Making Goliath Blink

Oftentimes, litigation between employers and employees is as contentious as a divorce. Cases involving employer – employee relationships become heated because one party, inevitably the employer, believes its trust has been breached, and the “golden boy” (or girl) has disappeared with the company’s confidential information and trade secrets. The employer, especially in companies heavily invested in IT and conducting significant research and development, often launches aggressive litigation against the departing employee, seeking injunctive relief, suing for damages, and asking for attorney fees and costs. Most departing employees may be quickly daunted by their circumstances, and try to cut a reasonable deal. Others believe they should fight the battle to the bitter end, with no thought of the consequences or cost. So, which is the preferred approach?

Many employees believe themselves to be in the shoes of David against Goliath. However, unlike the story in the Book of Samuel, David may not always win. Goliath may just pummel an errant shepherd who is found fleecing the employer’s sheep. But a “win” is based on the relationship the employee had with the employer. Was the employee trusted with confidential information, that he or she was not privy to except from the employer? Was the employee in a position of trust and confidence with the employer? While certainly not dispositive, these factors are very relevant to the battle.

Employees may then look at the confidential information the employer is trying to protect. Is that information truly an issue at the employee’s new place of business? If the employee is actively taking the former employer’s trade secrets and confidential information to the new employer and the former employer can prove it, then Goliath wins.

If, however, the employee can show the former employer is merely trying to prevent the employee from plying his or her trade, and the former employer’s confidential information is not an issue at the employee’s new place of business, Goliath is forced to pause. In that time, the employee may directly challenge the former employer’s contentions, requiring the former employer to place his “confidential information” cards on the table — a very uncomfortable process, because much of this information is often the employer’s customer information. No business wants its customer information involved in an intramural scrimmage. Essentially, the employee challenges his former employer as to how far it is willing to go. Thus, Goliath blinks.

By focusing litigation and discovery, the dispute may have a realistic chance of resolution, short of trial. True, the parties will have incurred fees and costs to get to this point, but the alternative —to proceed with continued litigation, for the sake of litigation — is prohibitively expensive and may be unwarranted. Focused litigation, conducted by business lawyers experienced in these types of cases, identifies issues that are important to both the employer and employee. And, hopefully, Goliath and David may look at other, more profitable battles to wage.

Charles M.R. Vethan