In the digital age, businesses may assume that firewalls, login credentials and restricted access are enough to shield proprietary data. But a recent federal court decision shows that a “trade secret” under the Defend Trade Secrets Act (DTSA) may require more than technical controls — it requires documented, enforceable commitments to confidentiality. The case of Superb Motors Inc. v. Deo demonstrates the crucial role that nondisclosure agreements (NDAs) and written policies play in safeguarding competitive assets such as customer lists and internal software systems.
On March 21, 2025, the U.S. District Court for the Eastern District of New York addressed whether plaintiff Superb Motors’ Dealer Management System (DMS) and customer list qualified as trade secrets under the DTSA. The court determined that restricting access to information solely through computer firewalls, usernames and passwords was insufficient to establish reasonable safeguards for trade secrets.
The Trade Secrets Dispute. Anthony Deo, a former shareholder of automobile dealership Superb Motors, allegedly misappropriated Superb Motors’ DMS and customer list to benefit competing dealerships. Superb claimed Deo took the proprietary DMS and customer list, poached employees, and leveraged their familiarity with Superb Motors’ systems and customer base to redirect business to his new enterprises.
Superb allegedly invested time, expertise and financial resources to develop its DMS and customer list. The DMS was a sophisticated software platform that centralized and automated core dealership operations, serving as the operational “blueprint” for Superb’s business. The platform cost $120,000 to integrate at the company. Superb compiled the customer list through a $1.5 million investment in targeted advertising and refined it using years of industry experience and relationships. These assets allegedly gave Superb a competitive advantage in the automotive market.
The Court’s Ruling. The court recognized Superb’s investments and the value of its information, noting that “Plaintiffs likely demonstrated enough factors to show the economic value of both the DMS and the customer list, especially given the substantial investments [that were] made on behalf of Superb to secure this information. However, Plaintiffs did not proffer sufficient facts to show they took reasonable measures to keep the information a secret.” The court found that Superb only restricted access by requiring employees “to maintain its confidentiality in a computer system secured with firewalls, usernames, and passwords.”
The court held that mere expectations of confidentiality or technical safeguards such as password-protected systems are insufficient. Reasonable measures in this case required explicit contractual protections, such as NDAs. The lack of such agreements or formal confidentiality policies meant that the DMS and customer list did not qualify for trade secret protection under the DTSA, regardless of its intrinsic value or the resources invested.
Practical Takeaways. The Superb Motors case shows that even highly valuable and hard-to-replicate assets may not receive trade secret protection in the absence of robust confidentiality agreements. To ensure that proprietary information qualifies as a trade secret, employers should implement NDAs and confidentiality protocols for all employees and contractors with access to such information.
While a baseline NDA for employees with access to trade secrets is essential, these agreements must be tailored to reflect current labor and transparency laws. For example, overly broad confidentiality clauses that prohibit employees from discussing wages or workplace conditions may run afoul of the National Labor Relations Act. Similarly, some states require disclosures to ensure employees understand their rights regarding whistleblowing or reporting misconduct. As a result, companies should regularly review and update their NDAs to ensure enforceability and compliance with evolving legal standards.
Superb Motors is a cautionary tale for businesses relying on informal or technical safeguards to protect valuable information. Courts evaluating trade secret claims will look beyond the dollar value of an asset or the presence of passwords. They will ask whether the company took reasonable steps to maintain secrecy, which can require explicit written agreements, implementing clear confidentiality policies and ensuring employees understand their obligations. Without these measures, even the most valuable business tools can be left unprotected.
