The General Knowledge, Skill, and Experience Paradox

Abstract

Can employers use trade secret law to prevent employees from using knowledge and skills they acquired on the job? Courts in all fifty states say no—an employee’s general knowledge, skill, and experience cannot be protected as a trade secret. Yet a benchmark principle of trade secret law is that employers can share trade secrets with employees so long as they take reasonable measures to preserve the information’s secrecy. The result is a paradox that runs to the heart of trade secret law: employers are encouraged to communicate trade secrets to employees, but this information loses protection if it becomes part of those employees’ unprotectable general knowledge, skill, and experience. This Article traces the roots of this doctrine in the common law and shows how it has been incorporated, though never actually codified, in statutes, including the Defend Trade Secrets Act of 2016. As originally construed, the general knowledge, skill and experience exclusion was intended to preserve an employee’s right to improve her skills on the job and thereafter transfer those skills to a different job or business endeavor. Trade secret law was thus interpreted not to encompass information that an employee needed in order to continue working in her profession. This Article reveals that, despite longstanding recognition of the doctrine, courts today misapply and misunderstand it. Rather than separately assessing whether claimed trade secrets constitute an employee’s unprotectable general knowledge, skill, and experience, many courts simply assess whether the information is generally known to others outside the company or was previously known to the employee before she took the job—and stop there. Courts therefore miss the category of information that, while technically secret to a company, is nonetheless unprotectable. Such oversights stymie the development of trade secret law and have potentially devastating effects for employee-defendants, who may be prevented from taking a new job even when they have not signed a noncompetition agreement.