Joby–Archer Trade-Secret Ruling: What California Companies Can Protect When an Employee Leaves for a Competitor

Joby and Archer compete in the developing electric vertical-takeoff-and-landing, or eVTOL, aircraft industry.

According to Joby’s amended complaint, Kivork downloaded dozens of company files shortly before announcing his resignation in July 2025 and sent certain files to a personal email account. He later joined Archer. Those remain allegations, not established facts.

Joby asserted claims involving breach of contract, inducement of breach, violations of the federal Defend Trade Secrets Act (18 U.S.C. §§ 1836, 1839), and related California law claims. The September 29 order allowed some theories to continue and dismissed others.

California Business and Professions Code section 16600 reflects the state’s strong policy favoring employee mobility.

In an earlier ruling in the case, the court concluded that a particular continuing confidentiality provision in Kivork’s agreement with Joby operated as an unenforceable de facto noncompete. In the September 29 order, the court struck allegations that continued to rely on that provision.

That does not mean California prohibits confidentiality agreements generally. Instead, the ruling illustrates a drafting problem: a confidentiality restriction can become vulnerable when its scope effectively prevents a former employee from working in the employee’s field rather than legitimately protecting defined confidential information or trade secrets.

Businesses should therefore distinguish between protecting proprietary information and attempting to restrain lawful competition.

The court reached a different conclusion regarding another provision of Kivork’s agreement. That provision prohibited him, while still employed by Joby, from assisting another person or organization in competing with Joby.

Because the restriction applied only during employment, the court held that it did not violate section 16600. The court therefore allowed Joby’s contract theory to proceed to the extent it concerned alleged conduct occurring while Kivork was still working for Joby.

For California businesses, the distinction matters: the state’s strong protection of post-employment mobility does not necessarily prevent an employer from enforcing obligations governing competitive conduct during the employment relationship.

Joby’s agreement also contained an Item Return provision requiring company materials to be returned. The court allowed Joby’s claim against Archer for allegedly inducing a breach of that provision to proceed.

That provides a practical reminder that an employer does not need to rely exclusively on a sweeping confidentiality clause when an employee departs. Well-drafted agreements and offboarding procedures—part of sound startup and business transactions planning—can separately address:

Those obligations can be particularly important when questions later arise over whether company information was retained after departure.

One of the most locally significant portions of the decision concerns Hawthorne Airport in Los Angeles County.

Joby alleges that it developed contacts and strategy concerning the potential use of Hawthorne Airport as a vertiport and maintenance facility. It further alleges that Kivork downloaded files containing Hawthorne-related contacts and strategy before leaving Joby, and that Archer later obtained a long-term lease involving the airport.

At this stage, the court did not find that Archer actually used Joby’s trade secrets. Instead, it held that the alleged sequence of events and surrounding circumstances were enough to support a plausible inference of use at the pleading stage. The court therefore allowed the Hawthorne Airport past-misappropriation theory to proceed.

That distinction is critical: surviving a motion to dismiss is not a finding of liability.

Joby did not prevail across the board. Although the court found that the amended complaint identified its alleged trade secrets with sufficient particularity, it concluded that Joby had not plausibly alleged past misappropriation for most of the asserted categories. Apart from the Developer Agreement and Hawthorne Airport theories, those past-misappropriation theories were dismissed with leave to amend.

For example, the court found Joby’s allegations concerning a potential Los Angeles Dodgers sponsorship insufficient to plausibly plead past misappropriation. The court nevertheless permitted Joby’s allegations of threatened misappropriation to proceed as to the specifically identified trade secrets.

The result illustrates another important lesson: describing information merely as “confidential,” “proprietary,” or “business strategy” is not necessarily enough. A trade-secret plaintiff must identify the information being protected with sufficient specificity and plausibly connect the alleged misuse to that information.

The order also dismissed Archer’s Lanham Act and unfair-competition counterclaims without leave to amend. Archer disclosed the ruling in a Form 8-K filed with the SEC, describing it as narrowing some claims while allowing others to proceed.

The Joby-Archer dispute highlights two principles that coexist under California law. Employees generally remain free to leave and compete. But businesses can still take lawful steps to protect genuine trade secrets, secure the return of company property, control access to sensitive information, and enforce appropriate obligations relating to conduct during employment.

For companies concerned about employee departures, practical protection often starts before a dispute arises. That may include:

The goal is not to prevent lawful employee mobility. It is to distinguish legitimate competition from the unauthorized retention or misuse of legally protectable company information.

Employee departures can create overlapping issues involving contracts, intellectual property, business competition, electronic evidence, and trade-secret law.

Mahrouyan Law, P.C. advises businesses and startups concerning commercial agreements, intellectual-property protections, and selected business and trade-secret disputes.

For a related discussion concerning protection of proprietary information shared between businesses, see our analysis of the AI startup trade-secret lawsuit involving Perplexity.