Business & Insurance Litigation Newsletter for Indiana

Employer Not Vicariously Liable Under Indiana Trade Secrets Act for Employee's Misappropriation of Trade Secrets from Former Employer

Where a salesperson utilized the pricing and cost analysis formula of his former employer to undercut the price of his former employer and lure customers to his new employer, the new employer was not liable for the employee's misuse of trade secrets absent knowledge of the employee's misdeeds. In Infinity Products, Inc. v. Quandt, 2004 WL 1445520 (Ind., June 29, 2004), the Supreme Court held that, unless the new employer knew or should have known that the employee was wrongfully using a former employer's trade secrets, the employer was not liable, even if they realized a profit from the employee's wrongdoing. The Court held that the Trade Secrets Act displaces the common law doctrine of respondeat superior and provides the only remedies for misappropriation of trade secrets. The employer will only be liable if they know or should have known of the employee's wrongdoing.