Execs Refuse To Sign Confidentiality Agreement, Company Argues Conduct Constitutes Consent: RedLPR VS HTS
If executives refuse to sign confidentiality agreements, can companies effectively force them to abide by them if the executives continue to work at the company? This is a core question in current litigation between HTS and RedLPR.
In this report, IPVM examines HTS' and RedLPR's positions on whether the ex-HTS employees had confidentiality obligations (implied or otherwise) and the actual agreements signed, including feedback from a co-founder of RedLPR and HTS's counsel.
This is a companion to IPVM's report: HTS LPR Sues Ex-Employees for Allegedly Stealing Trade Secrets, Including "Flux Capacitor".
Fundamental ************ ** *************** ***********
*** *** ****** *** ********** ******* or *** **** **** *** ****** Barker's ********** ********** **** *** ********* confidentiality ***********. ******** ******'* ******** ** that **** *** ****** *** ** confidentiality *********** ** ***, *** ****** this.
***'**** ** ********** ** ******'* ****** for ******* ******** (***)******:
*. **** *** ******’* ********** ********** with *** ******* ** *************** *********** and *** ***** ********* **** **** and ****** ****** *** *************** ** any ***********.
***’ ********: ******.*****, **** ****’* *** ******’* ******** employment ********** *******:
**** *********** ** **** ************* *********** ** *** ******* *** *********, materials *** ********* ***** ** *** by *** ******* ** ********* ****** your ********** **** *** *******.
Amit *** ******'* ********** ********** ********
**** ****** *** ** ****, *** Barker ****** ** ****. **** ****** very ******* ********** ********** (****'* **** *********;******'* **** *********) **** **** **** *****.
**** ********** ********** ******* * "***********" section **** ****** ********* **** ** returned ***** ***********:
*******, **** ** *** **** ******** in *** ******** ***** ****-*********** *******. There *** ** ******* ********** ********** confidentiality.
RedLPR: ** *************** ***********
** * ******, ******'* ******** ** that **** *** ******'* ********** ********** contained ** *************** ***********. *** ******* alleges **** *** ***** ******:
********** ******* **** *** ******’* ******** employment ********** ******* *************** *********** ****** because **** ******* **** “‘**** *********** of **** ********** *** ***** ****** to *** ******* *** *********, ********* and ********* ***** ** *** ** the ******* ** ********* ****** **** employment **** *** *******.’”
*** ********** *********does *** **** *******, *** ********* **** *** ********, *** ************ ***********. Instead, it simply requires departing employees to return “equipment, materials and documents,” presumably for the company’s continued use and to ensure an orderly transition after the employee’s departure.[******** *****]
****** ********** **** *** ********* ** the ********** ******** **** ********** **** Amit *** ****** ****** ***** ********* after ***********, *** **** ***** *** no ***** *********** "**********."
** ****, *** ****** ****** **** nothing ** *** ********* ** ******* Amit *** ****** **** "********** ** the ******** ***** **** **** ******* while ******* *** ***":
******, ******* ***** *** ********* ***** preclude **** *** ****** **** ******* copies ** *** ********* ******** ** HTS ***/** ********** ** *** ******** every **** **** ******* ***** ******* for ***.
*******, ****** **** **** **** **** left ***, *** ******* ****'* *** for *** ********* **** *** *** the ******* *** *** ** **** the *********** ************:
** *** ****** ***** ** *** ambiguity ** *** *********, *** ***** is ****, ***’* ****** ** ******* removes *** **** *********.When **** **** ***, *** *** *** **** ****** ********** **** **** ****** *** *********, ********* ** *********, **** **** **** ** ******* ** ********* ******* *** ************ *********. [******** *****]
**** ******* **** **** **** *** lawyer ********* ** ******* *** ***** Amit ******** ** ******* ********** *** HTS ********* **** ***** ********* *** the ************ **** *** **** ** Amit, *** *** *** *** *******:
**** * ********, ** ****** ******* out ** **** *** ****, ** you *** ***** ** *** ** client, *** *** ********** *****, *** 401k *****, *** *** ****** **** contribution, **'** ********** ** ******* *** conferring *** ********* *** *** ****** and **********. **** *** *** ******* to ****.
*** *********, **** **** *** ****** Acknowledged ***************
*** *********,*********** ***** ******* *** ***, **** and ****** "******** ********* *** ***** materials ************* ********** ** ************" *** "************ ***** *************** *********** ** ************** with **** ***** *** **** ***** parties":
*** *******, **** *** ****** ********* numerous ********* *********** ********** ** “************” such ** ***’ “**** **** ***** List *** ** ****” *********** (*** “HTS *********”). *********, ** ************** **** certain *********, **** **** ******** *** pricing *********** *********** ********** ** “*** Internal *** ****” *** “************.”
