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Georgia company claims breach of contract by founder, former CEO

Business litigation in Georgia sometimes arises following the departure of an executive from one company and going to work for the competition. The immediate concern of the former employer is whether or not the executive was in breach of contract by allegedly taking confidential information or trade secrets to share with the new employer. Virtually all large businesses require employees to sign an employment contract requiring, in part, that the employee promise to maintain complete confidentiality and protect any and all trade secrets of the employer.

It was reported last month that the former CEO and founder of a Georgia energy software company "jumped ship" and joined forces with a competitor that makes energy-efficient building components and software. His new title is Vice President of Research and Development. A second employee from the former company also joined the same competitor at the same time.

The former employer has now filed suit in Georgia Superior Court against both men, as well as their new company, alleging violations of trade secrets and breaches of contract. Saying that it was caught completely off-guard by the employment moves, the company indicated it was "combing its computer systems and database" to see what the former employees may have taken with them.

The new employer issued a statement saying it had not yet been formally served with the legal papers. Nevertheless, the petitioning company denied the claims.

The company stated that it requires all its employees, including the two in question, to sign confidentiality agreements. Those agreements purportedly require employees to affirm they will not "improperly use or disclose the proprietary information or trade secrets of their former employer." The lawsuit will now proceed to the discovery stage where specific allegations may be addressed and claims of wrongdoing investigated.

Business litigation is sometimes necessary to preserve the integrity of a company's trade secrets. By the same token, a new employer generally does not want to expose itself to liability for the misuse privileged information and data. These are complex issues that require an experienced Georgia litigator in business and commercial law.

Source: The Environmental Leader, "Scientific Conservation Sues Serious Energy Over Exec Poaching," July 28, 2011

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