Saturday 19 August 2017

Hooters Chain Accuses Rival Twin Peaks of Stealing Trade Secrets

The AP is reporting the Hooters of America restaurant chain filed a federal lawsuit in Atlanta this week claiming that a former executive swiped mounds of documents to help an upstart competitor that plans to expand the Twin Peaks franchise.

The lawsuit filed in U.S. District Court in Atlanta on Wednesday said former Hooters vice president Joseph Hummel downloaded reams of “sensitive and highly confidential business information” to help La Cima Restaurants, an Atlanta-based firm that plans to help build 35 Twin Peaks stores across the Southeast.

Both chains are known for scantily clad women serving casual food, but there’s nothing sexy about the documents that Hooters claimed Hummel took. The lawsuit claims that Hummel downloaded marketing plans, contract agreements, recruiting tools and sales figures before and after he left the company to join La Cima on July 22.

“The casual dining industry operates on extremely thin profit margins,” it said. “As a result, every operational advantage … is a jealously guarded business secret.”

Hummel, who was Hooters’ executive vice president of operations and purchasing, was privy to the company’s most highly classified information and had “unequaled access to the company’s most sensitive business information, data and documents,” it said.

On July 2, days before Hummel told Hooters of his plan to leave, the executive downloaded the first batch of documents, the company said. Even after his last day, Hummel was still able to download documents from company servers and transmit them through his personal email account because the company forgot to block his access, it said.

All told, the lawsuit said, Hummel took “well over 500 pages of highly sensitive business information and trade secrets” from Hooters.

Trade secret law is an area of law best known for nondisclosure and non-compete agreements. This makes trade secrets unlike other areas of intellectual property because it relies solely on do-it your self protection. Restaurants need to take time to identify trade secrets, work with legal counsel to build non-disclosure agreements, and build internal systems and operating procedures to protect sensitive information. When all else fails, like with any area of intellectual property, be ready to enforce non-disclosure and non-compete contracts.

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