Trade Secrets. (Judicial Decisions)

By Anderson, Teresa | Security Management, July 2002 | Go to article overview

Trade Secrets. (Judicial Decisions)


Anderson, Teresa, Security Management


The Utah Supreme Court has ruled that when a salesman took pricing lists labeled confidential from his former employer to a competitor and helped that company develop chemical formulas based on specific client data, he was guilty of stealing trade secrets.

Steven Keil began working for Water and Energy Systems Technology (WEST) in 1986. Keil's job as a water treatment chemical salesman required him to manage the company's industrial sales accounts, which included several large companies. To do his job, Keil had access to the formulas WEST used to make its chemicals and the company's pricing plans, which were unique to individual companies.

In September 1997, managers from Brody Chemical Company (BCC) offered Keil a job. Keil declined. BCC executives continued to contact Keil until, at the end of 1997, he agreed to leave WEST.

Before Keil officially left WEST, he met with various BCC employees to ensure that BCC carried chemicals comparable to those sold by WEST at competitive prices. Keil then helped BCC create products that would be similar to those sold by WEST but less expensive.

On February 18, 1998, Keil wrote letters on BCC stationery to six WEST clients. In the letters, Keil announced that he would be changing employment and would be offering "essentially the same chemicals" he had provided before but for 10 percent less.

On March 2, 1998, Keil resigned from WEST. When he left that day, he took the pricing information for several WEST clients. The next day, Keil delivered the letters he had written to these WEST clients. Within two weeks, three of WEST's largest clients had switched to BCC, despite the fact that all the companies had contracted with WEST for several years. …

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