Hooters Enters 'Breastaurant' War, Sues Twin Peaks - Free Enterprise
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Hooters Enters 'Breastaurant' War, Sues Twin Peaks

A new breastaurant lawsuit has been filed, and this time it has nothing to do with trademarks.

Hooters has sued Twin Peaks, a scantily clad startup with 15 restaurants in the Southeast. The mountain-themed chain, which uses the slogan "Eats, Drinks, Scenic Views," plans to build another 35 locations in the next few years.

Hooters claims that the plan is based on confidential information stolen by former vice president Joseph Hummel.

La Cima Restaurants is behind Twin Peaks' expansion plan, according to the Associated Press. When Hummel left Hooters this summer, he joined the company as its new COO.

The breastaurant lawsuit alleges that Hummel downloaded hundreds of documents prior to his resignation. He supposedly took marketing plans, contracts, recruiting tools and sale figures.

If true, Hummel may have violated trade secret laws.

Both state and federal statutes protect trade secrets--intangible assets that give a business a competitive edge. Stealing trade secrets is a federal crime, but is more often litigated as a civil matter.

But just because a business has secrets, it doesn't mean they are protected by the law. Generally, a company must take reasonable steps to keep that information confidential. This can be accomplished through limited access, security measures, and employee training.

It is also wise to protect informational assets through contractual provisions. Strict noncompete and nondisclosure agreements can fill in where the law does not apply.

The breastaurant lawsuit is likely somewhat based on one of these agreements. If so, Hooters might have an easier time making its case.

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