Detroit, Michigan Federal Court Affirms Enforceability of Business Confidentiality Agreements
I am often asked by clients (and prospective clients) how much protection a confidentiality agreement really provides. The answer: a lot. Confidentiality agreements are important tools that can be used to protect a company's trade secrets and proprietary information. Michigan state and federal courts routinely enforce properly drafted confidentiality agreements.
A recent example of this was provided by the U.S. District Court in Detroit. The case involved a breach-of-confidentiality lawsuit that Multimatic Inc. - a Canadian auto parts supplier -- brought against Faurecia Interior Systems U.S.A. Inc - a French auto parts supplier. The federal court awarded Multimatic nearly $10 million in damages against Faurecia.
The two firms entered into a confidentiality agreement in February 2004 under which Faurecia agreed to protect Multimatic’s design and technology for a proprietary crossbeam. Faurecia wished to use the crossbeam to install instrument panels in Chrysler’s JS program. The JS program is the code name for the replacement for the Chrysler Sebring and Dodge Stratus vehicles.
Faurecia breached the confidentiality agreement in April, 2005 when it solicited bids to manufacture Multimatic’s crossbeam design from Multimatic competitors. Multimatic sued Faurecia in June of 2005. The case went to trial in September of 2007.
