Vendavo, Inc. v. Long

Vendavo, Inc. (plaintiff) advised its corporate customers on how to address their so-called pain points of competitive weakness. Vendavo’s rivals included two companies collectively known as Price f(x) (Price) (defendants). Vendavo took several measures to protect its confidential customer information, sales data, and financial data. For example, Vendavo presented its plans for addressing a customer’s pain points only after the customer signed a nondisclosure agreement (NDA). Internally, Vendavo (1) made its employees sign NDAs; (2) gave all new hirees security training; (3) controlled access to confidential data and secure servers through encryption, complex passwords, and multifactor authentication; and (4) compartmentalized data so that Vendavo’s sales people generally did not have access to the company’s financial data and Vendavo’s financial staff generally did not have access to the company’s sales data. As an employee in Vendavo’s sales department, Kim Long (defendant) was subject to all these protective measures. Moreover, when Long announced she was leaving Vendavo, Vendavo’s general counsel met with Long to remind her of her obligations to preserve the confidentiality of sensitive Vendavo sales information. Nevertheless, evidence later emerged that Long took much of that information with her when she quit Vendavo and went to work for Price. Vendavo sued Long and Price in federal district court and moved for a preliminary injunction to block Price from using any of Vendavo’s allegedly misappropriated trade secrets. Long and Price challenged Vendavo’s characterization of its data as trade secrets, pointing to (1) Vendavo’s lack of an active-monitoring program to prevent unauthorized downloading of company data and (2) two instances in which Vendavo disclosed its customer list and generic marketing information to customers before obtaining the customers’ NDAs.