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    In a lengthy decision out of Delaware, which you can read at on our website under Leading Cases  https://www.kirschenbaumesq.com/article/wayman-fire-protection-inc-plaintiff-v-premium-fire-security-llc-robert-weitzel-and-robert-white-and-premium-power-services-llc-defendants-ca-no-7866-vcp        a fire alarm company terminated a long time employee who went to work for a local business that decided to start a fire alarm division and compete directly with the former employer.  The employee solicited co workers at his former employment and customers of his former employer.  An action for tortious interference was brought.  A significant issue was that one of the co workers who had been solicited wiped out his computer before giving it back to the employer, but made a flash drive of the data, which he retained and used which contained proprietary information and trade secrets.  The retention of that computer data apparently constituted a violation of  Delaware Misuse of Computer System Information Act.  The former employer sued the former employee, the individuals

he hired, the new fire alarm and fire protection system business and its parent company, engaged in a separate non competing business, asserting various claims for both monetary and equitable relief.  The court dismissed the action against the parent company.

    The court found as follows on the tortious interference claim:

    "Wayman's tortious interference claim is predicated on an expectancy, rather than the existence, of a contractual relationship with Doylestown regarding the upgrade project. Under Delaware law, an action for tortious interference with

prospective contractual relations requires: 

(1) a reasonable probability of a business opportunity or prospective contractual relationship; 

(2) intentional interference by a defendant with that opportunity;

(3) proximate cause; and 

(4) damages.  

Furthermore, all of these requirements must be considered in light of a defendant's privilege to compete or protect"

    Here is what the court had to say about customer lists:

    " Wayman's argument that the contact list qualifies as a trade secret because it also contains the names of some of the -decision makers[#x2016] at its various clients is similarly unavailing. Wayman has offered no evidence that its clients' phone numbers are not publicly available or that learning the identity of the -decision makers[#x2016] would require anything more than using that publicly available information to contact the client."

    Regarding trade secrets that are confidential and protected, the court had this to say:

    " Even if, however, the contacts report does have independent economic value, neither the contacts report nor the opportunities report constitutes a protectable trade secret under DUTSA because Wayman has not shown that the reports were the -subject of efforts that are reasonable under the circumstances to maintain [their] secrecy. As evidence that it took reasonable steps to preserve the secrecy of the Salesforce documents, Wayman points to the facts that access to the Salesforce documents was password protected, only a limited number of employees were given Salesforce passwords, and those with passwords were required to change their passwords every 30-60 days.  In prior trade secrets cases, this Court has recognized confidentiality provisions in employment contracts, employee handbooks, and letters sent to employees following their termination as evidence of reasonable efforts to maintain the confidentiality of trade prove that this information was not available publicly; for example, could not one simply call the number of the company and discover the  names of these contact people without significant burden or expense? Because the data on the list can be duplicated from publicly available sources, the list does not carry independent economic value, and as such fails to qualify as a protectable trade secret;Total Care Physicians, P.A. v. O'Hara, 798 A.2d 1043, 1054 (Del. Super. 2001) (noting that a Rolodex that contained -only the names of insurance companies, HMO's and contacts within these organizations[#x2016] was not a trade secret because the plaintiff -ha[d] not indicated how this information is not available elsewhere, e.g., a telephone call (from a number obtained in the phone book or directory assistance) to the carriers or HMO's themselves) secret information.  This Court also has found that reasonable efforts were taken to preserve confidentiality when a company had implemented specific policies to prevent disclosure of information to outsiders or the company was in an industry where custom dictated that certain information be kept confidential.Wayman has not shown that, in terms of the Salesforce documents, it has used any of the measures that this Court has recognized as reasonable to protect the confidentiality of such documents in a meaningful way, except for password protecting the Salesforce portal.  112 See Great Am. Opportunities, Inc. v. Cherrydale Fundraising, LLC, 2010 WL 338219, at *19 (Del. Ch. Jan. 29, 2010) (-KB took steps to protect the confidentiality of its customer lists by, among other things, including provisions in its Employment Contract, its Handbook, and letters it sent its employees following termination that notified sales reps and other KB employees of the sensitive and proprietary nature of that information and prohibited them from disclosing such information while employed with and after leaving  (citations omitted).  113 See Miles, Inc. v. Cookson Am., Inc., 1994 WL 676761, at *12 (Del. Ch.1994) (finding a process subject to reasonable efforts to maintain secrecy where access to the company plant was restricted, and employees signed confidentiality agreements and were not permitted to remove documents from the plant).  114 See Beard Research, Inc. v. Kates, 8 A.3d 573, 596 (Del. Ch. 2010) (finding that reasonable efforts were made to preserve confidentiality when, among other things, the evidence showed that -throughout the industry it was generally considered  [*54] inappropriate to use experimentals anywhere outside of the lab in which they were created.  115 Although not referred to in Wayman's briefing or at trial, a copy of a 2008 Wayman employee handbook is in the record.  Wayman cites to noevidence that Weitzel, White, or Fox, who began working at Wayman well before 2008, had ever seen a copy of this or any other Wayman employee handbook. In addition, the confidentiality language in the 2008 handbook is geared moretowards protecting Wayman's client's confidential information than it is towards protecting Wayman's confidential information. I am not convinced that the language in the handbook would lead a Wayman employee to believe that either the contacts report or the opportunities report was confidential information.  

