Wednesday, July 28, 2010

Injunction in Bimbo Bakeries case maintained; secret muffin formula still safe?

On 27 July 2010, the Third Circuit issued a ruling in the "Bimbo Bakeries"/Thomas' English Muffin case:

The issue on appeal is
whether the District Court erred in enjoining appellant Chris
Botticella, formerly a senior executive at appellee Bimbo
Bakeries USA, Inc. (“Bimbo”), from working for one of
Bimbo’s competitors until after the Court resolved the merits
of Bimbo’s misappropriation of trade secrets claim against

CA3 affirmed, and the injunction remains.

Of some details:

Botticella, a California resident,
who already had experience in the baking industry, began
working for Bimbo in 2001 and was, until January 13, 2010,
its Vice President of Operations for California. In that
position in which Botticella earned an annual salary of
$250,000, he was directly responsible for five production
facilities and oversaw a variety of areas including product
quality and cost, labor issues, and new product development.
In addition Botticella worked closely with Bimbo’s sales staff
on sales promotion and capacity planning, and also was
responsible for overseeing the operations of “co-packers” in
his region, i.e., third-party manufacturers under contract with
In one instance over the Christmas holiday, Botticella
deleted a number of documents from his company-issued
laptop computer. These documents included both items of a
personal nature, such as his resume, and a number of work-
related documents containing confidential information.
Botticella claimed that he deleted these documents because he
“didn’t think th[ey] would [have] any value to anybody.”
App. at 198. Nevertheless, when Botticella returned to his
office at Bimbo on January 4, 2010, he asked a computer
technician to restore the files because “he wanted to have
them back just in case for the next weeks we needed to have a
meeting or something.” App. at 198. Bimbo’s technician
then restored the files to the computer.

Following Botticella’s departure, Bimbo hired E. Brian
Harris, a computer forensics expert, to investigate Botticella’s
use of his company laptop during December 2009 and
January 2010. Harris’s testing revealed that a user who
logged in as Botticella had accessed a number of confidential
documents during the final weeks of Botticella’s employment
at Bimbo. In particular, the testing revealed that the person
logging in as Botticella had accessed twelve files within a
span of thirteen seconds on January 13, 2010, Botticella’s last
day at Bimbo. Significantly this access occurred minutes
after the phone call in which Botticella finally disclosed to
Bimbo his plans to work for Hostess and Bimbo told him to
cease working for it.
In his video-taped
deposition, portions of which were presented at the
preliminary injunction hearing, Botticella admitted to copying
files periodically from his laptop to external devices during
his final weeks at Bimbo, but maintained that he had done so
only to practice his computer skills in preparation for his new
position at Hostess. Despite an earlier denial, he eventually
admitted to conducting such “practice” exercises in January
2010. The District Court found that Botticella’s explanation
of his use of the laptop computer and the external devices was
“confusing at best” and “not credible.” Bimbo Bakeries, 2010
WL 571774, at *6.

Of "public interest," CA3 noted:

As noted by the District Court, there is a
generalized public interest in “upholding the inviolability of
trade secrets and enforceability of confidentiality
agreements.” Bimbo Bakeries, 2010 WL 571774, at *16.
Additionally, there is a public interest in employers being free
to hire whom they please and in employees being free to work
for whom they please. Of these latter two interests,
Pennsylvania courts consider the right of the employee to be
the more significant. See Renee Beauty Salons, Inc. v. Blose-
Venable, 652 A.2d 1345, 1347 (Pa. Super. Ct. 1995) (“[T]he
right of a business person to be protected against unfair
competition stemming from the usurpation of his or her trade
secrets must be balanced against the right of an individual to
the unhampered pursuit of the occupations and livelihoods for
which he or she is best suited.”) (internal citation omitted);
see also Wexler v. Greenberg, 160 A.2d 430, 434-35 (Pa.
1960) (noting a societal interest in employee mobility). We
are satisfied on the facts of this case that the public interest in
preventing the misappropriation of Bimbo’s trade secrets
outweighs the temporary restriction on Botticella’s choice of
employment. See SI Handling Sys., 753 F.2d at 1265 (finding
unnecessary an “extended analysis of the public interest
[because] extensive precedent supports an injunctive remedy
where the elements of a trade secret claim are established”).


Post a Comment

<< Home