Computer Forensic Case Study - Breach of Fiduciary Duty (Part 1)

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Scenario

Type of Case: Civil Litigation
County: Dallas
Plaintiff: Voice/Data Cabling Company – “ABC”
Defendant: Mr. Operations

Description: Mr. Operations was an employee of ABC Company hired to run the voice/data cabling division of this growing organization. Mr. Operations terminates his employment with ABC Company providing no notice and did not provide ABC Company with any opportunity to inquire as to open issues with existing clients and jobs.

Complication: To complicate matters there was no employment contract, confidentiality agreement, security policy, nor employee titles. The employee handbook consisted of approximately two pages of text. No documentation existed showing Mr. Operations was an Officer of ABC Company.

Summary

Claims of Plaintiff
ABC Company purports that Mr. Operations was an Officer of ABC and as an Officer had a Fiduciary Duty of no harm. ABC Company believes Mr. Operations took both customer contact and proprietary data from company systems to use in direct competition. ABC Company also believed existing data had been modified or removed from the system by Mr. Operations.

Defendants’ Response
Texas is a right-to-work State and doesn’t enforce non-compete agreements. Mr. Operations claimed no knowledge of his job title or responsibilities within ABC Company.

Computer Forensic Evidence Recovered
This is a typical small company environment where everyone wears many hats and may have various titles depending on the situation. Mr. Operations was recognized internally as both the Director and the VP of Operations. In the absence of official titles, employment offers, and employment agreements, proof had to be located that Mr. Operations knew his position as an Officer of ABC Company.

Here are two examples of evidence located from 2005 clearly showing Mr. Operations knowledge and advertisement of his position as VP of Operations.

• Multiple documents were located on ABC Company’s file server containing employee names, contact information, and titles. The purpose of these documents was for inclusion in proposals being sent to potential clients. The documents labeled Mr. Operations as both the Vice President and Director of Operations. A search through Mr. Operations 1GB email file revealed many instances where these documents were sent by him outside the organization to potential clients.
  
  
• An email conversation was discovered between Mr. Operations and a client ABC Company performed subcontract work for. In the final email, a document, identified as a subcontractor agreement, was attached and the sender stated, “Have an Officer sign and return two copies of the attached subcontractor agreement.” A search through printed files revealed that Mr. Operations himself signed the subcontractor agreement and wrote in the title, VP of Operations.

Conclusion

There were numerous other items found with similar impact to those mentioned above. All the evidence combined clearly corroborated the plaintiff’s assertion that Mr. Operations was employed, and had knowledge of his employment, as an Officer of ABC Company. Now that Fiduciary Duty has been established, see Computer Forensic Case Study – Breach of Fiduciary Duty (Part 2) for information on the actions of Mr. Operations and his coconspirators.

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