Reg Seneca, LLC v. Harden

(When an employee has trouble discerning between general knowledge about his employment and trade secrets, an injunction enforcing a noncompete clause is appropriate to protect trade secrets.)

Opinion (Jarvey): Phillip Harden (“Harden”) worked for Reg Seneca (“REG”) as a "lead operator" in a biodiesel plant, and then left to take a job with Scott Petroleum (“Scott”), another biodiesel producer. Based on the noncompete clause that Harden signed with REG, REG brought a motion for preliminary injunction to prevent Harden’s employment with Scott. Part of REG’s case concerned the potential that Harden would share trade secrets with his new employer, effectively misappropriating them. The court found that REG had trade secrets because first, although the processes they used to refine biodiesel were generally known, the exact formulas and the processes that they had developed were unknown to others and gave REG a competitive advantage. Second, the Court also found that REG had also taken steps to prevent dissemination of the information because REG require all employees to sign a confidentiality agreement. The Court found the injunction proper, despite Harden’s assertion that the noncompete clause was overbroad. The Court determined that REG’s trade secrets would be in danger of misappropriation because Harden demonstrated difficulty in separating his general knowledge about the processes and his knowledge that implicated REG’s trade secrets, there was a sufficient likelihood that Harden would have shared trade secrets with his potential new employer. Because this would have caused irreparable harm to REG, the Court GRANTED REG's motion enjoining Scott from employing Harden.