BFV Perspectives, Noncompete & Trade Secrets, | Dec 29, 2011

Georgia Court of Appeals Affirms Judgment Against Former Employee for Breaching his Duty of Loyalty

Sitton v. Print Direction, Inc., — S.E. 2d. —, 2011 WL 4469712 (Ga. App. Sept. 28, 2011), involved a peculiar application of some of the claims often at issue in unfair competition disputes between employers and their former employees.

Larry Sitton was formerly employed by Print Direction, Inc. (“PDI”), a commercial printing business.  Mr. Sitton was fired when PDI discovered that he was taking part in a competing business on the side of his employment.  PDI discovered Mr. Sitton’s conduct while reviewing e-mails on the personal computer he used while at work.  While PDI provided Mr. Sitton with a laptop, he chose to use his own computer while at the office.  He would bring his computer into the office and then connect it to PDI’s network.

At some point in time, PDI’s President and Chief Executive Officer heard that Mr. Sitton was competing with PDI.  He entered Mr. Sitton’s office, moved the mouse on Mr. Sitton’s computer, and clicked on the e-mail listing which appeared on the screen.  He then printed certain e-mails from Mr. Sitton which demonstrated that, while he was employed with PDI, he was brokering jobs through a company called Superior Solutions Associates, LLC.

PDI then terminated Mr. Sitton.  Oddly, Mr. Sitton then sued PDI, alleging that PDI’s viewing and printing the incriminating e-mails on his computer constituted computer theft, computer trespass and computer invasion of privacy in violation of the Georgia Computer Systems Protection Act, O.C.G.A. § 16-9-93 (“GCSPA”).

The trial court rejected Mr. Sitton’s claims, finding that PDI’s accessing his computer was not “without authority” as required for a violation of the GCSPA.  The Court of Appeals affirmed the trial court’s finding that even though the e-mails were found on Mr. Sitton’s personal computer, PDI had authority to inspect the computer pursuant to the computer usage policies in PDI’s employee manual, which Mr. Sitton had agreed to.   The Court of Appeals pointed to the fact that PDI’s computer usage policy was not limited to PDI-owned computer equipment and it specifically stated that employees should not regard electronic mail left on or transmitted over PDI’s systems as private or confidential.  The e-mails on Mr. Sitton’s computer which PDI saw were therefore subject to review under the company’s computer usage policy.

Thus, PDI’s actions were not “without authority”, and Mr. Sitton’s GCSPA claims failed.  The Court of Appeals also observed that there was no evidence that PDI accessed Mr. Sitton’s computer with the intent of taking his property; deleting, altering or damaging any computer data; or examining any personal data.  The fact that the requisite intent was lacking was thus another reason that PDI’s viewing the e-mails was not proscribed by the GCSPA.

The Court of Appeals also affirmed the trial court’s ruling denying Mr. Sitton’s claim for common law invasion of privacy.  In light of the evidence discussed above, the Court of Appeals agreed with the trial court’s finding that PDI’s review of Mr. Sitton’s e-mails did not constitute such an unreasonable intrusion as to rise to the level of an invasion of privacy.

Mr. Sitton also challenged the judgment against him on PDI’s counterclaim for breach of the duty of loyalty.  The Court of Appeals rejected Mr. Sitton’s argument that he did not owe a duty, given that there was evidence in the record that he had authority to solicit business on PDI’s behalf and to bind PDI for certain obligations.  The Court of Appeals found that this evidence supported the trial court’s finding that he owed a fiduciary obligation.  The trial court also found that the terms of PDI’s employee manual specifically prohibited competition.  This fact further supported the trial court’s finding that Mr. Sitton breached his duty of loyalty.  The Court of Appeals also rejected Mr. Sitton’s challenges to the trial court’s damages calculations.

This case illustrates the importance of employers being proactive in having robust computer usage, e-mail, and internet usage policies.  Such policies may significantly aid an employer in obtaining relief from a court in the event of a rogue former employee like Mr. Sitton.

BFV Perspectives, Noncompete & Trade Secrets, | Dec 29, 2011
Neal F. Weinrich
Neal F. Weinrich

Neal Weinrich knows noncompetes and trade secrets inside and out. A shareholder at Berman Fink Van Horn, Neal counsels clients in all industries on matters involving restrictive covenants, trade secrets and other competition-related issues.