In this сase involving restrictive covenants in an employment agreement, Michael Holton appeals from the grant of an interlocutory injunction prohibiting him from working in an executive capacity for a particular competitor of his former employer for one year. He also challenges the trial court’s ruling that he would inevitably disclose his former employer’s trade secrets and confidential information in violation of the Trade Secrets Act and his confidentiality covenant if he went to work for the competing business. Because a stand-alone claim for the inevitable disclosure doctrine of trade secrets — untethered from the provisions of our state trade secret statute —• is not cognizable in Georgia, we reverse the part of the order enjoining Holton from the inevitable disclosure and use of trade secrets. On the remaining issues, we dismiss as moot his challenge to the order enjoining him from working for the competitor until October 2012 and affirm the part of the order enforcing the confidentiality covenant.
Holton was hired in August 2009 as the vice president and chief operating officer of Physician Oncology Services, LP, which provides radiation therapy services to cancer patients. In that position and later as president, Holton was responsible for overseeing the operations of seven facilities then operating in the metro Atlanta area. As part of the hiring process, Holton executed an employment agreement that contained a one-year noncompete covenant in which he agreed not to provide similar services to a competing business within a 25-mile radius of the seven company locations. The agreement also had a two-year confidentiality covenant in which he agreed not to use, divulge, disclose, or mаke accessible any confidential or proprietary information of the business or any personal information, which is defined as “any information concerning the personal, social, or business activities of its officers, directors, principals, partners, shareholders, agents, and employees.”
A month later, Holton accepted employment with Ambulatory Services of America, Inc., to become the chief executive officer of its radiation oncology business, Radiation Oncology Services of America, Inc. (ROSA). ROSA is a competitor of Vantage and had four operating centers within the noncompete territory in Holton’s employment agreement, none of which were to fall within Holton’s day-to-day oversight. Vantage immediately sought a temporary restraining order and then an interlocutory injunction, alleging that Holton had violated his noncompete and confidentiality covenants, misappropriated trade secrets in violation of the Georgia Trade Secrets Act of 1990, and would inevitably disclose and use Vantage’s trade secrets. Vantage sought an injunction to prevent Holton from working for ROSA, which the trial court granted. The trial court found that Holton had knowledge of the following trade secrets and confidential information: a company initiative on a new technology measuring radiation doses, a project to improve business and management processes, the details of a direct-to-patient marketing plan, the markets and physicians’ practices targeted by Vantage for development or acquisition, and the company’s “practice models.” The trial court’s order enjoined Holton from (1) working for ROSA in any executive capacity from “the date of this Order through October 4, 2012,” (2) providing services that are substantially similar to the duties he performed for Vantage to any other competing business within a 25-mile radius of seven locatiоns in metro Atlanta through October 4, 2012, and (3) using or disclosing confidential information or personal information that are trade secrets in perpetuity and those that do not qualify as trade secrets through October 4, 2013. Holton sought a stay of the injunction, which was denied. He appealed to the Court of Appeals, which transferred the case to this Court on the grounds that the appeal involves the legality and propriety of equitable relief. See Lee v. Environmental Pest & Termite Control, Inc.,
2. Holton next challenges the trial court’s ruling that Vantage was likely to prevail on the merits of its claim for the inevitable disclosure of trade secrets because Georgia has not adopted the inevitable disclosure doctrine and there is no evidence he has any Vantage documents or recalls any of its trade secrets. In its complaint, Vantage alleged as a separate claim that Holton “would inevitably misappropriate, disclose, and misuse” Vantage’s trade secrets and other confidential information in violation of the state trade secrets law and his employment agreement and sought to enjoin him from serving in an executive capacity for ROSAfor at least 12 months. Ruling in Vantage’s favor, the trial court determined that there was a substantial likelihood that Vantage would prevail on the merits of its claim that Holton, if employed by ROSA, “would inevitably disclose the confidential information and trade secrets of Plaintiffs.”
The purpose of an interlocutory injunction is “to maintain the status quo pending a final adjudication on the merits of the case.” Hampton Island Founders v. Liberty Capital,
*866 (1) there is a substantial threat that the moving party will suffer irreparable injury if the injunction is not granted; (2) the threatened injury to the moving party outweighs the threatened harm that the injunction may do to the party being enjoined; (3) there is a substantial likelihood that the moving party will prevail on the merits of her claims at trial; and (4) granting the interlocutory injunction will not dis-serve the public interest.
