By Marisa Kendall, From The Recorder

SAN FRANCISCO — Yahoo Inc. took an aggressive and potentially risky step last week when it sued a former employee for allegedly leaking confidential company information to a reporter.

The suit, filed by lawyers with Gibson, Dunn & Crutcher, accuses a “rogue employee” of flouting the company’s confidentiality agreement by providing fodder for a tell-all book about CEO Marissa Mayer.

Cecile Lal, a former chief of staff to a Yahoo senior vice president, spent four months spilling secrets to Business Insider reporter Nicholas Carlson, according to Yahoo’s lawyers. The end result was the January publication of “Marissa Mayer and the Fight to Save Yahoo!,” which took a critical and often unflattering look at the CEO’s efforts to turn around the struggling company.

Yahoo’s lawsuit is an anomaly in the employment litigation landscape, where confidentiality agreements are typically invoked to protect trade secrets from competitors, not the press. Now, according to several lawyers, the company must prove the juicy tidbits it claims were leaked by Lal—including salary information and details of exchanges involving Mayer and other executives—were in fact confidential, and that their release damaged the company.

Meanwhile, the litigation could backfire by damaging Yahoo’s reputation, hurting worker morale and tarnishing the company in the eyes of potential recruits. “There’s a certain bullying aspect to this,” said James McManis of McManis Faulkner, “where you’ve got a public company suing some poor employee that stepped out of line in the view of the CEO.”

A Yahoo spokeswoman declined to comment on the litigation.

An attorney had not entered an appearance on behalf of Lal, but Ronald Cook of Willoughby Stuart Bening & Cook said the defendant has reached out to him. Cook, who specializes in business litigation, insurance and property claims in San Jose, said Lal has not signed a retainer and he believes she’s still weighing her options.

Lal worked at Yahoo for nearly five years, leaving in September to join career guidance website Talentoday. During her employment with Yahoo, she agreed to abide by a confidentiality agreement, code of ethics and other policies that forbade her from disclosing or distributing confidential company information, publishing articles about Yahoo without permission, or talking to the press, according to Yahoo’s lawyers. The lawsuit, filed last week in Santa Clara County Superior Court, accuses Lal of breach of contract and breach of fiduciary duty, and seeks damages and an injunction that would prevent Lal from disclosing more information.

In December, The New York Times published a lengthy article adapted from Carlson’s book in anticipation of its release. Yahoo claims the article includes confidential details about Mayer’s input on Yahoo’s new mobile app, the company’s internal review process, and private interactions between senior executives.

“Carlson could only have obtained this highly sensitive and confidentially held information from a Yahoo employee to whom that information had been entrusted as part of her employment at Yahoo,” the company’s lawyers wrote.

The article described a meeting Mayer called the day before the scheduled release of the Yahoo Mail mobile app, where she told her team she wanted to change the color scheme from blue and gray to purple. The announcement required the team members to spend all night making thousands of adjustments, and left some “visibly furious,” Carlson wrote.

The article also detailed quarterly “calibration meetings,” which Carlson wrote managers used to “conjure reasons that certain staff members should get negative reviews.” He described one meeting where an executive noted that an employee annoyed her, and the employee’s rating was subsequently lowered.

Yahoo has assembled a team of forensic experts and lawyers to investigate the alleged breach, according to the complaint. So far the company says it has uncovered evidence of lengthy phone calls between Lal and Carlson, and emails where she offers her help, saying “[i]t would be my pleasure to discuss Yahoo with you.”

That kind of forensic “hand in the cookie jar evidence” is helpful, said Rodger Cole, chair of Fenwick & West’s litigation group. But Yahoo likely will have a tough time getting an injunction, he said, since the book already has been published. The company also faces an uphill battle proving damages.

“They have to show the value of the information that was disclosed,” Cole said, “and how a competitor could use that information.”

This isn’t the first time Yahoo has chosen to launch an aggressive attack against a former employee. When an engineer sued Yahoo’s senior director of engineering for sexual harassment last year, the company struck back with a defamation countersuit. O’Melveny & Myers represents Yahoo in that litigation.

Yahoo’s team at Gibson Dunn also claims Lal gave Carlson the user name and password to her online employee portal, where the company posted transcripts from its Friday afternoon “FYI” meetings open to all full-time staff. Mayer and other senior executives used the meetings to share information about business plans, strategies and upcoming products. Security guards restricted attendance, presentation slides were marked confidential, and Mayer began and ended each session with a reminder that the information discussed cannot be repeated, according to the suit.But according to emails between Lal and Carlson quoted in the complaint, he was able to log into Yahoo’s portal from his computer and stay logged in for several days.

Philip Gregory, of Cotchett, Pitre & McCarthy, said he’s surprised a site containing confidential information could be breached so easily.

“If I were on the defense side,” he said, “I would challenge whether or not the company is really tracking what’s happening to its confidential information.”

For more on this story go to: http://www.therecorder.com/id=1202726146638/Yahoo-Taps-Gibson-to-Go-After-Reporters-Source-on-TellAll-Book#ixzz3ZvmelzOl