1 of 138 DOCUMENTS

BRISTOL-MYERS COMPANY


BOONVILLE DIVISION OF ETHAN ALLEN, INC.


OWENS-ILLINOIS, INC.

OSHRC Docket No. 77-648

Occupational Safety and Health Review Commission

December 20, 1978

[*1]

Before CLEARY, Chairman; BARNAKO and COTTINE, Commissioners

COUNSEL:

Baruch A. Fellner, Office of the Solicitor, USDOL

Stephen J. Stanford, for the employer

OPINION:

DECISION

BY THE COMMISSION:

The issue presented in this case is whether a non-federal expert should be permitted to enter Owens-Illinois' plant for purpose of discovery on behalf of the Secretary, despite Owens-Illinois' contention that trade secrets might thereby be revealed. Administrative Law Judge Frank B. Zinn granted the Secretary's motion for entry. No hearing was held on the issue of trade secrets, nor was any limit placed upon the type of expert permitted to enter. However, the Judge imposed certain conditions on the entry aimed at protecting the confidentiality of Owens-Illinois' alleged trade secrets. The Commission now holds that the likelihood of disclosure of trade secrets to an expert who is not a federal employee does not preclude the granting of a motion for entry upon respondent's land by such an expert as long as an adequate protective order is entered to insure that such trade secrets are kept confidential. Because Owens-Illinois was not required to demonstrate below that it has one or more trade secrets [*2] which are likely to be revealed to the expert during the requested discovery entry and because we find the protective order entered in this case to be inadequate, the Commission vacates the Judge's order granting the entry upon land and remands the case for further proceedings consistent with this opinion.

I

Owens-Illinois, Inc. ("Owens") manufactures corrugated boxes in its plant in Milan, Michigan. An OSHA compliance officer inspected the plant on March 27, 1974, and a citation was issued to Owens alleging, among other things, a violation of the noise standard, 29 C.F.R. 1910.95. Owens contested this item of the citation and subsequently entered into a "stipulation and settlement agreement" with the Secretary, which was approved by the Commission.

Owens' Milan plant was inspected again on January 26, 1977, and a "Notification of Failure to Correct Alleged Violation and of Proposed Additional Penalty" with respect to the noise violation was issued to Owens. Owens filed a notice of contest; a complaint and answer followed; and the parties commenced discovery. As part of discovery proceedings, the Secretary filed a "Motion to Enter Upon Respondent's Land" under Federal Rule [*3] of Civil Procedure 37(a)(2), seeking to enter Ownes' Milan plant "for the purpose of inspecting and measuring, surveying, photographing, testing and/or sampling the property or any object or operation therein which relates to the subject matter of this action." n1

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n1 The Secretary states that his prior request to enter, served upon Owens in accordance with Federal Rule of Civil Procedure 34(b), was objected to by Owens on the basis that the matter sought to be discovered involved trade secrets and was privileged within the meaning of Federal Rule of Civil Procedure 26(b).

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Owens opposed the Secretary's motion on the ground, inter alia, that "any 'expert' Complainant designates may not be a Federal officer and subject to obligations of Section 15 of the OSHA Act and 18 USC 1905 with regard to the confidentiality of trade secret information learned during the course of any inspection."

Without holding a hearing, Judge Zinn entered an order granting the Secretary's "Motion to Enter Upon Respondent's Land" but [*4] imposed three conditions:

1. The entry and inspection be completed by September 9, 1977;

2. The facts obtained be compiled and submitted not later than September 20, 1977; and,

3. "Any person making that entry and inspection, not an employee of the United States, be first required to take under oath a written pledge to maintain in confidence under the same rules that bind a United States employee, information obtained upon such inspection and entry or examination of records obtained from respondent, with any violation of such pledge to be a contempt and subject to punishment as provided under Occupational Safety and Health Act of 1970."

The Judge made no findings and gave no grounds for his order, except to state that he had reviewed the submissions of the parties.

