Trade Secret Theft by a Former Employee in California: What to Send

What counts as a trade secret in California?

Information qualifies when two things are true: it has actual or potential economic value because it is not generally known to others who could profit from it, and you took steps that were reasonable under the circumstances to keep it confidential (Civil Code section 3426.1(d)). Compilations, programs, methods and processes all count.

Reasonable efforts are what a court can see you did. Gather evidence of yours before you write:

• Confidentiality or invention assignment agreements the employee signed.
• Access limits: role-based permissions, passwords, multifactor sign-in.
• Confidential labels on files, folders and reports.
• Policies and training on handling confidential data.
• Exit procedures: return of devices, revoked access, an exit interview reminder.

Misappropriation means acquiring a trade secret by improper means, or using or disclosing it without consent when there was a duty to keep it secret (section 3426.1(b)). Reverse engineering and independent development are not improper means.

Is a customer list a trade secret?

It can be, when the list has value because competitors do not have it and you protected it. A compilation of buyer contacts, order histories, pricing and renewal dates built over years is a stronger candidate than names anyone could find online.

A former employee may still use general skill and experience. The line a letter should draw is between that and using your protected compilation.

What can't a California employer stop a former employee from doing?

Working for a competitor. Business and Professions Code section 16600 voids contracts that restrain anyone from a lawful profession, trade or business, and as of 2024 it says it must be read to void any employee noncompete, however narrow, unless a statutory exception applies.

Overreaching has a cost. An employer that tries to enforce a void noncompete commits a civil violation, and a former employee can sue for an injunction, actual damages and attorney's fees (section 16600.5). A clause that simply bars soliciting former customers can face the same problem.

What remedies does California trade secret law allow?

The federal claim requires that the trade secret relate to a product or service used in interstate or foreign commerce. Federal law also requires employers to give notice of whistleblower immunity in agreements covering confidential information. If you did not, you cannot recover exemplary damages or attorney's fees under the federal act against that employee (18 U.S.C. 1833(b)(3)).

How to write a trade secret cease and desist and preservation letter

1. Describe the information precisely enough to identify it, without revealing the secret itself in the letter.
2. State the facts you know: the export, the dates, the accounts contacted. Avoid accusations you cannot support.
3. Cite the confidentiality agreement and California's trade secret law.
4. Demand that use and disclosure stop, and that all copies be returned, not deleted.
5. Demand preservation of devices, personal email, cloud storage and messaging accounts, with no wiping or resetting.
6. Ask for a written confirmation by a specific date, including where the information went.
7. Keep your own evidence intact: image the employee's work laptop and save access logs before reissuing equipment.

Precision matters later too. If you sue under California's act, you must identify the trade secret with reasonable particularity before seeking discovery about it (Code of Civil Procedure section 2019.210). Drafting a precise letter now is good practice for that step.

Should you also write to the new employer?

Sometimes, with care. A short, factual letter can put the new employer on notice that information it receives may be your trade secret, which matters because misappropriation includes using information one has reason to know was acquired improperly.

Keep it to what you can prove, and do not suggest the employer cannot hire the person. Statements beyond the facts can lead to claims of interference or defamation. If the employee signed a nondisclosure agreement, quote its confidentiality terms rather than describing it as a noncompete. For the noncompete side of this, see noncompete agreements in California.

When customer data walks out the door: an attorney-written letter

A forgotten laptop calls for a friendly note. A full export the night before a resignation calls for a more careful letter: one that describes the information without revealing it, demands preservation rather than deletion, and stays clear of a void noncompete. Attorney drafting fits those facts, and fits when customers are already being contacted or a new employer is involved. A letter that threatens a void noncompete or overstates the facts can create claims against your business.

With Talk to My Lawyer, a licensed California attorney writes your letter from your facts and documents (your agreements, access logs and timeline) and sends it on your behalf. Whether to seek a restraining order is a strategic call to make with a lawyer who knows the full record.