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Importance of Confidentiality and Non-Competition Agreements: Protecting Your Trade Secrets & Proprietary Information

above-the-bar-logo-no12.jpgHooters of America restaurant chain (“Hooters”) filed a federal lawsuit in Atlanta, Georgia suing competitor Twin Peaks Restaurant alleging that it stole trade secrets and other confidential business information after several of its executives left the company to work at Twin Peaks Restaurants.

Hooters has alleged that its former vice president of operations and purchasing, Joseph Hummel, left Hooters to become partner and CEO at Twin Peaks, a chain of restaurants owned by La Cima. Hooters’ has alleged that Hummel stole “sensitive business” information that it had used to grow the business. The lawsuit also alleges that prior to the weeks before his departure from Hooters, Hummel downloaded and e-mailed a “substantial volume” of Hooters documents, which included plans related to management, marketing, recruitment, distribution and sales to his private account. The complaint alleges violations under the federal Computer and Abuse Act and the federal Electronic Communications Privacy Act which make it illegal to steal confidential data electronically. Our attorneys have counseled many companies on how to protect their trade secrets confidential information from departing executives and employees. Call our attorneys if you suspect a departing employee of stealing valuable company information.

Hooters is an Atlanta based company well known for its casual dining and “Hooters Girls” who dress in a white Hooters tank top and orange shorts. Hooters was started in Florida in 1983 and has 455 locations around the world with 67 in the southeast.

Hummel left Hooters for La Cima Restaurants, which owns the Twin Peaks restaurants, which are a mountain lodge themed chain with an all female waitress staff. Twin Peaks has 15 locations in five states where the waitresses serve chicken wings dressed in tan shorts and tiny flannel bikini tops. Twin Peaks’ motto is “Eats, Drinks, Scenic Views.” Twin Peaks recently announced that it plans to open about 35 franchises throughout the Southeast over the next 10 years. Over the next 7 years, it plans on opening 7 franchises in the Atlanta area, competing directly with Hooters.

Departing executives or employees with access to valuable company information can be disastrous for companies who rely on their trade secrets for their success. Make sure you have your executives and all employees with access to classified information sign a confidentiality agreement as well as a non-competition agreement. It is imperative that before any employees with sensitive information leave your company, they return all confidential documents. Given the ease of transferring information electronically, consider implementing electronic security measures. Once information is stolen and known by your competition, it can’t be given back. Limit the number employees you give access to confidential information and make sure your employees don’t leave your business premises with classified information or files.

Our attorneys have prepared employment agreements with non-competition and non-solicitation agreements for many executives and employees from varying trades and professions.

If you are hiring or if any of your top executives or employees with sensitive, classified information is leaving to join a competitor, call our Attorneys at Villanueva & Sanchala at (800) 893-9645 to help you prepare confidentiality and non-competition agreements to protect your business.

Disclaimer: 

Thank you for visiting our Blog. This blog provides general information and thoughts about various employment law issues primarily in the New York Tri-State area and occasionally in other areas. You are welcome to read the posts. However, do not construe any content on this blog as legal advice or the creation of an attorney-client relationship. Again, we provide the content only for informational purposes. You should not make decisions based information on our blog since the application of the law depends on the facts and each situation may be different. In addition, the law in most jurisdictions is different and changes constantly and we make no representations that any information on our blog has been updated. The Blog should not be used as a substitute for competent legal advice from an experienced employment law attorney in your state or jurisdiction.