{"id":646,"date":"2013-05-02T21:39:28","date_gmt":"2013-05-02T21:39:28","guid":{"rendered":"https:\/\/www.bfvlaw.com\/cpa-firm-unsuccessful-at-enjoining-former-employee\/"},"modified":"2013-05-02T21:39:28","modified_gmt":"2013-05-02T21:39:28","slug":"cpa-firm-unsuccessful-at-enjoining-former-employee","status":"publish","type":"post","link":"https:\/\/www.bfvlaw.com\/cpa-firm-unsuccessful-at-enjoining-former-employee\/","title":{"rendered":"CPA Firm Unsuccessful at Enjoining Former Employee"},"content":{"rendered":"

Drawdy CPA Services, P.C. v. North Ga CPA Services, P.C.<\/em>, \u2014 S.E.2d \u2013, 2013 WL 1189274 (Ga. App. March 25, 2013), pitted a CPA firm against its former employee and the new company she formed.<\/p>\n

Jamie Pritchett was employed with and worked for Drawdy CPA Services, P.C. and its principal, John T. Drawdy, Jr. (collectively, \u201cDrawdy\u201d).\u00a0 After Ms. Pritchett left Drawdy and formed North Ga. CPA Services, P.C., Drawdy filed suit against her and her new company.\u00a0 Drawdy sought injunctive relief to prevent alleged misappropriation of client information and trade secrets.\u00a0 Drawdy specifically sought to prevent Ms. Pritchett from accessing Drawdy\u2019s client portals and from \u201csiphoning off\u201d Drawdy\u2019s clients.<\/p>\n

The factual basis for Drawdy\u2019s request for injunctive relief was two-fold.\u00a0 Drawdy had developed a \u201cclient portal\u201d on its website.\u00a0 The client portal housed Drawdy\u2019s clients\u2019 tax returns.\u00a0 When clients sought out Ms. Pritchett after she left Drawdy to prepare their tax returns, many of those clients provided Ms. Pritchett with the password to access their portal at Drawdy so that she could obtain copies of their prior tax returns.\u00a0 Ms. Pritchett entered Drawdy\u2019s client portals for this purpose and with express permission from the clients.<\/p>\n

Ms. Pritchett also sent a direct market mailer to a list of 2500 people who fit a particular demographic profile.\u00a0 The list was compiled by a third-party company.\u00a0 Drawdy introduced evidence that one of the clients who received the mailer was a client of Drawdy\u2019s.<\/p>\n

The trial court found that this evidence did not support the grant of any injunctive relief in Drawdy\u2019s favor.\u00a0 Drawdy appealed the trial court\u2019s ruling, enumerating several grounds why Ms. Pritchett should have been enjoined.\u00a0 First, Drawdy relied on the non-disclosure covenant in Ms. Pritchett\u2019s employment agreement.\u00a0 Drawdy argued that the company owned the client portals which housed the clients\u2019 tax returns, and that Ms. Pritchett breached the non-disclosure covenant by accessing and using the portals.\u00a0 The Court of Appeals rejected Drawdy\u2019s argument, however, finding that because Mr. Drawdy testified that he had already shut down the portal system for former clients, there was no need to enter injunctive relief to enjoin Ms. Pritchett from using the company\u2019s client portals.<\/p>\n

Drawdy also argued that injunctive relief should have been granted under the Georgia Trade Secrets Act, claiming that the process by which he delivered client services was a trade secret.\u00a0 The Court of Appeals rejected Drawdy\u2019s arguments that any alleged trade secrets had been misappropriated, noting that Ms. Pritchett had not misappropriated the client portal software itself.\u00a0 Rather, she merely used the portal to gain access to the clients\u2019 tax returns, and Drawdy admitted that the returns belonged to the clients, not to the company.<\/p>\n

The Court of Appeals also rejected Drawdy\u2019s arguments for injunctive relief based on the Georgia Computer Systems Protection Act.\u00a0 The Court of Appeals found that because Ms. Pritchett obtained the passwords to access the client portals from her clients and never accessed the clients\u2019 files on Drawdy\u2019s network, she did not commit the crime of computer theft.\u00a0 The Court of Appeals also again noted that the fact that the portals had already been shut down warranted denial of the request for injunctive relief.<\/p>\n

Finally, the Court of Appeals rejected Drawdy\u2019s attempt to enjoin Ms. Pritchett based on the non-solicitation covenant in her employment agreement.\u00a0 Drawdy submitted the affidavit of only one client who had received the direct mail advertisement from Ms. Pritchett.\u00a0 Ms. Pritchett testified that prior to using the list generated by the third-party company to send the mailer, she reviewed the list and removed five or six individuals that she recognized to be Drawdy\u2019s clients, but missed the one that was sent to the client whose affidavit was introduced.\u00a0 Based on this evidence, the Court of Appeals agreed with the trial court that injunctive relief was not necessary.<\/p>\n

The Court of Appeals thus agreed with the trial court that Drawdy\u2019s claims had very little merit.\u00a0 Drawdy<\/em> thus appears to reflect a situation where a former employee is lawfully competing and the employer has little legal recourse to thwart its competitor\u2019s efforts.<\/p>\n

\n","protected":false},"excerpt":{"rendered":"

Drawdy CPA Services, P.C. v. North Ga CPA Services, P.C., \u2014 S.E.2d \u2013, 2013 WL 1189274 (Ga. App. March 25, 2013), pitted a CPA firm against its former employee and the new company she formed. Jamie Pritchett was employed with and worked for Drawdy CPA Services, P.C. and its principal, John T. Drawdy, Jr. (collectively, […]<\/p>\n","protected":false},"author":18,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_mo_disable_npp":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[4,9],"tags":[27,28,20,25,17,69,16,22,29],"acf":[],"yoast_head":"\nCPA Firm Unsuccessful at Enjoining Former Employee<\/title>\n<meta name=\"description\" content=\"Enjoining Former Employee: Drawdy CPA Services, P.C. v. 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