Can an Atlanta Business Sue a Former Employee for Taking Its Customer List?
Georgia business owners often have valuable intellectual property rights in the form of “trade secrets.” A trade secret is basically any information that has value because it is “not commonly known by or available to the public.” A business that seeks judicial protection and enforcement of its trade secrets must therefore make “reasonable efforts” to maintain secrecy.
Judge Allows Misappropriation Case to Proceed Despite “Vague” Allegations
Some trade secrets are fairly easy to define. For example, if a company has a proprietary formula for its key product–think the recipe to Coca-Cola–that is unquestionably a trade secret. But what about something like a customer list? Can that also be a protected trade secret?
The short answer is that mere knowledge of the names and addresses of a business’ customers is not, in and of itself, a trade secret. But a list of actual (or potential) customers that is not commonly known by, or available to, the general public may qualify for trade secret protection. Basically, there needs to be a tangible list containing non-public information that the business has taken reasonable steps to keep confidential.
A recent decision from a federal judge here in Georgia illustrates the fine line between public information and confidential customer list. This decision is from an ongoing lawsuit, Medical Buyers Group LLC v. Pence, between a Georgia small business (the plaintiff) and its former sales director (the defendant). The defendant worked full-time for the defendant for approximately seven years. During her tenure, the defendant signed two non-disclosure and non-compete agreements with the defendant where, among other things, she agreed not to disclose the employer’s private information and trade secrets for a specified period of time.
The crux of the plaintiff’s lawsuit is that the defendant allegedly shared its customer list with her mother-in-law, who runs a small business that sells products that directly competes with those offered by the plaintiff. In December 2025, the judge overseeing the case denied a defense motion to dismiss this allegation. This motion turned on what the judge deemed a “close call” as to whether the plaintiff had identified a protectable trade secret.
As the judge explained, “Customers are not trade secrets,” and while “a customer list is protectable,” an employee’s acquired knowledge about those customers is not. Here, the plaintiff alleged that as part of its business, it had “assembled, accrued, or developed substantial confidential information related to manufacturer information [and] supplier information.” While vague, the judge said that was sufficient at this stage of the litigation to proceed with the case. Ultimately, through the discovery process and trial, the plaintiff will need to define its trade secrets with greater specificity and prove how the plaintiff “misappropriated” any such confidential information for the benefit of herself or her mother-in-law’s business.
Contact an Atlanta Business Litigation Attorney
Whether you are an employee or employer looking to assert their legal rights, you need to work with an experienced Atlanta business litigation attorney who can represent you throughout the process. Contact The Forsythe Law Firm, LLC, today at 404-476-2717 to schedule a consultation.
Source:
scholar.google.com/scholar_case?case=11688494622270932142
