What information is relevant in non-compete litigation?  This issue was recently addressed by the United States District Court for the Southern District of Ohio in Momentive Specialty Chemicals, Inc. v. Alexander, C.A. No. 2:13-cv-275 (S.D. Ohio May 23, 2013).  The employer in Momentive brought claims against a former employee who went to work for a competitor.  As part of his defense, the employee wanted to show that the company he was now working for sells a different kind of product than his prior employer.  Id. at *1.  During the course of the litigation, the employer objected to the employee's discovery requests to the extent the employee sought the employer's business plans for 2012 and 2013.  Id.

The employer in Momentive produced redacted business plans to the employee.  The employee asked the court to conduct an in camera review of the unredacted documents to insure that the redacted material was not relevant to the employee's claims.  The court, however, denied the employee's in camera request and instead accepted the employer's representations that none of the redacted material referenced the type of products the employer offered.  Momentive at *2.

Next, the employer argued that the employee, by seeking business plans from the previous year, was seeking out of date information.  The court disagreed, finding that the business plans addressed the types of products the employer sold and was therefore either relevant, or at a minimum, would lead to the discovery of relevant evidence.  Id. at *2.  In making this finding, the court reminded the employer that as the party opposing production of relevant evidence, it has the burden of showing that the production of the business plans would be cumulative or duplicative.  Id., citing Fed.R.Civ.P. 26(b)(2)(c).  Further, the court noted that any burden to the employer in producing the 2012 business plans would be minimal.  Id.

The employer in Momentive produced its 2013 business plan pursuant to a protective order using the designation "for attorney's eyes only."  The employee sought to have the designation modified from the attorney's eyes only designation to "confidential," which would permit both the employee and his attorneys to review the 2013 business plans.  In support of re-designation, the employee argued that he had already seen the 2013 business plans and that as a business person, he is the only person who can interpret the documents.  Id. at *4.  The employer, on the other hand, opposed re-designating the documents to confidential, arguing that the business plans are straightforward and anyone could understand them.  The employer also argued that given the employee's move to a competitor, the information in the 2013 business plans are highly sensitive and should not be viewed by a competitor.  Id.

Though the court in Momentive was willing to compel production of the employer's 2012 business plans, it was unwilling to re-designate the 2013 plans such that the former employee could review the documents.  Having considered the arguments of the parties, the court found that the information in the plans did not seem to be overly technical.  Further, counsel for the employee did not submit any evidence showing they are unable to interpret the business plans.  Id. at *4.  The court also found that "it is typical that business plans containing competitively sensitive information be restricted, at least in the first instance, to attorneys and not be shared with parties who work for or might share information with the producing party's competitors."  Id., citing Layne Christensen Co. v. Purolite Co., 271 F.R.D. 240, 246 (D. Kan. 2012)(holding that the attorneys eyes only designation "is usually reserved for more sensitive information, such as trade secret information, future product plans, competitive pricing, customer lists, or competitive business financial information.")  Information which has become outdated, however, may be entitled to lesser protection.  Id. at *4, citing JTS Choice Enterprises, Inc. v. E.I. Du Pont De Nemours and Co., 2013 WL 791438 (D. Colo. March 4, 2013).

The Momentive decision shows a balancing by the court of the needs to protect a employer's confidential information against an employee's right to seek discoverable evidence.  It also demonstrates a willingness to protect information such as business plans, competitive pricing, etc., yet still make such information available to counsel so that they can properly represent their clients.  Equally important, the protection afforded to employers may lessen as the information sought to be protected becomes dated. 

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