Facts

This case is a trade secrets misappropriation action brought under the Uniform Trade Secrets Act, [citation], by an employer against former employees. The employer, Ed Nowogroski Insurance, Inc. (Nowogroski Inc.), owned by the Rupp family, sued its former employees, Michael Rucker, Darwin Rieck and Jerry Kiser, for soliciting its clients using confidential information. The employees had worked for Nowogroski Inc. as insurance salesmen and servicers of insurance business. Nowogroski Inc. also sued Potter, Leonard and Cahan, Inc., a rival insurance agency, for which employees Rucker, Rieck and Kiser commenced work when they terminated their employment with Nowogroski Inc.

   Following * * * trial, the trial court found that the employees had misappropriated Nowogroski Inc.’s trade secrets by retaining and using confidential client lists and other information. However, it awarded no damages for one employee’s solicitation of clients through the use of memorized client information. None of the factual findings has been challenged in this Court.

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   Nowogroski Inc. appealed, arguing that the trial court erred in holding that prior Washington cases prohibiting an ex-employee from using memorized, confidential client information to solicit his former employer’s customers were abrogated by the Uniform Trade Secrets Act. Nowogroski Inc. argued that the form of information which constituted a trade secret is irrelevant. Nowogroski Inc. also argued that the employees should be liable for misappropriation of a trade secret whether the information that constituted the protected information was written or memorized.

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  The Court of Appeals held that there was no legal distinction between written and memorized information under the Washington Uniform Trade Secrets Act. * * * The Court of Appeals affirmed the trial court’s award of damages based on 0.5 percent of commission * * *. 

   We granted the employees and their new employer’s petition for review. * * * The Petitioners challenge only the Court of Appeals’ conclusion that both memorized confidential information, as well as written information, may be protected under the Uniform Trade Secrets Act if it otherwise qualifies as a trade secret under the Act. * * *

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 Analysis

   As a general rule, an employee who has not signed an agreement not to compete is free, upon leaving 830 Part 9 Regulation of Business employment, to engage in competitive employment. In so doing, the former employee may freely use general knowledge, skills, and experience acquired under his or her former employer. However, the former employee, even in the absence of an enforceable covenant not to compete, remains under a duty not to use or disclose, to the detriment of the former employer, trade secrets acquired in the course of previous employment. Where the former employee seeks to use the trade secrets of the former employer in order to obtain a competitive advantage, then competitive activity can be enjoined or result in an award of damages. [Citation.]

   Once a common law concept, trade secret protection is now governed by statutes in most states, including Washington. [Citation.] Forty-one states and the District of Columbia have adopted the Uniform Trade Secrets Act. [Citation.] * * * The Act codifies the basic principles of common law trade secret protection. [Citation.] A purpose of trade secrets law is to maintain and promote standards of commercial ethics and fair dealing in protecting those secrets. [Citation.]

   The Uniform Trade Secrets Act defines trade secret as follows:

‘‘Trade secret’’ means information, including a * * * compilation * * * that:
(a) Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and
(b) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

   [Citation.]

   In determining whether information has ‘‘independent economic value’’ under the Uniform Trade Secrets Act, one of the key factors used by the courts is the effort and expense that was expended on developing the information. [Citation.] A plaintiff seeking damages for misappropriation of a trade secret under the Uniform Trade Secrets Act has the burden of proving that legally protectable secrets exist. [Citation.]

   In this case, the trial court found that the insurance information, including the customer lists: (1) derived independent economic value from not being known or readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use, and (2) that the plaintiff’s efforts to keep the customer files secret by educating its staff and by providing employment manuals and employment agreements had been reasonable.

   The portion of the Act’s definition of ‘‘misappropriation’’ which applies here proscribes the disclosure or use of a trade secret of another without express or implied consent by a person who, at the time of disclosure or use, knew or had reason to know his or her knowledge of the trade secret was acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use. [Citation.]

   The nature of the employment relationship imposes a duty on employees and former employees not to use or disclose the employer’s trade secrets. [Citation.] The Petitioners in the present case do not argue that the trial court erred in concluding that they ‘‘misappropriated’’ a trade secret; rather, they argue that information in the memory of the employee about a customer list is not a trade secret.

   A customer list is one of the types of information which can be a protected trade secret if it meets the criteria of the Trade Secrets Act. [Citations.]

   Trade secret protection will not generally attach to customer lists where the information is readily ascertainable. [Citations.] If information is readily ascertainable from public sources such as trade directories or phone books, then customer lists will not be considered a trade secret and a prior employee, not subject to a noncompetition agreement, would be free to solicit business after leaving employment. [Citation.] * * *

   Briefly expressed, whether a customer list is protected as a trade secret depends on three factual inquiries: (1) whether the list is a compilation of information; (2) whether it is valuable because unknown to others; and (3) whether the owner has made reasonable attempts to keep the information secret. There is no dispute in this case that the customer names, expiration dates, coverage information and related information is a compilation of information. The trial court found that the customer list and associated information derived independent economic value from not being known, or readily ascertainable by proper means, by other persons who can obtain economic value from its disclosure or use and that Nowogroski Inc. undertook reasonable steps to protect its secrecy.

   The question before us is whether the fact that the customer information was in one of the employee’s memory allows him to use with impunity the information which was otherwise a trade secret under our statute. *** 

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   The Uniform Trade Secrets Act does not distinguish between written and memorized information. The Act does not require a plaintiff to prove actual theft or conversion of physical documents embodying the trade secret information to prove misappropriation. [Citations.] The Washington Uniform Trade Secrets Act defines a ‘‘trade secret’’ to include compilations of information which have certain characteristics without regard to the form that such information might take. The definition of ‘‘misappropriation’’ includes unauthorized ‘‘disclosure or use.’’ [Citation.] As the Court of Appeals noted, two types of information mentioned in the Uniform Trade Secrets Act as examples of trade secrets include ‘‘method’’ and ‘‘technique;’’ these do not imply the requirement of written documents. [Citation.] 

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   * * * If an employee was privy to a secret formula of a manufacturing company, which was valuable and kept secret, it should not cease to be a trade secret if an employee committed it to memory. [Citation.] While customer lists may or may not be trade secrets depending on the facts of the case, we conclude that trade secret protection does not depend on whether the list is taken in written form or memorized.

Conclusion

The form of information, whether written or memorized, is immaterial under the trade secrets statute; the Uniform Trade Secrets Act makes no distinction about the form of trade secrets. Whether the information is on a CD, a blueprint, a film, a recording, a hard paper copy or memorized by the employee, the inquiry is whether it meets the definition of a trade secret under the Act and whether it was misappropriated. Absent a contract to the contrary, an employee is free to compete against his or her former employer, and a former employee may use general knowledge, skills and experience acquired during the prior employment in competing with a former employer. However, an employee may not use or disclose trade secrets belonging to the former employer to actively solicit customers from a confidential customer list. In this case, the former employees actively solicited customers from the employer’s customer lists, which the trial court found to be of independent value because unknown and subject to reasonable efforts to keep secret. The weight of modern authority is that the manner of taking a trade secret is irrelevant. Hence, we conclude the Court of Appeals was correct in holding that there is no legal distinction between written and memorized information under the Uniform Trade Secrets Act and in remanding for a recalculation of damages. 

   We affirm.