Where employees of a government contractor who learned of a subcontract the company was attempting to win then formed their own company, submitted a bid and won the subcontract, a jury will decide if they breached their duty of loyalty to their employer.
Background
While working for Adnet Inc., Rohit Soni, Laura Barr and Jason Laird learned of a subcontract that Adnet was attempting to win. Thereafter, defendants, through their own company, submitted a bid for that same subcontract. After defendants won the subcontract, Adnet sued them for breach of the duty of loyalty, tortious interference with a business relationship and business conspiracy. The district court granted defendants’ motion for summary judgment.
Breach of loyalty
In Williams v. Dominion Tech. Partners, L.L.C., 576 S.E.2d 752 (Va. 2003), the Virginia Supreme Court noted three circumstances in which an employee breaches his duty of loyalty: when he misappropriates trade secrets, misuses confidential information or solicits an employer’s clients or employees before his employment ends. However, the court specifically explained that these circumstances are simply examples of situations that “clearly constitute a breach of the duty of loyalty” and are “by no means exhaustive.”
Purporting to apply Williams, the district court stated that the inquiry before it was “narrow” “because Adnet does not allege misappropriation of trade secrets or the misuse of confidential information.” The district court then stated...
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