San Jose Construction v. S.B.C.C., Inc. (Cal App 10/12/07) Decision Short Summary
SJC sued SBCC and Foust for misappropriation of trade secrets and related claims. SJC prevailed below on summary judgment and the appellate court reversed and remanded.

The parties are local competitors in the business of commercial construction. Foust was a project manager at SJC from 1999 to 2004. In early 2004, Foust conveyed his dissatisfaction with his current employment to Furtado, SBCC's principal. Furtado then offered Foust a position as a senior project manager with SBCC. Foust believed that SJC clients would follow him to SBCC and took information on pending projects to enable him to move forward with those projects. Foust copied documents related to five prospective jobs on which SJC had bid. The documents Foust took to SBCC included project budgets and proposals, correspondence, subcontractor bids, and cost estimates. Foust met with various subcontractors and indicated that the five projects were going with him to SBCC and that he was interested in having the subcontractors participate. All but two accepted. The trial court concluded that the information relating to the five construction projects was not a trade secret.

What SJC sought to protect was the overall compilation of the correspondence involving architects, SJC, and project owners, descriptions of the proposed scope of each project, measurements for each building, and detailed cost estimates. SJC's budget proposals were based on a review of construction drawings, site conditions, and other submissions by architects and engineers. The process of generating a viable proposal was more elaborate than contacting names on a subcontractor list and soliciting their bids. Those proposals that had been accepted by owners and were ready to be implemented were a valuable asset to SJC. It could readily be inferred that the information contained in SJC's project binders, viewed as a whole, derived economic value from being kept secret from competitors. Considering the length of time that each proposal took to finalize and the urgency with which four of the project owners impressed upon the prospective contractors to begin the work, the court could not overlook the possibility that the information was not readily ascertainable in the circumstances presented. SJC produced evidence that some project owners would not have been willing to wait for SBCC to go through the entire bidding process from the start. Thus, a fact issue existed as to whether the entire proposal for each project was readily ascertainable. Whether SJC took reasonable efforts to maintain the secrecy of the information was also subject to dispute.