Thereafter, Owens filed a "Motion for Protective Order for Plant Site Inspection" requesting more stringent conditions on the disclosure of trade secrets by the individuals who would conduct the entry upon land. Judge Zinn denied Owens' motion, noting that Owens would have an opportunity to depose the consultant prior to the hearing and noting that Howard Pelton, the outside consultant, had entered into an agreement [*5] with the Secretary and had signed an oath of confidentiality which satisfied the requirements of the Judge's earlier order. The text of the agreement, in relevant part, stated:

The Consultant shall not disclose any information obtained or developed in the performance of this Agreement, except in reports furnished to the Occupational Safety and Health Administration in accordance with the requirements of this Agreement and when relevant in proceedings under the Act.

The oath of confidentiality stated:

Howard Pleton being first duly sworn says that he agrees to be subject to the same rules that bind a United States employee in the performance of his duties in this matter, and will maintain in confidence any information obtained or developed in the performance of said duties, except in reports furnished to the Occupational Safety and Health Administration in accordance with the Rules of the Commission and when relevant in proceedings under the Act. Mr. Pelton understands that any violation of this pledge may result in his being found in contempt and subject to punishment as provided under the Occupational Safety and Health Act of 1970.

Pursuant to Commission Rule 11(b), Owens filed [*6] an interlocutory appeal of the Judge's orders granting the entry upon land and denying the motion for protective order. That interlocutory appeal is now before us.

II

On appeal, Owens argues that the Judge's orders should be reversed on several grounds. First, it contends that section 15 n2 of the Occupational Safety and Health Act of 1970, 29 U.S.C. 651-678, ("the Act") contemplates that access to confidential information be granted only to employees of the federal government. Second, it argues that the Judge's orders depart from precedent established in Reynolds Metals Co., 78 OSAHRC 51/F1, 3 BNA OSHC 1749, 1975-76 CCH OSHD para 20,214 (No. 4385, 1975) ("Reynolds I"), where a divided Commission held that, absent a showing by the Secretary of good cause why it is necessary to use outside experts, only federal employees could be used to conduct an entry upon an employer's property in which trade secrets were likely to be disclosed. Additionally, Owens asserts that the Judge's orders fail to protect its trade secrets and other confidential information and that it has no other means of protection under state statutory and common law. Finally, Owens argues that the Judge's [*7] orders do not comply with the criteria for protective orders set out by Chairman Cleary in his dissenting opinion in Reynolds I, in which he argued against barring non-federal employees from making discovery entries.

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n2 Section 15 states:

All information reported to or otherwise obtained by the Secretary or his representative in connection with any inspection or proceeding under this Act which contains or which might reveal a trade secret referred to in section 1905 of title 18 of the United States Code shall be considered confidential for the purpose of that section, except that such information may be disclosed to other officers or employees concerned with carrying out this Act or when relevant in any proceeding under the Act. In any such proceeding the Secretary, the Commission, or the court shall issue such orders as may be appropriate to protect the confidentiality of trade secrets.

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Arguing in support of affirmance of the Judge's orders, the Secretary maintains that Reynolds I was decided erroneously, [*8] has brought about protracted proceedings on discovery issues in OSHA cases, and has hindered enforcement of the Act. He contends that under the Federal Rules of Civil Procedure he need only show the relevance of the material sought to be disclosed and the burden then is on respondent to establish good cause why a protective order should issue. Specifically, in the Secretary's view respondent must establish that the information sought actually involves trade secrets. Even if this is proven, the Secretary asserts, trade secrets are not absolutely privileged; rather, the conflicting interests must be weighed to determine whether the trade secrets should be disclosed. Moreover, the Secretary contends that trade secrets are more appropriately protected by a protective order requiring confidentiality n3 than by barring non-federal employees from entering respondent's plant. The Secretary argues that any breach of such a protective order would be punishable by contempt and that respondent would have additional remedies under state law for unauthorized disclosure of trade secrets.

