Please ensure Javascript is enabled for purposes of website accessibility
Home / Opinion Digests / Business Law / Employment – Loyalty Duty – Sales Contacts – Trade Secrets

Employment – Loyalty Duty – Sales Contacts – Trade Secrets

A Fairfax Circuit Court says a medical equipment salesman who inadvertently took a contacts list and a vendors list as he copied his personal files onto a flash drive before starting a job with a competitor did not breach a fiduciary duty of loyalty or misappropriate trade secrets.

Defendant Brian Thomas worked for a woman-owned company that sold medical and dental equipment to the U.S. government through its Decentralized Blanket Purchase Agreement. Before Brian worked there, his mother, Jacqui Thomas, worked for Tryco for 14 years until retirement from her marketing position. Two years after Brian began at Tryco, his sister-in-law, Jayne Thomas, formed U.S. Medical Source LLC, a competitor with Tryco. After USMS received a DBPA in 2008, Jayne hired Brian to work for USMS.

Before Brian left Tryco, he took the flash drive with the two documents. At Tryco’s request, Brian also prepared a document on “How to Quote Lackland,” to instruct his replacement on making job quotes. Also, at Tryco’s request, he sent a farewell e-mail from Tryco to many customers, with no information about where he would be going or how to contact him.

Tryco sued on multiple statutory and common law claims.

Brian testified, and the court finds it persuasive, that he did not take the “Lackland Contacts” list and the “Bank and Trades” document purposefully and they were not accessed or shared between the time they were copied onto the flash driver and returned to Tryco. Likewise, there is no evidence that he shared either of the documents with any of the defendants.

Tryco did not have a noncompete provision in Brian’s employment contact. He was free to work for a competitor and there was no legal obligation for him to disclose this fact to Tryco. As to this “How to Sell Lackland” document, it may well be true that the document in question was not as comprehensive or as detailed or as specific as it should have been. But all that establishes is that Brian did not do as thorough a job on the document as he perhaps could have or perhaps should have. That does not make it proof – or even evidence – of a breach of fiduciary duty.

Nor were the two lists trade secrets. The “Lackland Contacts” list admittedly was outdated. This is extremely significant because an outdated document provides no independent economic value if the information no longer has any value. Although the court does not find these two lists to be completely devoid of economic value, it does note their economic value is significantly below that asserted by plaintiff. The Lackland Contacts information is essentially public information. The account numbers on the “Bank and Trades” document are of no economic value; the vendor names and their contact information is readily ascertainable through proper means.

As Tryco has not shown an injury that resulted from Brian’s copying of information onto the flash drive, the court finds no violation of the Computer Trespass Act, Va. Code § 18.2-152.12.

Finally, the court does not find, from the evidence, any malice on the part of the defendants. They had a legal right to form USMS, to hire Brian and to solicit bids from Lackland and AFMLO. There was no noncompete or nonsolicitation clause in effect to prevent them from doing so. The court finds defendants did not employ any lawful means in this case, they did not act maliciously and they did not violate Va. Code § 18.2-500 or interfere with Tryco’s business expectancies. Defendants have not shown bad faith on Tryco’s part and are not entitled to attorney’s fees under the Trade Secrets Act.

Tryco Inc. v. U.S. Medical Source LLC (Bellows, J.) No. CL 2009-8914, Aug. 3, 2010; Fairfax Cir.Ct.; John A. Fraser III for Tryco Inc.; Jonathan S. Jacobs for Brian Thomas; Malik K. Cutlar for USMS, J. Christopher Thomas, Jayne Thomas. VLW 010-8-160, 12 pp.

VLW 010-8-160

Leave a Reply