ReadyLink Healthcare v. Cotton, 126 Cal. App. 4th 1006 (2005)

ReadyLink obtained an injunction against Jerome Cotton, a former employee, prohibiting Cotton from soliciting ReadyLink employees and customers and from using or disclosing ReadyLink’s trade secrets and confidential information. ReadyLink fired Cotton for stealing ReadyLink records containing proprietary and confidential information. During a search of his residence and storage locker (to which Cotton consented), the police recovered one or two boxes of stolen ReadyLink documents; Cotton also was videotaped entering ReadyLink’s private offices late at night and copying payroll records and other confidential documents. Cotton acknowledged in a declaration that he had misappropriated and improperly used ReadyLink’s confidential and proprietary information and agreed not to become employed at any other healthcare staffing company. Nonetheless, Cotton began working for a ReadyLink competitor two weeks after his termination. ReadyLink then sued Cotton and his new employer for violation of the Uniform Trade Secrets Act, unfair competition, interference with economic relations, tortious interference with prospective business advantage, etc. The Court of Appeal affirmed the injunction in favor of ReadyLink on the ground the company was likely to prevail on the merits given the evidence that Cotton had misappropriated trade secrets and committed acts of unfair competition. Cf. Millennium Corporate Solutions v. Peckinpaugh, 126 Cal. App. 4th 352 (2005) (upholding employees’ unopposed injunction compelling former employer to turn over client files and documents).