The jury awarded $6,475,855.44 in compensatory damages and $17 million in punitive damages.
The jury found that the salaries of Innovative Technologies employees and its mapping strategies were trade secrets, or that Advanced Management Technologies and Kenton Trace Technologies misappropriated the plaintiff's trade secrets. Jurors found that the plaintiff suffered actual loss proximately caused by the defendants' misappropriation of its trade secrets or that the defendants were unjustly enriched by its misappropriation of the plaintiff's trade secrets.
They found that Advanced Management Technologies acted with purpose to procure contract breaches or terminate the business relationships the plaintiff had with its employees, and that there was no justification for Advanced Management Technologies' conduct. The jury found that Advanced Management Technologies' tortious interference with the plaintiff's business relationship and contracts with its employees was the proximate cause of the damages it suffered. Jurors found that Advanced Management Technologies engaged in a civil conspiracy with the individual defendants or the plaintiff's employees to cause it harm, which was a proximate cause of the plaintiff's damages.
The plaintiff sought $1.25 million in one year of loss of profits and $465,000 in one year of unjust enrichment.
Plaintiff Innovative Technologies Corp. is a Dayton-based government contractor that provides professional services to supplement civilian and military workforces.
James Silcott, a project manager; Sheila Silcott, financial/logistics management; and David Nicolas, information technology, were employees of Innovative Technologies who worked for the corporation for six years before resigning in May 2001.
Prior to their resignation, the Silcotts and Nicolas worked on a contract that Innovative Technologies obtained in the early 1990s, wherein Innovative Technologies was contracted to provide financial and logistical services for the renovation of C-130 cargo planes for nearby Wright-Patterson U.S. Air Force Base.
Over a year prior to their resignation in May, the Silcotts and Nicolas formed Kenton Trace Technologies LLC, of Fairborn, and prepared a competing bid along with three other undisclosed Innovative employees to the C-130 contract that Innovative Technologies had with the government. (Most government contracts are periodically subjective to competitive bidding, and the C-130 contract was up for bid in 2001.) When the three employees left Innovative Technologies, they bid for the contract. Before an award could be made, Innovative Technologies filed for a temporary restraining order against Kenton Trace Technologies, Nicolas and the Silcotts, which was granted. Following a court injunction, the Air Force canceled the May bid and solicited new competitive bids in August. Advanced Management Technologies Inc., outside of Washington, D.C., was awarded the bid in August.
According to Innovative Technologies, Advanced Management Technologies had been communicating with Kenton Trace Technologies, the Silcotts, Nicolas and other Innovative Technologies employees for over a year prior to the August 2001 bid, and obtained confidential information (i.e., what tasks were performed and their execution, production costs and employee salaries) that aided Advanced Management Technologies in pricing and presenting a bid in competition with Innovative Technologies.
Advanced hired The Domar Group, a Dayton-based independent contractor, to be a liaison to provide business opportunities and leads for all of the parties, alleged Innovative.
Claiming tortious interference with a contract and misappropriation of trade secrets, Innovative Technologies sued the Silcotts, Nicolas, Kenton Trace Technologies, Advanced Management Technologies and Jerome Domask, owner of The Domar Group.
Prior to trial, a judge determined that the Silcotts and Nicolas were "unfaithful servants" and breached employment agreements with Innovative Technologies. The jury was ordered to determine how much compensation of the three employees received from the period of 14 months, which the court found unfaithful. Also during pretrial, Innovative settled with Domask for a confidential amount.
The punitive damage phase of the trial was bifurcated at the request of Innovative and only against Advanced Management Technologies.
Plaintiff's counsel argued that the Silcotts, Nicholas, Kenton and Advanced Management interfered in its employment contracts by inducing Innovative employees to disclose their salaries and breach their employment contracts. As a result, Innovative claimed Advanced unfairly won the C-130 contract away from Innovative that it would have otherwise have won.
Advanced argued that Innovative failed to prove that in the competitive bid process, Innovative was not awarded the contract but for Advanced's actions. The government witnesses testified that Innovative ranked fourth out of the five bidders and that if Advanced was not awarded the contract, it would have awarded the contract to the next highest bidder, not Innovative. Advanced also argued that a person's salary cannot be a trade secret as Innovative did not treat it as such, and that Innovative's bid price was so high that it priced itself out of the competition. Advanced also showed that it is common practice at Wright Patterson Air Force Base for contractors to talk to potential employees.
Kenton counsel argued that Kenton did not assist or cooperate with Advanced regarding the government contract.
Plaintiff's counsel argued that Innovative Technologies was a small government contractor with a significant portion of business, and it welcomed competition from other businesses but only if the playing field was level. Competition is good for everyone and good for the government, but unfair competition is illegal and not good for any entity, plaintiff's counsel argued.
Defense counsel contended that the plaintiff's alleged damages were not as much as it alleged, and that if Advanced Management Technologies wasn't awarded the contract, another business would have won it. Furthermore, counsel contended that Innovative failed to prove causation.
The court ruled that ITC's damages were limited to the base year as the government had discretion to award additional years, and ITC could not prove it would have been awarded the option years.
Court of Common Pleas of Ohio, Montgomery County
Innovative Technologies Corp. v. James Silcott, Sheila Silcott, David Nicolas,
Kenton Trace Technologies LLC, Advanced Management Technologies Inc. and Jerome
Domask, d/b/a The Domar Group
No. 2003cv03674

