A recent case is a helpful reminder to companies with valuable intellectual property to be diligent in protecting trade secrets and monitoring compliance by employees with access to this confidential information.

On June 15, 2020, Ryan, LLC (“Ryan”) filed a lawsuit in Texas state court against S.K. Thakkar (“Thakkar”), who was employed by a company acquired by Ryan, and Ernst & Young, LLP (“Ernst & Young”), his new employer, seeking a temporary restraining order and permanent injunction based on alleged (1) trade secret misappropriation, (2) tortious interference with contract, and (3) breach of contract.

In its Complaint, Ryan, a Texas-based accounting and consulting firm serving clients in the oil and gas industry, states that its severance tax and federal royalty group spent time and money developing confidential models and proprietary methodologies to maximize recovery for and/or limit liability of its clients. Ryan claims that Ernst & Young’s audit group demanded Ryan’s work papers containing trade secret information from its energy clients – who are also Ryan’s severance tax and royalty clients – and attempted to mislead a mutual client into believing that the documents were necessary to complete the audited financials. Ryan alleges that Thakkar was provided its confidential documents and that he attempted to reverse engineer the proprietary process in violation of his employment agreement in an effort to develop an oil and gas offering for Ernst & Young. Ryan seeks injunctive relief, damages, attorneys’ fees, and expedited discovery.