Washington Supreme Court
RCW 19.108.900(1) is one of the most contested provision in the Washington act, and the question it raises is squarely presented in most pleadings: may a plaintiff assert conversion, unjust enrichment, breach of confidence, tortious interference, or replevin alongside a WUTSA claim?
Boeing Co. v. Sierracin Corp. held that WUTSA does not displace a claim for breach of a confidential relationship, because "proof of trade secrets is not required for breach of confidentiality claims, which may be brought independently of trade secrets claims." 108 Wn.2d at 48. The Court has not revisited the displacement clause in the intervening thirty-nine years.
Division Two's Approach
Thola v. Henschell, 140 Wn. App. 70, 164 P.3d 524 (2007) presents the most thorough Washington analysis. A chiropractor's former employee took patient information to a competing practice; the jury awarded damages on both WUTSA and common law theories.
Division Two held two things. First, a defendant may be vicariously liable under WUTSA, and a future employer may be vicariously liable if it knowingly benefits from a future employee's tortious conduct. Id. at 80. Second, and more consequentially, WUTSA displaced some of the plaintiff's common law claims, and the jury had been incorrectly instructed on displacement. Because the damages award was not segregated between displaced and surviving theories, the court reversed the entire award and remanded for a new trial.
The court adopted what it termed a factual displacement analysis, drawn from the majority of UTSA jurisdictions and articulated in Mortgage Specialists, Inc. v. Davey, 153 N.H. 764, 778–79, 904 A.2d 652 (2006): (1) assess the facts supporting the civil claim; (2) ask whether those facts are the same as those supporting the UTSA claim; and (3) hold the civil claim displaced unless it is factually independent. Thola, 140 Wn. App. at 82. The court expressly declined, at that time, to adopt the competing elements-based test — under which a claim survives if its elements require some allegation or factual showing beyond those required under the UTSA — because the issue had not been briefed. Id. at 82 n.4.
The stated purpose of displacement, in the court's framing, is to preclude duplicate recovery for a single wrong.
Division One's Approach
Division One has taken a narrower view of displacement in two published decisions.
Modumetal, Inc. v. Xtalic Corp., 4 Wn. App. 2d 810, 425 P.3d 871 (2018), relying on Boeing, held that WUTSA did not displace a breach of confidentiality claim — reversing a trial court that had found displacement on the reasoning that the plaintiff's descriptions of its trade secrets and its confidential information were the same.
SEIU Healthcare Northwest Training Partnership v. Evergreen Freedom Foundation, 427 P.3d 688 (Wash. Ct. App. 2018) (No. 76220-6-I), review denied, 192 Wn.2d 1025 (2019), held that WUTSA does not displace a statutory replevin claim under chapter 7.64 RCW. A former employee had sold a database of roughly 42,000 trainee records to the defendant for $12,000. The court affirmed that relief under the replevin statute "is not based upon misappropriation of a trade secret" within the meaning of RCW 19.108.900(2)(a) and that the two statutes do not conflict — reasoning reinforced by the replevin statute's provision that its remedies are cumulative. The court also held that the replevin statute reaches electronic data, since it does not distinguish tangible from intangible property and electronic data can be both taken and returned.