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Customer Lists and Trade Secrets in California

The Edwards v. Anderson decision has recently further liberalized competition, holding that almost all non-compete agreements between an employee and the employer are invalid and unenforceable.

However, a number of significant exceptions to this rule remain in effect. One such exception is that it is illegal for a former employee of a company to engage in unfair competition, including using trade secrets or proprietary information of their former employer. This exception is often applied to the situations were the sales people who leave a company, take the company's customer lists, and start their own company, using the subjects lists of customers in order to solicit business from them.

In 1985, California adopted a Uniform Trade Secret Act for misappropriation of trade secrets. It defines a trade secret as "information, including a formula, pattern, compilation, program, device, method, technique, or process that (1) derives independent economic value from not being generally known to the public..., and (2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. The legislature meant to codify that a customer list procured by substantial time, effort, and expense is a protectable trade secret. Thus, one case held that a list of customers or subscribers "built up by ingenuity, time, labor and expense of the owner over a period of many years is property of the employer," and "knowledge of such a list, acquired by an employee by reason of his employment, may not be used by the employee as his own property or to his employer's prejudice." Greenly v. Cooper (1978) 77 Cal.app.3d 382, 392.

On the other hand, if the information about potential clients is generally available to the public, and the compilation process of the subject list that the employer used is neither sophisticated not difficult or particularly time consuming, then there will likely not be a violation. This may include making cold calls or consulting phone directories in a competitive industry, where many other business target the same customers the same way. (See American Paper & Packaging Products, Inc. v. Kirgan 183 Cal.App.3d 1318 (1986)).

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Law Office of Arkady Itkin - San Francisco & Sacramento Injury and Employment Lawyer
We represent employees and employers in employment and wrongful termination cases, as well as victims of serious injuries in San Francisco, Oakland, Sacramento, San Jose, Palo Alto, San Mateo and throughout Northern California. We all represent businesses and start-ups in a wide range of business and employment issues and disputes. 


57 Post Street, Suite 812, San Francisco, CA 94104; Tel. (415) 295-4730; Fax. (415) 508-3474; [email protected]
  • Home
  • Employment Law
    • Wrongful Termination >
      • At-Will Employment
      • Termination After Unfair Warnings and Write-Ups
      • Union Grievance, Workers Comp and Wrongful Termination
      • Labor Code 970 Claims
      • Promissory Estoppel and Employment Contracts
      • Implied Contract Claims
    • Discrimination >
      • Proving Discrimination
      • Age Discrimination
      • Disability Discrimination >
        • Protected Disabilities
        • Medical Leave / Disability Accommodations
        • Job Reassignment As A Disability Accommodation
        • SSI Disability Benefits and Your Court Case
        • Sample Request for Reasonable Accommodation
      • Pregnancy Discrimination
      • Race Discrimination
      • Sample Discrimination Complaint
      • DFEH and EEOC Investigations
    • Retaliation >
      • How to Prove Retaliation
      • Dealing with Retaliation While Still Employed
      • Retaliation for Complaining
      • Whistleblower Retaliation
    • Harassment
    • Defamation at Workplace
    • Prof. License Defense
    • Leaves of Absence >
      • Medical Leave as Reasonable Accommodation
      • FMLA Entitlement and Reinstatement to Work
      • CFRA Leave
      • Employers' FMLA Notice Obligations
      • Paternity Leave (FMLA)
      • Sample FMLA Leave Request
    • Wages / Overtime Claims >
      • Wage Claims
      • Employee or Contractor
      • Exempt / Non-Exempt >
        • Admistrative Exemption
        • IT Support Specialists Compensation
        • Computer Professional Exemption from Overtime
        • Recruiters / Account Executives Exemption
        • Complaining About Being Misclassified
      • Vacation Pay / PTO
      • On-Call Time Compensation
      • Deductions fr. Commissions
    • Unempl. Benefits Appeals >
      • Tips for EDD Phone Interview
      • Unemployment Benefits Appeal Hearing Representation
      • CUIAB Hearing Tips
    • Employment Law Blog
    • For Employers
  • Personal Injury
    • Five Tips For Injury Cases
    • Slip-and-Fall Injuries
    • Assault and Battery
    • Recorded Statements
    • Repairing Your Vehicle
    • Unpaid Medical Bills
    • Injury Law Blog
    • Medical Malpractice
    • Police Excessive Force
  • Practice Areas
  • About
  • Results
  • Submit Case
  • Contact
  • Resources
    • Consultations
    • Workplace Rights Checklist
    • Deposition Tips
    • Mediation Tips
    • Effective Mediator
    • Suing Current Employer
    • Severance Agreements
    • Workplace Investigation
    • Arbitration
    • Statutes of Limitations
    • Healthy Litigation Mindset
    • Trial Tips
    • Working Remotely
    • How To Find The Right Lawyer For Your Case