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Salesman Fired for Not Signing Confidentiality Agreement : jury returned a unanimous verdict on countersuit, awarding $3,911,552.66.

Montrenes Financial sought unspecified damages for the violation of its trade secrets. In 2004, plaintiff Montrenes Financial Services, a credit card processing sales company, claimed that four of its salespersons, Calvin Lim, Jerry Vigil, Kirk Moore and Michael Littell, intended to set up a competing business and that Montrenes Financial's way of doing business was proprietary. The employees claimed they were fired after they refused to sign confidentiality agreements. Montrenes Financial sued Lim, Vigil, Moore and Littell, alleging violation of trade secrets. Thereafter, Montrenes filed complaints with the Cypress Police Department and the FBI against each of the employees claiming they had stolen from the company. Littell and the other employees each individually answered the complaint and countersued for wrongful termination, Labor Code violations (wrongful deductions of other employees' compensation from the salesperson's commissions), underpayment of wages, fraud, oppression and malice. Littell's countersuit, filed two weeks after Montrenes Financial filed suit, was against Montrenes Financial, RST Ventures and Dan Montrenes, owner of Montrenes Financial. Littell, who worked for Montrenes Financial for eight years as a commissioned salesperson, argued that he had no intention or desire to set up a business, competing or otherwise. He contended that he had no proprietary information on his computer and that he had done nothing to threaten Montrenes Financial's proprietary information. In his cross complaint, Littell claimed he attended a mandatory employee meeting on July 1, 2004, where Montrenes presented an agreement that all employees were expected to sign. Littell contended that he was not comfortable with the agreement because it included "at will" provisions, an overly broad non-compete clause and an ambiguous nondisclosure agreement. When he refused to sign, his manager took the keys to his office. On July 14, he claimed, he was fired for refusing to sign the agreement. When he attempted to obtain his personal property, including his computer, computer monitor and family photographs, Montrenes refused to return any of it. Montrenes denied firing Littell, asserting that he "just stopped coming to work." Further, the defense contended that the confidentiality agreement was not illegal and so the terminations were appropriate were appropriate under law. He also argued that while the company kept the computers, it did so to preserve evidence that Littell had proprietary information on his computer. Little moved the court for a determination of the legality of the agreement. After extensive briefing and argument, the judge found the agreement was legally unenforceable. In his countersuit, Littell sought unspecified damages for wrongful termination in violation of public policy, conversion, reimbursement of deductions from Littell's commissions that Montrenes used to pay other employees, and a B&P § 17200 (unfair competition) claim because Montrenes made the same illegal deductions from all Montrenes' salespersons' commissions. In addition, Littell contended that if he had not been fired, he would still be working at Montrenes Financial because he loved his job and intended to stay there until retirement.

Full post as published by The Trade Secrets Vault on June 27, 2008 (boomark / email).