Marsteller v. ECS Federal, Inc.
August 5, 2013
United States District Court - Eastern District of Virginia
A September 5, 2013 opinion from the Eastern District of Virginia reminds us that plausible claims for trade secret misappropriation against former employees can survive a motion to dismiss even in the absence of actual use of the trade secret by a defendant. In Marsteller v. ECS Federal, Inc., a former Senior VP of ECS Federal Inc. (“ECS”), a government contractor, allegedly downloaded and transmitted confidential information in the period between her notice of termination and her last day of work, including company contracts, billing rates and business development plans. ECS alleges various violations of the Virginia Uniform Trade Secret Act (“VUTSA”) and the Virginia Computer Crimes Act, as well as breach of contract, conversion, breach of fiduciary duty and unjust enrichment. Marsteller moved to dismiss these claims under the theory that ECS had not adequately alleged that she had actually used any of this information in her possession, and it is the court’s denial of this motion that is most relevant here.
The VUTSA recognizes trade secret misappropriation if there “improper acquisition” or “disclosure of use” of a trade secret. See Va. Code Ann. § 59.1-336. In Virginia, misappropriation through acquisition occurs when “a person knows or has reason to know that a trade secret was acquired by improper means” which include, among other things, “use of a computer or computer network without authority.” Id. In applying this section of the VUTSA as well as the liberal standards for reviewing motions to dismiss under the Federal Rules of Civil Procedure, the court denied Marsteller’s motion to dismiss and allowed ECS’s counterclaim to stand. See Fed. R. Civ. P. 8, 12(b) (6). The court emphasized that “[u]nder the VUTSA, improper acquisition of a trade secret, even in the absence of allegations of use or disclosure, is sufficient to state a claim.”
Jacqueline D. Marsteller
ECS Federal, Inc.