Does our NDA protect this information in Nebraska, and does the Trade Secrets Act displace our other claims?
Only if the information is not ascertainable AT ALL by proper means (Nebraska's definition is narrower than the uniform act's), and the displacement question has no answer in the statute, because Nebraska never enacted the uniform displacement section. Neb. Rev. Stat. § 87-502(4) defines a trade secret as information that “Derives independent economic value, actual or potential, from not being known to, and not being ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use” and “Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” In First Express Servs. Group v. Easter the Supreme Court made the deleted-qualifier point in its own words (“The Legislature, however, deleted the qualifiers “generally” and “readily” from the statutory definition”), and then adopted and applied a commentator's gloss: “Nebraska’s statute greatly narrows the definition of a trade secret”, the gloss being that “if an alleged trade secret is ascertainable at all by any means that are not ‘improper,’ the would-be secret is peremptorily excluded from coverage under the [Act].” Dick v. Koski Prof. Group carries the same rule to a contractual confidentiality covenant: “our case law reflects that we have often treated “confidential information” and “trade secrets” inter- changeably”. There the jury was instructed that “If infor- mation is ascertainable at all by any means that are not improper, the information is not confidential information or a trade secret” and that “Information disclosed to customers without any confi- dentiality requirement, including pricing information, is not confidential information”, and the court found “nothing in the bylaws that convinces us that the court should have presented a different definition”. A customer list CAN qualify (Home Pride Foods, Inc. v. Johnson holds “that a customer list can be included in the definition of a trade secret under § 87-502”), but in First Express the list failed: “Because the information on the customer list was ascertainable through proper means, we conclude that, as a matter of law, it was not a trade secret.” The remedies are limited to what §§ 87-503 and 87-504 give: § 87-503 allows an injunction against “Actual or threatened misappropriation”, and Neb. Rev. Stat. § 87-504 gives actual loss plus non-duplicative unjust enrichment or a reasonable royalty, with no exemplary multiplier and no attorney fees, and Neb. Rev. Stat. § 87-506 requires that “An action for misappropriation shall be brought within four years after the misappropriation is discovered or by the exercise of reasonable diligence should have been discovered.”
The trap
The NDA does not enlarge the protected set. Nebraska treats “confidential information” and “trade secret” interchangeably, and Dick v. Koski applies the ascertainable-at-all test to a confidentiality covenant in a firm's own bylaws, so labelling pricing, customer or process information confidential in your contract buys nothing if it can be worked out by any proper means, and information you already gave customers without a confidentiality requirement is outside the covenant by definition. Second trap, and it is the one the statute creates: THERE IS NO DISPLACEMENT SECTION. Nebraska enacted sections 1 to 6 of the Uniform Trade Secrets Act and dropped section 7, Effect on Other Law, along with the uniform act's exemplary-damages, attorney-fee and uniformity-of-construction provisions. Neb. Rev. Stat. § 87-507 is a pure prospective-effect section: “The Trade Secrets Act shall not apply to any misappropriation occurring prior to July 9, 1988.” So Nebraska has neither a clause displacing your common-law claims nor a clause preserving your contract claim, and no Nebraska appellate decision fills the gap. Anyone who tells you the Nebraska Act expressly saves your contract claim is describing the uniform act, not this one. Third trap: the definition's second half is a housekeeping requirement you have to be able to prove (“efforts that are reasonable under the circumstances to maintain its secrecy”), and Magistro v. J. Lou, Inc. shows both halves being met on recipes and the plaintiff STILL losing, for failure to prove continued use. Fourth, on drafting: because the Nebraska covenant and the Nebraska trade secret are measured by the same yardstick, a confidentiality covenant with no time limit does not get the protection the uniform act's saving clause gives elsewhere. Nothing read here establishes that an unlimited-duration NDA is good or bad in Nebraska.
16 authorities
- statuteNeb. Rev. Stat. § 87-502enactment date not established
The words that state the rule
Trade secret shall mean information, including, but not limited to, a drawing, formula, pattern, compilation, program, device, method, technique, code, or process that: (a) Derives independent economic value, actual or potential, from not being known to, and not being ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (b) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
- statuteNeb. Rev. Stat. § 87-506enactment date not established
The words that state the rule
An action for misappropriation shall be brought within four years after the misappropriation is discovered or by the exercise of reasonable diligence should have been discovered. For purposes of this section, a continuing misappropriation shall constitute a single claim.
- statuteNeb. Rev. Stat. § 87-507enactment date not established
The words that state the rule
The Trade Secrets Act shall not apply to any misappropriation occurring prior to July 9, 1988. With respect to a continuing misappropriation that began prior to July 9, 1988, such act also shall not apply to the continuing misappropriation that occurs after such date.
The words that state the rule
Because the information on the customer list was ascertainable through proper means, we conclude that, as a matter of law, it was not a trade secret. We reverse the jury’s finding against Arlene on the misappro- priation of trade secrets claim.
The words that state the rule
As Dick points out, our case law reflects that we have often treated “confidential information” and “trade secrets” inter- changeably.
The words that state the rule
If infor- mation is ascertainable at all by any means that are not improper, the information is not confidential information or a trade secret.
The words that state the rule
Information disclosed to customers without any confi- dentiality requirement, including pricing information, is not confidential information.
The words that state the rule
We agree and hold that a customer list can be included in the definition of a trade secret under § 87-502.
The words that state the rule
Whether information sought to be protected rises to the level of a trade secret under the act is a question of fact.
The words that state the rule
The recipes derived independent economic value from not being known to other persons, and Magistro and his family made reasonable efforts under the circumstances to maintain their secrecy.
- statuteNeb. Rev. Stat. § 87-504enactment date not established
The words that state the rule
Except to the extent that a material and prejudicial change of position prior to acquiring knowledge or having reason to know of the misappropriation renders a monetary recovery inequitable, a complainant shall be entitled to recover damages for misappropriation. Damages may include both the actual loss caused by misappropriation and the unjust enrichment caused by misappropriation that is not taken into account in computing actual loss. In lieu of damages measured by any other methods, the damages caused by misappropriation may be measured by imposition of liability for a reasonable royalty for a misappropriator's unauthorized disclosure or use of a trade secret.
The words that state the rule
The Legislature, however, deleted the qualifiers “generally” and “readily” from the statutory definition.17 And as one commen- tator noted, Nebraska’s statute greatly narrows the definition of a trade secret: “[U]nder the literal terms of the . . . language, if an alleged trade secret is ascertainable at all by any means that are not ‘improper,’ the would-be secret is peremptorily excluded from coverage under the [Act].”
- statuteNeb. Rev. Stat. § 87-502enactment date not established
The words that state the rule
Improper means shall mean theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means
The words that state the rule
There is nothing in the bylaws that convinces us that the court should have presented a different definition than that set forth in jury instructions Nos. 12 and 13.
- statuteNeb. Rev. Stat. § 87-503enactment date not established
The words that state the rule
Actual or threatened misappropriation may be enjoined. Upon application to the court, an injunction shall be terminated when the trade secret has ceased to exist, but the injunction may be continued for an additional reasonable period of time in order to eliminate commercial advantage that otherwise would be derived from the misappropriation.
- statuteNeb. Rev. Stat. § 87-501enactment date not established
The words that state the rule
Sections 87-501 to 87-507 shall be known and may be cited as the Trade Secrets Act.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.