Traverse Internet Law Federal Court Report: November 2009 Trade Secret Violation Lawsuits

Traverse Internet Law Disclaimer

The facts are unproven allegations of the Plaintiff and all commentary is based upon the allegations, the truthfulness and accuracy of which are likely in dispute.


BAY VIEW DENTAL LAB, INC. v. EDDIE VON SCHLICHTING AND INTER-CHROME DENTAL LAB, LLC
EASTERN DISTRICT OF VIRGINIA (NORFOLK)
2:09-CV-00589
FILED: 11/30/2009

It is not an unusual situation to have an employee launch a competing business and walk out the door with confidential or proprietary information. “Dual employment” by an individual working for two competing businesses at the same time is obviously a major problem for that individual. And also for your business if this is happening to you. I am often surprised by the number of businesses, from Fortune 500 to small mom-and-pop affiliate marketing shops, that allow “moonlighting” in the affiliate marketing industry. It is difficult to imagine conflicts of interest not arising, and yet this practice continues. Consider prohibiting “moonlighting” totally or limit the practice so that it does not create conflicts or breaches of fiduciary duties.

The Plaintiff is a well known dental laboratory. Defendant Von Schlichting was employed by the dental lab for over six years. Plaintiff alleges that the employee began a competing business on July 10, 2009 and did not disclose the new business and continued working for the Plaintiff until December 4, 2009. During his employment the Plaintiff alleges that the Defendant deliberately retained confidential information and company records without its knowledge or consent and is using those in his new business.

The lawsuit alleges unfair competition in violation of the Lanham Act, breach of fiduciary duties, conversion of customer list and information, misappropriation of trade secrets, conversion of business name and images, and tortious interference with business relationships and expectancies. The claim for relief includes a request for the entry of an injunction prohibiting Defendant’s further interference with Plaintiff’s customers and a monetary award of compensatory damages in the amount of $150,000, punitive damages in the amount of $250,000, pre-judgment and post-judgment interest, and costs and expenses. Traverse Internet Law Cross-Reference Number 1383.