Legal Memorandum: Protectable Trade Secret in NY

Issue: Under New York law, can a customer list be a protectable trade secret?

A substantial number of cases address customer lists.  The cases boil down to a single basic rule.  “[S]olicitation of an employer’s customers by a former employee is not actionable unless the customer list could be considered a trade secret or there was wrongful conduct by the employee, such as physically taking or copying the employer’s files or using confidential information.”  Levine v. Bochner, 132 A.D.2d 532, 533, 517 N.Y.S.2d 270, 271 (2d Dep’t 1987) (defendant casually memorized and recollected confidential information about 26 customers and their insurance needs).  Thus, if the departing employee can develop a customer list from sources other than his or her former employer, the customer list is not secret.  E.g., Reed, Roberts Assocs., Inc. v. Strauman, 40 N.Y.2d 303, 353 N.E.2d 590, 386 N.Y.S.2d 677 (1976) (plaintiff admitted that solicitation of customers was usually done using national business directories such as Dun & Bradstreet’s Million Dollar Directory; court stated “[i]t strains credulity to characterize this type of information as confidential”); H&R Recruiters, Inc. v. Kirkpatrick, 243 A.D.2d 680, 653 N.Y.S.2d 865 (2d Dep’t 1997) (customer list was not secret when plaintiff’s past and future customers could be discovered through company directories and job postings); WMW Mach. Co. v. Koerber AG, 240 A.D.2d 400, 402, 658 N.Y.S.2d 385, 387 (2d Dep’t 1997) (“Trade secret protection will not attach to customer lists where such customers are readily ascertainable from […]