For years, an Alaska-based defense contractor worked to develop relationships with the Navy.
Clarus Fluid Intelligence LLC knew how to flush some of the Navy’s vital mechanical systems. And more importantly from a business aspect, the company knew how to win the necessary Department of Defense contracts to keep the lights on.
But according to a new lawsuit filed in U.S. District Court in Norfolk, that competitive edge may have walked out the door earlier this year with a disgruntled employee versed in not only the company’s technical systems — but also its pricing structure.
Clarus’ parent company, Ohio-based RelaDyne, sued Charles Bronder of Virginia Beach this week claiming he violated various state and federal laws intended to protect the company’s trade secrets and computer systems. It also claims multiple contract breaches.
The lawsuit alleges eight counts of wrongdoing by Bronder.
RelaDyne is asking the court to temporarily prevent Bronder, and his new company, Accurate Marine, from soliciting their customers and employees.
Michael Lockerby, one of RelaDyne’s attorneys, declined to comment. No lawyer is listed for Bronder, who did not respond to a message on the LinkedIn social media network.
Accurate Marine also declined to comment.
No hearing is scheduled.
If not restrained, the lawsuit claims Bronder’s actions will continue to cause “irreparable harm and damages to RelaDyne.”
Experts in intellectual property said the lawsuit outlines perhaps the most common way trade secrets are stolen. According to a study done by two associate professors at Washington and Lee University’s School of Law and the Elon University School of Law, the majority of trade secret lawsuits involve a current or former employee.
“The number one threat to trade secrets is a business’ own employees,” said Christopher Seaman, of Washington and Lee University School of Law.
In most cases, it comes down to an employee having lawful access to information at one company and then taking it to another competing firm. Taking reasonable precautions can’t guarantee someone doesn’t walk off with a business’ vital information, Seaman said.
According to the lawsuit, Bronder, Clarus’ former eastern waterfront manager in charge of the company’s East Coast operations, was fired in January.
The lawsuit said Bronder stole various trade secrets from Clarus that he had access to while employed. The lawsuit alleges he transferred or copied the information to his personal Gmail account in the months before his termination.
The documents the lawsuit said he took includes a copy of a master project file that contained detailed pricing and cost information, scheduling breakdowns and other sensitive business information.
It said Bronder then joined Accurate Marine, and even boasted he was going to go after Clarus’ federal contracts in a call Bronder initiated with RelaDyne’s director of finance. In the same call, the lawsuit alleges, Bronder outlined specific ways he intended to harm RelaDyne’s business — mainly by going after RelaDyne’s employees.
In Bronder’s employment contract, which RelaDyne provided in the court filing, Bronder agreed to a non-solicitation covenant that prohibits him from “contacting, retaining, soliciting, or attempting to solicit” RelaDyne’s employees or “RelaDyne’s customers, including the U.S. Navy.”
Bronder also agreed to a non-compete clause for a period of two years after his termination.
Over the past year, Clarus, which was acquired by RelaDyne in January 2019, did $1.7 million worth of work for the Navy.
In the court filing, RelaDyne claims some of what Bronder took contained information on warship flushing services and that, for national security reasons, the project control procedures must be transmitted for authorized purposes only.
While it is often impossible to stop employees from stealing trade secrets, Seaman said newer technology provides employers with the forensic tools to track what information was downloaded.
To prove trade secret misappropriation, Seaman said a company has to show the information was a trade secret, the trade secret holder took reasonable precautions to prevent disclosure of the information and that somebody misappropriated the information.
Seaman said it appeared from the lawsuit Clarus did all the standard things he’d expect a company to do to keep their information safe.
“But again, it wasn’t successful from preventing this appropriation,” he said.
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