Complaint
(Restrictive Covenant Breach and Trade Secret Misappropriation)

Summary

This template is a Complaint that asserts claims relating to a former employee's breach of a restrictive covenant and/or misappropriation of trade secrets. It is intended for private employer claims against a former employee. This template includes practical guidance, drafting notes, and alternate and optional clauses. Because this Complaint is non-jurisdictional and does not address state law variations or other state law causes of action, you should check any relevant state and local laws. Both state and federal law govern trade secrets. Most states have adopted and codified some version of the Uniform Trade Secrets Act (UTSA), which, among other things, provides a common definition for "trade secret" and "misappropriation" and a uniform remedy scheme for misappropriation. By contrast, the Defend Trade Secrets Act of 2016 (DTSA), enacted on and effective as of May 11, 2016, provides a federal private cause of action for trade secret misappropriation. 18 U.S.C. § 1833(b)(1). See Defend Trade Secrets Act (DTSA) and Other Legal Claims and Recourse to Protect Employers' Confidential Information and Trade Secrets and Defend Trade Secrets Act (DTSA) Fundamentals. Claims under the DTSA are limited to those arising from a trade secret "related to a product or service used in, or intended for use in, interstate or foreign commerce." 18 U.S.C. § 1836(b)(1). Since the enactment of the DTSA, employers have filed thousands of federal trade secret misappropriation lawsuits, and in 2020, 72.9% of all trade secret cases in federal district court had claims under the DTSA. See Lex Machina Trade Secret Litigation Report 2023 (registration may be required). You should also be mindful of the three-year statute of limitation that exists for misappropriation actions, for generally both UTSA and DTSA. The relevant statutes require bringing suit within three years after the misappropriation was discovered or should have been discovered by the exercise of reasonable diligence (though the length of the statute of limitations of the UTSA vary from state to state). See, e.g., 18 U.S.C. § 1836(d). While there is currently no federal law directly addressing non-competition provisions, the National Labor Relations Board and Federal Trade Commission have scrutinized non-competition provisions under federal labor and antitrust laws. Because many states restrict the scope of non-competition agreements before they will enforce them, you should also review your state's treatment of non-compete provisions. See Non-competes and Trade Secret Protection State Practice Notes Chart and Non-competes and Trade Secret Protection State Expert Forms Chart. For additional guidance on federal trade secret law, see Trade Secret Fundamentals, Defend Trade Secrets Act (DTSA) Fundamentals, Defend Trade Secrets Act (DTSA) and Other Legal Claims and Recourse to Protect Employers' Confidential Information and Trade Secrets and Defend Trade Secrets Act (DTSA) Claims and Remedies Checklist. For more information on restrictive covenant and trade secret misappropriation claims, see Restrictive Covenant and Trade Secret Misappropriation Claims: Key Initial Considerations and Tips for Seeking TROs, Preliminary Injunctions, and Other Relief. For information on state law variation on the enforcement of restrictive covenants and treatment of trade secrets, see the Restrictive Covenants and Trade Secrets topics in the Labor & Employment State Law Comparison Tool, Non-competes and Trade Secret Protection State Practice Notes Chart, and State Trade Secret Statutes Chart (includes links to both state statutes and State Q&As on trade secret protection).