Last week, the iconic restaurant chain Hooters sued an emerging rival, La Cima Restaurants, for claims under the Uniform Trade Secrets Act and Computer Fraud and Abuse Act. Hooters, the self-proclaimed “beach-themed establishment” with waitresses who present “an all-American cheerleader image,” claims that La Cima has entered into a series of franchise development agreements to operate the aptly-named competitor Twin Peaks Restaurants throughout the Southeast. I am not making this up. The Non-Compete News Blog has a thoroughly entertaining post on the complaint in greater detail for those interested.
La Cima hired a former executive of Hooters, Joseph W. Hummel, as well as a number of other former executives this summer. According to Hooters’ Complaint, Hooters discovered that in the weeks leading up to his resignation, Hummel downloaded and transmitted to his private e-mail account a substantial number of highly confidential and sensitive documents including, among other things, Hooter’s distribution infrastructures, sales figures, and plans to capitalize on internal market forecasts.
Other sensitive documents were accessed from Hooter’s computer servers after his last day, which Hooters blames on the circumstances of Hummel’s abrupt departure. Hummel is alleged to have accessed the server at least five times after his departure to secure some of the trade secrets in question. Curiously, Hooters has elected not to sue Hummel or the other individuals, at least at this time.
The key lesson from this case? The importance of stopping further electronic access of a critical employee or executive upon learning that he or she is leaving to join a competitor. At least as of the time of this post, Hooters has not requested a temporary restraining order, and one can’t help but wonder whether its apparent laxity in safeguarding that information may have contributed to the decision not to pursue what would otherwise be critical relief.