Is It Sabotage or Did They Just Quit?

Is It Sabotage or Did They Just Quit?

When former employees leave to become competitors, a lawsuit is often part of the equation. But as Jackson Lewis partner V. John Ella explains on the Non-Compete & Trade Secrets Report, a recent unfair-competition suit takes such disputes a step further by accusing the new competitor and the individuals and corporate entities involved of an act of sabotage.

The suit, filed in Pennsylvania federal district court by Ozburn-Hessey Logistics against 721 Logistics and 10 individuals, alleges the defendants participated in a coordinated plan to cripple OHL’s produce-clearing operations and convert its customers by arranging for the company’s entire perishables division to quit and join 721 at the exact moment that would be most damaging.

Ella says that a district court judge has decided to allow core allegations of the lawsuit to proceed to trial against the key actors, dismissing the unfair-competition claim against all but one individual and the sole corporate defendant, and allowing the civil conspiracy claim against the same parties based on the possibility of unfair competition.

He says the breach-of-contract claim survived against one defendant, but the allegation of the breach of duty of loyalty was eliminated altogether because the employees didn’t use confidential information or solicit customers while still employed.

Practice Area(s):