Court Rejects Lockheed Martin's Suit Over 13 Ex-Employees

A New York appellate court rejected charges by Lockheed Martin that a former employee breached confidentiality agreements when she hired 13 former Lockheed employees for a software startup. The court concluded that whatever former program manager Lynn Slota knew about the salaries and experience of her former colleagues was not confidential information.

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A New York appellate court on May 17 rejected charges by Lockheed Martin Corp. that a former employee breached confidentiality agreements in hiring 13 former Lockheed employees for a software start-up. Lockheed Martin Corp. v. Atlas Commerce Inc., No. 88042, N.Y. Sup. App. Div., 3rd Dept. (2001). Lynn Slota was a program manager for Lockheed who left in January 2000 to take a job as director of development for Aatlas, a developer of business-to-business software. Soon after, 13 other Lockheed software engineers left to join Aatlas. Lockheed sued Slota and Aatlas, contending that Slota was using confidential information about personnel matters to entice former colleagues to join her new firm. Slota denied the allegations. The 13 former employees submitted affidavits that they had initiated contact with Aatlas on their own. The New York Supreme Court, Broome County, granted summary judgment for both defendants and dismissed the case. NOT CONFIDENTIAL In affirming dismissal, the Appellate Division, Third Department, accepted Lockheed’s allegations as true but concluded that whatever Slota knew about the salaries and experience of her former colleagues was not confidential information. The agreement Slota signed states that confidential information may include “personnel matters,” but “it strains credulity to characterize this type of information as confidential,” the Third Department said, quoting Reed, Roberts Assocs. v. Strauman 40 N.Y. 2d 303, 308 (1976). Lockheed did not affirmatively allege in its complaint that such information was not publicly available, the court said, and “[i]f plaintiff’s construction of the agreement is accepted, no employee of plaintiff, including Slota, could fill out an employment questionnaire, r�sum� or credit application without breaching the confidentiality agreement.” The court also found that Lockheed’s remaining claims of tortious interference and breach of contract were similarly deficient. Counsel for Lockheed: Paul T. Sheppard of Hinman, Howard & Kattell in Binghamton, N.Y. Counsel for Aatlas Commerce: James P. O’Brien of Coughlin & Gerhart in Binghamton. Counsel for Slota: Jeffrey A. Tait of O’Connor, Gacioch Pope & Tait in Binghamton.

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