When Restrictive Covenants Meet Reality: A Maryland Trade Secrets Case Study (Part II)

In Part I, I examined the court’s March 2025 opinion in TK Elevator Corporation v. Drzewiecki, which granted injunctive relief on TKE’s claim for breach of a restrictive covenant but denied relief on its trade secret claims for lack of specificity. That ruling highlighted key lessons for employers on drafting enforceable covenants and litigating injunctions in court.

Part II picks up the story immediately after that ruling, as the case moved into the pleadings stage.

Quick Recap of Factual Background

TK Elevator Corporation (“TKE”) alleged that Nichole Drzewiecki, a former sales representative, took confidential business information before leaving to join competitor Nouveau Elevator. Drzewiecki had signed a Restrictive Covenant Agreement requiring confidentiality and prohibiting solicitation of TKE customers for two years post-employment. A forensic review later indicated she downloaded sensitive files to personal devices shortly before her departure, and TKE claimed that customers identified in those materials subsequently moved their business to Nouveau. TKE sued for breach of contract, tortious interference, and trade secret violations under the Defend Trade Secrets Act (“DTSA”) and the Maryland Uniform Trade Secrets Act (“MUTSA”).

The Next Phase—Motions to Dismiss

After the court’s March 2025 decision, rather than answering the complaint, Nouveau moved to dismiss the trade secret and tortious interference claims and Drzewiecki sought dismissal only of the trade secret claims.

The Court’s Decision and Reasoning

The court denied the motions and allowed the trade secret and tort claims to proceed. Under DTSA and MUTSA, TKE had to plead that an employee misappropriated information that qualifies as a trade secret, which must be alleged with specificity, including identifying the reasonable steps taken to maintain the secrecy of the information and that the information derived independent economic value from not being generally known. The court analyzed these elements in turn.

• Reasonable Steps to Maintain Secrecy: TKE satisfied this element by alleging that it housed documents in password-protected, cloud-based systems, limited access to authorized individuals, and required employees to sign confidentiality agreements.
• Independent Economic Value: TKE identified 9 specific documents and described their content, including that they contained business plans, pricing information, and customer lists. The court rejected Nouveau’s argument that this information was publicly available or outdated, holding that this argument presented a factual question more appropriately addressed at a later stage.
• Misappropriation: As to Drzewiecki, TKE plausibly alleged improper use based on the timing of the downloads and failure to return the information. As to Nouveau, TKE sufficiently pled vicarious liability because Drzewiecki’s use of TKE’s customer information matched the type of work she was hired to do and Nouveau ultimately benefited when at least one customer moved from TKE to Nouveau.

The court also allowed the tortious interference claim to proceed, holding that TKE adequately alleged that Nouveau knew of Drzewiecki’s Restrictive Covenant Agreement, failed to take steps to prevent or correct the misuse of TKE’s customer information, and caused harm by taking at least one of TKE’s customers. Those allegations also supported an unfair competition claim.

Where That Leaves Us

TKE’s trade secret and tort claims survived dismissal despite the trade secret allegations not being detailed enough at the TRO stage to support injunctive relief. The case now moves into discovery, currently scheduled to run through September 2026, with summary judgment briefing expect in late 2026.

Practical Takeaways for Employers

1. Confidentiality Agreements: Ensure that all employees with access to sensitive information sign comprehensive confidentiality agreements. These agreements should clearly define what constitutes confidential information and trade secrets and what steps should be taken to maintain their confidentiality.
2. Data Security Measures: Implement robust data security measures, such as password-protected systems and restricted access, to protect trade secrets and confidential information. Regularly monitor employee access to sensitive information and conduct forensic analyses when suspicious activity is detected, especially when employees resign or are terminated.
3. Legal Preparedness: Be prepared to take swift legal action if you suspect misappropriation of trade secrets, including moving for temporary restraining orders or injunctions.
4. Plead Multiple Claims with Specificity: In any complaint, be sure to plead multiple different claims, if available, such as breach of contract, tort, or trade secret claims, to increase the chances of success at various phases of litigation. Plead each claim with specificity, identifying not only the categories of documents misappropriated, but the specific documents, how they qualify as trade secrets, how they were misappropriated, and what harm has occurred.
5. Prepare for the Long Haul: While some actions move through the courts quickly, such as TROs, others, such as motions to dismiss and discovery, can take years to resolve. Assess the likelihood of success at each stage and prepare for a long battle.

By taking these proactive steps, employers can better protect their trade secrets and reduce the risk of legal disputes related to misappropriation and unfair competition.

The attorneys at Luchansky Law are experienced in drafting and enforcing restrictive covenants to protect your business interests while minimizing legal and competitive risk. I would welcome the opportunity to discuss with you how to protect your business. For more information, call me at Luchansky Law 410.522.1020, or email me at ari@luchanskylaw.com.