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n3 On the matter of the contents of a protective order, the Secretary states:

Further, the Secretary stands ready to have an expert chosen sign a written pledge of confidentiality as part of his or her employment contract. At this point it should be noted that the Secretrary has never intended to use a competitor of Respondent as an outside expert to make the inspection and would willingly submit the name, address, telephone number and background resume of any expert chosen with a view toward permitting Respondent to have a veto over an expert demonstrated to be aligned with a competitor.

[*9]

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III

In Reynolds I, a divided Commission held that a trade secret should be protected by limiting any discovery entry to federal employees, who are prohibited by criminal statue, 18 U.S.C. 1905, from disclosing trade secrets. This precedent was affirmed by an equally-divided Commission in World Color Press, Inc., 77 OSAHRC 202/B9, 6 BNA OSHC 1084, 1977-78 CCH OSHD para. 22,358 (No. 76-2005, 1977). Subsequently, in Reynolds Metals Co., 78 OSAHRC 51/D4, 6 BNA OSHC 1667, 1978 CCH OSHD para. 22,806 (No. 4385, 1978) ("Reynolds II"), the Commission, composed of Commissioner Barnako and Chairman Cleary, reiterated its position as set forth in Reynolds I that discovery inspections shall be conducted by federal employees where trade secrets exist. However, the Commission held that the employer must establish the existence of trade secrets before entry would be limited to a federal employee and allowed an exception to the federal expert restriction when the Secretary shows good cause for the use of a non-federal expert. Chairman Cleary concurred in the result, solely on the ground that [*10] the Commission's decision in Reynolds I was controlling.

Based on the Commission's experience with the trade secret issue and on a re-examination of the applicable law, we rule that the likelihood that a discovery entry will disclose an employer's trade secret to those participating in the entry does not warrant barring the Secretary from using non-federal experts to make such an entry. Prior decisions noted supra are overruled to the extent that they hold to the contrary. We further hold that trade secrets can be protected most appropriately in discovery entries by the use of protective orders requiring outside experts to maintain the confidentiality of trade secrets. n4

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n4 Section 15 of the Act specifically provides for the issuance of protective orders to protect the confidentiality of trade secrets.

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Based on the Commission's experience with the trade secret issue following its decision in Reynolds I, we are persuaded that such protective orders are preferable to barring the use of outside experts. [*11] Reynolds I appears to have prompted numerous employers to oppose discovery entries by outside experts on the ground that trade secrets might be revealed. While certainly the concern expressed for protecting the confidentiality of trade secrets has been genuine in the majority of those cases, in some instances the objection may have been raised not out of any real fear that trade secrets would be revealed but rather as a strategy to hinder the Secretary in the prosecution of cases by sharply restricting the experts he could employ to aid his prosecution and by delaying trial on the merits through prolonged litigation over this collateral discovery matter. Such a purpose is not a legitimate reason for restricting the use of experts by the Secretary. We believe that the use of protective orders requiring outside experts not to reveal trade secrets will avoid imposing such excessive constraints on the Secretary's prosecution of cases while at the same time adequately protecting employers' legitimate interests in preserving the confidentiality of their trade secrets.

In holding that the possibility trade secrets will be disclosed does not warrant barring the use of outside experts [*12] in discovery inspections, we note that federal courts have adopted a similar approach. In cases in which plaintiffs have sought to use outside experts to conduct discovery inspections of defendants' plants, such inspections were permitted by the courts even though they could reveal defendants' trade secrets. n5 Ordering the experts not to reveal any trade secrets they discovered during an inspection was thought to be sufficient protection of the trade secrets.

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n5 Paul v. Sinnott, 217 F.Supp. 84 (W.D. Pa. 1963); Louis Weinberg Associates, Inc. v. Monte Christi Corp., 11 F.R.D. 514 (S.D. N.Y. 1951).

