by Kelly G. Swartz, Esq.
Hayworth, Chaney and Thomas, P.A.
www.hctlaw.com
Office: (321) 253-3300

Few people would be willing to dispute the importance of satisfied clients to the success of a business. Without clients who purchase things from the business few businesses can survive, much less thrive. Most business owners go to great lengths to seek out potential clients and entice them to patronize their business. The result of these countless hours of toil and untold expenses is a client list that may provide significant value to the business. If maintained properly, this client list may be protected and valued as a trade secret. However, if this client list is not handled properly, the business owner may not be able to recover a penny in the event it is stolen.

What is a Trade Secret?
Trade secrets are defined by Florida Statute § 688.002(4). This statute creates a two-prong test to determine if information qualifies as a trade secret. Essentially, information will only be classified as
a trade secret if (1) somebody would be willing to pay for the information and (2) the owner of the information treats the information like it is, in fact, a secret.

Client Lists have Value
There is no doubt that a client list satisfies the first prong of the test. Client lists are exactly the type of information for which people are willing to pay. Courts have repeatedly held that active client lists can be the subject of trade secrets. See Sethscot Collection v. Drbul, 669 So.2d 1076 (Fla. 3d DCA 1996) and Cytodyne Technologies, Inc. v. Biogenic Technologies, Inc., 216 F.R.D. 533, 536 (M.D. Fla. 2003). Therefore, when determining whether a client list is a trade secret the only question that must be answered is whether the owner of the client list has taken appropriate action to protect the client list such that the client list attains trade secret status.

Reasonable Steps to Maintain Secrecy
The determination of whether a client list has achieved trade secret protection is ultimately a question of fact to be determined by a jury based on the circumstances surrounding the particular client list in dispute. Allegiance Healthcare Corp. v. Coleman, 232 F. Supp. 2d 1329, 1335 (S.D. Fla. 2002). The jury must decide whether the owner of the client list was reasonable in his or her efforts to maintain the list as a secret. While there is no procedure which can be found to be reasonable in every situation, there are certainly steps a business can take which may make it more likely that a jury would find that a client list is indeed a trade secret. The business must recognize that the client list as a valuable piece of information that should not be disclosed to others outside the company and the business should have procedures in place to prevent the dissemination of the client list. If the client list must be distributed, it should always be marked as confidential information. Sepro Corp. v. Florida Dept. of Envtl. Prot., 839 So.2d 781, 784 (Fla. Dist. Ct. App. 2003). And the client list should not be disclosed without an accompanying non-disclosure agreement which establishes that the client list is confidential information owned by the disclosing party. Merely by recognizing the value of a client list and limiting its distribution, a business can go a long way toward creating trade secret rights in the client list.

Maintaining your client list in these ways not only helps to ensure that the list of clients you have worked so hard to build cannot be easily obtained by a competitor, it also provides a possible remedy if your information is misappropriated. While nobody wants to be involved in a lawsuit, being prepared to prove your case should you end up in litigation can help your business recover financially in the unfortunate event that your client list is stolen.