The advisory focuses on California, where employers generally cannot bar former employees from joining competitors, leaving trade secret law as the main protection. A company claiming trade secret status must show it took reasonable steps to keep the information secret, and the authors argue that weak safeguards around AI use can undermine that showing. Related court activity points the same way. A federal court in San Francisco dismissed xAI's trade secret claims against OpenAI with prejudice on June 15, 2026. In United States v. Heppner, a Southern District of New York court held that documents drafted on a public AI platform were not privileged. In Trinidad v. OpenAI, a Northern District of California court dismissed a Defend Trade Secrets Act claim because the plaintiff had uploaded her frameworks into ChatGPT.
For legal and HR teams, the takeaway is that AI-use policies now carry legal weight, not just compliance value. Counsel should review whether current confidentiality agreements and access controls address generative AI tools, whether employees know what they can and cannot paste into them, and whether the company can document those steps if it later has to prove reasonable secrecy measures. Studios and production companies with pre-release material should treat AI use as a standing disclosure risk, since the authors expect adoption to keep growing and the number of exposure paths with it.