This case involves an alleged breach of an employee confidentiality agreement, with trade secrets and confidential information passed from one company to another by a senior employee. The plaintiff is a large medical device company in the orthopedic space. It was alleged that a senior employee for the plaintiff who had knowledge of an important new product with a very high commercial value left the company in order to join a competitor. It was further alleged that the employee brought trade secrets to his new employer, which influenced company strategy and eventually personally enriched the employee in question through the development of a similar device.
Question(s) For Expert Witness
- 1. Please describe your background in this industry as it relates to hiring.
- 2. What typical considerations should a company make when deciding whether to hire a senior employee from a direct competitor?
Expert Witness Response E-047782
I am a professor of health law and policy with training in ethics and social science and I now specialize in pharmaceutical issues. I have been a research fellow working on pharmaceutical policy and ethics at a leading ivy-league university and have worked for the World Health Organization on pharmaceutical issues related to transparency, good governance practices, conflicts of interest and related issues. I have published articles on off-label marketing and prescribing and on disclosure of information related to data from clinical trials, on conflicts of interest, and on related issues. I have lectured on my research in leading universities in the United States and in a dozen foreign countries. When hiring employees from a competitor there are always issues related to ensuring that the newly hired employee honors contracts not to compete, maintains confidentiality of corporate information and intellectual property, trade secrets and related issues. Companies that consider hiring employees from a competing firm need to learn what work the employee was engaged in previously and to ascertain whether work in the new firm would conflict with fiduciary or contractual obligations to the previous employer. They need to check that the new employment does not pose risks of conflicts of interest and if there are potential conflicts they must put in place a plan to manage the conflicts.
Expert Witness Response E-007856
There is not to my knowledge an authoritative statement of an industry standard with respect to the obligations of employees or a company hiring employees and then misappropriating trade secrets. My sense would be that in this case an expert trying to claim that there was would be on shaky ground ultimately. The case would thus come back to the legal principles generally applicable to trade secret misappropriation cases which are very fact specific. In this case there would appear to be strong facts which suggest that it was the misappropriation that led to commercial success and so much would depend on the specific contractual agreements between the ex-employee and the company and the specific knowledge base and trajectory of the defendant’s research program.