Opinion ID: 874208
Heading Depth: 3
Heading Rank: 8

Heading: Idaho Trade Secrets Act

Text: Wesco argues that Defendants, acting jointly and severally, acquired, disclosed or used Wesco's customer information at the Idaho Stores using improper means. Wesco asserts that it maintained confidential customer information at its Idaho Stores including customer names, customer buying preferences, and customer history; this information derives independent economic value and is not readily ascertainable by proper means; Wesco reasonably attempted to maintain the secrecy of the customer information; and the customer information constitutes a trade secret under I.C. § 48-801(5). Idaho Code § 48-801(5) defines a trade secret as follows: [I]nformation, including a formula, pattern, compilation, program, computer program, device, method, technique, or process, that: (a) Derives independent economic value, actual or potential, from not being generally known to, and not being readily 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. . . . In order to prevail in a misappropriation action under the Idaho Trade Secrets Act (ITSA), the plaintiff must show that a trade secret actually existed. Basic Am., Inc. v. Shatila, 133 Idaho 726, 735, 992 P.2d 175, 184 (1999). In Basic American, this Court looked to the Restatement for six factors that can be used to show that given information is a trade secret: (1) the extent to which the information is known outside [the plaintiff's] business; (2) the extent to which it is known by employees and others involved in the business; (3) the extent of measures taken by him to guard the secrecy of the information; (4) the value of the information to him and his competitors; (5) the amount of effort or money expended by him in developing the information; and (6) the ease or difficulty with which the information could be properly acquired or duplicated by others. Id. (quoting Restatement of Torts § 757 cmt. b (1939)) (alteration in original). All of these factors address the issue of whether the information in question is generally known or readily ascertainable. Id. In Northwest Bec-Corp v. Home Living Service, Inc., the issue was whether actual misappropriation, as defined by I.C. § 48-801(2), occurred. 136 Idaho 835, 839, 41 P.3d 263, 267 (2002). The Court agreed with the district court's finding that the legislature did not intend the statute to be read so broadly as to preclude the hiring of an employee from a competitor; the legislature also did not intend that merely hiring a competitor's employee constitutes acquiring a trade secret. Id. at 840, 41 P.3d at 268. Instead, [a]n employee will naturally take with her to a new company the skills, training, and knowledge she has acquired from her time with her previous employer. This basic transfer of information cannot be stopped, unless an employee is not allowed to pursue her livelihood by changing employers. Id. In Northwest Bec-Corp, the Court found that, despite the evidence that  after the defendant left her employment with the appellants  approximately ninety customers ended their business relationship with the appellants and began doing business with the defendant's new place of business, defendants nevertheless established the absence of any genuine issue of material fact through the affidavits they submitted providing alternative explanations for the customer changes. Id. at 840-41, 41 P.3d at 268-69. Here, based on the evidence in the record, the district court found that there was a genuine issue of material fact as to whether Cook's actions with the Wesco computer violated ITSA because customer lists, lists showing customer buying preferences, the history of customer purchases, and custom paint formulas are trade secrets. The court further found that there was no evidence that Wesco's former employees used Wesco's trade secrets to cause the customers to buy their products from P & S. We affirm the district court on this issue. Wesco did not raise a genuine issue of material fact that any of the employees other than Cook took customer lists, lists showing customer buying preferences, the history of customer purchases, and custom paint formulas through the evidence it presented. To the extent that customers left Wesco and began using P & S, the depositions of the employees indicate that this was due to the relationships the employees had developed with the customers and not trade secrets taken from Wesco.