IT Forensics And Strong Intuition Play Key Role in Jury Verdict for Sherman & Howard Client MSC Safety Solutions in Case Involving Breach of Loyalty and IP Theft by Former Employees
Discovery of Former Employees’ Laptops and Mobile-App Usage Uncovered Long-Term Misconduct and Ultimately Revealed Scope of Their Theft
DENVER, Colo. (November 18, 2021) – When three former employees left MSC Safety Solutions then started their own competing safety consulting business, MSC owner Troy Clark suspected that they had taken with them proprietary customer data, electronic files and other valuable data to help form and grow their new company, Trivent Safety Consulting. However, he didn’t have the smoking gun to support his concern until he engaged Sherman & Howard attorneys Emily Keimig and James Korte to ascertain the scope of the damage done to his business.
“In cases that involve alleged misconduct by former employees related to electronic data, it is vitally important to immediately undertake IT forensics of the employees’ work computers and phones,” said Keimig. “Forensics can uncover things that most of us cannot see, but that are often material in litigation.”
With MSC, the three former employees copied the company’s entire network, including a large volume of marketing and sales, human resources and operations files that represented everything they needed to establish their competing business. To ascertain the scope of what was done and taken, Sherman & Howard retained an information technology (IT) firm that uncovered voluminous evidence of deleted emails and use of company equipment to commit various unlawful acts.
With this evidence, Clark and MSC brought civil claims against the three former employees and their newly founded company. According to Keimig, an important aspect to the litigation was the discovery of messages shared among the three former employees on the popular messaging and calling mobile app, WhatsApp. Those messages also showed critical evidence related to the timing and unlawful intent of the former employees.
It was only several months into the hard fought litigation when the three former employees tried to leverage their unlawful conduct that MSC discovered evidence that defined the case to and throughout trial. The three former employees had been able to immediately establish a competing business upon leaving MSC—literally within hours—because they had stolen MSC’s entire network.
After a five-day trial in federal court, a jury found in favor of MSC on its claims against the former employees and their company, and in favor of MSC and Clark on the former employees’ counterclaims. The jury awarded damages to MSC for Breach of the Duty of Loyalty against all former employees, Interference with Prospective Business Relations against the former employees’ company, Trivent, and Conversion and Civil Theft, both against all three former employees.
“The key for companies who suspect their former employees of misconduct orchestrated by way of misappropriating electronic data and exploiting IT resources is to retain legal counsel as soon as possible, so that the company can commence a thorough investigation to put it in the best position to prosecute and recover from the wrongdoers,” said Keimig. “Ensure that your counsel is well-versed in employment law and data security, and that they can put together a strong IT forensics team to help determine whether there is cause to proceed and what are the strongest claims to be made.”