David Beats Goliath: Small Staffing Firm Prevails in Trade Secret Trial

A small staffing firm, The Johnson Group, defeated international industry-giant Aerotek in its second trial of the same matter, prevailing against Aerotek’s claims for damages and injunctive relief.  On February 22, 2011, a Sacramento County jury ruled that The Johnson Group and former Aerotek employee Michael Ponce did not unlawfully misappropriate or solicit any of Aerotek’s clients nor unlawfully disclose any of Aerotek’s trade secret information.  This action had been tried to a jury in March of last year with The Johnson Group resoundingly prevailing, but Aerotek receiving a $40,000.00 verdict against Ponce individually for breach of contract.  Unsatisfied, Aerotek requested and received a new trial due to inconsistencies in the jury’s verdict.  This year, Aerotek was entirely defeated at the re-trial.

Aerotek claimed that The Johnson Group and Ponce misappropriated Aerotek’s clients and client contact information in violation of the Uniform Trade Secrets Act and in breach of Ponce’s employment agreement with Aerotek.  Although initially claiming damages over $1 million, Aerotek ultimately claimed $320,000.00 in “lost profits” at trial.  The Johnson Group and Ponce primarily defended against the claims by bringing in clients who repeatedly testified that they were not unlawfully solicited by Ponce.  The Johnson Group and Ponce also argued that the clients chose who they wanted to do business with, and that they simply liked Ponce better than his replacement at Aerotek because of Ponce’s skills and professionalism.  The Johnson Group and Ponce also aggressively attacked Aerotek’s embellished “lost profits” for the period of 2008-2010, which were based on estimates and speculation rather than actual empirical data that was available to Aerotek for those years.   According to client Michael Ponce, “Attorneys Jennifer Duggan and Mary Edes fought for us in a fearless manner, caring for us not only as clients, but individuals as well.”

Sacramento Superior Court Judge Brian Van Camp’s ruling on the court trial portion from last year still stands.  In that ruling, Judge Van Camp rejected Aerotek’s request for a permanent injunction for alleged false advertising and unfair competition as a result of confidential internet postings – dubbed “ghost postings” by Aerotek.  Specifically, Judge Van Camp ruled that Aerotek had failed to meet its burden to establish any causal connection between the postings and any alleged harm to Aerotek or to any consumer.  This issue was the subject of a previous Sacramento Business Journal article wherein Aerotek suggested that postings of the nature routinely utilized by The Johnson Group and other staffing agencies was confusing and unlawful.

After nearly four years spent in litigation, The Johnson Group and Ponce feel absolutely vindicated.  Client Chris Johnson said, “Jennifer and Mary were extremely prepared for the trial.  They had superior knowledge of the case; in fact, Jennifer and Mary knew Plaintiff’s evidence far better than Plaintiff’s own attorneys.” According to lead defense counsel, Jennifer Duggan, “The jury absolutely got this one right.  They sensed from the beginning that there was no wrongdoing under the law, and that Aerotek was using this case as a scare tactic to dissuade other employees from leaving the company to form a competitor business.”  The Johnson Group and Ponce will be seeking recovery of their attorney’s fees and costs shortly.

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