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Moreover, federal courts generally view the use of outside experts as a solution, rather than a problem, in discovery involving trade secrets. Often in litigation between business competitors, one party resists discovery requests on the grounds that the discovery will reveal its trade secrets to its opponent. In numerous cases federal courts have resolved this problem by permitting the discovery but ordering that the [*13] trade secret information be made available only to the discovering party's counsel and to the experts. n6 The experts in such cases usually are ordered to refrain from revealing the trade secret information or to sign oaths that they will keep such information confidential.

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n6 E.g., Covey Oil Co. v. Continental Oil Co., 340 F.2d 993 (10th Cir. 1965), cert. denied, 380 U.S. 964 (1965); Davis v. General Motors Corp., 64 F.R.D. 420 (N.D.Ill. 1974); Triangle Ink and Color Co. v. Sherwin-Williams Co., 61 F.R.D. 634 (N.D.Ill. 1974); Spartanics, Ltd. v. Dynetics Engineering Corp., 54 F.R.D. 524 (N.D.Ill. 1972).

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In addition, nothing in the Act precludes permitting outside experts from making discovery entries when trade secrets may be disclosed. Contrary to Owens' assertion, section 15 of the Act, n7 which refers to 18 U.S.C. 1905, does not contemplate that access to trade secrets be given only to federal employees. n8 Rather, that section addresses the limitations on disclosure by the Secretary or his representative [*14] of trade secrets which are in the Secretary's possession.

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n7 See note 2, supra.

n8 Respondent's reliance on the Act to substantiate its claim that Congress envisioned only the use of federal employees when trade secrets are at issue is misplaced. An opposite conclusion is suggested by section 7(c)(2) of the Act which authorizes the Secretary to employ experts and consultants on an intermittent basis to assist him in carrying out his responsibilities under the Act.

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Moreover, 18 U.S.C. 1905 n9 provides criminal penalties for any federal employee who divulges, to any extent not authorized by law, any information coming to him in the course of his employment which concerns the trade secrets of any person. Section 15 of the Act provides that all information obta hed by the Secretary which contains trade secrets shall be considered confidential for the purpose of 18 U.S.C. 1905 "except that such information may be disclosed to other officers or employees concerned with carrying out this Act or when relevant [*15] in any proceeding under this Act." Thus, 18 U.S.C. 1905 forbids the disclosure of trade secrets not authorized by law and section 15, rather than adding to this proscription, establishes two categories of disclosure which are authorized by law - disclosure to other officers or employees concerned with carrying out the Act and disclosure when relevant in any proceeding under the Act. Hence, section 15 is in the nature of an exemption from 18 U.S.C. 1905 rather than a prohibition and clearly does not limit access to trade secrets only to federal employees. n10

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n9 18 U.S.C. 1905 provides as follows:

Whoever, being an officer or employee of the United States or of any department or agency thereof, publishes, divulges, discloses, or makes known in any manner or to any extent not authorized by law any information coming to him in the course of his employment or official duties or by reason of any examination or investigation made by, or return, report or record made to or filled with, such department or agency or officer or employee thereof, which information concerns or relates to the trade secrets, processes, operations, style of work, or apparatus, or to the identity, confidential statistical data, amount or source of any income, profits, losses, or expenditures of any person, firm, partnership, corporation, or association; or permits and income return or copy thereof or any book containing any bstract or particulars thereof to be seen or examined by any person except as provided by law; shall be fined not more than $1,000, or imprisoned not more than one year, or both; and shall be removed from office or employment.

n10 See also the holding in Ditlow v. Volpe, 362 F.Supp. 1321 (D.D.C. 1973), rev'd on other grounds sub nom. Ditlow v. Brinegar, 494 F.2d 1073 (D.C. Cir. 1973), cert. denied, 419 U.S. 974 (1974), discussed by Chairman Cleary in World Color Press, 6 BNA OSHC at 1089, that 15 U.S.C. 1401(e), a statute identical in pertinent part to section 15, was not intended to create any greater protection for trade secrets than that already provided by 18 U.S.C. 1905.

