Does Alabama's Trade Secrets Act protect what our confidentiality clause covers?
Only if the information meets all six statutory elements. As used in that chapter, unless the context clearly indicates otherwise, a trade secret is information that is used or intended for use in a trade or business; is included or embodied in a formula, pattern, compilation, computer software, drawing, device, method, technique, or process; is not publicly known and is not generally known in the trade or business of the person asserting that it is a trade secret; cannot be readily ascertained or derived from publicly available information; is the subject of efforts that are reasonable under the circumstances to maintain its secrecy; and has significant economic value (Ala. Code § 8-27-2(1)). The chapter's provisions that are inconsistent with the common law of trade secrets supersede the common law, and otherwise the chapter is to be construed consistently with it (§ 8-27-6). Separately, the restraint-of-trade article treats as a protectable interest not only trade secrets as defined in § 8-27-2 but also confidential information that would not otherwise qualify as a trade secret, listing pricing information and methodology, compensation, customer lists, customer data, mailing lists, prospective customer information, financial and investment information, management and marketing plans, business strategy, technique and methodology, business models and data, processes and procedures, and company-provided files, software, code, reports, documents, manuals and forms treated as confidential to the business (§ 8-1-191(a)(2)). The same section stops short of the employee's own skills: job skills in and of themselves, without more, are not protectable interests (§ 8-1-191(b)).
The trap
Six elements, all required, and the two that decide most cases are reasonable secrecy efforts and the readily-ascertainable test. A confidentiality clause that sweeps in everything the employee saw does not turn it into a trade secret, and it may cut the other way: calling public or easily derived information confidential is evidence against the secrecy of what genuinely is secret. Note also that § 8-27-6 supersedes only the INCONSISTENT common law, so it is not a displacement provision of the kind found in Uniform Trade Secrets Act states; by its terms it speaks to the common law OF TRADE SECRETS and says nothing either way about a breach-of-contract claim, which is a separate question these materials do not settle.
4 authorities
- statuteAla. Code § 8-27-2enactment date not established
The words that state the rule
As used in this chapter, the following terms shall have the following meanings, respectively, unless the context clearly indicates otherwise: (1) TRADE SECRET. A “trade secret” is information that: a. Is used or intended for use in a trade or business; b. Is included or embodied in a formula, pattern, compilation, computer software, drawing, device, method, technique, or process; c. Is not publicly known and is not generally known in the trade or business of the person asserting that it is a trade secret; d. Cannot be readily ascertained or derived from publicly available information; e. Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy; and f. Has significant economic value.
- statuteAla. Code § 8-27-6enactment date not established
The words that state the rule
Those provisions of this chapter that are inconsistent with the common law of trade secrets supersede the common law; otherwise, this chapter should be construed to be consistent with the common law of trade secrets.
- statuteAla. Code § 8-1-191enactment date not established
The words that state the rule
(a) A protectable interest includes all of the following: (1) Trade secrets, as defined in Section 8-27-2. (2) Confidential information, including, but not limited to, pricing information and methodology; compensation; customer lists; customer data and information; mailing lists; prospective customer information; financial and investment information; management and marketing plans; business strategy, technique, and methodology; business models and data; processes and procedures; and company provided files, software, code, reports, documents, manuals, and forms used in the business that may not otherwise qualify as a trade secret but which are treated as confidential to the business entity, in whatever medium provided or preserved, such as in writing or stored electronically.
- statuteAla. Code § 8-1-191enactment date not established
The words that state the rule
(b) Job skills in and of themselves, without more, are not protectable interests.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.