DTI v. LDiscovery – Round One to LDiscovery

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.”

Extract from article by Greg Buckles

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.

Additional Reading:

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