Migrated from eDJGroupInc.com. Author: Greg Buckles. Published: 2017-07-09 20:00:00Format, images and links may no longer function correctly.
For industry insiders who have been following the fight over four top Epiq sales reps recruited by LDiscovery, the various matters were consolidated to the southern US district court of New York, which issued a motion denying DTI’s motion for injunctive relief. To ‘mansplain’ from my own non-attorney perspective, Judge Rakoff’s 30 page opinion seems to drop the hammer on the legal basis of many of DTI’s claims, while confirming the basic sequence of events. All of us in eDiscovery should know that things are rarely black and white when large amounts of money are at stake. Here are a couple of my favorite take aways (remember, these are perspective from a non-attorney):
- The reps assert that they were dissatisfied with Epiq’s underinvestment in document review centers in key regions for their clients back in 2014 and jointly met with Consilio to explore potential employment prior to rumors of the DTI acquisition.
- “They viewed DTI as a “low cost” provider that would harm their reputation and their relationship with their clients, and accordingly stepped up their efforts in mid-2015 to find new employment.”
- Communication of the reps sales revenues to competitor LDiscovery is not automatically protected as Confidential/Trade Secret information based on a number of factors.
- eDJ Perspective- Our industry has a long history of suppressing free communication of revenues, metrics, pricing models and more under the guise of protecting client confidentiality and trade secrets. I call BS on this. Judge Rakoff makes great points about how this is unfair to employees seeking opportunities and bad for the market.
- The court found that LDiscovery’s offer of a collective $5.1 million signing bonus for the 4 reps to sit out their “Sabbatical Year” was not itself improper. DTI has not yet provided any evidence that the reps have solicited the DTI clients or otherwise harmed DTI.
- eDJ Perspective- Yes, you can shop around for a new opportunity as long as you really do refrain from poaching clients or providing actual services during your time in the non-compete penalty box.
- For all of us forensic nerds, the reps seem to have made a strong defense against the accusations that they misappropriated large amounts of confidential information from Epiq’s CRM system and other sources. There were three days of preliminary hearings and the opinion purports that the ‘forgotten’ thumb drives were not accessed and DTI has not provided any evidence that actual confidential information was transferred to LDiscovery.
- eDJ Perspective- Machine and site access logs don’t always tell the full story. Just because someone connected to a system does not mean that they stole from it. Real discovery may differ from this preliminary round, but this seems to have deflated DTI’s rather salacious accusations that the reps robbed the candy store on their way out the door.
- The court found that the reps could engage in preparatory actions during their non-compete year as long as the actions do not, “detrimentally impact the former employer’s economic interests during the term of a non-competition clause.”
- The opinion found the restrictive covenant barring at-will employees from discussing/talking about competitive opportunities to co-workers failed a three-part reasonableness test.
- eDJ Perspective- If you can be laid off at any time, it is reasonable to be aware of opportunities and to communicate with your fellow employees about them.
The opinion is packed with lots of interesting details and should be required reading for any eDiscovery professional who feels trapped by the non-compete they signed to get their job. An attorney will have to opine on how much of this applies outside of NY, but this matter is a good reminder of how a well written, impassioned complaint can construe truths into a story that does not always hold up to scrutiny. I am sure that the war is not over with this ruling, but it has shed a different light on the actions and reputations of the sales reps at the center of the conflict.
Stay skeptical my friends!
Greg Buckles wants your feedback, questions or project inquiries at Greg@eDJGroupInc.com. Contact him directly for a free 15 minute ‘Good Karma’ call. He solves problems and creates eDiscovery solutions for enterprise and law firm clients. His active research topics include analytics, mobile device discovery, the discovery impact of the cloud, Microsoft’s Office 365/2013 eDiscovery Center and multi-matter discovery. Recent consulting engagements include managing preservation during enterprise migrations, legacy tape eliminations, retention enablement and many more.
Greg’s blog perspectives are personal opinions and should not be interpreted as a professional judgment. Greg is no longer a journalists and all perspectives are based on best public information. Blog content is neither approved nor reviewed by any providers prior to being posted. Do you want to share your own perspective? eDJ Group is looking for practical, professional informative perspectives free of marketing fluff, hidden agendas or personal/product bias. Outside blogs will clearly indicate the author, company and any relevant affiliations.