Former employee sharing trade secrets with competitor - NDA worth anything?

I'm losing my mind over here. Our lead engineer left 3 months ago and just popped up at a direct competitor. Fine, whatever, people move on.

But now I'm hearing from industry contacts that they're using methods that are IDENTICAL to our proprietary process. Like, the exact same approach we spent 18 months developing. There's no way they independently came up with this.

He signed an NDA when he joined us. Is it actually worth anything or are these just pieces of paper that lawyers make us sign? What are my real options here?

NDAs are definitely not just paper — they're enforceable contracts. But let me be realistic with you about what enforcement actually looks like.

Your options, from least to most expensive:

• Cease and desist letter ($2-5K) — sometimes enough to scare them, often gets ignored
• Motion for preliminary injunction ($15-30K) — if you win, court orders them to stop immediately
• Full litigation through trial ($50-150K+) — can recover damages but takes 1-2 years

The good news: you may have claims beyond just the NDA. The Defend Trade Secrets Act (federal) and your state's trade secret law likely apply. These can provide stronger remedies than contract breach alone.

Key question: can you actually prove they're using YOUR specific methods vs. having developed something similar independently? "Identical" is a strong word — do you have documentation showing exactly what your process is?

went through almost exactly this last year. former sales director took our entire customer list and pricing strategy to a competitor.

we sent a C&D, they basically said "prove it." we filed for a TRO (temporary restraining order) and won — judge issued an order within 10 days forcing them to stop soliciting our clients.

total cost was about $40K but honestly worth it. competitor backed off completely after that. sometimes u just gotta show ur willing to fight.

Practical question: what kind of evidence do you actually have? The "industry contacts" thing is hearsay and won't hold up.

Things that would help your case:

- Dated documentation of your proprietary process (internal docs, git commits, design docs)
- His access logs to confidential materials
- Any communications about the confidential info
- Evidence of what the competitor is actually doing (marketing materials, product demos, customer reports)

tbh if you can't show a paper trail proving (1) you had something secret and (2) he took it, the NDA is gonna be hard to enforce regardless of what it says

Thanks everyone. The evidence situation is actually decent — we have detailed internal docs, Confluence pages with his edits, and Slack messages where we discussed keeping this confidential.

But I'm gonna be honest, $40-150K is terrifying for a Series A company. We have maybe 14 months of runway. Spending that on lawyers instead of product feels insane even if we're right.

Is there any middle ground? Like can I get a lawyer to send a really scary letter and see if they blink first?

Totally understand the budget concern. Here's the realistic path for a resource-constrained startup:

1. Hire an IP litigation attorney for a consult ($500-1000) to assess the strength of your case

2. If the case looks strong, have them send a detailed demand letter ($2-3K) that lays out your evidence and threatens specific legal action

3. If no response, consider a focused TRO motion — you can sometimes get one for $10-15K if the facts are clear cut

The key is the demand letter needs to signal you actually have evidence and know what you're doing. Generic "cease and desist" letters get ignored. A letter that says "we have Slack messages from April 15 where you acknowledged this was confidential, and Confluence logs showing you accessed the system 47 times in your final week" — that gets attention.

Also worth asking: does your investor have legal resources or relationships? Some VCs will help fund IP enforcement if the threat is existential.

Quick update for anyone following this thread. Took @IP_Litigator's advice and hired a local IP attorney for a consult. She reviewed everything and said we have a "strong but not slam dunk" case.

Sent the detailed demand letter two weeks ago. It specifically referenced the Confluence access logs and some Slack messages where my former engineer explicitly acknowledged the process was proprietary.

Got a response from their counsel yesterday. They're not admitting anything but they want to "discuss a resolution." Meeting scheduled for early January.

Total cost so far: $3,200. Hoping we can settle this without actual litigation. Will update.

Found this thread while researching my own situation. Similar problem but different angle — our former head of product didn't go to a competitor, she started her own company doing almost exactly what we do.

She signed an NDA but NOT a non-compete (our lawyer at the time said they were unenforceable in CA anyway). Now she's pitching our exact product positioning to our customers.

Is the calculus different when it's a new startup vs. an established competitor? Feels like suing someone who just raised their seed round is different than going after a company with deep pockets.

@k_martinez_cto - Different situation indeed. A few thoughts:

The good news: Going after a seed-stage startup can actually be MORE effective because they have less runway to fight. Legal bills can be existential for them. A credible threat often produces quick settlements.

The complications:

• California's non-compete restrictions are real, but NDAs and trade secret claims are still enforceable there. Focus on what information she took, not that she's competing.
• "Product positioning" is trickier than technical processes. Positioning is often considered general knowledge unless it was derived from truly confidential market research or customer data.
• If she raised seed money, her investors' counsel will get involved. Sometimes that's good (they push for quick settlement) and sometimes bad (they have resources to fight).

What specifically is she using? Customer lists? Pricing strategies? Proprietary market research? The more specific, the stronger your case.

FINAL UPDATE: We settled. Took about 6 weeks from demand letter to signed agreement.

Can't share all the details due to the settlement terms, but the key points:

• Competitor agreed to stop using the specific methodology we documented
• Former employee signed a declaration acknowledging the confidentiality obligations
• We got a modest cash payment (less than litigation would have cost us, but something)
• No admission of wrongdoing (they insisted on that)

Total legal costs: ~$8K including the settlement negotiation. WAY better than the $50-150K litigation scenario.

Lessons learned for anyone in similar situations: (1) document everything while employees are still there, (2) act fast when you discover misuse, and (3) a well-crafted demand letter with specific evidence is worth its weight in gold. Thanks to everyone here who helped me think through this.

@k_martinez_cto good luck with your situation. Feel free to DM if you want to chat.