[*16]

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Owens also contends that a protective order by itself is insufficient to protect its trade secrets and that it presently has no contract, tort or statutory remedies under Michigan law for the unauthorized release of trade secrets, while the Secretary contends that Ownes has adequate state law remedies available to it. However, we do not base our holding on any state law remedies. Rather, we rely on the efficacy of protective orders and the ethical nature of professional scientific consultants to insure the confidentiality of an employer's trade secrets. In the unlikely event that such an order is violated, the Commission has various disciplinary powers it may exercise, which include barring the offending individual from participating in further proceedings before the Commission. We believe the threat of these sanctions, as well as those available under the provisions of appropriate protective orders and contract provisions, discussed infra, will deter the unauthorized disclosure of an employer's trade secrets.

IV

Since we place our reliance on protective orders requiring nondisclosure as the [*17] mechanism by which to protect trade secrets, a close examination of the nature of the protective order is warranted. Judge Zinn's order required that the inspection be completed by a particular date, that the facts obtained be submitted 11 days later, and that the outside expert take a written oath to maintain in confidence information obtained from the inspection under the same rules that bind a federal employee. The expert thereafter signed such an oath and entered into an agreement with the Secretary which contained a confidentiality provision.

While these provisions constitute significant measures designed to protect the confidentiality of Owens' alleged trade secrets, we agree with Owens that they do not go far enough. In cases where a protective order is appropriate, we believe that it should contain the following elements:

First, is should require that at a reasonable time before the discovery inspection is to occur, the Secretary provide the employer with a resume of the expert who is to make the inspection. The resume should include the expert's name, address, employment history, clients, education and published works. The employer should have an opportunity to challenge [*18] the selection of the expert on the ground that the expert is closely aligned with a competitor of the employer. See Louis Weinberg Associates, Inc. v. Monte Christi Corp., 11 F.R.D. 514 (S.D.N.Y. 1951). Any such challenge should be ruled on by the Judge. While this provision does not provide employers with veto power over the Secretary's selection of an expert, in should provide them substantial protection against their trade secrets being revealed to an individual who has a close relationship with their competitors. A primary purpose of providing the employer with the expert's resume is to apprise the employer of the expert's background in this regard.

Second, the expert should be ordered to sign and comply with a written oath stating that any information which he obtains during the discovery entry which the employer has established is a trade secret (or, in the event the Secretary consents to the entry of a protective order without a trade secret being established, any information obtained during the discovery entry which the employer designates to the expert in writing as a trade secret) shall not be disclosed except to the Secretary's representatives who are involved [*19] in litigation of the case and in proceedings before the Review Commission. The purpose of ordering the expert to sign the oath is to bring the confidentiality requirement to his attention and impress upon him its seriousness. The order should also cleary indicate that a breach of the oath is a direct violation of a Commission order.

Third, the order should require the Secretary to include in his contract with the expert a non-disclosure provision identical in content to the oath just described. The provision should be drafted to make clear that it is the express intent of the parties that the employer be a beneficiary of the provision and is granted by it a right to enforce the provision, 17 AM. JUR. 2d Contracts 304, 308 (1964); 4 CORBIN CONTRACTS 776, 777 (1951 & Supp. 1971.) Making the employer a third-party beneficiary of the contractual non-disclosure provision enhances its deterrent effect by assuring that it is enforceable by the party who would have the most interest in enforcing it. n11

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n11 This third-party beneficiary provision is particularly necessary because it does not appear that an expert's initial violation of a Commission protective order would be punishable as contempt. Section 12(i) of the Act makes the provisions of 29 U.S.C. 161, section 11 of the National Labor Relations Act ("NLRA"), "applicable to the jurisdiction and pose of the Commission." Section 11(1) of the NLRA provides that the National Labor Relations Board, upon the application of any party, shall issue subpenas requiring the attendance and testimony of witnesses and production of evidence. Under section 11(2) of the NLRA, in case of refusal to obey a subpena, a district court, upon application by the Board, has jurisdiction to issue an order requiring a person to appear and produce evidence or give testimony. Failure to obey such a court order may be punished by the court as a contempt.

