After a week-long trial in June, a jury in the Southern District of Texas awarded digital marketing firm Six Dimensions, Inc. (Dimensions) $287,000 for its breach of contract claim against its former employee, Lynn Brading. However, the jury rejected Dimensions’ $50 million lawsuit against its competitor, Perficient Inc. (Perficient) for stealing its trade secrets.
On September 5th, 2017, Dimensions filed a complaint against Lynn Brading and Perficient, alleging breach of contract against Brading and misappropriation of trade secrets against Perficient. Upon beginning her employment in 2014, Brading signed an employment agreement that prohibited the solicitation of Dimensions’ employees and the sharing of Dimensions’ confidential information. When Brading left the company in 2015 and signed a termination agreement, she once again confirmed these prohibitions. Despite agreeing to these terms, Brading solicited Dimensions’ employees to leave Dimensions for her new employer, Perficient. Dimensions also alleged that Brading shared confidential information with Perficient.
Prior to the June trial, U.S. District Judge David Hittner ruled that Brading breached her 2014 employment agreement and 2015 termination agreement with Dimensions by soliciting employees to join Perficient. At the trial’s conclusion, the jury awarded $287,000 in damages to Dimensions for Brading’s breach of contract violations. However, after deliberating for approximately three hours, the jury was not convinced that Perficient misappropriated Dimensions’ trade secrets.
At trial, Perficient was able to show that Dimensions’ employees left for reasons unrelated to trade secrets, including Dimensions’ worsening performance. Additionally, Perficient was able to successfully argue that Perficient did not steal Dimensions’ trade secrets – they merely gained access to the names, experience, and contact information of Dimensions’ employees.
The outcome of this case demonstrates that a former employee’s breach of a restrictive covenant agreement does not guarantee a favorable trade secrets verdict against the employee’s new employer.