Availability of Client Data on LinkedIn, Facebook, and Google Sinks Trade Secrets Claim -- Sasqua Group v. Courtney[Post by Venkat with a brief comment from Eric]
Sasqua Group, Inc. v. Courtney, 2010 WL 3613855 (E.D.N.Y. Aug. 2, 2010)
Background: Sasqua Group and its principal (Tors) ran a executive search consulting firm for professionals in the financial services industry. They work with "a small group of high-caliber clients, including . . Barclays Capital, The Royal Bank of Scotland, Nomura American Holding, Inc. . . . " In 2000, Sasqua took on Lori Courtney (Tors's niece) as a consultant. Sasqua claimed that Courtney ran the day-to-day affairs of Sasqua and lacked experience when she came to work for Sasqua. Courtney's version differed.
In 2008, Tors and Courtney negotiated but did not enter into a partnership agreement and continued to work together. [If this isn't a red flag for a dispute in the future, I'm not sure what is.] Courtney continued to work with Sasqua under a consulting agreement which was renewed annually. In 2009, despite the lack of a partnership agreement, Tors and Courtney started sharing profits and expenses of Sasqua. In early 2010, Courtney resigned from Sasqua and formed Artemis Consulting. Within the week, three Sasqua recruitment consultants advised Sasqua that they were leaving to work for Courtney at Artemis. Tors contacted Sasqua clients to let them know of Courtney's departure, and one of the clients (Standard Charter) told Tors that it already know what was going on. Predictably unhappy, Tors sued Courtney and Artemis. Sasqua asserted a variety of claims, but sought an injunction to prevent Courtney's communication with Sasqua's "client contacts" (i.e., particular individuals at companies who were in charge of hiring companies such as Sasqua and Artemis).
The Court's Decision: Since Sasqua did not have a non-competition or a non-solicitation agreement with Courtney, it was left to rely on a trade secrets claim based on its client list. This claim did not fare well.
The key issue the court focused on was whether the information sought to be protected as a trade secret was known outside the business or readily ascertainable. Courtney argued that the information Sasqua sought to protect was freely available, or available with little efforts through using sources such as LinkedIn, Facebook, and Google:
Sasqua argued that it developed database software which kept track of client contacts and preferences. Unfortunately for Sasqua, Courtney was adept at finding information on the internet, and her in-court demonstration of how ...
Sasqua Group, Inc. v. Courtney, 2010 WL 3613855 (E.D.N.Y. Aug. 2, 2010)
Background: Sasqua Group and its principal (Tors) ran a executive search consulting firm for professionals in the financial services industry. They work with "a small group of high-caliber clients, including . . Barclays Capital, The Royal Bank of Scotland, Nomura American Holding, Inc. . . . " In 2000, Sasqua took on Lori Courtney (Tors's niece) as a consultant. Sasqua claimed that Courtney ran the day-to-day affairs of Sasqua and lacked experience when she came to work for Sasqua. Courtney's version differed.
In 2008, Tors and Courtney negotiated but did not enter into a partnership agreement and continued to work together. [If this isn't a red flag for a dispute in the future, I'm not sure what is.] Courtney continued to work with Sasqua under a consulting agreement which was renewed annually. In 2009, despite the lack of a partnership agreement, Tors and Courtney started sharing profits and expenses of Sasqua. In early 2010, Courtney resigned from Sasqua and formed Artemis Consulting. Within the week, three Sasqua recruitment consultants advised Sasqua that they were leaving to work for Courtney at Artemis. Tors contacted Sasqua clients to let them know of Courtney's departure, and one of the clients (Standard Charter) told Tors that it already know what was going on. Predictably unhappy, Tors sued Courtney and Artemis. Sasqua asserted a variety of claims, but sought an injunction to prevent Courtney's communication with Sasqua's "client contacts" (i.e., particular individuals at companies who were in charge of hiring companies such as Sasqua and Artemis).
The Court's Decision: Since Sasqua did not have a non-competition or a non-solicitation agreement with Courtney, it was left to rely on a trade secrets claim based on its client list. This claim did not fare well.
The key issue the court focused on was whether the information sought to be protected as a trade secret was known outside the business or readily ascertainable. Courtney argued that the information Sasqua sought to protect was freely available, or available with little efforts through using sources such as LinkedIn, Facebook, and Google:
virtually all capital markets personnel have their contact information on Bloomberg, LinkedIn, Facebook or other publicly available databases, including the firm's own media advertising.
Sasqua argued that it developed database software which kept track of client contacts and preferences. Unfortunately for Sasqua, Courtney was adept at finding information on the internet, and her in-court demonstration of how ...
