BFV Perspectives, Noncompete & Trade Secrets, | Apr 21, 2014

Trade Secret Protection Versus Public Access to Records: Deal v. Coleman

As the Georgia Trade Secrets Act (O.C.G.A. section 10-1-760 et seq.) illustrates, the state’s public policy favors the protection of trade secrets.  At the same time, as the Georgia Open Records Act (O.C.G.A. section 50-18-70 et seq.) demonstrates, the state also has a longstanding public policy interest in allowing citizens access to public records and information.  When state organizations like the Georgia Department of Economic Development work with private companies to bring jobs to the state, these two interests can come into conflict with each other.  Just such a scenario was taken before the Supreme Court of Georgia in Deal v. Coleman, 294 Ga. 170 (2013). 

When Kia Motors Manufacturing Georgia, Inc. (“Kia”) opened a manufacturing facility in Georgia, the state’s Technical College System – as part of the Georgia’s Quick Start program – undertook to provide vocational and technical training to workers, who would then be hired to work at the Kia facility.  Id. at 170.  Such arrangements are increasingly common as states look to provide competitive economic environments in which large corporations may do business and create jobs. 

Years later, however, came the rub.  Several individuals filed Open Records Act requests to the Technical College System for a variety of documents, including documents related to Kia’s hiring practices, which Kia said constituted trade secrets.  The Technical College System refused to make the requested records available for inspection, so the individuals sued to compel production.

In the trial court, the Technical College System and Kia moved to dismiss, arguing that a specific exception in the Open Records Act (O.C.G.A. section 50-18-72(a)(47)) meant that documents relating to Georgia’s Quick Start program did not have to be produced.  More specifically, when Georgia’s Quick Start program was instituted, an exception was added the Open Records Act to protect certain classes of documents that might include trade secrets.  Specifically, the statute provided that documents relating to a Quick Start operation “relating to job applicants, or identifying proprietary hiring practices, training, skills, or other business methods and practices of a private entity” did not need to be made available to the public for inspection.  (O.C.G.A. § 50-18-71(a)(47)). 

The trial court granted the motion to dismiss on the basis of this exception.  The Supreme Court of Georgia granted certiorari to determine: (a) whether the Open Records Act exception was constitutional; and (b) whether all of the documents requested truly fit under the exception.

When it wrote in this exception, however, had the Georgia legislature unconstitutionally robbed the public of a vested right, retroactively carving out an exception to the Open Records Act?  After an in-depth analysis, the Supreme Court of Georgia concluded that, because the right to open access to public records is held by the public in common, it is not vested in any particular group and therefore be modified without infringing on a constitutional right.  Thus, the Supreme Court concluded the exception was valid.

As to the second question, the Supreme Court of Georgia could not reach a definitive answer.  Many classes of documents had been requested – and sued for – and the Court could not conclusively say that all of the requested documents fit into the Open Records Act exception.  Accordingly, the Court remanded to determine that question of fact, which the trial court had not considered.

As state governments compete with one another to lure large companies, they work often closely with private enterprises.  Such relationships make it increasingly likely that the records of a private corporation may be in the government’s possession and thus may be responsive to an open records act request.  These relationships may therefore naturally increase the frequency of conflicts between the company’s interest in protecting its trade secrets and the government’s interest in providing transparency to the public as this practice continues.  In Deal v. Coleman, the Supreme Court of Georgia provides a fascinating in-depth look at how state courts weigh these concerns against one another. 

BFV Perspectives, Noncompete & Trade Secrets, | Apr 21, 2014