Assuming that a Commission order requiring an employer to permit a discovery inspection and requiring an outside expert not to disclose trade secret information constitutes a "subpena requiring . . . the production of evidence" within the meaning of section 11(1) of the NLRA, the initial violation of such an order appears not to be subject to contempt. Under the statute, only a violation of a district court order would subject one to contempt, and a district court appears to have jurisdiction to enter such an order only when there is a prior refusal to obey a Board (or Commission) order. Thus, since a district court's jurisdiction apparently cannot be invoked until a Commission order has been violated, the third-party beneficiary contract provision is necessary to serve as an effective deterrent to disclosure. See 1 K. Davis, Administrative Law 3.11 (1958).

[*20]

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Finally, any protective order entered by the judge shall be broad enough to include within its coverage the Secretary and his representatives, and shall clearly indicate that the sanctions for a violation of the order apply to anyone acting in the Secretary's behalf.

Requirements similar to the four enumerated above have been used, singly or in various combinations, by federal courts to deal with situations in which trade secrets were to be disclosed in discovery. n12 We believe that these four elements provide a sound basis for an adequate protective order and that they constitute the minimum requirements for a protective order when an employer's trade secret is likely to be revealed to an outside expert conducting a discovery inspection.

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n12 See, e.g., Covey Oil Co. v. Continental Oil Co., note 6, supra (confidentiality ordered); Alloy Cast Steel Co. v. Steelworkers, 70 F.R.D. 687, 689 (N.D.Ohio 1976) (confidentiality ordered); Davis v. General Motors Corp., note 6, supra (court must approve outside expert); Triangle Ink and Color Co. v. Sherwin-Williams Co., note 6, supra (both parties must agree on expert; expert must sign non-disclosure agreement); Tosa Chrysler-Plymouth, Inc. v. Chrysler Motors Corp., 55 F.R.D. 41 (E.D. Wis. 1972) (plaintiff barred from using competitors of defendant to aid in discovery of defendant; confidentiality ordered). Spartanics, Ltd. v. Dynetics Engineering Corp., note 6, supra (both parties must agree on expert; expert must sign non-disclosure agreement); Struthers Scientific and Int'l. Corp. v. General Foods Corp., 45 F.R.D. 375 (S.D.Tex. 1968) (confidentiality ordered); Paul v. Sinnott, note 5, supra (identity of outside experts and photographers to be made known prior to inspection; outside experts and photographers must sign non-disclosure oath); United States v. National Steel Corp., 26 F.R.D. (S.D.Tex. 1960) (confidentiality ordered); American Oil Co. v. Pennsylvania Petroleum Products Co., 23 F.R.D. 680 (D.R.I. 1959) (outside persons aiding discovery not to be employees of or associated with party conducting discovery); Louis Weinberg Associates, Inc. v. Monte Christi Corp., note 5, supra (name of outside expert to be furnished prior to discovery inspection; party upon whom discovery is sought may object to expert if he is business competitor).

[*21]

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V

Since this case is before us on interlocutory appeal, we remand for further proceedings consistent with this decision. We note that the Secretary has agreed to the entry of a protective order containing elements similar to those we have outlined. n13 However, we believe the Secretary should be accorded the opportunity to reconsider his position in light of this decision. If the Secretary does not agree to the entry of a protective order, the order will be entered only if Owens proves that it possesses a trade secret which is likely to be revealed by the requested entry. Reynolds II, supra; Carter Products, Inc. v. Eversharp, Inc., 360 F.2d 868 (7th Cir. 1966); Hunter v. International Systems & Controls Corp., 51 F.R.D. 251 (W.D. Mo. 1970).

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n13 See note 3, supra.

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We note that Owens raised the trade secrets issue in this case in a rather perfunctory manner. In its motion opposing entry upon land, Owens' only [*22] mention of trade secrets was made as follows:

Respondent further objects to Complainant's request for further inspection to the extent that any "expert" Complainant designates may not be a Federal officer and subject to obligations of Section 15 of the OSHA Act and 18 USC 1905 with regard to the confidentiality of trade secret information learned during the course of any inspection.

