When Trade Secrets Get You in Trouble
You don’t have to be a corporate spy to find yourself facing accusations of trade secret theft. Sometimes, it’s as simple as changing jobs, taking your skills with you, or being accused of knowing too much. These situations can quickly escalate, leaving you facing serious legal consequences—even if you didn’t mean to cross any lines.
Let’s take a closer look at what trade secret theft really involves and how these allegations unfold.
What Counts as a Trade Secret—and When It Becomes Theft
Not every piece of confidential business information qualifies as a trade secret. For something to be protected under trade secret laws, it usually needs to be both:
Valuable to a business, and
Not generally known to the public.
That could mean formulas, software code, internal processes—anything that gives a company an edge. But here’s the key: that information has to be kept secret. If the business hasn’t taken steps to guard it, they might not get much sympathy from the court.
Trade secret theft happens when someone acquires or uses that secret information without permission. This can involve stealing files, sharing information you weren’t supposed to, or even just using what you learned at a former job in a way your old employer didn’t approve of.
Where Things Get Complicated
The law also considers “misappropriation,” which includes unauthorized use, breach of trust, or leaking information. Sometimes, it’s obvious—like hacking into a system. Other times, it’s more subtle, like an employee passing info to a competitor or starting a competing company using old knowledge.
How Trade Secret Theft Allegedly Happens
There are more ways than you might think to end up facing a trade secret claim.
Leaving a job and being accused of taking confidential information with you.
Using public info that your old employer now claims was secret.
Reverse engineering a process and being told it was protected.
Getting files from a third party who didn’t have the right to share them.
In some cases, businesses cry “trade secret theft” to stop competition, even when there’s no actual wrongdoing. That’s why understanding what really happened—and proving it—is so important.
What’s at Stake If You’re Accused
Accusations of trade secret theft aren’t just about money—they can damage your reputation, your career, or your business.
If the other side can prove their case, you might face:
Injunctions, which can block you from working in your field or using certain information.
Financial damages, including what they claim they lost and what you allegedly gained.
Long-term legal battles, especially if things cross state or national lines.
Even if the claims are weak, just being in court can be stressful and expensive. And if you’re a business owner, these cases can distract from everything else you’re trying to build.
What the Law Says—and What You Should Know
In the U.S., trade secrets are protected under both state and federal laws. The Defend Trade Secrets Act (DTSA) gives companies the right to sue in federal court, while most states follow versions of the Uniform Trade Secrets Act (UTSA).
Here’s what these laws expect:
That the information was actually secret.
That the business took reasonable steps to keep it that way.
That the information was misused or taken without permission.
Globally, different countries have different rules, which can make things tricky if your work crosses borders. But in every case, the burden is on the accuser to prove their claims.
Defending Yourself Against a Trade Secret Claim
If you’re accused, don’t panic—but don’t ignore it, either.
Common defenses include:
The information wasn’t a trade secret to begin with.
You didn’t take or use anything improperly.
You developed it independently, or it was already public.
You’re being targeted unfairly by a company trying to kill competition.
You might also be able to push back with counterclaims—especially if the accusation was used as a business weapon.
Preventing Trouble Before It Starts
Whether you’re switching jobs or starting a business, it’s smart to stay cautious about confidential information:
Avoid using or sharing anything that seems proprietary.
Be careful what files you take with you—or leave behind.
If you’re unsure, ask a lawyer before acting.
Sometimes, just following your gut isn’t enough. What feels like fair use to you might be seen as theft by someone else.
If You’re Facing Trade Secret Accusations, Talk to a Lawyer Now
Allegations of trade secret theft can have serious consequences—even when they’re unfounded. Don't wait to get legal advice if you’ve been accused or think you might be at risk.
At Hodges, Doughty & Carson, PLLC, we help people protect their rights and futures in tough situations. Whether you're being accused of taking trade secrets or want to avoid a costly mistake, we’re here to help.
Call us today at (865) 205-6554 for a confidential consultation.