Employees’ E-Mails Lead to Non-Compete Lawsuit

Employees who are considering leaving their employer for a competitor and taking with them trade secrets or proprietary information may want to think twice.  A suit filed by Performance Food Group Co., LLC, a food-service distributor, alleges that a former employee did exactly that.  The federal lawsuit, which alleges breach of contract, claims that the former employee sent confidential and proprietary information to a competitor, all from his work e-mail account. 

The leak was discovered after the employee gave two-weeks’ notice of his intent to resign.  He was terminated.  The competitor to whom the employee sent the confidential information had extended him a job offer at the time of the breach, but subsequently withdrew it.  Another competitor, however, hired the employee.  In its lawsuit, Performance Food Group seeks punitive and compensatory damages, as well as injunctive relief, barring the former employee from future violations of his non-compete agreement.

What are the lessons to be learned from this unfortunate story?  For one, it should be an absolute wake-up call to employers about the need to monitor emails.  And, by “monitor,” I actually mean monitor-not threaten to monitor.  Having an effective e-mail monitoring system in place and following it can sometimes help to prevent situations such as this while employees are still working.

The second lesson is more of a procedural one.  Employers should have a procedure in place whereby, immediately upon the termination of any employee or upon receipt of notice from an employee that he or she intends to quit, the employer: (1) has its IT department (or consulting firm) preserve the employee’s email account; and (2) has management or HR personnel review the emails for critical information such as evidence of a leak of confidential information.

The worst case is to lose evidence simply by failing to act quickly to preserve it. Emails are often an employer’s best defense against a lawsuit brought by a former employee. It is also, as in this case, sometimes the best evidence in support of the employer’s own claims that it wishes to pursue against the former employee.