Digest Summary by Profs. Daniel D. Blinka & Thomas J. Hammer in September 2006 Wisconsin Lawyer.
Sokolowski was employed by Burbank Grease Services in various management positions. When he left the company, he took certain information (for example, customer lists and other information about Burbank's customers) without Burbank's permission and with the knowledge that Burbank considered this information to be confidential. The defendant later began working for a different company and then allegedly provided the confidential information to his new employer and used the information to solicit customers for the employer.
When Burbank became aware that the defendant was soliciting its customers, it filed this action alleging that the defendant misappropriated Burbank's trade secrets in violation of Wis. Stat. section 134.90; breached his duty of loyalty to Burbank, which he owed as Burbank's agent; intentionally interfered with Burbank's business relationships; and committed computer crimes in violation of Wis. Stat. section 943.70(2). Burbank also filed claims against the defendant's new employer.
Both sides filed motions for summary judgment. The circuit court granted the defendants' motion and dismissed the complaint. The circuit court concluded that Burbank's confidential information was not protected by Wis. Stat. section 134.90(6), the trade secret statute, because the information did not meet the statutory definition of a trade secret. The circuit court also held that the enactment of section 134.90(6) precluded all common law tort claims based on the misappropriation of confidential information, except those that involved information that met the statutory definition of a trade secret. The circuit court further concluded that there had been no computer crime under Wis. Stat. section 943.70(2) because the defendant was authorized to obtain the computer-stored information at the time he obtained it. The court of appeals affirmed the circuit court. See 2005 WI App 28. In a majority decision authored by Justice Roggensack, the supreme court affirmed in part and reversed in part.
In previous decisions in this case that were not appealed, lower courts concluded that the confidential information described above did not qualify as a trade secret under Wis. Stat. section 134.90(1)(c). The supreme court accordingly did not address that question. Rather, it was asked to decide whether section 134.90(6) precludes Burbank's other claims for relief. The court concluded that "the plain language of Wis. Stat. § 134.90(6)(a) appears to have the effect of making § 134.90 the exclusive remedy for civil claims based on the misappropriation of a statutorily-defined trade secret" (¶ 20). However, the language in section 134.90(6)(b)2. leaves available all other types of civil actions that do not depend on information that meets the statutory definition of a "trade secret." Therefore, any civil tort claim not grounded in a trade secret, as defined in the statute, remains available to Burbank (see ¶ 33).
The court also addressed the applicability of Wis. Stat. section 943.70(2)(a)6., which prohibits the willful, knowing, and unauthorized disclosure of "restricted access codes or other restricted access information to unauthorized persons." The court concluded that this statute "was meant to prohibit disclosing information that would permit unauthorized persons to access restricted or confidential information. There has been no allegation that [the defendant] provided information to others that would permit them to access Burbank's computer system" (¶ 37). "In sum, we agree with the court of appeals' construction of Wis. Stat. § 943.70(2)(a)6, that it prohibits the unauthorized disclosure of codes, passwords or other information that grants access to restricted-access systems. We also agree with the court of appeals' conclusion that the statute was not meant to criminalize the disclosure of all types of information that could be stored on a computer, when that information was obtained with authorization in the first instance" (¶ 39) (citation omitted).
Justice Bradley filed a dissenting opinion that was joined by Chief Justice Abrahamson.