The jury apparently wanted to send the message to companies that act with faithless servants – “you need to play fair.” This message cost one Virginia company, Advanced Management Technology Inc. (“AMT”), $23 million in damages.
In an Ohio court, a jury awarded a total of $23 million to an Ohio defense contractor whose former employees misappropriated trade secrets, interfered with a business relationship, and conspired with each other for profit at the expense of their former employer.
The former Innovative Technologies employees, David P. Nicholas, James R. Silcott, and Sheila K. Silcott, had used trade secrets and confidential company data while they were still employees of Innovative Technologies. They started working with AMT to take a major federal contract away from Innovative Technologies. The federal contract made up a third of Innovative Technologies’ business. The contract involved supplying support services to the Mobility Systems Program Office at Wright-Patterson Air Force Base.
As a consequence, the jury ordered AMT to pay $17 million in punitive damages and almost $6 million in compensatory damages.
According to the jury, all might be fair in love and war, but this is not true with executive-level governance. When employers hire employees, particularly highly-skilled or executive-level employees, employers must play fair. Employers should:
- Ask the employee if they’ve signed any non-competition agreements.
- Understand what the terms of such non-competition agreements are.
- Refrain from asking new employees for privileged or confidential information.
- Be careful what you ask for. If employers solicit and obtain information from new employees, employers should be careful not to get more than they bargained for.