CHARLESTON – One of the self-proclaimed leading manufacturers of mining filters is suing its former president, saying he stole money, confidential information and employees from it in order to start his own competing business.
Seebach America filed a federal complaint against its former president, Brian Edmonds, and the companies he began, Seetech LLC and Superior Systems Inc.
Seebach, a company that manufactures and distributes filter and filtration systems used in mining operations throughout the world, says it hired Edmonds as its vice president in May 2003. In December 2005, Edmonds was named president of the company.
Through his employment with the company, Edmonds was exposed to privileged information, such as Seebach's pricing and marketing strategies and detailed customer information, according to the complaint.
"Between the commencement of his employment and March 9, 2009, when Edmunds abruptly resigned and left Seebach America's employ without notice, Seebach America provided Edmonds with a wide variety of sensitive, confidential commercial information that would be extremely valuable in the hands of a competing company," the suit states.
In May 2008, Edmonds used the confidential information to start his own company, Superior Systems, the complaint says. At the time he started the competing company, Edmonds still was president of Seebach.
Edmonds started a second company on Jan. 23, 2009, initially named Mine-Tech LLC, and later renamed Seetech.
To start his companies, Edmonds began talking with potential financial backers during a Seebach business meeting in Kassel, Germany, which Edmonds paid for using his Seebach America credit card, Seebach claims.
While still under Seebach's employ, Edmonds began informing the company's employees that Seebach intended to exit the United States market or lacked commitment to continuing its local operations, none of which Seebach says is true. But employees began believing Edmonds.
"Upon information and belief, Edmonds also circulated confidential communications with Seebach GmbH representatives to the employees he supervised, adding negative commentary designed to create feelings of insecurity among those employees," the suit states.
Finally, on March 9, Edmonds resigned from Seebach through a letter, stating he was resigning immediately and was entering into a competitive business with Seebach. In his letter, Edmonds continued on to say he was willing to assist with any Seebach-related issues, but only if he was paid on a contractual basis.
However, when Seebach asked Edmonds to return for an exit interview to discuss the location of missing corporate records and financial discrepancies, Edmonds refused to consent to the interview, according to the complaint.
Seebach says it discovered numerous irregularities after Edmonds's departure, including inventory valued at $519,000 that cannot be accounted for, missing personnel and customer files, a number of unusual payments made to employees, including a $60,000 bonus paid to Edmonds, and personal expenses Edmonds charged to Seebach's bank account.
Three days after Edmond's resignation, all seven of Seebach America's remaining full-time employees resigned, citing their belief the company was going to cease its American operations, the suit states.
"For example, Sam Brown, Seebach America's Sales/Service Representative for the Western Region, resigned without notice, stating in a letter dated March 12, 2009 that he was resigning because of 'current conditions and not knowing what, if any, future the company has," the complaint says. "Also on March 12, 2009, Charlene Farmer, Seebach America's office manager, sent an electronic mail message to Seebach GmbH. Farmer's message announced that she was resigning effective immediately, and stated, 'I don't believe Seebach Germany has any real in Seebach America and I need a job and a future."
Seebach claims Edmonds was the reason for the employees' suspicions that the company was going to curtail its operations in the United States.
Edmonds's deceptions that Seebach America was going out of business did not stop with the company's employees. Edmonds began telling its customers, also, that the company was going under, Seebach claims.
For example, Edmonds's new company, Seetech, sent a proposal to a Seebach customer for a mine filtration system.
"Seetech's proposal was worded in such a way as to suggest that it was being submitted by Seebach America or a successor in interest to Seebach America," the complaint says. "Specifically, the proposal stated that, 'We have made certain changes to the layout of the system, based on our experience with the first system.' The 'first system' referenced in the proposal was sold by Seebach America."
In its proposal, Seetech also agreed to provide an extended warranty on the existing Seebach filtration system currently at the mine, the suit states.
According to the complaint, Seetech attempted to further mislead Seebach's customers as to the origin of its products by using a logo with a concentric circle design similar to Seebach's.
"Had Edmonds informed Seebach America that he intended to divert its customers and employees, Seebach America would immediately have restricted Edmonds's access to Seebach America's confidential, proprietary information and trade secrets and terminated his employment," the suit states.
Seebach America's relationship with its customers is extremely valuable, it claims.
"The business of supplying filtration systems is a highly specialized and competitive one," the complaint says. "Seebach America has become a leader in its industry by offering superior products and service and by establishing strong customer relationships."
Unless Edmonds and his companies are prevented from similar conduct in the future, Seebach says it will lose the goodwill and trust of its customers, lose its business reputation, lose employees and critical vendor relationships and lose its confidential business information.
In the eight-count suit, Seebach is asking the court for a preliminary injunction preventing Edmonds and his companies from directly or indirectly using its trademark, from using Seebach's trade secrets or confidential commercial information and from interfering with Seebach's contractual relationships.
It is also asking the court to order Edmonds and his companies to deliver and destroy all written materials incorporating Seebach's trademark and to immediately return all materials concerning Seebach and its business.
In addition, Seebach would like the court to impose a constructive trust on any profits earned by Edmonds and his companies and any compensation paid to Edmonds for any dealing with any Seebach customer or vendor since the beginning of Edmonds's wrongful conduct.
Seebach is also seeking unspecified compensatory and treble damages, equitable accounting and disgorgement of any profits arising from Edmonds's conduct, disgorgement of all compensation paid to Edmonds since his breach of fiduciary duties, reimbursement of all costs and expenses, plus attorneys' fees and other relief the court deems just.
Samuel M. Brock II and Richard M. Thomas of Spilman, Thomas and Battle in Charleston and Barbara A. Scheib of Cohen and Grigsby in Pittsburgh will be representing it.
U.S. District Court case number: 2:09-510