Recently, Yahoo! sued startup MForma Group, Inc., a wireless content provider
based in San Francisco, claiming that a group of seven Yahoo! workers left the
Internet giant to join MForma, taking trade secrets with them–including
proprietary source code and other confidential business information. The lawsuit
included charges that one former employee, David Chang, copied over two
gigabytes of proprietary information, and that ex-employee Erik Pavelka stole
thousands of pages of documents containing trade secrets.
On March 1, a superior court in Santa Clara granted Yahoo! a temporary
restraining order (TRO), barring the workers from using Yahoo!’s trade secrets
and requiring them to return to Yahoo! any source codes they possess. The TRO
also prohibits MForma from using any of Yahoo!’s trade secrets in its business.
Now, with the TRO in hand, Yahoo! says it will vigorously pursue the
lawsuit against MForma. Mforma says the suit is without merit and that the seven
employees will continue in their new jobs while the case is pending.
400+ pages of state-specific, easy-read reference materials at your fingertips—fully updated! Check out the Guide to Employment Law for California Employers and get up to speed on everything you need to know.
Additional Resources:
Trade Secrets:
Staggering Fines For High-Tech Company That Stole Sensitive Information; 5 Steps
To Minimize Disclosure Risks, in the September 2001 issue of the California
Employer Advisor