An Imaginary Attorney-Client Discussion in the wake of Badger Daylighting Corp. v. Palmer, Court File No. 1:19-cv-02106-SEB-MJD, U.S. District Court for the Southern District of Indiana.
Lawyer: Mr. Palmer, I have good news and I have bad news.
Client: What’s the good news?
Lawyer: The good news is you won your non-compete case. Judge Barker agreed with our argument that the non-compete agreement you signed with your former employer, Badger Daylighting, is unenforceable.”
Client: That’s great!
Lawyer: She said that the non-compete language was overbroad because it tried to prevent you from working for a competitor “in any manner.” Non-compete provisions must limit their restraints to employees’ future employment involving positions that are “analogous to those you actually performed for the former employer.” So, you won on that count.
Client: Okay, so what’s the bad news?
Lawyer: The bad news is that she enjoined you from going to work for Badger’s competitor anyway.
Client: What! Why?
Lawyer: Oh, it had something to do with the fact that at 5:00 AM on the day you announced your resignation, you downloaded more than 5000 confidential Badger documents from your company computer onto a Seagate large capacity external hard drive.
Lawyer: So, the judge did not think you should have taken Badger’s confidential information, like all the Badger budgets, emergency response plans, employee contact information, customer contact information, contract pricing and bid information for specific customers, plans, organizational charts, job descriptions, regional compensation planning information, financial reports and statements, employee training materials, business development planning materials and goals, master servant agreements and compiled lists of master servant agreements, equipment drawings, and employee salary information.
Client: What made her think that I was going to doing anything with those documents?
Lawyer: It didn’t help that you apparently were, in the judge’s words, “moved to steal them on [your] way out the door en route to [your] new position” and that you “subsequently provided evasive and obfuscating answers in response to Badger in a transparent attempt to keep Badger from uncovering the nature and extent of [your] theft.” I think that had something to do with it.
Client: Well . . .
Lawyer: She also seemed kinda concerned about the fact that when asked originally, you denied taking the information.
Client: Didn’t you tell her what I told you?
Lawyer: Yes, I did, but apparently, she was not persuaded by the old, “It slipped his mind” defense. She wrote:
“Mr. Palmer’s persistent refusal to disclose, first, that he had actually taken the documents and, thereafter, to explain or confirm whether he saved them anywhere else or given them to a third party leaves us wary. . . . If true that his dead of night downloading of these documents had ‘slipped his mind,’ surely he would have been reminded of his actions when at the time of his resignation his supervisor reiterated his obligations under the Agreement, or when Badger brought this lawsuit, or when he was asked pointedly in discovery interrogatories whether he had any access to Badger documents. . . . His repeated lack of candor has created a level of distrust that neither the Court nor Badger can wish away or ignore.”
Client: Well, okay, but eventually I said that I would not use any of this information, so why the injunction?
Lawyer: The judge seemed to think that your “pre-departure harvesting” of Badger’s proprietary information “compounds the threat of misuse and misappropriation that could likely result in irreparable harm to Badger for which there is no remedy at law.”
Client: Wow. That’s harsh. . . . I guess that under those circumstances, taking those 5000 confidential documents was kind of a bad idea.
Lawyer: Ya think?
Lesson: When you leave your employer, be it by resignation or termination empty your pockets and turn them inside out, put your hands in the air, and say, “I came in here with nothing and I leave with nothing. Check for yourselves.” If they want to go through your laptop and smartphone, let them (in your presence of course). Don’t just take info and think they will never know. Employees always leave digital fingerprints that are easy to find and follow.
Bill Egan is a Seasoned Employment Law Attorney backed by over 33 years of proven, veteran experience. He specializes in navigating businesses through conflict resolution in the workplace.