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Courage or Folly? Superior Court Awards Significant Attorney’s Fees Against a Defeated Trade Secret Plaintiff

Lexology (01/25/12) Charles Post

In Aerotek v. The Johnson Group Staffing Co., the Sacramento Superior Court awarded a successful defendant in a trade secret misappropriation and unfair competition case more than $730,000 in attorney’s fees. In doing so, the Court increased the fees incurred by the defendant by 33%. Michael Ponce was an employee at the Aerotek staffing firm who served as both a recruiter and a salesperson. Ponce signed a noncompete agreement where he agreed that he would not divulge Aerotek’s trade secrets which were defined to include Aerotek’s customer list, and would not solicit any of those customers following the termination of his employment at the company.

Ponce eventually went to work at the personnel recruiting and placement company The Johnson Group as a recruiter and salesperson charged with generating new employer accounts. Aerotek sued both Ponce and the Johnson Group, both times failing to recover any damages. The defendants moved the court award attorney’s fees under the California Uniform Trade Secret Act, and the court did so, citing Aerotek’s failure to seek injunctive relief at the outset of the litigation and the lack of customer loss.