L&G gets TRO Against Former Employee of Client

Rob Smeltzer and Kevin Clancy recently obtained a temporary restraining order and then a preliminary injunction: (1) precluding a former employee from soliciting the prospective customers of its client (a national insurance brokerage); and (2) compelling the former employee to return to our client all of information in his possession regarding customers or actual customers. The litigation also included the former employee's new employer (a competitor of our client), which terminated him shortly after the suit was initiated. The case was brought under the federal Computer Fraud and Abuse Act and the California Trade Secrets Act and, in addition, based on certain restrictive covenants the former employee made to our client. This victory is of particular note because the restraining order and injunction were obtained in the U.S. District Court for the Northern District of California and California is notorious for its refusal to enforce employee non-solicitation clauses.

The key to success was performing a fast computer forensic analysis of the former employee's laptop, which showed that he had, immediately prior to his resignation, deleted all of the prospective customer information on the laptop and then "defragmented" its hard drive so that our client could not recover it. Further analysis revealed that the employee had ceased entering prospect information into the employer's databases several weeks prior to resignation, which suggested that he had planned to quit and deprive his employer of the fruits of his labor well in advance thereof. Messrs. Smeltzer and Clancy were also able to obtain certain emails the former employee had sent to his future employer while still employed by our client. These emails showed that the former employee had, while still employed by our client, communicated sensitive information about it to its competitor. The former employee attempted to argue that because he personally developed and paid for the information about prospective customers, he had a legal right to take it upon resignation. We were able to get the Court to reject that argument on the basis that all information developed by an employee on the employer's time belongs to the employer. For more information about this case, please contact Rob Smeltzer at (312) 456-7952.