Keeping Diversity Under Wraps? The Courts' Role in Shielding Novel Trade Secrets

23 Wake Forest J. Bus. & Intell. Prop. L. 208.

In February 2018, IBM sued its former Chief Diversity Officer, Lindsay-Rae McIntyre, for violating “her one-year noncompetition agreement by accepting [an] identical position . . . at Microsoft.” IBM contended that McIntyre’s defection to one of its main competitors risked the disclosure of company trade secrets. The claim bore all the hallmarks of the classic trade secrecy fact pattern. Yet, to the keen-eyed observer, the trade secrets at issue were anything but ordinary. I BM asserted trade secret protection over its confidential diversity information, a novel argument made only once before by—wait for it— Microsoft. Diversity information is an umbrella term for data, strategies, and initiatives relating to company workforce diversity. The information at issue in the IBM dispute included “confidential strategies, secret diversity representation data, proprietary technologies, and recruitment, retention and promotion plans for diverse talent.”

Those who had hoped for a judicial pronouncement on the merits of IBM’s claim were left disappointed: the parties settled one month later. Yet, the IBM dispute remains a talking point, compared to other examples of trade secret claims over “nontraditional” subject matter. Besides diversity information, this includes environmental and healthcare safety information, and pharmaceutical supply chain pricing information. Some scholars have contended, and this Article. presumes, that nontraditional subject matter lies beyond the “customary domain of trade secret law.” While “[t]he typical defendant in trade secrecy cases involves a competitor who has allegedly misappropriated the plaintiff’s trade secret for profit and unfair competition,” in nontraditional cases, the “defendant’s motivation is . . . to investigate a particular source of information.” According to Sonia K. Katyal, a law professor at Berkeley Law, confidential information is sought for the “purposes of disclosure to the public or for the purposes of investigation of bias.” Flowing from this, there is a risk that information owners invoke trade secrecy in novel situations for pretextual reasons—to deny informational access and public oversight. Thus, as explained by Deepa Varadarajan, an associate professor of legal studies at the J. Mack Robinson College of Business, the trade secret protection of nontraditional information “implicate[s] a different set of concerns.”

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