Thursday, June 09, 2011, 6/09/2011 09:54:00 AM

Office Equipment Sales Companies Square Off in Sioux Falls Trade Secrets Battle

By Todd


We don't just cover the big-name trade secret cases here, folks. We even tell you about the smaller skirmishes.






The Sioux Falls Argus-Leader is reporting that two Sioux Falls businesses are at the center of a lawsuit with one accusing the other of breach of contract and violation of the Uniform Trade Secret Act.






Marco Inc., which recently purchased Best Business Products in Sioux Falls, filed a complaint May 27 with the United States District Court against Advanced Systems Inc., alleging unfair competition and interference with Marco's customer and employment contracts, among other accusations.






Seems Marco Inc. bought this Best Business Products' outfit but before they were able to get it operating some key Best Business employees jumped ship and went to work with a third company, Advanced Systems. The lawsuit is targeted, of course, at Advanced Systems and former Best employees Christine Bergeson, Wayne Ewing, Jim Liebsch, Michael Linton, Lorin Pitts, Paul Robson and Kent Reilly.






The lawsuit alleges that Bergeson, Ewing, Liebsch and Pitts "simultaneously resigned from their employment with Best and started Advanced System's new 'Sioux Falls' branch office' " on April 28, the day before Marco closed on the Best acquisition. They then "began immediately targeting Best customer accounts, the same accounts that Marco lawfully purchased from Best," court papers say.



The lawsuit claims that Advanced Systems has used "confidential information" it obtained from Best and from the individual defendants, "including the information that Ewing stole prior to his departure from Best, to solicit Best's employees and Best's customer accounts."






This is the classic successor-in-interest litigation that frequently occurs following acquisitions. Employees of the sold outfit want a new deal and aren't comfortable with the new owner. New owner says the employees conspired to take from it what the new owner thought it was purchasing. And so the world turns . . . .






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