Merely Receiving Confidential Data Isn’t Enough: Georgia Courtroom Dismisses Tortious Interference with Contract Declare in Commerce Secret Case | Seyfarth Shaw

It’s a fact pattern that repeatedly appears in commerce secret circumstances: a corporation hires any individual who has a confidentiality settlement with their former employer. Merely sooner than (or shortly after) being employed the individual emails confidential information from their former employer to folks at their new job. The earlier employer info swimsuit in the direction of the individual, however moreover asserts a declare for tortious interference with contractual relations in the direction of the model new employer.

When launched with a fact pattern like this throughout the post-Iqbal and Twombly age, it is essential that the plaintiff explicitly allege of their criticism that the model new employer did larger than merely get hold of the confidential information at problem. If not, the plaintiff runs the very substantial menace of their tortious interference declare being dismissed on the outset of the case. This state of affairs is precisely what occurred throughout the case of HI Experience Corp. and Interactive Communications Worldwide, Inc. v. Roderick J. Kersch and NationsBenefits, LLC, US District Courtroom, Northern District of Georgia (Atlanta), Case No. 1:21-cv-03468-TWT.

In HI Experience, Georgia District Courtroom Select Thomas W. Thrash Jr. held {{that a}} former employer’s criticism did remember even allege—as a matter of Georgia regulation—that an employee’s new employer had tortiously interfered with that employee’s employment settlement collectively together with his former employer by merely accepting emails that contained the earlier employer’s confidential information. Accordingly, Select Thrash granted the model new employer’s motion to dismiss.

In its criticism, HI Experience alleged that its former employee, Kersch, unlawfully communicated with NationsBenefits executives about HI Experience’s distributors whereas nonetheless employed by HI Experience, in direct violation of his employment settlement. The criticism moreover alleged that NationsBenefits’ executives permitted the sharing of this confidential information. In his opinion, Select Thrash held that these actions, even when true, had been insufficient to state a viable clarification for movement:

“Even creating [the] allegations throughout the plaintiffs’ favor, not one of many actions taken by the NationsBenefits executives attain the extent of fraud or misrepresentation, and the plaintiffs do not set up any confidential information utilized by these folks. The Plaintiffs allege that the NationsBenefits executives ‘repeatedly permitted Kersch to ship Plaintiff’s confidential information’ to them. Nonetheless these allegations do not allege any use of that information or completely different improper actions undertaken by the executives; instead, these allegations merely describe actions taken by Kersch and the executives’ failure to preemptively cease such emails from being despatched.”

Beneath Georgia regulation, a declare of tortious interference with contractual relations requires (1) improper movement or wrongful conduct, (2) purposeful malice or intent to injure, (3) inducement to breach contractual obligations, and (4) ensuing harm. Based totally on this customary, Select Thrash held that on account of HI Experience did not allege any improper use of its confidential information, fraud or misrepresentation by NationsBenefits or its staff, HI Experience’s declare of tortious interference failed as a matter of Georgia regulation:

“Whereas use of confidential information might characterize improper movement, the Plaintiffs merely allege that Nations Benefits engaged in extraordinary enterprise conduct that was facilitated by an employee in violation of his contract. Lastly, the Plaintiffs’ allegations each concern actions taken solely by Kersch or actions by NationsBenefits that point out collaboration with an individual in breach of his contractual obligations. These allegations are insufficient beneath Georgia regulation.”

The HI Experience decision is an outstanding reminder that when drafting a declare for tortious interference with contractual relations (significantly in Georgia) it is essential to allege larger than the model new employer solely acquired confidential information from the model new employee. Receipt alone is unlikely to characterize “improper movement or wrongful conduct, purposeful malice or intent to injure.” In its place, the declare ought to claim factual allegations that the model new employer was an full of life—not merely passive—participant in inducing the individual defendant to breach their settlement with their former employer.