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Posts Tagged ‘Employment’

Defendant Pleads Guilty to Charge of Criminal Theft of Trade Secrets, 18 U.S.C. § 1832, and Faces, Inter Alia, up to 10 Years in Prison and Deportation

In Criminal Theft of Trade Secrets on November 16, 2010 at 9:33 am
Bristol Myers Squibb Factory, Leasowe. The pic...
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The U.S. Attorney’s office announced that a defendant entered a guilty plea to a charge of theft of trade secrets from Bristol-Myers Squibb, in violation of Title 18, United States Code 1832.  According the U.S. Attorney, the defendant Shalin Jhaveri holds a Ph.D. from Cornell University and was employed at the time of his arrest in February of 2010 as a Technical Operations Associate in Bristol-Myers’ management training program.  The U.S. accused defendant of stealing trade secrets during his employment with Bristol-Myers and devising a plan to convert them to his own use.  At the time of his arrest, Jhaveri was allegedly meeting in a Syracuse hotel room with an individual he believed was an investor willing to finance a business venture Jhaveri planned to start in his native India.  According to the U.S. Attorney, Jhaveri transferred Bristol-Myers trade secrets to this investor, an individual he knew was not employed by or associated with Bristol-Myers in any capacity.

Jhaveri admitted the following as part of his plea: (1) while employed by Bristol-Myers in its management training program at its Syracuse facility, he devised a plan to steal trade secrets of Bristol-Myers and convert them to his own use; (2) he did steal trade secrets from Bristol-Myers, and in doing so used methods to disguise his actions and evade detection by the Company; (3) he communicated, using a specially created email account and password he set up expressly for that purpose, with an individual he knew was not employed by or affiliated with Bristol-Myers, who he believed to be an investor willing to finance a business venture Jhaveri planned to start in his native India; (4) Jhaveri discussed with and transferred to that individual trade secrets he had stolen from Bristol-Myers; and (5) when asked by this investor whether the information he had taken from Bristol-Myers was everything he needed, responded that it was.

Jhaveri also consented to the entry of an order of removal/deportation from the United States by an Immigration Judge, to take place upon completion of any jail term imposed, and to not seek relief or take an appeal from such order.  Jhaveri faces up to 10 years in prison, a $250,000 fine, up to three years of supervised release, and deportation.

Attorneys

Stephen C. Green was the Assistant United States Attorney prosecuting the case.

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California Trade Secrets on Holiday This Week

In Blog Status on October 18, 2010 at 4:54 pm

[Interior of Coliseum, Rome, Italy] (LOC)

Image by The Library of Congress via Flickr

I am traveling this week, so California Trade Secrets will be updated less frequently.  I’ll resume daily updates next week, October 26, 2010.
Cheers!
Charles Jung

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Immediate Steps to Take Upon an Employee’s Departure for a Competitor

In Employee Mobility, Investigations on September 17, 2010 at 2:57 pm
Security camera at London (Heathrow) Airport. ...
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Richard C. Darwin posted a useful summary and reminder of the steps an employer should take once an employee has decided to pursue an opportunity with a direct competitor.  Darwin recommends the following nine common-sense precautionary measures to be taken right away to reduce the risk of lost or deleted evidence:

  1. Secure the defecting employee’s computer and make sure no one uses it.
  2. If the IT department recycles backup tapes, immediately suspend that practice.
  3. Check the former employee’s office or workspace for missing documents and files.
  4. Get copies of the tapes or electronic files if the building has security cameras. Read the rest of this entry »

Employee Has Viable Tameny Claim Against New Employer for Wrongful Termination in Violation of Public Policy When Terminated by New Employer, Who Cites Alleged “Understanding” Between Old and New Employer to Honor Old Employer’s Noncompetition Agreement

In California Appellate Opinions, Employee Mobility, Wrongful Termination on August 3, 2010 at 8:59 am
LONDON, ENGLAND - SEPTEMBER 16:  Singer Hayley...
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While this next case doesn’t deal directly with trade secrets, it addresses a common fact pattern in the employee mobility arena.  The Second District Court of Appeal in Silguero v. Creteguard, Inc., — Cal. Rptr. 3d —-, 2010 WL 2978222, *1 (Cal. Ct. App. 2d Dist. July 30, 2010) decided the issue of whether a terminated employee working in the area of sales has a viable claim for wrongful termination in violation of public policy under Tameny v. Atlantic Richfield Co., 27 Cal. 3d 167 (1980), against her subsequent employer when the employee’s former employer contacts the employee’s subsequent employer and informs it that the employee had signed an agreement with the former employer which prohibited the employee “from all sales activities for 18 months following either departure or termination,” and the subsequent employer terminated the employee’s employment out of “respect and understanding with colleagues in the same industry,” notwithstanding its belief that “non-compete clauses are not legally enforceable here in California .”  Silguero, 2010 WL 2978222, *1.

Citing California Business and Professions Code section 16600’s legislative declaration of California’s “settled legislative policy in favor of open competition and employee mobility” (Edwards v. Arthur Andersen LLP (2008) 44 Cal.4th 937, 946 ( Edwards )), we conclude that the employee has a viable Tameny claim.”  Silguero, 2010 WL 2978222, *1.
The Court cited the alleged “understanding” between the old employer and the new employer to honor the old employers noncompetition agreement.  The new employer Creteguard admitted in writing that it entered into this understanding with the old employer, “although [the new employer] believe[d] that non-compete clauses are not legally enforceable here in California,” because the new employer “would like to keep the same respect and understanding with colleagues in the same industry.”

The Court reasoned that this alleged understanding is “tantamount to a no-hire agreement.” Silguero, 2010 WL 2978222, *6.  The Court concluded that such an “understanding” between the new and old employer “would be void and unenforceable under section 16600 because it ‘unfairly limit[s] the mobility of an employee’ and because [the old employer] ‘should not be ‘allowed to accomplish by indirection that which it cannot accomplish directly.’” Silguero, 2010 WL 2978222, *1 (citing VL Systems, Inc. v. Unisen, Inc., 152 Cal. App. 4th 708, 716-17 (2007).

[P]ermitting a Tameny claim against Creteguard under the circumstances of this case furthers the interest of employees in their own mobility and betterment, “‘deemed paramount to the competitive business interests of the employers, where neither the employee nor his new employer has committed any illegal act accompanying the employment change.’” (Dowell v. Biosense Webster, Inc. (2009) 179 Cal.App.4th 564, 575, quoting Diodes, Inc. v. Franzen, supra, 260 Cal.App.2d at p. 255 [in Dowell, both employees and their current employers sued a former employer to invalidate a noncompetition agreement].)  For all of the foregoing reasons, we conclude that Silguero has pleaded a viable Tameny claim against Creteguard predicated on the public policy in section 16600.

Id. *6.

The Court created a new avenue of liability for employers, who must now carefully decide how to respond to cease and desist letters from old employers.   Creteguard would almost certainly have fared better had it avoided the unnecessary editorializing in its termination letter.

By CHARLES H. JUNG

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