Trade Secrets, Non-Competes and E-Mail Do Not Go Well Together (Unless You Like Punitive Damages) - Part 5
By The trial court found that Tammy Keymon violated the non-compete contained in her Employment Agreement and misappropriated trade secrets of her former employer. The Court then found the misappropriation was “willful and malicious” and awarded exemplary damages. Now it was time to total the bill.
First, the trial court awarded $94,307 for breach of the Employment Agreement plus $48,283.20 in attorney’s fees under that agreement. The trial court also found Keymon procured Verizon’s breach of its contract with Hamilton-Ryker in violation of T.C.A. § 47-50-109. The damages for this misappropriation were also $94,307. The trial court then trebled that award pursuant to the statute for a total award under T.C.A. § 47-50-109 of $282,921. Once the trial court added in the actual damages for Keymon’s breach of her common law and contractual duties of loyalty and trust and her obligation to refrain from self dealing, conversion, and unjust enrichment, the total actual damages for all claims other than the trade secret misappropriation was $477,178.
The trial court then calculated the damages for misappropriation of trade secrets by taking Hamilton-Ryker’s 32.9% profit margin on the Verizon business and applying that to the $1,450,388 Keymon had billed related to Verizon through the date of trial. This lost profits analysis also resulted in $477,178 in damages. As an award of exemplary damages under the Trade Secrets Act, the trial court then doubled this amount due to the malicious nature of Keymon’s conduct for a total award of $954,356.
The Court of Appeals upheld the total damage award, approving the trial court’s calculation using the profit margin and the exemplary damages. Keymon argued on appeal that the $477,178 award for misappropriation was inconsistent with the actual damages calculation of $94,307 for the inducement of breach of the contract between Hamilton-Ryker and Verizon. The Court of Appeals noted that the Trade Secrets Act gave the trial Court the discretion to award the higher of actual damages or lost profits resulting from misappropriation in approving the $477,178 award (before also approving the doubling of it as exemplary damages).
Related content
- Trade Secrets, Non-Competes and E-Mail Do Not Go Well Together (Unless You Like Punitive Damages) - Part 4
- Trade Secrets, Non-Competes and E-Mail Do Not Go Well Together (Unless You Like Punitive Damages) - Part 3
- Trade Secrets, Non-Competes and E-Mail Do Not Go Well Together (Unless You Like Punitive Damages) - Part 6
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