SJC Rules Attorneys Departing Firm Violated Unfair and Deceptive Trade Practices Law
The SJC issued its ruling in a closely watched case involving a group of attorneys who copied files from the firm’s proprietary database and, when the owner of the firm rejected their buyout offer, resigned and used the database in their own newly formed firm. The jury returned a verdict of $900,000 in the plaintiff’s favor on a claims of conversion and civil conspiracy, but found for the defendants on the claim under c. 93A. The plaintiff argued that the trial judge erred in instructing the jury that the conduct of the defendants prior to their resignation, including the copying of files for potential use in their new firm, was irrelevant to the 93A claim. The SJC agreed. While disputes between employers and employees, as part of a single enterprise, are ordinarily not subject to c. 93A, the judge’s instruction went too far by effectively telling the jury to disregard conduct that occurred during employment. The Court clarified that a theft of trade secrets by an employee for use in a post-employment venture is a “marketplace transaction” that may give rise to liability. The Court remanded the case back to the Superior Court for a new trial on the 93A claim, which could result in double or treble damages against the defendants. Read the full decision.