In a recent move, the New York Knicks have sued their former employee as well as his current employer, the Toronto Raptors. This lawsuit could provide significant insights to employers regarding the misappropriation of trade secrets. On August 21, the Knicks launched a claim against their Eastern Conference rivals. The lawsuit accuses the Raptors of conspiring to obtain confidential data from the Knicks’ computer systems. This data, the Knicks assert, would assist the Raptors’ first-time head coach in establishing new systems in his position. This case transposes the competition between the Knicks and Raptors from the court to an altogether different venue – the Southern District of New York. Fisher Phillips provides more insight on the case.
This suit brings to light six key takeaways for employers:
- Every employer must ensure that their employees are educated on the legal implications of trade secret misappropriation. Awareness is particularly crucial for employees who have access to confidential information and personnel transitioning to competitors.
- Employers must make an active effort to secure their computer systems and take steps to guard against unauthorized access.
- The agreement documents that employers hand to their employees should explicitly state the consequences of divulging confidential information. Furthermore, reiteration of these policies is necessary for transitional periods.
- It is incumbent upon employers to monitor and maintain control over confidential information. In case of potential misappropriation, swift action is essential to limit damage.
- When hiring, it is advisable for employers to conduct investigations into potential candidates, particularly those transitioning from a competitor. This can limit exposure to potential claims of misappropriation.
- Employers need to work diligently to ensure respect for confidentiality agreements and others’ trade secrets, creating a culture of responsibility and respect to limit potential liability.
The outcome of this suit could significantly impact precedent, marking this as a case to watch closely.