Holton v. Physician Oncology Services, LP

Summarized by:

  • Court: Intellectual Property Archives
  • Area(s) of Law: Trade Secrets, Inevitable Disclosure
  • Date Filed: 05-06-2013
  • Case #: No: S13A0012
  • Judge(s)/Court Below: Supreme Court of Georgia
  • LexisNexis Citation: 2013 Ga. LEXIS 414
  • Westlaw Citation: 2013 WL 1859294
  • Full Text Opinion

The inevitable disclosure doctrine is not an independent claim through which a trial court may enjoin an employee from working for a competitor employer.

Opinion (Hunstein): Michael Holton ("Holton") appealed the interlocutory injunction granted against him, which prevented him from working for a competitor of his former employer. In August 2009, Holton was hired at Physician Oncology Services (“POS”) after he executed an employment agreement that contained a one-year noncompete clause, which forbade him to work for a competitor of POS for one year following the end of his employment with them. During his employment, Holton had direct oversight responsibilities for all POS facilities in the Southeast region and was also the senior executive in charge of merger procedures. In February 2011, Holton was hired by Ambulatory Services of America (“ASA”), which owned a subsidiary that was a direct competitor to POS. POS filed for an interlocutory injunction to prevent Holton from divulging trade secrets he acquired during his employment with POS and Vantage. The trial court granted the injunction after finding Holton had sufficient knowledge of Vantage’s trade secrets. Holton challenged Vantage’s argument of inevitable disclosure of trade secrets based on the state of Georgia not having adopted the doctrine of inevitable disclosure and having no evidence to support his knowledge of Vantage documents or trade secrets. The Georgia Trade Secrets Act of 1990 prohibits the misappropriation of trade secrets by a former employee, defining trade secrets as deriving economic value from being secret and are subject to efforts to maintain their secrecy. The inevitable disclosure doctrine allows a former employer to prevent a former employee from working for a competitor if the employee’s new job duties will lead to the inevitable disclosure of trade secrets of the former employer. The court found that the inevitable disclosure doctrine is not itself an independent claim through which a trial court may grant an injunction against an employee from working for a competitor. Therefore, the Court REVERSED the trial order relying on the inevitable disclosure doctrine.

Advanced Search