    I am not persuaded that merely password protecting the Salesforce information at issue here constitutes reasonable efforts to protect the confidentiality of that information. Wayman has not presented evidence that it conveyed to those to whom it gave passwords to access Salesforce that the Salesforce information was highly confidential or secret. As previously discussed, it is not inherently obvious that the names and phone numbers of  Wayman's clients was confidential proprietary information. If Wayman believed that information was proprietary, I find that they should have done something more to impress that fact upon those with access to Salesforce. That is not to say that a company always must do more than password protect information to comply with DUTSA's reasonable efforts requirement. In this case, however, based on the

nature of the information at issue, I find that in simply relying on the security features that came with Salesforce, primarily a password requirement, Wayman failed to make efforts that were reasonable under the circumstance to maintain secrecy of either of the Salesforce documents.  Thus, Wayman has not met its burden of establishing that either report is a protectable trade secret under DUTSA.  Therefore, the employee handbook in this case is not persuasive evidence that Wayman took reasonable steps to protect the confidentiality of the Salesforce reports.  At the end of both Salesforce reports, in small print, it says -Confidential information - Do Not Distribute  . There is no evidence that Fox or any other Wayman Salesforce user was cognizant of that easy-to-overlook  language, or that Wayman ever brought that concept to its employees' attention.  Wayman also has failed to prove misappropriation or disclosure of the Salesforce documents"

    Regarding the use of stolen computer data the court found:

    "White intentionally copied files from Wayman's computer system, and uploaded those files onto his Premium Fire laptop. Wayman never authorized White to make copies of its files for such use. Thus, White is liable for computer misuse under Section 935(1)"  And the court also found that the new employer was equally liable, holding that:

    "Therefore, Premium Fire has knowingly -retained Wayman's files in contravention of Section 935(3).  Premium Fire also is liable for computer misuse under Section 935(4) because,at a minimum, its employee and agent White improperly used Wayman's computerinformation.  In addition, Weitzel is individually liable under the misuse statute. Wayman argues that Weitzel is liable because he knew about Fox and White's possession of Wayman's property and failed to ensure it was returned to Wayman and not used. Defendants concede that at some point Weitzel possessed, retained, or received impermissibly, through Fox or White, some of Wayman'scomputer system information. On the basis  of that concession, I find Weitzel liable for computer misuse."

    There is a lot more to the decision and you're welcome to read it.  I have expressed reservations about getting involved in this type of litigation because of the cost and uncertainty of outcome.  This case is a sterling example.  Rest assured this case cost all parties plenty.  Here is the final result:

 " Defendants Weitzel and Premium Fire are liable for civil conspiracy and Defendant White is liable for breaching his duty of loyalty to Wayman. Based on these findings, Defendants Weitzel, White, and Premium Fire are jointly and severally liable for, in addition to the expert and attorneys' fees and expenses specified in Section III.A.4 supra, the $17,390 in nominal damages and $69,716.25 in unjust enrichment damages that I awarded Wayman on its computer misuse claim. Finally, I find Defendants Weitzel,  White, and Premium Fire in contempt of this Court's Preliminary Injunction order and hold them jointly and severally liable for the reimbursement of the previously discussed fees and expenses Wayman incurred related to the Preliminary Injunction and for payment of the $10,000 fine to the State of Delaware."

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Speaking Engagements

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Sonitrol Verified Electronic Security.  Annual convention March 22, 2014 at The Worthington Renaissance Fort Worth Hotel in Fort Worth, Texas.

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SentryNet's 19th Annual Dealer Conference.  April 22 - 24, 2014 at Harrah's in Tunica, MS.  register at http://www.sentrycon.us or call Peggy at 800-932-3304 for more information.   www.sentrynet.com

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Northeast Security & Systems Contractors Expo  Thursday, May 22, 2014 10 am to 5 PM at  Royal Plaza Trade Center,  Marlborough, MA.  registration  https://www.expotracshows.com/neacc/2014/  Presentation on Alarm Law issues and Q&A will be at 2 PM.  For more info contact Gary Spaulding, NEACC President

207-384-2420 gary@spauldingsecurity.com
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Alabama Alarm Association.  AAA's Fall Meeting and Trade Show - October 21, 2014 from 3 to 5 PM at DoubleTree Hotel 808 South 20th Street Birmingham, AL 35205  for more info contact AAA Executive Director: director@alabamaalarm.org  (205) 933-9000 

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Electronic Security Summit for 2014.  October 22-24, 2014  at the landmark Broadmoor Hotel. Colorado Springs, CO.  For more information contact Alexander J. Quirin, CEO & Managing Partner, Advisory Summit Providers, LLC.,  (786) 999-9738    alex.quirin@aspsummits.com    www.aspsummits.com

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