A trade secret lawsuit recently filed in federal court in Pennsylvania highlights the need for caution when executives change employers.
ACE American Insurance Company sued OneBeacon U.S. Holdings, Inc., claiming that OneBeacon poached several of its workers and stole ACE’s trade secrets in the process. The veracity of those claims, of course, is the subject of the litigation (and the judge is already threatening to sanction both sides over discovery disputes), so I can’t speak to those.
The reason this case caught my eye was because the allegations hit on so many of those actions I write frequently about, in particular, how employees act before they’re about to change jobs and what employers do after those employees leave. According to a report in Law360 (subscription required):
For example, ACE’s suit claims it investigated company-owned electronic devices and the emails of the eight employees it said defected to OneBeacon with proprietary information. ACE claimed a substantial number of emails containing the trade secrets were deleted. [emphasis added]
Executives who leave their employers must assume that their former employers will unleash the IT hounds to determine whether they took any proprietary information to their new employers. And it doesn’t take long to figure out that emails have been deleted, files were downloaded, or any other kind of technological shenanigans occurred.
Of course, the employees in the OneBeacon case may not have done anything wrong. But this lawsuit is essentially a Miranda warning to executives on the move: anything you do, say, download or take with you can be used against you in a court of law.
Executives pondering a job change are advised to seek the advice of an experienced executive employment lawyer.