. . . information, without regard to form, including, but not limited to, technical or nontechnical data, a formula, a pattern, a compilation, a program, a device, a method, a technique, a drawing, a process, financial data, financial plаns, product plans, or a list of actual or potential customers or suppliers which is not commonly known by or available to the public and which information:
(A) Derives 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.
OCGA § 10-1-761 (4).
At the hearing on the interlocutory injunction, Vantage did not present evidence that Holton had shared any trade secrets, disclosed any confidential information, or shown an intent to use proprietary information. Holtоn testified that he did not have any documents related to Vantage’s trade secrets in his possession and that ROSA had instructed him to abide by his confidentiality agreement; his attorney stated that all Vantage documents had been permanently deleted from Holton’s computer. Vantage’s chief executive officer testified that he had no knowledge that Holton retаined any document, but was confident that he retained knowledge of major company initiatives “in his head.” Therefore, it is the likelihood of
The inevitable disclosure doctrine provides that “a plaintiff may prove a claim of trade secret misappropriation by demonstrating that defendant’s new employment will inevitably lead him to rely on the plaintiff’s trade secrets.” PepsiCo, Inc. v. Redmond,
As one state court has noted, “the theory remains the subject of considerable disagreement.” LeJeune v. Coin Acceptors, Inc.,
In support of its conclusion that Holton “would inevitаbly disclose the confidential information and trade secrets” of Vantage, the trial court cited without discussion the Georgia Trade Secrets Act and Essex Group, Inc. v. Southwire Co.,
While Vantage argues that this Court upheld the use of the inevitable disclosure concept in Essex,
In this case, we hold that the inevitable disclosure doctrine is not an independent claim under which a trial court may enjoin an employee from working for an employer or disclosing trade secrets. Therefore, we reverse the part of the trial order relying on the inevitable disclosure doctrinе to enjoin Holton from working for ROSA or disclosing trade secrets and other confidential information. Because it appears that the trial court did not reach Vantage’s claim for actual or threatened misappropriation of trade secrets and the case returns to the trial court for a final adjudication on the merits, we decline to addrеss today whether the inevitable disclosure doctrine may be applied to support a claim for the threatened misappropriation of trade secrets.
3. As his final contention, Holton asserts that the trial court erred in ruling that Vantage was substantially likely to prevail on its claim for breach of the confidentiality covenant because it is overbroad. In its order, the trial court enjoined the use of “confidential information” and “personal information” as those terms were defined in the employment agreement; it did not draw the injunction narrowly based on the specific information that needed protection. See Durham v. Stand-By Labor of Georgia, Inc.,
Judgment affirmed in part and reversed in part, and case dismissed in part.
Notes
But see Merck & Co., Inc. v. Lyon, 941 FSupp. 1443, 1460 (M.D.N.C. 1996) (relying on North Carolina case law that “a showing of bad faith or underhanded dealing by the former employee or new employer would not necessarily be required” when the injunction is limited to “specifically defined” and clearly identified trade secrets “of significant value”). Sеe generally Ryan M. Wiesner, A State-by-State Analysis of Inevitable Disclosure: A Need for Uniformity and a Workable Standard, 16 Marq. Intell Prop. L. Rev. 211, 229 (2012) (proposing standard that requires showing of employee’s bad faith or intent to disclose when there is no valid employment agreement that is narrowly tailored to protect the employer’s trade secrets).
See, e.g., Barry L. Cohen, The Current Status of the Inevitable Disclosure Doctrine, 3 No. 2 Landslide 40 (2010); Jessica Lee, The Inevitable Disclоsure Doctrine: Safeguarding the Privacy of Trade Secrets, 33 Colo. Law. 17 (Oct. 2004); Brandy L. Treadway, An Overview of
See Erika C. Birg, Application of the “Inevitable Disclosure” Doctrine in Georgia, 6 Ga. B. J. 58 (April 1999) (arguing Court’s decision in Essex “may have rested in part on an implicit adoption of the inevitable disclosure doctrine”); Wiesner, State-by-State Analysis,
The 2011 act revising the law related to restrictive covenants in contracts does not apply to contracts entered into before May 11, 2011. See Ga. L. 2011, p. 399, § 5. Therefore, the act’s provision on judicial modification of restrictive covenants does not apply here. See OCGA § 13-8-54 (b).