On July 6, 2021, a federal court ordered that Mars, Inc.'s
trade secret lawsuit against its former executive must
be resolved in arbitration. Mars v. Szarzynski is a
cautionary example of broad judicial interpretation of arbitration
provisions and illustrates why arbitrating trade secret claims can
be undesirable.
In this case, Mars accused its former executive, Jacek
Szarzynski, of violating the Defend Trade Secrets Act by providing
thousands of confidential documents to his future employer. The
defendant brought a motion to dismiss, arguing that his employment
agreement required all such claims to be brought in arbitration.
Even though Szarzynski's contract was with Mars Belgium, a
subsidiary of Mars, Inc., the court found that Mars, Inc. was a
third-party beneficiary to the agreement—and thus bound by
its terms—because it consciously participated in and accepted
the benefits of the agreement. The court also rejected Mars'
arguments that subsequent incentive
