Courts are reluctant to protect customer lists when they consist of information from public sources (such as business directories). (Morelife, Inc. v. Perry (1997) 56 Cal.App.4th 1514, 1521-1527.) On the other hand, where the employer has expended time and effort identifying customers with particular needs or characteristics, courts will prohibit former employees from using this information to capture a share of the market. Such lists are to be distinguished from mere identities and locations of customers where anyone could easily identify the entities as potential customers. As a general rule, the more difficult information is to obtain, the more time and resources expended by an employer in gathering it, the more likely a court will find such information constitutes a trade secret. The requirement that a customer list must have economic value to qualify as a trade secret has been interpreted to mean that the secrecy of this information provides a business with a “substantial business advantage.” (Morelife, supra, at 1521-22.)
In sum, not all customer lists are trade secret. Lists maintained as secret, however, that would give a competitor a “head start” in identifying potential customers likely constitute a trade secret under California law.