Does EPLI Cover Non-Compete or Trade Secret Disputes When a Chef Leaves?
Generally, no. When a departing chef opens a competing restaurant using recipes, supplier lists, or staff taken from your kitchen, that dispute is rooted in contract and trade secret law, not employment discrimination or harassment. EPLI policies typically exclude pure contract and trade secret disputes.
Why This Looks Like an EPLI Claim but Usually Isn't
A chef who leaves and opens a competing restaurant down the street, taking recipes, supplier relationships, or key staff with them, feels like an employment dispute because it involves a former employee. But the legal theory underneath it is contract and trade secret law, not discrimination, harassment, wrongful termination, or retaliation.
EPLI is built to cover the legal theories in that second list. It is not built to cover breach of a non-compete agreement or misappropriation of confidential recipes and supplier information.
The Statute Behind Trade Secret Claims
When a restaurant pursues a departing chef over misappropriated recipes, plating techniques, or supplier pricing, the federal claim typically runs through the Defend Trade Secrets Act, 18 U.S.C. § 1836, which creates a civil cause of action for trade secret misappropriation connected to a product or service used in interstate commerce.
Where the Coverage Line Actually Falls
The hub's coverage exclusions section notes that EPLI excludes breach of contract claims not involving discrimination, harassment, or other protected activity. Trade secret and non-compete disputes fall squarely into that excluded category:
- A non-compete enforcement action is a contract dispute
- A recipe or client-list theft claim is a trade secret dispute
- Neither involves an allegation of discriminatory or retaliatory treatment
These disputes require separate legal counsel and, in some cases, a distinct insurance product rather than reliance on an EPLI policy.
When It Can Cross Back Into EPLI Territory
The line blurs only if the departing chef also alleges something like wage violations or retaliation as part of the same dispute, for example claiming they were pushed out after complaining about pay practices shared across locations. That kind of overlap is closer to the exposure described in Does EPLI Cover Class Action Wage Claims Across Multiple Locations?
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