If a CEO took company trade secrets when they left what would happen?

[Cattledog]

Curious minds would like to know.

[Ocelot II]

1. They would be sued, and possibly prosecuted for the theft of trade secrets

if they violated the Economic Espionage Act, 18 U.S.C. §§ 1831–37.

[DBoon]

2. "VW AGREES TO PAY G.M. $100 MILLION IN ESPIONAGE SUIT"

Bringing to an end a four-year feud between two of the world's largest companies, Volkswagen A.G. agreed today to pay $100 million to the General Motors Corporation to settle accusations that VW stole trade secrets from G.M.

In the settlement, one of the largest in a corporate espionage case, Volkswagen also agreed to buy at least $1 billion worth of auto parts from the American company during the next seven years. Both companies also agreed to drop their civil suits against each other.

While not admitting any wrongdoing, VW said that it ''acknowledges the possibility that illegal activities'' by some executives who defected from G.M. to VW may have occurred.

While the agreement means that both companies can go back to building cars rather than legal cases, the central figure in the case, Jose Ignacio Lopez de Arriortua, still faces criminal charges in Germany. And the Justice Department is still looking into the matter.

https://www.nytimes.com/1997/01/10/business/vw-agrees-to-pay-gm-100-million-in-espionage-suit.html

my bolding

This site has additional examples:
https://blogs.orrick.com/trade-secrets-watch/2014/07/18/update-a-new-top-10-disclosed-trade-secret-settlement/

[ProfessorGAC]

3. At The Very Least..

...they would expose themselves to direct civil action.
Upon retirement, I left with a handful of trade secrets committed to memory. That was easy because it was my own work.
But, selling off that knowledge, even if not leading to criminal action, would definitely include me as part of "joint & several" in any lawsuit.
My responsibility ends after 18 years, post retirement, so even though I'm retired I'm still legally bound to not share secrets.
And, I wasn't a CEO.

[RainCaster]

4. If Trump, not a damn thing

[unblock]

5. Depends.

CEOs often leverage insider knowledge to negotiate sweet sweet deals.

Oh my 4-year employment contract is running out? Hey board of directors, I could continue for 4 more years, but if we can't agree on repriced stock options and much bigger bonus and so on, I just might start my own business competing against you or go work for a competitor....

It'd be a shame for you to lose billions in market share over a puny little $20 million right?


Granted, they usually don't steal physical documents, but if a company feels that ceo would be too much of a danger as a competitor knowing what that know, they might well cave.

[Ocelot II]

6. A high-level employment contract would have a non-compete agreement.

You'd have to wait out the non-compete term before starting or joining a competing business, and you'd have to watch out for insider trading problems.

[unblock]

7. True insomuch as contractual provisions go.

But such things are difficult to enforce in practice. You can't bar someone from working in their chosen profession, even if they've signed a non-compete.

Then there are ways around it anyway, just be a consultant during the non-compete period.

Worst of all, a ceo who bolts to a competitor can do damage far in excess of anything the previous employer could recover. Billions in lost market share only to recover millions from the ceo.