Breach of Fiduciary Duty

A New Mexico court of appeals recently held that a former employee could not be permanently enjoined from disclosing trade secrets because his employment agreement provided for a five-year limit on the duty of confidentiality.

Lasen, Inc. (“Lasen”), a company that uses trade secret helicopter-mounted LIDAR imaging technology to detect methane gas leaks in natural gas pipelines, sued a former research scientist who wrote the source code for the company’s signature technology. Lasen alleged that the former employee stole the source code and other crucial information as well as deleted Lasen’s copies following his termination in 2009. As a result, Lasen was unable to update its LIDAR technology because it could not decipher the source code. Lasen also alleged that the former employee used its trade secrets in seeking employment with a direct competitor. After a bench trial, the court found the former employee did not misappropriate Lasen’s trade secrets, but he did breach his fiduciary duty and wrongfully retained intellectual property and trade secrets that belonged to Lasen. Therefore, the court permanently enjoined the former employee from disseminating or retaining any of Lasen’s trade secrets (the parties had stipulated that the source code was trade secret).
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On September 23rd, 2019, the District Court for the District of Colorado awarded Atlas Biologicals, Inc. a total of $2 million against Defendant Thomas Kutrubes and his company, Peak Serum, Inc. Kutrubes, a part owner and former employee of Atlas, was found liable for trademark infringement, misappropriation of trade secrets, and breach of fiduciary duty.

On May 10, 2019, the Delaware Chancery Court issued an opinion adopting a “narrow approach” in interpreting Section 1030(a)(2)(C) of Computer Fraud and Abuse Act (CFAA). Section 1030(a)(2)(C) imposes liability on a person who “intentionally accesses a computer without authorization or exceeds authorized access, and thereby obtains… information from any protected computer.” 18 U.S.C. §

The Third Circuit recently held that a former employer’s alleged surreptitious monitoring of a departed employee’s Facebook messages was not enough to invoke the unclean hands doctrine in Scherer Design Grp., LLC v. Ahead Eng’g LLC, No. 18-2835, 2019 WL 937176 (3d Cir. Feb. 25, 2019). SDG, an engineering firm, became suspicious when several

The Federal Reserve is prepared to ratchet up the penalty for bankers caught misappropriating their employer’s trade secrets. Although bankers were already subject to civil liability under state laws governing trade secrets and breach of contract, the Federal Reserve now appears willing to subject guilty bankers to an outright ban from working with any institution

In an aggressive first move, Plaintiffs – two former employees accused of trade secret misappropriation – filed a preemptive suit for declaratory relief and unfair business practices against their former employer, Defendant Chandler Holding’s, Inc., in California Superior Court. Plaintiffs contend that shortly after their resignations from Chandler Holdings, Inc., they received letters from Defendant’s