San Francisco Employment Law Firm Blog
When an employee leaves for a competitor and takes confidential company files, the employer’s immediate reaction is often predictable: “They stole our trade secrets. We have a case.” Maybe. But a recent Northern District of California case involving electric-aircraft competitors Joby Aero and Archer Aviation illustrates why these cases can be much more complicated.
In Joby Aero, Inc. v. Archer Aviation Inc., Joby alleged that a former employee took confidential company information before joining Archer, one of Joby’s main competitors. According to Joby’s allegations, the employee downloaded dozens of files from Joby’s SharePoint repository shortly before resigning and sent some company files to a personal email account. Those facts certainly sound troubling. But they did not automatically establish a viable trade-secret claim.
One of the most important distinctions in trade-secret litigation is the difference between confidential information and a legally protected trade secret. Companies naturally consider many things confidential: customer information, pricing, internal presentations, technical documents, business plans, contacts, marketing strategies, and expansion plans. But simply labeling something “confidential” does not make it a trade secret. A company pursuing a trade-secret claim generally must be able to identify what the alleged secret actually is with sufficient specificity. In its earlier June ruling, the federal court dismissed allegations that merely described broad categories of supposed trade secrets while allowing more specifically identified information to proceed.
Joby’s amended complaint became considerably more specific, identifying particular alleged trade secrets and particular files containing them. The court found those allegations sufficient to identify trade secrets at the pleading stage. That provides an important lesson for companies contemplating litigation: Don’t just ask, “What files did the employee take?” Ask, “What specific trade secret was contained in those files?” You also have to connect the trade secret to what the competitor did.
The September 2026 ruling illustrates a second problem that is sometimes overlooked. Even when a company sufficiently identifies a trade secret and alleges that a departing employee took a document containing it, the company still needs a viable theory that the secret was improperly acquired, disclosed or used. For example, Joby alleged that one of its confidential materials contained strategies for navigating regulatory and logistical issues associated with demonstrations in Japan and South Korea. It also claimed that after the employee joined Archer, Archer made progress in those markets. But the court found the alleged connection insufficient. Among other things, Joby’s own allegations acknowledged that Archer had expressed plans involving those markets before hiring the former Joby employee. The court therefore dismissed that portion of Joby’s misappropriation claim, while giving Joby an opportunity to amend.
This illustrates an important litigation principle: Timing and suspicion are not necessarily enough. The fact that an employee takes confidential information, joins a competitor, and the competitor later achieves something similar may create a compelling reason to investigate. But ultimately there needs to be evidence connecting the alleged trade secret to improper acquisition, disclosure, or use.
Broad Categories of “Confidential Information” Can Create Problems
Trade-secret cases sometimes begin with allegations such as:
- proprietary business strategies;
- confidential technical information;
- customer information;
- pricing strategies; or
- confidential marketing plans.
Those descriptions may be too broad by themselves. A stronger case identifies something concrete. For example, a particular engineering process, pricing methodology, customer strategy, technical specification, negotiation strategy, or other defined information that derives value from remaining secret. That specificity matters not only at trial. It can determine whether the lawsuit survives its earliest stages of being challenged on a motion to dismiss.
What Employers Should Do When an Employee Leaves for a Competitor
If you suspect that an employee took confidential information, preservation and investigation should begin quickly. Preserve the employee’s company computer, email account, cloud-storage activity, and access logs. Determine what was downloaded, copied, emailed or transferred before departure. Preserve evidence before wiping or reassigning devices. But don’t stop there. For each important document, determine: What exactly is the trade secret? Why isn’t it generally known? What did the company do to protect it? What competitive value does secrecy provide? And what evidence suggests the former employee or competitor actually used or disclosed it? Those questions are often much more important than the sheer number of files taken.
What Employees and Competitors Should Understand
Employees should not assume that information is theirs to take simply because they created it or worked with it. Sending company files to a personal account immediately before joining a competitor can generate expensive litigation even if the employer ultimately cannot establish every suspected trade secret. Competitors hiring employees from rivals should also have procedures designed to prevent incoming employees from bringing their former employer’s information. Instructions such as “Do not bring, upload, forward or use any documents or confidential information belonging to your former employer” should be explicit and documented.
If litigation follows, those precautions may become important evidence concerning whether the new employer acquired or used the former employer’s information.