How will TD Bank recover from this trade secret lawsuit?
Employees often pose the greatest threat to a company’s proprietary information. In fact, a Symantec study found that half of employees surveyed who had left jobs within the past year took corporate data with them. In New Jersey, TD Bank is currently embroiled in a trade secret lawsuit involving a rival bank and a former employee. TD Bank’s lawsuit alleges that its former loan officer misappropriated sensitive customer information, including tax returns and credit approvals, in the weeks prior to leaving his job. He then sent the information to his new employer, Kearny Federal Savings Bank, so it could be used to solicit the clients.
According to the complaint, Kearny Federal executives “plotted and planned for [employee]’s departure from TD Bank and his employment with Kearny, discussing, in detail, numerous TD Bank clients, customers and deals, and how Kearny could compete for and steal that business.” TD Bank also alleges that its former employee violated a non-solicitation agreement under which he was prohibited from soliciting the bank’s customers during the course of his employment as well as 12 months after he left the position.
The complaint, which seeks a temporary restraining order, includes counts of misappropriation of trade secrets, tortious interference with contractual relationships and prospective economic advantage, unfair competition, unjust enrichment, and civil conspiracy. It also alleges violations of the New Jersey Computer Related Offenses Act, the federal Computer Fraud and Abuse Act, and the newly enacted New Jersey Trade Secrets Act.
To deter a similar trade secret theft, New Jersey businesses can take several key actions to protect their proprietary customer data. One of the most important is to require employees to sign non-disclosure and non-solicitation agreements. Even if a breach were to occur, then the existence of the agreement improves the chances of success in a resulting suit and could allow you to seek an injunction. Think about it – if you don’t have measures in place to protect your intellectual property, why would a court consider such property worthy of protection?
Given the growing risk of employee data theft, it also makes sense to review a departing employee’s computer activities in the months preceding departure. In this case, TD Bank allegedly discovered the theft when conducting a forensic analysis of its ex-employee’s email upon his departure.
Businesses should also be sure to immediately discontinue ex-employee access to documents, databases and cloud storage systems as well as request that all company-owned devices be immediately returned. It only takes a few minutes for a departing employee to transfer a file before waking out the door. In some industries, it may also be advisable (if not required by law or regulation) to notify key vendors, clients, or business partners that the employee is no longer affiliated with the company, so as to prevent any unauthorized disclosures.
Does Your Homeowners Insurance Provide Adequate Coverage?
Your home is likely your greatest asset, which is why it is so important to adequately protect it. Homeowners insurance protects you from the financial costs of unforeseen losses, such as theft, fire, and natural disasters, by helping you rebuild and replace possessions that were lost While the definition of “adequate” coverage depends upon a […]
Understanding the Importance of a Non-Contingent Offer
Making a non-contingent offer can dramatically increase your chances of securing a real estate transaction, particularly in competitive markets like New York City. However, buyers should understand that waiving contingencies, including those related to financing, or appraisals, also comes with significant risks. Determining your best strategy requires careful analysis of the property, the market, and […]
Fred D. Zemel Appointed Chair of Strategic Planning at Scarinci & Hollenbeck, LLC
Business Transactional Attorney Zemel to Spearhead Strategic Initiatives for Continued Growth and Innovation Little Falls, NJ – February 21, 2025 – Scarinci & Hollenbeck, LLC is pleased to announce that Partner Fred D. Zemel has been named Chair of the firm’s Strategic Planning Committee. In this role, Mr. Zemel will lead the committee in identifying, […]
Novation Agreement Process: Step-by-Step Guide for Businesses
Big changes sometimes occur during the life cycle of a contract. Cancelling a contract outright can be bad for your reputation and your bottom line. Businesses need to know how to best address a change in circumstances, while also protecting their legal rights. One option is to transfer the “benefits and the burdens” of a […]
What Is a Trade Secret? Key Elements and Legal Protections Explained
What is a trade secret and why you you protect them? Technology has made trade secret theft even easier and more prevalent. In fact, businesses lose billions of dollars every year due to trade secret theft committed by employees, competitors, and even foreign governments. But what is a trade secret? And how do you protect […]
What Is Title Insurance? Safeguarding Against Title Defects
If you are considering the purchase of a property, you may wonder — what is title insurance, do I need it, and why do I need it? Even seasoned property owners may question if the added expense and extra paperwork is really necessary, especially considering that people and entities insured by title insurance make fewer […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
TD Bank Trade Secret Suit Highlights Data Theft Risks
Author: Scarinci Hollenbeck, LLC
How will TD Bank recover from this trade secret lawsuit?
Employees often pose the greatest threat to a company’s proprietary information. In fact, a Symantec study found that half of employees surveyed who had left jobs within the past year took corporate data with them. In New Jersey, TD Bank is currently embroiled in a trade secret lawsuit involving a rival bank and a former employee. TD Bank’s lawsuit alleges that its former loan officer misappropriated sensitive customer information, including tax returns and credit approvals, in the weeks prior to leaving his job. He then sent the information to his new employer, Kearny Federal Savings Bank, so it could be used to solicit the clients.
According to the complaint, Kearny Federal executives “plotted and planned for [employee]’s departure from TD Bank and his employment with Kearny, discussing, in detail, numerous TD Bank clients, customers and deals, and how Kearny could compete for and steal that business.” TD Bank also alleges that its former employee violated a non-solicitation agreement under which he was prohibited from soliciting the bank’s customers during the course of his employment as well as 12 months after he left the position.
The complaint, which seeks a temporary restraining order, includes counts of misappropriation of trade secrets, tortious interference with contractual relationships and prospective economic advantage, unfair competition, unjust enrichment, and civil conspiracy. It also alleges violations of the New Jersey Computer Related Offenses Act, the federal Computer Fraud and Abuse Act, and the newly enacted New Jersey Trade Secrets Act.
To deter a similar trade secret theft, New Jersey businesses can take several key actions to protect their proprietary customer data. One of the most important is to require employees to sign non-disclosure and non-solicitation agreements. Even if a breach were to occur, then the existence of the agreement improves the chances of success in a resulting suit and could allow you to seek an injunction. Think about it – if you don’t have measures in place to protect your intellectual property, why would a court consider such property worthy of protection?
Given the growing risk of employee data theft, it also makes sense to review a departing employee’s computer activities in the months preceding departure. In this case, TD Bank allegedly discovered the theft when conducting a forensic analysis of its ex-employee’s email upon his departure.
Businesses should also be sure to immediately discontinue ex-employee access to documents, databases and cloud storage systems as well as request that all company-owned devices be immediately returned. It only takes a few minutes for a departing employee to transfer a file before waking out the door. In some industries, it may also be advisable (if not required by law or regulation) to notify key vendors, clients, or business partners that the employee is no longer affiliated with the company, so as to prevent any unauthorized disclosures.
