Merely Receiving Confidential Data Is not Sufficient: Georgia Court docket Dismisses Tortious Interference with Contract Declare in Commerce Secret Case | Seyfarth Shaw

It is a reality sample that repeatedly seems in commerce secret circumstances: an organization hires somebody who has a confidentiality settlement with their former employer. Simply earlier than (or shortly after) being employed the person emails confidential data from their former employer to people at their new job. The previous employer information swimsuit towards the person, but additionally asserts a declare for tortious interference with contractual relations towards the brand new employer.

When introduced with a reality sample like this within the post-Iqbal and Twombly age, it’s crucial that the plaintiff explicitly allege of their grievance that the brand new employer did greater than merely obtain the confidential data at problem. If not, the plaintiff runs the very substantial danger of their tortious interference declare being dismissed on the outset of the case. This state of affairs is exactly what occurred within the case of HI Expertise Corp. and Interactive Communications Worldwide, Inc. v. Roderick J. Kersch and NationsBenefits, LLC, US District Court docket, Northern District of Georgia (Atlanta), Case No. 1:21-cv-03468-TWT.

In HI Expertise, Georgia District Court docket Decide Thomas W. Thrash Jr. held {that a} former employer’s grievance did be aware even allege—as a matter of Georgia regulation—that an worker’s new employer had tortiously interfered with that worker’s employment settlement together with his former employer by merely accepting emails that contained the previous employer’s confidential data. Accordingly, Decide Thrash granted the brand new employer’s movement to dismiss.

In its grievance, HI Expertise alleged that its former worker, Kersch, unlawfully communicated with NationsBenefits executives about HI Expertise’s distributors whereas nonetheless employed by HI Expertise, in direct violation of his employment settlement. The grievance additionally alleged that NationsBenefits’ executives permitted the sharing of this confidential data. In his opinion, Decide Thrash held that these actions, even when true, have been inadequate to state a viable explanation for motion:

“Even setting up [the] allegations within the plaintiffs’ favor, not one of the actions taken by the NationsBenefits executives attain the extent of fraud or misrepresentation, and the plaintiffs don’t determine any confidential data utilized by these people. The Plaintiffs allege that the NationsBenefits executives ‘repeatedly permitted Kersch to ship Plaintiff’s confidential data’ to them. However these allegations don’t allege any use of that data or different improper actions undertaken by the executives; as a substitute, these allegations merely describe actions taken by Kersch and the executives’ failure to preemptively stop such emails from being despatched.”

Below Georgia regulation, a declare of tortious interference with contractual relations requires (1) improper motion or wrongful conduct, (2) purposeful malice or intent to injure, (3) inducement to breach contractual obligations, and (4) ensuing injury. Primarily based on this commonplace, Decide Thrash held that as a result of HI Expertise did not allege any improper use of its confidential data, fraud or misrepresentation by NationsBenefits or its workers, HI Expertise’s declare of tortious interference failed as a matter of Georgia regulation:

“Whereas use of confidential data might represent improper motion, the Plaintiffs merely allege that Nations Advantages engaged in unusual enterprise conduct that was facilitated by an worker in violation of his contract. In the end, the Plaintiffs’ allegations both concern actions taken solely by Kersch or actions by NationsBenefits that indicate collaboration with a person in breach of his contractual obligations. These allegations are inadequate below Georgia regulation.”

The HI Expertise resolution is a wonderful reminder that when drafting a declare for tortious interference with contractual relations (particularly in Georgia) it’s crucial to allege greater than the brand new employer solely acquired confidential data from the brand new worker. Receipt alone is unlikely to represent “improper motion or wrongful conduct, purposeful malice or intent to injure.” As an alternative, the declare ought to assert factual allegations that the brand new employer was an energetic—not simply passive—participant in inducing the person defendant to breach their settlement with their former employer.