Company Being Sued For Contract Dispute And Trade Secret Use

On behalf of The Law Office of Lynnette Ariathurai, A Professional Corporation posted in Contract Disputes on Tuesday, May 1, 2012.

As many California companies know, it isn't uncommon to hear of individuals leaking company information to a different company in order to get ahead in their career - possibly being promised a promotion at the other company. Could a contract dispute be the case in this business incident?

Consumer Health Technologies-P&W Software Inc. is reportedly suing Evolution1 alleging that a former employee of the company, who was Director of Sales and Marketing, leaked confidential information to its competitor. The former employee is now the vice president of sales at the competitor.

The complaints within the lawsuit include a breach of contract, leaked trade secrets and additional illegal activities such as unfair competition. Consumer Health Technologies-P&W Software Inc. is also alleging that Evolution1 took part in aiding and abetting, intentionally interfered with potential economic relations, trade libel as well as unjust enrichment. The lawsuit is seeking remuneration for damages.

The lawsuit was filed on April 13 in the Superior Court of the State of California. It will need to be proven in court that the former employee did in fact leak confidential company information and that Evolution1 utilized that information to their advantage thus meaning that the employee breached his contract with his former company. If this can be done, there could very well be a successful damages settlement for Consumer Health Technologies-P&W Software Inc.

When running a business, it is always important to ensure that every employee signs a contract that outlines their behavior while employed at the company and consequences for not following the contract stipulations. If you are in a situation where you believe an employee has wronged you, it would be beneficial to take the time to go over the contract, as there may be a direct obligation written within that your employee signed to follow. You may have a successful claim for the California court to regain compensation for any damages that the contract dispute has caused your company.

Source: Avon, CT Patch, "Company Sued Following Trade Secret Violation Claims, Among Others," Jessie Sawyer, April 27, 2012

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