation of trade secrets.

What the Tennessee Court of Appeals confirmed in Ram Tool is that most non-TUTSA claims in unfair competition cases will no longer be viable if the employer claims that the employee, as part of his or her alleged wrongdoing, misused confidential information.

Written by:

Published In:

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Ogletree, Deakins, Nash, Smoak & Stewart, P.C. | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.
×
Loading...
×