This statement did not expressly assert that Owens' Milan plant contains trade secrets or that the Secretary's outside acoustical expert would be likely to learn of such trade secrets if he were permitted to make the requested entry upon land. Nor did Owens submit an affidavit to support its claim of trade secrets. If proof of trade secrets is required on remand, the vagueness of Owens' allegations concerning trade secrets will hinder the proceedings on this question, since its allegations provide little notice to the parties of what is at issue. Therefore, we believe that before Owens, or any employer, may go forward with evidence of the existence of trade secrets, it should be required to squarely raise the trade secrets issue.

In order to adequately raise a claim of trade secrets, an employer should [*23] allege in an appropriate pleading that a certain trade secret exists and that the procedure to which objection is made, such as entry upon land, is likely to reveal the trade secret. Additionally, the general nature of the trade secret should be described. These allegations must be supported by affidavits of individuals who possess personal knowledge of the alleged trade secret. n14 If the Secretary desires to contest an employer's claim of trade secrets, he should submit affidavits controverting this claim. n15 We believe that this is the appropriate procedure to follow on remand if the Secretary does not consent to a protective order and Owens elects to present proof on the trade secret issue. Additionally, if proceedings concerning proof of trade secrets are necessary, the Judge should enter whatever orders are appropriate to protect the confidentiality of the alleged trade secret during the course of the proceedings on that issue.

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n14 See Rosenblatt v. Northwest Airlines, Inc., 54 F.R.D. 21 (S.D.N.Y. 1971) (attorney's affidavit which merely alleges that discovery will reveal trade secrets is insufficient to warrant protective order); Sacks v. Frank H. Lee Co., 18 F.R.D. 500 (S.D.N.Y. 1955) (same).

n15 Where the Secretary claims that he cannot respond adequately by affidavit to the merits of the employer's trade secret claim because the facts relating to the existence of the alleged trade secrets are within the exclusive control of the employer, a procedure analogous to that provided for in Federal Rule of Civil Procedure 56(f) should be followed.

[*24]

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Accordingly, since Owens was not required to demonstrate before the Judge that it has one or more trade secrets which are likely to be disclosed to the Secretary's outside expert in a discovery entry of Owens' Milan plant, the Judge's order permitting discovery and requiring confidentiality is vacated and the case is remanded for further proceedings consistent with this decision. Should Owens establish that it has a trade secret that would be likely to be revealed to an outside expert during the discovery inspection, or should the Secretary consent to the entry of an order to protect Owens' asserted trade secrets, the Judge shall enter a protective order that conforms with the requirements we have described.

IT IS SO ORDERED.

DISSENTBY: BARNAKO

DISSENT:

BARNAKO, Commissioner, dissenting:

I do not believe that protective orders requiring confidentiality are an effective bar to the inadvertant disclosure of trade secrets by non-federal experts, who in the normal conduct of their business frequently communicate with others with respect to practices, methods and techniques and who over time may not be able to mentally segregate [*25] the trade secret information they obtained in one plant from processes, methods and techniques they observe elsewhere. I also believe that the Commission lacks authority to punish violations of its orders through contempt proceedings, for the reasons outlined in footnote 11 of the majority decision, and that the preferred method of protecting trade secrets is through prosecution under 18 U.S.C. 1905 whenever Federal employees disclose trade secrets. Therefore, I would adhere to the Commission precedent articulated in Reynolds Metals Co., 78 OSAHRC 51/F1, 3 BNA OSHC 1749, 1975-76 CCH OSHD para. 20,214 (No. 4385, 1975) and Reynolds Metals Co., 78 OSAHRC 51/D4, 6 BNA OSHC 1667, 1978 CCH OSHD para. 22,806 (No. 4385, 1978).

If the Secretary shows good cause for the use of non-federal experts, I would agree to the entry of a protective order as outlined in the majority opinion.