If you think an ex-employee is using your trade secrets to build a competing business, you might decide to haul the person into court to protect your confidential information. But you have to be very careful with what you say about the employee or this move could backfire, which is what happened recently to a Southern California employer.
Former Employee Sued For Using Customer Information Michael Drummond worked as a sales representative in San Bernardino County with Curtis 1000, a nationwide printer. After Drummond left the company to start a competing business, Curtis took him to court. It claimed Drummond misappropriated its trade secrets by contacting Curtis customers. It also accused him of violating an agreement barring him from soliciting or working for Curtis customers for two years after he left the company.
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Employee Turns The Tables On Employer
The dispute didn’t stop there. Drummond countersued Curtis for slander. He alleged Curtis sales representatives falsely told customers that Drummond had “ripped [them] off” while working for Curtis by padding his quotes to increase his commissions.The jury awarded Drummond $200,000 for the slander claim, which the trial judge later reduced to $25,000. The jury also threw out Curtis’ trade secrets charge on the ground that the customer information wasn’t confidential. Apparently the jury concluded Curtis’ printing services were so widely used that it was no secret who its customers might be.6
Be Circumspect About Ex-Employees Even if you believe you are justified, avoid making negative statements about former employees. Instead, if a key worker leaves to go into competition with you, send a letter to customers and vendors introducing your replacement staff and reaffirming your commitment to excellent service. This type of damage control helps put your company in a positive light and also ensures that you’re not defaming the former worker. Also remind existing employees not to comment on those who have left.
No-Solicitation Agreement Thrown Out The agreement Drummond signed prohibiting the solicitation of Curtis’ customers was also at issue in the case. The court threw out the contract because it was unreasonably broad, according to Drummond’s Los Angeles attorney, Theodore Bacon. It restrained him from contacting any Curtis customer nationwide, not just those Drummond had a relationship with.
(6) Curtis 1000 v. Drummond, San Bernardino Superior Court No. SCV41656, 1999