Misappropriation of trade secrets claims can sometimes be difficult to sustain. While evidence of the taking of a trade secret may be available, evidence of its subsequent use may not. In Integrated Global Services, Inc. v. Michael Mayo, Case No. 3:17cv563, by decision issued on September 13, 2017, the federal court for the Eastern District of Virginia entered a preliminary injunction against a former employee, after concluding that he had likely misappropriated the company’s trade secrets in violation of the Virginia Uniform Trade Secrets Act (“VUTSA”). The opinion is particularly notable for its conclusion that the mere acquisition of a trade secret by improper means constituted an unlawful misappropriation under the VUTSA, regardless of whether the defendant actually used the trade secrets or disclosed them to third parties.
The former employee, Michael Mayo, held a management position with Integrated Global Services, Inc. (“IGS”) until his involuntary termination on June 21, 2017. In that role, Mayo evaluated work proposals; assisted in the development of project estimates, bids and proposals; and interacted extensively with customers. Those activities allegedly afforded Mayo access to IGS’ “technical, engineering, sales, customer, budget, manpower, and cost and pricing information.” IGS took various measures to ensure the confidentiality of that information, including limiting accessibility to only employees who needed the information to perform their jobs, as well as requiring those employees to sign detailed confidentiality agreements.
For nearly one month after his termination, IGS claims Mayo ignored repeated requests for the return of his company-issued laptop and phone. Further, when IGS finally received the property, it allegedly discovered that Mayo “wiped” his phone of company data in the days following his termination, as well as copied and deleted numerous files of highly sensitive information from the laptop. IGS also allegedly learned that Mayo was going to work for a competitor and had been in discussions with competitors prior to returning the laptop and phone. IGS quickly filed suit under the VUTSA and moved for a preliminary injunction, requiring the immediate return of any IGS documents and strict compliance with the terms of his Confidentiality Agreement.
The Uniform Trade Secrets Act is a model statute for the protection of trade secret information that has been adopted, to varying degrees, by 48 states and the District of Columbia. Virginia’s version, the VUTSA, defines a prohibited “misappropriation” as “[a]cquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means” or “[d]isclosure or use of a trade secret of another without express or implied consent by a person who … [u]sed improper means to acquire knowledge of the trade secret.”
In granting IGS’ request for a preliminary injunction, the court held that IGS established a likelihood of success on its VUTSA claim by submitting credible evidence that Mayo (1) copied electronic trade secret data from his company-issued laptop to an external memory device, and (2) used “improper means” to do so (by copying the data after his termination date, despite knowing that his actions were prohibited by the Confidentiality Agreement). Importantly, the court specifically held that the statutory definition of “misappropriation” did not require IGS to prove that Mayo had actually used the copied data files against IGS.
When a company learns that a former employee has left with valuable trade secret information, there is often an immediate need to secure the information before any material damage has been done. The above decision demonstrates that in Virginia at least, companies can pursue enforcement actions against the former employee without having to wait for damage or threatened damage to occur.