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Employees accused of violating Business Conspiracy Act – $12,900,000 Verdict

The case involved the actions taken by 21st Century Systems Inc., the two principals of its newly created government contracting division, and two former Perot Systems employees to compete with Perot Systems. While still employed with Perot Systems, the two former employees copied confidential electronic information and worked with the two principals of 21st Century Systems to recruit Perot employees and transfer Perot business to the new division of 21st Century Systems.

The complaint asserted claims for breach of fiduciary duty, aiding and abetting breach of fiduciary duty, breach of non-disclosure agreement, breach of non-solicitation agreement, tortious interference with contract, violation of the Virginia Computer Crimes Act, violation of the Virginia Business Conspiracy Act (§18.2-499), common law conspiracy, violation of the Virginia Uniform Trade Secrets Act, and conversion.

After seven days of trial and two days of deliberation, the jury returned a verdict against defendants on all claims. The jury awarded $4,113,845 on the statutory conspiracy claim, which was trebled to $12,341,535, and awarded compensatory and punitive damages on the other claims.

The issue of attorneys fees was bifurcated, and the court will address fees and Perot Systems’ request for injunctive relief in a separate hearing. The defendants asserted counterclaims for abuse of process, tortious interference with contract and for defamation arising primarily from a memorandum circulated by Perot Systems to its employees that reported on the August 2009 award of a preliminary injunction by the court. The jury found against defendants on the abuse of process and tortious interference claims.

With regard to defamation, of the 14 statements claimed to be defamatory, the jury found against defendants on all but one. For one statement, the jury awarded each individual defendant approximately $40,000 in compensatory and punitive damages and awarded 21 Century Systems approximately $160,000 in compensatory and punitive damages.


Type of action: Business torts
Injuries alleged: Lost good-will, lost profits and other damages
Name of case: Perot Systems Government Services Inc. v. 21st Century Systems Inc., et al.
Court: Fairfax Circuit Court
Case no: CL 2009-08867
Tried before: Jury
Name of judge: Leslie M. Alden
Verdict or Settlement: Verdict
Amount: $12,900,000
Date: June 25, 2010
Experts: Jessica Smith and Shannon Perkins with Stroz Freidberg (computer forensics); Michael Smigocki (damages)
Plaintiff’s attorneys: Michael E. Barnsback, Alexandria; Kevin Perra and Brendan O’Rourke, New York

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