***' *******,***** *******, **** ****:
**** *** ******’* ******** ********** ********** were ****** *** ******** *************** ***********.
********** ***** **********, **** *** ****** sent *** ******** **** ******** *** documents *** ************** **** *** ***** HTS ********* ********** ********** ‘************.’ **** were ******** ** ************** *** ************ conducted ***** ******* “***” **********. ** sum, **** *** ****** **** **** aware **** *** ********** **** ** its ******** ********* *** ******** *********** to ** ************.
************, **** *** ****** *** ***** to ** **** ** ** ** they ****** **** ***’ ************ ***********, including ********** ** ** *** ********. This ********* ********* ** ******** ** the ***, ** ************** *. * (**: *** ********** to ******** *************** ** ************ *********** obtained ****** **********, ************ ******* *************** *********).
** ** ******* ******* ************** ** enough ****** ********** ******* *** *** signed *************** *******. ** *** *** RedLPR ************* ******** ** *** *****, the ***** **** **** ** ****** which ************** ** ******* ***** ** evidence **** *********.
2018 ********** ********* ******** ******** *************** ******
*** **** ********** * ***** **** employment ********* ** * ****** *** Amit *** ****** ****** ** ******** to *************** ***********. **** **** ********* was ********* ********* ** **** *** Barker***** *** *** ******** ******* **** year,*** ****:
** ***** **** *** ********* ******* employment ********* ** **** *** ******, including ** “*** *** ***. ******** Agreement” (*** “**** ******** *********”) *** “HTS *** ***. ******** ********” (*** “Employee ********”).
******** ********** ************* ******* ** ******** "************ ***********" section, ****** *** ****/**** ********** **** did *** ********** ******* "***************.":
2. ************ ***********.
*.******* ***********. * ***** ** *** ***** during *** **** ** ** ********** and **********, ** **** ** ********* confidence, *** *** ** ***, ****** for *** ********* ******* ** *** Company, ** ** ******** ** *** person, **** ** ****** ******* ******* authorization ** ** ********** ******* (***** than ******), *** ************ *********** ** the *******....
Amit *** ****** ******* ** **** **** *********
******** *** **** ********* **** ********** have * *************** *********, ******* **** nor ****** ****** *** **** *********. Both *** ******** ** **** ** HTS *** ~* ****** ***** **** were **** ***** ** **** **** agreement.
********* * ******* ******* ***** ********* **** ***** ** **** the ******* ******** *** **** *** $130,000+ ** ****** *********** *** ***(*) and ****** ********. **** ******* *** ultimately******************* ** ***** ****, ********** **** **** ************* **** *** ****** ******** ******* to **** *** **** ********* ******* they **** ******* **** *** *********'* terms.
************ ** *** ******** ***** ** **** ****** **********, *** *** ** ***, *** concerns **** *** **** *********, ********* compensation ****** *** ************ *********:
*** ****** ********:
*** ***** ***** ***** **** ** would *** **** *** ******** ********** Agreement ****** *** *****: (*) ** further ********** *** *****; *** (**) HTS ******** ******* ****** ********* *** “compensation *****,” ********* ****** ******* ** HTS’ ******* ** *** ** **** commissions *** ******* ***** ****** ********** in ***** *-* ** **** *****.
*******, *** ****** ******* **** **** and ****** ********* ** "**** *****" that **** ***** *** ******** ******* the **** ********* ***** *** *** issues ** *** ***** ***** **** resolved:
***** ****** **** **** *****, ****** and * *** ******** ************* **** Lustgarten *** ****** ********* ***** ******. During ***** **************, ****** *** * continued ** **** ***** ** ********** and ****** ****we ***** *** ******** ******* *** ******** ********** ********* ***** *** ****** ********** ** *** ***** **** ********* ** *** ************ and we further discussed the terms of the Proposed Employment Agreement. In ******** ** *** ********, ********** *** ****** *********** ** ** **** ***** *** ** **** ** **** *** ******** ********** ********* ***** *** ** ***** ****** **** ******** and until we have had a chance to otherwise discuss and address any and all other issues with the Proposed Employment Agreement. [emphasis added]
****, *** **-******* ** ******, ********** to **** **** **, *** *** other *** ********* ** *** ****, actively ******* ** **** *** **** agreement ******* ** *** ****** *****:
The **** ** ** ******** ******* ** **** ** ******* ** *** ******** ** ** ** ****'* ***** **, like the year non-compete, giving them the authority to go through our personal phones and personal computers. The four employees in the US got together and we talked about it and said **'** *** ******* ** **** ** ** **. We tried to get together with the new management team and get them to have a discussion about it, and we could never pin them down. For the eight months that the company was managed by Teamtronics, we couldn't have a conversation about it, then that's why I resigned and then Jeremy resigned. [emphasis added]
HTS: ******* *************** ***********
******** **** *** ****** *** *** sign *** **** ********** *********,*** ********** **** *** ******'* ******* "********** acceptance" ** *** *** ***** *** of *** **** ******** *********:
****, **** *** ****** ******** *** 2018 ******** ********* *** *** ******** Handbook, ************ ******* ** ***** *********, completed ******* ********** *********, *** **** continued ******* *** *** *** *********** periods ** ****. **** ******* “*********** [Amit’s *** ******’*] **********” ** ***’ offer.**. *** *************** *********** ********* ** the **** ******** ********* *** *** Employee ******** *** **** ******* ** Amit *** ******.
