Dispute Erupts Over Trade Secrets Consolidated Electronics Accuses Ex-Workers Of Stealing Information
When chief engineer David Gwynne resigned last December from Consolidated Electronics Inc., marketing executive Warren Stacey said he spotted him wheeling out a chair loaded with files and catalogs.
Stacey said he alerted Gwynne’s boss, Scott Hamilton, vice president of engineering. But Hamilton assured him that Gwynne wasn’t taking anything important.
The content of those files took on new meaning in February when Hamilton joined Gwynne to launch Resource Affiliates International. The North Spokane firm allegedly competes against Consolidated, which produces and sells devices that help utilities monitor electrical transmissions.
Consolidated last week filed a lawsuit in Spokane County Superior Court, accusing Hamilton, Gwynne and partner Greg Lloyd, another ex-Consolidated engineer, of misappropriating Consolidated trade secrets, breaching an employment contract and usurping business opportunities. That was accomplished, Consolidated claimed, when the men removed files and software.
They “conspired to sabotage the efforts of Consolidated Electronics and started planning their own business, purloining data, information and intellectual property,” Consolidated President Wendell Satre said in court documents.
But Resource Affiliates denies the claim, saying it’s an engineering firm, not a manufacturer like Consolidated. “They’ve misappropriated no files or trade secrets and never intended to be competitors,” the company’s attorney, Teresa Sherman, said Wednesday.
Judge Richard Schroeder on May 28 signed a temporary restraining order that bars Resource Associates from using Consolidated trade secrets and requires the company to return any files and software until a hearing can be held next week.
Consolidated is seeking a permanent injunction against Resource Affiliates and $1 million from Gwynne and Lloyd - an amount they allegedly agreed to pay in 1993 when they signed an agreement to not disclose proprietary information.
As evidence, Consolidated downloaded 36 pages from Resource Affiliates’ Internet “home page” that displayed promotional literature for a “Customer Data and Control Module.”
Consolidated claims the unit uses the same software and design as Consolidated’s “Continuous Condition Monitor,” a product that the company was about to market.
Attorney Sherman said the module is produced by another manufacturer, not Resource Affiliates.
, DataTimes