The lawsuit brought by the Missouri Funeral Trust against the Missouri State Board of Embalmers and Funeral Directors and CFL Pre-Need includes  a number of unique and dubious claims.  For example, the lawsuit defines CFL Pre-Need, an insurance company, as a competitor but not funeral home clients that are licensed as a preneed seller.  The lawsuit also claims that CFL Pre-Need would not, but for information obtained through the auditor, be able to steal away clients.   With information obtained through the audit, the MFT also asserts that CFL Pre-Need can engage in price fixing, cutthroat pricing, and other improper pricing activities on various products and services.   We will examine these allegations in future posts, but for this article we will examine the crux of the MFT lawsuit: its customer list (the provider funeral homes) is a trade secret.

While the lawsuit assets claims that fall under the Missouri Uniform Trade Secret Act, the petition never cites the court to Chapter 417.  That may reflect the plaintiff’s recognition that the Missouri courts have yet to treat a customer list as a protectable trade secret under the Act.  That’s not to say a customer list could not be a trade secret, but as a recent Armstrong Teasdale’s Employment Law Letter explains, the party seeking to establish a customer list as a trade secret has to pass a six factor test.  The last element of that test may prove very difficult for the MFT to satisfy:  the ease or difficulty with which the information could be properly acquired or duplicated by others.

A company like CFL Pre-Need has a finite population of possible Missouri funeral home clients.  Not being licensed as a preneed seller, the company can only market its insurance through funeral homes that have a preneed seller’s license.   A list of those funeral homes can be downloaded from the website of the Division of Professional Registration.   To determine whether a funeral home is also a MFT client, one merely needs to visit the funeral home’s website.   It would seem that the MFT has a formidable challenge to establishing its customer list as a trade secret.

If the MFT cannot establish its funeral home client list as a trade secret, it then has the unenviable task of proving that its investment performance, administrative charges, investment contracts and program documents are trade secrets under the Uniform Trade Secrets Act.