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Pulte Homes Accuses Former Employee of Stealing Confidential Strategic Plan for Developing Albuquerque Properties

By Todd

Pulte Homes claims in a federal lawsuit that a top executive who was being laid off stole a highly confidential, $1 million Albuquerque market study and used it to create a similar report for a major competitor.

The lawsuit filed in U.S. District Court alleges that Lynn Galindo, a former area vice president based in Las Vegas, Nev., conspired with former subordinates and other employees to obtain the
Albuquerque Operating Strategic Plan as she was negotiating her severance from Pulte.

Pulte claims Galindo entered into an agreement with Forest City Covington, developer of the 13,000-acre Mesa del Sol development south of the Albuquerque International Sunport, to provide that firm with a marketing study and used material from Pulte's report to do so.

There is no allegation of wrongdoing against Forest City, which is identified in the lawsuit but not named as a defendant.

"We would never contract with anyone with the specific aim of obtaining trade secrets," said Forest City Covington spokeswoman Anne Monson.

"That's just not what we're about."

An attorney for Galindo says the lawsuit is retaliation for Galindo's participation, as a witness, in a Nevada sexual harassment case against Pulte.

"This is a lawsuit where Pulte is going to have a great deal of egg on their face," said Marty Esquivel, an attorney for Albuquerque's Narvaez Law Firm, which is representing Galindo.

The suit alleges that Galindo asked a colleague or colleagues, named as "Does 1 through X" in the suit, to provide her with a copy of the report during the period when she was negotiating the severance package.

The document contained information about the Albuquerque residential housing market, such as economic forces, population size and mobility and price sensitivity, and cost in excess of $1 million to produce, according to the lawsuit.

"The information is of great value to Pulte because it contains, in specific detail, the supply and demand characteristics of the entire Albuquerque market by Targeted Consumer Group, as well as detailed (and mapped) information about how the market breaks into component pieces ( submarkets), the perceptions of those submarkets among specific consumer groups and the desirability of the submarkets," the lawsuit alleges.

"Galindo, having served in a high level position at Pulte, knew or should have known that Pulte would not have executed the Severance Agreement had Pulte known that she was planning to, or in the process of, violating the Business Policy Agreement by obtaining and using its Confidential, Proprietary and Trade Secret Information," the lawsuit said.

Lynn Hynds, a Detroit-based attorney, told the Journal that Pulte discovered the alleged plot by reading e-mail communications by Galindo.

The Albuquerque market study is "the road map of (Pulte's) assessment of the market, today and into the future," he said. "It contains some of the most confidential information that can be known to a homebuilder."

But Esquivel said Pulte never saw the report Galindo prepared for Forest City -- for which the lawsuit says she was paid $250 an hour.

"They have no idea what was in that report," he said. "They're just making assumptions, and they're wrong."

We'll report back as information on this matter develops.

Full post as published by Womble Trade Secrets Blog on April 07, 2008 (boomark / email).