Executive Summary: On the heels of an appellate decision providing employees a virtual how-to manual to misuse and exploit confidential employer documents and safely provide them to a competitor, New Jersey’s Supreme Court reversed course last week by suggesting that employees do not have competing rights to confidential employer documents in commercial or business disputes. State v. Saavedra (June 23, 2015), clarifies when a sweeping multi-part test should be used to determine when an employee may remove and retain confidential employer documents. That test should be limited to where the employee engages in self-help to further her prosecution of an affirmative claim against the employer brought under New Jersey’s Law Against Discrimination (“LAD”). This ruling should minimize the impact of Spencer Sav. Bank SLA v. McGrover (App. Div. March 5, 2015), which now arguably misapplied the same multi-part analysis to find a departing employee did not breach his duty of loyalty to his former employer after he absconded with documents asserted to be confidential and proprietary. For a more detailed discussion of this decision, please see our June 25, 2015 Alert, Appellate Decision Teaches New Jersey Employees How To Remove Confidential Documents and Trade Secrets from Employers.
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