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1. Framing the Issues

Although all “raiding” cases share a common theme � your client’s employees have been poached by a competitor � each case is as unique as in any other area. Properly framing the issues before pursuing litigation will not only allow you to understand your client’s needs and goals better, but often makes the difference between success and failure in achieving those goals. The most important thing to keep in mind during the entire proceeding is what your client hopes to accomplish. Not every client will want � or need � to prevent its former employees from working for a competitor. Often, your client will be satisfied with preventing its former employees from soliciting its customers or forcing them to return any confidential and proprietary documents that they have removed. Keeping your client’s goals in mind will help ensure that you do not appear overreaching to a judge or other factfinder and that you maximize your success in gaining the desired result. Beyond your client’s goals, there are a number of key issues to consider when developing your case theory: (a) Who is your client? It is important to determine the nature of your client’s business in general and of its position within the industry. Is your client’s business one in which the existence of trade secrets will be obvious and probably presumed by a judge or other factfinder, or will the existence of trade secrets likely be a hotly contested fact, if not the focus of the litigation? Is your client a market leader, a former market leader on the slide down, or an up and coming contender in the industry? What is your client’s status in the geographic region and specific business area at issue in the “raiding” case? Where does your client fit within its industry as a whole? Is the industry a highly competitive one, where even a slight competitive advantage could produce magnified repercussions in the marketplace? Although by no means dispositive, you may also want to inquire into your client’s own hiring practices. Whether your client hires entry-level employees and trains them internally or hires trained employees from competitors � perhaps even the competitor in the subject litigation � will have to be incorporated into your case theory. At minimum, you will have to be prepared for your adversary’s arguments that such recruiting practices are commonly accepted in your client’s industry. (b) Who is the competitor? Once you understand your client and its place within the market, you should learn what you can about its former employees’ new employer. Is the competitor an industry leader or an upstart? Where does it fit within the industry as compared to your client? How has the competitor built its business? Does it have a history of “raiding” its competitor’s employees? Did the competitor have a significant presence in the particular geographic location or field of business before the “raid”? The answers to these questions will affect your portrayal of the competitor and its “raiding” activity and should affect your overall litigation strategy. The answers to these question are significant not only from a legal standpoint, but in helping to frame your client’s strategic goals as well. If the competitor had no meaningful presence in the particular geographic location or field of business before the “raid,” for example, it becomes much more important to prevent your client’s former employees from working for the competitor, to protect your client’s continued viability in that geographic location or field of business. If the competitor already had a significant position, however, your case theory may best be limited to the former employee’s customer relationships and possession of confidential and proprietary information. (c) Who are the former employees? It is hardly surprising that the employees’ roles both in their former employment with your client and in their new employment with its competitor are an important issue to be considered. Were the employees highly trained professionals or technicians, with skills inherently valuable to a competitor? Is their value to a competitor based on the former employees’ own skills brought with them to your client, or based on the fact that they had worked for your client? Did the former employees hold any special relationship with your client that would have given them heightened duties, such as access to particularly sensitive materials and information? Did they have a role in strategic decision-making for your client? Would this give their new employer a particular competitive advantage? A judge or factfinder will want to know the answers to these and similar questions before granting any relief, so it is essential to consider these issues as early as possible. (d) What was the nature of the “raid”? Before developing any litigation strategy and case theory, you must understand the nature of the “raiding” activity, not only as to which employees were taken, but how they fit within your client’s overall business organization, and what precisely is at stake in their departure and joining your client’s competitor. The more employees taken at one time the easier of course it will be to establish “raiding” activity. But how these employees fit together is at least equally important. Were the employees all employed in the same division or unit, or were they spread out throughout your client’s organization? Have they been hired by your client’s competitor into the same division or unit? Did the competitor “raid” an entire division or unit? Did the competitor randomly hire employees, or just the “cream of the crop,” perhaps with the assistance of a ringleader within the group? The employees’ role with their new employer is an important piece of a successful case theory. Does the group of employees hold a special place in their new employer’s business plans? Perhaps the “raided” employees will allow entry into an otherwise impenetrable market niche or geographic area. Has the competitor attempted such entry unsuccessfully in the past? Did the competitor “raid” the manager or supervisor along with other employees? Perhaps the manager or ring-leader even helped the competitor orchestrate the “raid” while still employed by your client. The effects to your client as a result the “raid” must also fit into the case theory. How has your client been adversely affected or likely to be adversely affected by the “raiding” activity? Has its operations been disrupted? Will your client be able to replace the “raided” employees with either its own employees or new hires? How quickly will your client be able to resume normal operations following the “raid”? Is the “raid” likely to have continuing affects after the initial “raiding” activity? Depending on the circumstances, a “raid” can prejudice your client’s ability to service its existing clients or even retain its remaining employees. What information did your client’s employees take to their new employer? Theft of original documents not only will impact your client’s ability to compete with its own former employees, but is likely to persuade a judge or other factfinder that more than an innocent change of employment is at issue. All of these issues can be summed up as the process of identifying exactly what the employees are taking to their new employer. Whether it be their skills or training, the years of experience, knowledge of your client’s product line, customer relationships or acquired knowledge of your client’s confidential and proprietary information, you will want to be prepared to argue why your client deserves protection from its appropriation by a competitor.

