Many of the cases we talk about here on Suits by Suits are breach of contract cases brought by executives against their former employers. Sometimes, however, the employer turns the tables, bringing an action against a former executive for breaching its confidences. When that happens, the executive can find himself owing the company a lot of money, rather than the other way around.
Such was the fate of a former lawyer for Toyota named Dimitrios Biller, the subject of the Ninth Circuit’s recent opinion in Biller v. Toyota Motor Corp., 668 F.3d 655 (9th Cir. 2012).
Today’s decision of interest, U.S. Electrical Services, Inc. v. Schmidt (D. Mass. June 19, 2012), involves everyone’s favorite strip-mall stop: the Dollar Tree. James Schmidt and Peter Colon wanted to sell lighting and fixtures to the Dollar Tree (presumably for more than $1.00). Their former employer, U.S. Electrical Services (USESI), wanted to stop them, because it wanted to bid on the same Dollar Tree lighting account and it didn’t want Schmidt and Colon using its confidential pricing information to make their bid.
At the time USESI sued, the account was up for bid in only a few days. So USESI didn’t just file a complaint and seek damages. Instead, it asked for a preliminary injunction barring Schmidt, Colon, and their new employer, Munro, from competing for the business.
In my last post, I made the case that new social media haven’t changed the issues that come up in legal disputes between companies and high-ranking employees. But social media can add some new twists. For instance, are a company’s Twitter followers the equivalent of a confidential client list, such that you would be “misappropriating” a company “trade secret” if you left and took the list with you?
Twitter and other social media may be transforming our world, but they haven’t changed laws and company policies against disclosing sensitive company information. Take the recent firing – reported in The Inbox – by women’s clothing retailer Francesca’s Holdings Corp. of its CFO, Gene Morphis.
As the regulatory and business environments in which our clients operate grow increasingly complex, we identify and offer perspectives on significant legal developments affecting businesses, organizations, and individuals. Each post aims to address timely issues and trends by evaluating impactful decisions, sharing observations of key enforcement changes, or distilling best practices drawn from experience. InsightZS also features personal interest pieces about the impact of our legal work in our communities and about associate life at Zuckerman Spaeder.
Information provided on InsightZS should not be considered legal advice and expressed views are those of the authors alone. Readers should seek specific legal guidance before acting in any particular circumstance.
John J. Connolly
Partner
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Andrew N. Goldfarb
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Sara Alpert Lawson
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Nicholas M. DiCarlo
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