Government Technology Services, Inc. v. IntelliSys Technology Corp.

By Judge Jonathan C. Thacher This matter came before the court on July 23, 1999, to hear the Defendants Marlene Harold and Allison McIntosh’s Demurrer to Dismiss the Bill of Complaint brought by Government Technology Services, Inc. (hereinafter “GTSI”). The Demurrer as to Count I (Breach of Employee Duty of Loyalty against Defendants Harold and McIntosh) is overruled. Solicitation by an employee of other employees all employed “at will” to leave their employer and join a competitor constitutes a violation of fiduciary duty and is actionable. An. employee’s fiduciary duty “prohibits the employee from acting in a manner adverse to his employer’s interest.” See Hilb, Rogal and Hamilton v. DePew, 247 Va. 240, 246, 440 S.E.2d 918, 921 (1994), citing Greenspan v. Osheroff, 232 Va. 388, 400, 351 S.E.2d 28, 37 (1986). See also Duggin v. Adams, 234 Va. 221, 226-228 (holding that the breach of a fiduciary relationship is evidence of the required improper method in the intentional interference causing a termination of the contract). The Demurrer as to Count II (Breach of Confidentiality and NonDisclosure Agreement against Defendant Harold) is sustained. Plaintiff fails to allege direct or indirect disclosure of any confidential information to ITC [56] but rather states there was an “inevitable” or conclusoiy disclosure (¶¶ 61 and 62 of Bill of Complaint.) Count DI of the Demurrer (Misappropriation of Trade Secrets in Violation of Va. Code § 59.1-336 et seq. against Defendant Harold) is sustained. Count HI is the same allegation as Count H under the Virginia Trade Secrets Act, § 59.1-337(A). Under the Act, only actual or threatened misappropriation may be enjoined. Virginia does not recognize the inevitable disclosure doctrine. The Demurrer as to Count IV (Tortious Interference with Contractual Relations against all Defendants) is overruled as to Defendants Harold and McIntosh. The Demurrer to Count V, alleging Conspiracy in Violation of Va. Code § 18.2-499 against all Defendants, is overruled in part and sustained in part. The demurrer is overruled with regard to the allegation that defendants conspired to induce GTSI employees to terminate employment with GTSI and begin employment with IntelliSys. The demurrer is sustained as to the conspiracy to breach the Confidentiality Agreement between Defendant Harold and GTSI because Plaintiff failed to provide a factual basis to support this allegation. Conspiracy under § 18.2-499 requires that any two or more persons agree to undertake an act for the purpose of “willfully and maliciously” injuring another in his trade or business. Here the employees’ actions are clearly actionable as a breach of fiduciary duty, but the facts as alleged fail to support the willful and malicious requirement under Va. Code § 18.2-499. Plaintiff is granted twenty-one days’ leave to amend the pleadings.