2. Facts and Witnesses

Concurrently with framing the issues, it will be necessary for you to interview as many fact witnesses as possible in order to develop a case theory. Although Many “raiding” cases must be filed quickly, particularly where your client is seeking temporary or preliminary injunctive relief, factual investigation is as, or even more, important in this context than in other litigations. When a judge or other factfinder decides whether to issue a temporary restraining order, he or she has usually seen only the movant’s papers. While having the law “on your side” is of course a great help, such decisions often turn on the facts. Because the only facts before the judge or other factfinder will be contained in the papers you file, your factual investigation and affidavits take on special importance. You should therefore use the opportunity to provide a clear picture of the former employees’ conduct in leaving your client’s employment for a competitor. Interview the former employees’ coworkers, mindful that certain facts can almost jump off a page for a judge or other factfinder. That a former employee recruited his or her coworkers to join a competitor while he or she was still employed by your client is such a circumstance. In that regard you should collect all agreements, handbooks or other documents that governed the former employees’ employment relationships with your client. These documents are important not only in establishing non-competition and non-solicitation restrictions, but also to define the former employees’ obligations concerning confidential information. Additional lines of inquiries to pursue and incorporate into the fact affidavits are: a) the former employees’ conduct preceding the “raid,” both with coworkers and your client’s customers; b) whether the former employees took originals or copies of your client’s files when they left; c) whether the former employees or their new employer have contacted any other employees or their new employer has contacted any other employees following the “raid”; and d) whether the former employees or their employer have contacted any of your client’s customers.

3. Selecting the Party Defendants

Deciding whom to name as party defendants can involve a number of strategic issues. In some instances, naming just the competitor can fit perfectly with a case theory that the competitor essentially walked in and stole your client’s employees and information. Where, however, there is evidence that the former employees were more than just passive beneficiaries of the “raid,” it will often be appropriate to name one or more of your client’s former employees as party defendants. It may even make sense in some cases to forego the new employer’s “deep pocket,” naming just the former employees, particularly where those “deep pockets” will translate into a vigorous defense to your action. By contrast, the individuals, standing alone, are far more vulnerable defendants. One consideration in making this decision will be the forum chosen for the action. A forum appropriate for one possible party defendant may be inappropriate for other possible party defendants. Where one or more parties are subject to arbitration agreements, whether in an employment agreement or as part of a licensing or registration procedure, for example, bringing an action in court against those employees may not be possible (except for temporary or preliminary injunctive relief, as discussed below). But arbitration may not be an option for other employees or their new employer. In such a case, the forum selected for the litigation (i.e., court or arbitration) will narrow the field of possible party defendants. The choice between state and federal court may likewise limit the choices for party defendants. If you prefer bringing an action in federal court, for any number of reasons, you will have to be mindful of the residences of the possible party defendants. Diversity will likely be the only basis for jurisdiction, so care must be taken not to name as a party defendant anybody who would destroy diversity. Although perhaps less obvious, the strategic naming of a party defendant can also ensure that you can remain in a state court even where diversity jurisdiction exists. Defendants can normally remove a state court action to federal court where there is diversity of parties, but only where no party defendant is a resident of the state in which the action is brought. Naming as a party defendant a former employee who, while potentially liable for the “raiding” activity, is not absolutely necessary as a named defendant in the litigation can therefore preserve your choice of a state court forum. Another consideration in deciding whom to name as a party defendant is the expected reactions of the former employees and their new employer. If naming just one or more of the employees is likely to result in their new employer “throwing them to the wind,” this may be an important strategy in obtaining a quick and favorable settlement, thus achieving your client’s goals with minimal cost. It may be inappropriate to name former employees in some cases, however. If one or more of the former employees could potentially bring counterclaims of their own (e.g., discrimination or breach of contract claims) against your client if they were named as party defendants, you may decide to leave them out as parties to the litigation. While this may not eliminate the possibility of their bringing such claims, it will keep those claims away from the factfinder deciding your “raiding” case. Of course, the new employer’s ability to pay large judgments is always a good reason to name the new employer in the action, particularly if your case theory focuses more on damages than on injunctive relief.


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