When employees separate from their employer, whether voluntarily or involuntarily, their first instinct is often to get electronic files and documents out of company possession and into their possession as fast as they can. Often these files are of a personal nature, but when they relate to the person’s employment, they may be protected by any employment agreement the employee signed.
Thus, former Angie’s List employees according to Angie’s List allegedly violated confidentiality and nonsolicitation agreements when they emailed company information to themselves and texted coworkers about joining them at a competing company. An Indiana appellate court recently overturned a trial court ruling that had denied Angie’s List’s requested injunctions against the two ex-employees (Angie’s List, Inc. v. Myers, et. al, 2016 WL 7493406 (Ind. App. Ct.)).
Rick M. and Maggie L. were sales representatives for Angie’s List. They had signed employment agreements promising to return any proprietary information and not to solicit company employees for one year after their employment ended with the business review website. Maggie was allowed to use her home computer and email as part of her job. They informed the company separately in December 2015 that they were leaving to work for competitor HomeAdvisor, then proceeded to email documents from their office computers to their personal email accounts. Maggie claimed her office computer contained personal information, but later admitted that the emailed material included a list of Angie’s List salespersons.
According to trial testimony, Rick attempted to encourage a third Angie’s List employee to leave for HomeAdvisor, telling her that he was “building a team” and she was “at the top of his list.” He later supposedly texted other employees on his way to a HomeAdvisor meeting, telling them he was “leveraging” their positions “to get what everyone deserves.”
Angie’s List claimed it discovered that Maggie and Rick had emailed themselves confidential company information, sent them cease and desist letters and sought a temporary restraining order enjoining them from using or disclosing company trade secrets. It also sought to compel them to return the information and to enjoin them from working for HomeAdvisor. The trial court granted the TRO as far as the confidential material and solicitation of employees, but denied the request related to the defendants’ employment at HomeAdvisor.
The court soon after dissolved the TRO and denied Angie’s List’s request for a preliminary injunction, finding the company did not have protectable trade secrets.
The appellate court reversed, noting that the trial court had reviewed the company’s request under the Indiana Uniform Trade Secrets Act but ignored the confidentiality agreement the defendants had signed, as well as the code of ethics they signed requiring them to return proprietary information. The fact that the company allowed the defendants to take documents home to make sales calls outside the office did not mean the information was not secret and that Angie’s List didn’t take proper steps to secure it, the court concluded. The confidentiality agreement barred them from sharing the information with others who might benefit economically from it. The defendants’ subjective intent for use of the retained information was irrelevant in light of their contractual obligation to return it.
The appeals court also granted the nonsolicitation injunction against Rick, finding that his text message to fellow Angie’s List employees was tantamount to encouraging them to leave their jobs, and that the trial court’s finding to the contrary contravened “the logic and effect of the facts before it.”
Our Chicago employment, non-compete agreement and business dispute attorneys have defended high level executives in covenant not to compete and trade secret lawsuits. A case in which our firm defended a former Motorola executive was covered in Crain’s Chicago business. You can view that article by clicking here.
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