Departing worker took docs, didn’t breach duty

Always try to get a noncompete and a nonsolicitation agreement from employees.

That’s the take-away for small businesses in the wake of a recently dismissed business tort lawsuit in Fairfax Circuit Court.

The case featured two small woman-owned businesses that were competing for government contracts.

It had a mother who retired from the first business only to help her daughter-in-law organize the second business by offering advice.

It had a salesman for the first business, the son of that mother, who quit to work for his sister-in-law in her new business.

It had that salesman downloading his personal files, plus two key company documents, to a flash drive before he left.

But it did not have a noncompete agreement. So the first business was forced to rely on a number of business tort claims – misappropriation of trade secrets, breach of fiduciary duty and civil conspiracy – in its lawsuit.

Fairfax Circuit Judge Randy I. Bellows dismissed all claims earlier this month in Tryco Inc. v. U.S. Medical Sources LLC (VLW 010-8-160).

The two documents at issue were central to the judge’s analysis and his conclusions.

Before leaving the first company, Tryco, a man named Brian Thomas downloaded his personal files from his work computer to a flash drive. He also downloaded a list of contacts at Lackland Air Force Base and a list called “Bank and Trades,” which the company used when trying to establish new accounts.

Thomas only realized he had copied those files after getting a cease-and-desist letter from Tryco. He immediately contacted Tryco and returned the complete flash drive, saying he had mistakenly included those files and that he never copied the drive or showed it to anyone at the second company, USMS.

Bellows accepted Thomas’s assertions. He also noted that the first document, the Lackland contacts list, had been compiled by Thomas himself and was two years old at the time of its downloading.

Thomas had worked with anyone on the list who still was at the base, so he knew them personally.

Similarly, he knew many of the companies on the “Bank and Trades” list.

“He knew this information and had no need for a hard copy of it,” Bellows wrote.

Tryco also complained that Thomas breached his fiduciary duty to the company in a document it asked him to prepare. He was asked to write a document on “How to Sell to Lackland.” Tryco found the document inadequate and essentially accused him of sandbagging.

Bellows was not convinced. Their proof showed only that Thomas didn’t do as thorough a job as he could or should have on the memo. “Employees, whether departing or not departing, occasionally turn in work product their employers find wanting,” he said. That doesn’t necessarily show a breach of fidicuary duty, he wrote.

Bellows reviewed each of the claims, and, in each instance, concluded that Tryco was out of luck.

The judge noted that the Virginia Uniform Trade Secrets Act provides for an award of attorney’s fees for a defendant if the court determines that a plaintiff had no objective basis for believing it could win.

But here, he said that Tryco had not shown bad faith in pursuing the lawsuit and let both sides bear their own attorney’s fees and costs.