100 JOURNAL OF THE SOCIETY OF COSMETIC CHEMISTS What action may be taken by a former employer after the contro- versial employee has been hired by the new employer? Several recent cases have considered this question, among which are included the well- publicized cases of E. I. du Pont de Nemours & Co. vs. American Potash & Chemical Corp. et al., (11) and of B. F. Goodrich Co. vs. Wohlgemuth (12). In both of these cases, the employee continued to work for the new employer, although injunctions were issued by the courts enjoining the employee from improperly disclosing any trade secrets of the former employer. * What about the new employer and his obligations when hiring an ex- employee who is loaded with confidential information ? First of all, it is highly advisable that the old employer place the new employer on written notice that the employee in question may have knowledge of confidential information or trade secrets. Once so notified, the new employer must exercise good faith in seeing that the information re- mains undisclosed. Generalities present difficulties, but once it is deter- mined that trade secrets are in fact involved and that these secrets may be disclosed to the new employer, the new employer becomes involved in a very awkward position and should advise his new employee that he is not interested in any confidential information of the former employer. Preferably, the new employee should be employed in a capacity dif- ferent than that of his past employment to increase the certainty of non- disclosure. Although this is good advice in theory, it has little practical value, especially with less reputable concerns which usually hire an employee on the basis of his knowledge of confidential matters. Disclosure of trade secrets obtained during the course of employment by employees is a cause of increasing concern. What once first appeared as a very limited geographical problem has now expanded into one of world-wide importance. Some of the causes of the concern are obvious and may be directly attributable to the great annual expenditure on re- search and development. Even legislators are becoming more aware of the problem of protecting trade secrets such as in New York (13) where certain acts of an employee are now considered grand larceny in the second degree and punishable by a prescribed term in prison. Both present and projected future attempts to resolve and control unau- thorized disclosure of trade secrets, however, will continue to be complex, since the employer's legitimate interests must be balanced with the cor- relative interests of the employee. Such a balance of interests is further * For a xnore detailed discussion of these cases and the problems involved, attention is directed to Ref. (1).

EMPLOYMENT CONTRACTS 101 compounded by the natural and continuing interest of the public which requires workable employee-employer relationships as well as individual freedom from unreasonable contractual restraints. So long as tech- nological change requires increased specialization by employees, the problems of employment contracts and adverse employees will inevitably become more acute. The number of controversies, however, may be limited by informed employers and employees who honestly seek to avoid conflicts over employment contracts. (Received September 11, 1965) (13) REFERENCES (1) Chem. Eng. News, 43, 81 (1965). (2) The Practical Lawyer, 9, 77 (1963). (3) See, for example, the holding of Spiselman vs. Rabinowitz, 270 App. Div. 548, 61 N.Y. S. 2d 138, 69 USPQ 192 (1946). (4) Sternberg vs. O'Brien, 48 N.J. Eq. 370 22A. 348. (5) See, for example, Driver vs. Smith, 89 N.J. Eq. 339 104 A. 717. (6) Restatement of Torts, 4, Sec. 757. (7) See, for example, Mycalex Corp. of America vs. Pemco Corp., 159 F. 2d 907, 72 USPQ 290 (1947) and cases cited therein. (8) Ridsdale Ellis, Trade Secrets, Baker, Voorhis & Co., Inc., New York (1953). (9) Restatement of Torts, 4, Sec. 757 b. (10) Eastman Kodak Co. vs. Powers Fihn Products, Inc., 189 App. Div. 556 170 N.Y. S. 325 (1919). (ll) E. I. du Pont de Nemours & Co. rs. American Potash & Chemical Corp. et al., 141 USPQ 447 (1964). (12) B. F. Goodrich Co. rs. Woh]gemuth, 137 USPQ 389 and on appeal at 137 USP• 392 (1963). New York Penal Law 1296 (4) by amend•nent effective July 1, 1964.