Greene’s Jewelry Wholesale Llc

INTRODUCTION

Greene’s Jewelry Wholesale LLC recently learned that its competitor Howell Jewelry World had acquired knowledge of the secret process used to create Ever-Gold (a valued creation of Greene’s which is used in all their products and the process maintained as a trade secret). They also learned that Howell had made a few changes to the process but the product still had similar qualities and characteristics to Ever-Gold.

Investigation revealed that a former employee, Ms. Jennifer Lawson whose position was recently eliminated due to the downsizing of the company was responsible for sharing the information with Howell. She is in breach of the confidentiality agreement she signed when she started work with Greene’s three years ago. There is no doubt she had access to the information detailing the manufacturing process of Ever-Gold, however when she left the company she should have returned any of such documents to Greene’s when she discovered it in her possession – hence it can also be viewed as a misappropriation of a trade secret.

This led to Greene’s suing Ms. Lawson for breach of a confidentiality agreement. Upon receiving the lawsuit, Ms. Lawson countersues Greene’s for wrongful termination claiming gender discrimination under Title VII of the Civil Rights Act of 1964 as she was pregnant when her role was terminated.

However, the facts look to support Greene’s because no one was aware Ms. Lawson was pregnant prior to her discussion with the Head of HR, Lisa Peele who immediately told her the company was downsizing and was eliminating the role of junior executive secretaries.

FACTS AND LAWS

UNLAWFUL TERMINATION

Jennifer Lawson had worked at Greene’s Jewelry as a junior executive secretary in the research and development department for 3 years. She had a good record as shown from high marks from the company’s annual reviews in spite of habitually showing up 15 to 30 minutes late to work.

She files a counter suit against Greene’s for unlawful termination as she believes she was terminated due to her pregnancy notification which is a breach of the Pregnancy Discrimination Act (PDA) of 1978. This Act is an amendment of Title VII of the Civil Rights Act of 1964 to prohibit sex discrimination on the basis of pregnancy.

When Ms. Lawson learned she was pregnant, she proceeded to notify HR and that was when she was informed the company was downsizing and her position was being eliminated. Greene’s will show that they did not terminate Ms. Lawson because she was pregnant but that the company was downsizing and had made a decision to eliminate the position of junior executive secretaries prior to any discussions with her. This can be inferred from the immediate response she got from Lisa Peele the head of HR. More so, the fact show that it was not a targeted termination as all junior executive secretaries were affected.

CONTRACT ISSUES

A Confidentiality Agreement (CA) also known as a Non-Disclosure Agreement (NDA) is a legal contract where a person promises not to divulge specific information(s) without proper authorization - It is normally put in place to protect trade secrets and usually contains 5 elements: definition of the confidential information, exclusions from confidential information, obligations of receiving party, time periods and any miscellaneous provisions (Stim, R. n.d.)

When starting work at Greene’s employees are required to sign some documents (covenant not to compete and/or confidentiality agreements) depending on their positions.

Ms. Lawson signed a confidentiality agreement in which she agreed never to disclose any information she may acquire from Greene’s regarding the process used to create Ever-Gold. This is a binding contract and the fact indicate that Ms. Lawson breached this agreement by disclosing the acquired information to Howell, who used the information to create a similar product to Ever-Gold even though they made a few changes to the original.

Also worthy of mention is the Connecticut Uniform Trade Secret Act (CUTSA 2011) an adopted model of the Uniform Trade Secret Act.

CUTSA defines a trade secret as any information that is valuable because it is generally unknown and gives the owner an edge in the industry and as such subject to maintain its secrecy. Furthermore, it notes that claims can be made if evidence is shown that a trade secret is misappropriated either by acquisition or disclosure. (Poppick, D et al n.d.)

Greene’s maintained the process of making Ever-Gold as a trade secret and as such protected under CUTSA and by disclosing this information to Howell, Ms. Lawson has misappropriated a trade secret.

PRECEDENTS

UNLAWFUL TERMINATION

In the case of Smith v. F.W. Morse & Co 1996, Ms. Smith sued her employers for wrongful termination while she was on maternity leave under the guise of downsizing. However, judgement was entered in the favor of F.W. Morse because they presented sufficient evidence that the company had been undergoing restructuring over a period of time and was streamlining the managerial structures while Ms. Smith did not present proof of discrimination based on pregnancy.

A similar case was decided in 2014 – Carbonara v. Bank of New York