In W.L. Gore & Associates, Inc. v. Wu, read opinion here, the Chancery Court addressed the right by a former employer, W.L. Gore & Associates, to restrict the use of its trade secrets by a former employee. The factual background of this case is very involved and is also set forth in two prior opinions of the court that can be found at the following citations: WL Gore & Associates v. Wu, 2005 WL 311998 (Del. Ch. Nov. 14, 2005) (“Gore I”); WL Gore & Associates v. Wu, 2006 WL 905346 (Del. Ch. Mar. 30, 2006) ("Gore II"). The most recent decision of the court was heavily influenced by the demonstrably contradictory statements of Mr. Wu, as well as his flagrant violations of prior orders entered in the case, including willful destruction of evidence and failure to comply with a temporary restraining order and a consent judgment previously entered in the case.
Also noted about this case is that the public version of the published opinion is redacted and excludes many confidential trade secret details that are referred to in the opinion. Mr. Wu had a covenant-not-to-compete that lasted for two years but by the time of the opinion that two-year period had expired, however as part of its decision the court extended the covenant-not-to-compete for a period of five years on some matters and a period of 10 years on other matters.
One important part of the opinion is that the court, relying on many decisions from other states, determined that even in the absence of a current covenant-not-to-compete, the court had the authority to “limit a defendant working in a particular field if his doing so poses a substantial risk of the inevitable disclosure of trade secrets.” (emphasis mine.) The court cited other decisions from other jurisdictions that prohibited a former employee with trade secrets from working in any relevant industry that may allow a competitor to obtain such trade secrets. In this case the court found that it would be very difficult for Mr. Wu to not reveal the Gore trade secrets even assuming good faith (but based on the conduct of Wu in this litigation, the court could not even assume good faith on the part of Mr. Wu).