***' ****** ********** **** *** ****** **** ********* and ********* ***** *-* *** *-* documents ** ***. *-* *** *-* forms *** ******* ********** ***** **** US ********* **** *** **** **** start * *** ***. *** *-* form ******** *** ******** *** ********** authorization ** *********** ***** ** *** US. *** *-* ** * *** form ********* **** *** ** *** employers **** *** **** *** ** withhold **** ***** *********.
***' ******* ********* ** **** **** "Amit *** ****** ... ********* *** forms":
**** *** ****** **** *** ********* since **** *** ****, ************. **** Quest ********* ******** *** ** ***** 2018, *** *** ********* (********* **** and ******) **** ******** * ******* of ‘**********’ *********. ***** ********* ******** standard ******** ************ + *** ***** and ** ******* ******** ********* *** employee ********. **** ***’ ***** *********, Amit *** ****** ************ ********* ***** documents *** ********* *** *****. **** then ********* ******* *** *** *** 5 *** * ******, ************.
*******, ** ** *****, ******* **** nor ****** ****** *** **** ********** agreement.
HTS ***** ***** **** ***
*** ****** **** ************* *. ****** ******, ******** **** ******'* "****** ********" is "****** ************ **** *** ***." The **** ******** * **** ****** Journal ********** ****** ****** ****** *** gave ************ *********** ***** ** *** column's *********** ** * ***********. *** stockbroker **** ****** *** **** ****** given **** *********** **** *** *** unknown ** *** ****** *** ***** the ******* **** *** *** ******.
*** ***** *** *****'* *********** **** "even ** *** ******* ** * written ********, ** ******** *** * fiduciary ********** ** ******* ************ *********** obtained ****** *** ****** ** *** employment." ** *** **** ****,***** *. ****** ******, *** ***** ********* ***** **** "one ** ***** ***********, **** ********** by *** ****** *** **** ** the ******* ** * ******* ********** agreement, ** *** **** ** ******* confidential ** "**********" ***********."
*******, ***** ** *** ******** **** of ******* * ********* ************ ******* between *** *** **** *** ******. A **** ********** ******** *********, ***. *. *********, Inc.****:
***** ** ********* **** *** ******** a ********* *** * ********* ************, courts ********* ** *** ****** ***. Alleging **** ** ********'* **** ******** accessing ** ******** ************ *********** ** insufficient ** *** *** ** ****** a ********* ************.
*** ***** **** ********** ****** ***** party ** ***** *** ** ****** project ****.
Case ********* ** *********
*** **** ** ********* ** *********. IPVM **** ******** ** ***** *** progress *** **** ****** ** *** developments ***********.
***' ******* ********* ** **** **** "Amit *** ****** ... ********* *** forms"
*** ******* ********* ** ****** ******** ****** ** **** **. ******** ******, *** *** ** *********** at *** **** ***** ** ***** our **** ** **** * ************* dated (*** ****) ******** ** **** of ****:"Defendants *** ***, ***., **** ********** *** ******** ******'* ****** ** ****** *********** ** ******. *********
***:
"********* ****** **** ******************* ******* ** **** ***** ** signing *** *********, *** *** ** for *** ******. "** ******* ********* aboard *** ********* *** ********** ** the **** ******** ** ******** **** the *********** ******* *** ** *********** period ** ****..." (****** ****., ¶*.) Therefore, ****** ********* ********* ** ****, at **** ***** ** ** ********* whether ** ********* ** **** ***** the **** ******** ********* **** *** former ********.This ** ********** ** *** ** *** ********'* ******* ** **** *** ********* *********** ** ******** **** and the continued negotiations over the terms of his employment."
*** ******* *** ***** ** ***************. I **** ***** **** ***** **** non ******** *** **** ********* ** enforce ******, ********** * ***** ** will ** **** **** ** ***** that *** ****** *********** ****** *********** a *** *******, *** *** * lawyer