An employer that hires from a competitor faces its own, sometimes overlooked, exposure. The new hire's conduct can become the hiring employer's liability.
Vicarious Liability for a New Hire's Misappropriation
Washington recognizes that an employer may be vicariously liable under WUTSA, and that a future employer may be liable if it knowingly benefits from a future employee's tortious conduct. Thola v. Henschell, 140 Wn. App. 70, 80, 164 P.3d 524 (2007). A hiring employer that receives and uses a new employee's former-employer secrets — or that turns a blind eye to their use — risks direct exposure, including the same injunction, damages, exemplary-damages, and fee shifting.
The Federal Statute's Notice Trap
Under the federal DTSA, an employer that uses confidentiality or trade-secret agreements must include in any such agreement with an employee or contractor notice of the federal whistleblower immunity. 18 U.S.C. § 1833(b)(3)(A). An employer that omits this notice may not recover exemplary damages or attorney's fees against an employee who did not receive it. § 1833(b)(3)(C). This is a self-inflicted and easily avoided loss of the two most powerful remedies; agreement templates should be checked for the notice. This notice requirement does not apply to the Washington Act.
Inevitable Disclosure Is Not Established in Washington
A hiring employer should also understand the limits of the doctrine a former employer may invoke against it. Washington has neither adopted nor rejected the inevitable disclosure doctrine — the theory that an employee will inevitably rely on a former employer's secrets in a sufficiently similar new role. Moore v. Commercial Aircraft Interiors, LLC, 168 Wn. App. 502, 512–13, 278 P.3d 197 (2012). Under the federal statute, an injunction may not prevent someone from taking a job based merely on what they know; any restraint must rest on evidence of threatened misappropriation. 18 U.S.C. § 1836(b)(3)(A)(i). A former employer therefore cannot, on current law, reliably block a hire simply by asserting that disclosure is inevitable — but a hiring employer should not treat that as license to ignore a real risk of use.
Practical Risk-Reduction for the Hiring Employer
- Instruct new hires, in writing, not to bring or use any former-employer documents, files, or devices, and to return anything they possess.
- Screen or wall off a new hire from work directly implicating a former employer's specific secrets where the risk is acute — the step contemplated in confidentiality disputes to prevent inadvertent use.
- Do not solicit, accept, or store a competitor's proprietary materials offered by a new hire.
- Confirm the whistleblower-immunity notice appears in your own confidentiality and trade-secret agreements, preserving your access to exemplary damages and fees.
- Document a clean-hands onboarding so that, if the former employer sues, the record shows the hiring employer neither sought nor used protected information.