On April 4, 2025, the Eleventh Circuit reversed the U.S. District Court for the Northern District of Alabama’s ruling dismissing Alabama Aircraft Industries’ (“AAI”) trade secret misappropriation claim against Boeing, thereby allowing AAI to pursue unjust enrichment damages in addition to amounts previously recovered on its breach of contract claim. See Alabama Aircraft Industries Inc. v. The Boeing Co., No. 20-11141.

Background

In 2005, the parties entered a “teaming arrangement” to jointly pursue a maintenance contract with the U.S. Airforce.  The agreement consisted of three contracts: a master agreement, a work share agreement, and a non-disclosure agreement. In 2011, AAI filed suit against Boeing alleging misappropriation of trade secrets and breach of contract with respect to the master agreement and non-disclosure agreement.  In 2013, the Northern District of Alabama dismissed AAI’s trade secrets claim as barred by the Alabama statute of limitations.  But in 2020, AAI’s two remaining claims for breach of contract proceeded to trial where a jury returned a verdict in favor of AAI and awarded AAI $2.1 million in damages.  

In February 2022, the Eleventh Circuit reversed and remanded the dismissal of AAI’s trade secrets claims, holding that the claim was not time-barred.  On October 26, 2022, the district court dismissed AAI’s trade secrets claim on the grounds that AAI had already recovered all the damages that were available on its breach of non-disclosure agreement claim, and therefore it could not pursue a Missouri Trade Secrets Act “for the same injury arising from the same course of conduct.”  AAI appealed.

Eleventh Circuit’s Holding

On April 4, 2025, the Eleventh Circuit reversed and remanded the dismissal of AAI’s trade secrets misappropriation claim, holding that the Missouri Trade Secrets Act expressly permits the remedy of unjust enrichment recovery, so long as the amount is not duplicative of the actual loss damages stemming from the misappropriation.  According to the Eleventh Circuit, the unjust enrichment recovery AAI sought is distinct from the consequential damages awarded in the jury verdict (which compensated AAI for out-of-pocket expenses resulting from the breach of contract).  In contrast, an unjust enrichment remedy would deprive Boeing of the gain it purportedly obtained from allegedly misappropriating AAI’s trade secrets.

Further, pointing to the parties’ master agreement, the Eleventh Circuit noted that the remedy of unjust enrichment was “conspicuously absent from the list of categorically barred damages” under the limitation of liability provision.  Acknowledging that AAI and Boeing were both “sophisticated parties,” the Eleventh Circuit reasoned that if the parties “had wanted the liability limitation provision to categorically bar an unjust enrichment award, they could have added it to the list of remedies they specified were barred by the contractual provision. They didn’t.”

Implications

While trade secret misappropriation statutes typically offer a broad range of remedies, the Eleventh Circuit’s ruling suggests that sophisticated parties may potentially limit such remedies through carefully drafted agreements.

Posted in Misappropriation, Trade Secrets
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Photo of Steven J. Pearlman Steven J. Pearlman

Steven J. Pearlman is a partner in the Labor & Employment Law Department, where he is Head of the Restrictive Covenants, Trade Secrets & Unfair Competition Group and Co-Head of the Whistleblowing & Retaliation Group.

Employment, Restrictive Covenant & Trade Secret, and Whistleblower…

Steven J. Pearlman is a partner in the Labor & Employment Law Department, where he is Head of the Restrictive Covenants, Trade Secrets & Unfair Competition Group and Co-Head of the Whistleblowing & Retaliation Group.

Employment, Restrictive Covenant & Trade Secret, and Whistleblower Practice. Steven’s national practice focuses on defending companies in federal and state courts and in arbitration fora against the full spectrum of employment-related claims, including claims of executives; restrictive covenant violations; employee raiding; theft of trade secrets; whistleblower retaliation under the Sarbanes-Oxley Act, the Dodd-Frank Act and similar state laws; and wage-and-hour violations, including class, collective and PAGA actions.

Steven has successfully handled trials in multiple jurisdictions; prevailed in seeking and defending against applications for temporary restraining orders and preliminary injunctions; defended one of the largest Illinois-only class actions in the history of the federal courts in Illinois (over 90k putative class members); and prevailed following his oral arguments before federal and state appellate courts. He brings his litigation experience (beginning in 1998) to bear in counseling clients to minimize risk and avoid or prepare for success in litigation.

Investigations. Reporting to boards of directors, their audit committees, CEOs and in-house counsel, Steven conducts sensitive investigations and has the unusual experience of testifying in federal court in connection with investigations. His investigations have involved complaints of sexual harassment involving C-suite officers; systemic violations of employment laws and company policies; and fraud, compliance failures and unethical conduct.

Thought Leadership and Accolades. Steven was named Lawyer of the Year for Chicago Labor & Employment Litigation in the 2023 edition of The Best Lawyers in America. He is a Fellow of the College of Labor and Employment Lawyers. Chambers has reported:

  • Steven is “one of the best in the country and has a lot of experience”;
  • Steven is as an “outstanding lawyer” who is “very sharp and very responsive,” a “strong advocate,” and an “expert in his field”;
  • He is thoughtful, attentive and demonstrates an acute understanding of matters top of mind for business-minded general counsel; and
  • “He is someone who can navigate the twists and turns of litigation without difficulty.”

Steven was 1 of 12 individuals selected by Compliance Week as a “Top Mind.” Earlier in his career, he was 1 of 5 U.S. lawyers selected by Law360 as a ”Rising Star Under 40” in the area of employment law and 1 of “40 Illinois Attorneys Under Forty to Watch” selected by Law Bulletin Publishing Company. Steven is a U.S. Library of Congress Burton Award Winner for “Distinguished Legal Writing.”

Steven was appointed to Law360’s Employment Editorial Advisory Board and selected as a Contributor to Forbes.com. He has appeared on Bloomberg News (television and radio) and Yahoo! Finance, and is often quoted in leading publications such as The Wall Street Journal. The U.S. Chamber of Commerce has engaged Steven to serve as lead counsel on amicus briefs to the U.S. Supreme Court and federal circuit courts of appeal.

In 2024, Steven received the Excellence in Pro Bono Service Award from the United States District Court for the Northern District of Illinois and the Chicago Chapter of the Federal Bar Association.

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Brenna McLean

As a labor & employment associate, Brenna McLean represents employers in workplace law matters, including discrimination, harassment, retaliation, and wage and hour violations. Brenna also routinely advises clients on a variety of employment practices, including employee handbooks and policies.

Prior to joining Proskauer…

As a labor & employment associate, Brenna McLean represents employers in workplace law matters, including discrimination, harassment, retaliation, and wage and hour violations. Brenna also routinely advises clients on a variety of employment practices, including employee handbooks and policies.

Prior to joining Proskauer, Brenna began her career at a national employment law firm, where she completed a legal secondment at a major airline. Most recently, Brenna worked at an international videogame company conducting internal employee investigations.

Brenna graduated from Northwestern Pritzker School of Law, cum laude, where she served as Articles Editor for The Northwestern Law Review and externed for the Honorable Marvin E. Aspen in the Northern District of Illinois. While in law school, Brenna also earned the Public Service Star Award for completing over 200 hours of public service during her second and third years.

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