WEST VIRGINIA RECORD

CHARLESTON – Two Ohio corporations allege they lost an unknown amount of money when two of their former employees used confidential business information to steal prospective and current clients and to start a business.

RKC Enterprises doing business as ContactPointe and Netech Inc. filed a lawsuit Sept. 9 in U.S. District Court for the Southern District of West Virginia against WV Training and Technical Solutions and its former employees Billie S. Hoffman and Nancy Michael.

In their complaint, ContactPointe and Netech allege they trusted Hoffman and Michael with confidential information only to later discover both women were using the information for the benefit of a newly formed business.

ContactPointe and Netech, which are companies that provide computer services for a number of businesses, claim they hired Hoffman on Jan. 29, 2007, to work as a sales representative for ContactPointe. Michael was hired as a full-time trainer on Aug. 4, 2008. As part of her job duties, Michael was required to train ContactPointe's customers, according to the complaint.

"As one of only two sales representatives for ContactPointe, Hoffman was entrusted with a tremendous amount of confidential and trade secret information regarding the Customer Accounts with which she worked," the suit states. "Michael was also provided access to trade secret, confidential and proprietary information of ContactPointe, particular customer information, and received specialized training from ContactPointe."

As part of their employment, Hoffman and Michael signed a contract in which they promised not to disclose any trade secrets of the company, according to the complaint. In addition, they agreed not to use any of the company's confidential information for their own gain within two years after their employment expired, the complaint says.

After negotiating with Thomas Memorial Hospital on April 10, 2008, to provide certain training services to hospital employees for a new software program, ContactPointe assigned Hoffman to maintain its current relationship with the hospital. In August 2008, ContactPointe assigned Michael to begin training hospital employees for phase I of the three phases of training that employees would have to complete for implementation of the new software program.

In February 2009, phase II of the software program was rolled out, ContactPointe claims. However, instead of hiring ContactPointe to train its staff, Thomas Memorial elected to have nurses on staff conduct the training internally, according to the complaint.

Concerned about the hospital's decision, ContactPointe gave Hoffman the task to follow up with the hospital and to ensure that ContactPointe would provide training for phase III, which was due to begin in August, the suit states.

Meanwhile, in March and April, Hoffman began acting strange, the complaint says.

"She came into the office less frequently, failed to return phone calls from her superiors in a timely manner, and generally seemed distracted from her job," the suit states. "Moreover, her sales began to stall, then decrease, and she was not personally responsible for any new business."

Later, ContactPointe discovered Hoffman e-mailed to her personal account in April information about one of ContactPointe's potential business relationships.

Further, Hoffman told ContactPointe that Thomas Memorial decided again to conduct their own internal training when, in actuality, the hospital had expressed an intent to move forward with ContactPointe's training in August, it claims.

On June 10, Hoffman again e-mailed information to her personal account, but this time the information contained ContactPointe's confidential pricing information it supplied to Thomas Memorial in its proposal to the hospital, according to the complaint.

Around this time, Hoffman was sending to her personal e-mail numerous contracts between ContactPointe and its customers, the suit states.

"Hoffman was provided with remote access to ContactPointe's files and email account and consequently had no apparent business reason or need for emailing these documents to a personal email account, and certainly had no justification or need to email all of these files to herself within a matter of weeks," the complaint says.

Little did ContactPointe know that Hoffman became a member of WV Training and Technical Solutions, a company in direct competition with ContactPointe which her boyfriend organized on June 30.

Later, on July 8, Hoffman sent to her personal e-mail all of ContactPointe's trainer and employee information on the hospital account and ContactPointe's account and login information for the West Virginia bidding site, the company claims.

According to the complaint, Hoffman resigned from ContactPointe on July 13.

After Hoffman's departure from the company, ContactPointe attempted to locate files for accounts on which she worked to no avail.

"It was at that point that ContactPointe realized that Hoffman did not leave a single file behind," the suit states. "Upon information and belief, Hoffman either took with her or destroyed all of her files for ContactPointe's Accounts. These files contained significant amounts of ContactPointe's trade secret, confidential, and proprietary information."

Concerned about the accounts with which Hoffman dealt, especially the Thomas Memorial account, ContactPointe decided to meet with hospital employees to discover why they decided to forego the last two phases of employee training.

Upon their arrival at the hospital, ContactPointe managers noticed computer training was indeed being conducted by Michael, the complaint says.

"Critically, Michael was not at the Hospital in her capacity of Trainer for ContactPointe," the suit states. "As a matter of fact, a few weeks beforehand, Michael had requested and been approved for a vacation day on August 31, 2009."

Contacts at the hospital informed ContactPointe that WVTTS had entered into a contract with Thomas Memorial to provide the last phases of the software training, according to the complaint.

Because of Michael's conduct, ContactPointe fired her on Sept. 1. Now Michael is acting as a trainer for WVTTS while Hoffman is acting as a sales representative for the company, the suit states.

"Upon information and belief, Defendants have utilized trade secret, confidential, and proprietary information obtained from ContactPointe to conduct business for WVTTS, including, but not limited to, ContactPointe's sales information, customer information, including customer names, contact information, requirements, sales history and pricing, as well as employment and human resources information, such as fulltime and contract employees names and information," the complaint says.

Because of Hoffman's and Michael's actions, ContactPointe claims it has suffered a loss of its business and commercial reputation, goodwill and business and economic opportunities.

In the 10-count suit, ContactPointe and Netech are asking the court to enter a temporary, and eventually a permanent, restraining order requiring WVTTS, Hoffman and Michael to immediately restrain from using or disclosing any of ContactPointe's confidential and trade secret information, to prevent them from engaging directly or indirectly in any business that provides services or products competitive with ContactPointe, to enjoin them from soliciting any business that is already or is a prospective customer of ContactPointe's, to restrain them from soliciting any of ContactPointe's employees' services and to prevent them from interfering with any of ContactPointe's business.

The court granted ContactPointe's temporary restraining order. In the restraining order, the defendants are not allowed to disclose any of ContactPointe's trade secrets or confidential information, are not allowed to sell any services to any of ContactPointe's customers who have received services from ContactPointe in the past six and a half years and cannot destroy any of ContactPointe's documents. They must deliver any documents to ContactPointe within seven days of the Sept. 15 restraining order.

In addition to the restraining orders, ContactPointe and Netech are seeking a preliminary and permanent injunction preventing Hoffman and Michael from having any affiliation with WVTTS and to enjoin Hoffman and Michael from destroying any records containing information belonging to ContactPointe. ContactPointe wants the records to be returned immediately.

They are also seeking costs, statutory, compensatory and punitive damages of more than $75,000 and an order for the accounting of all profits and other benefits that flowed from the defendants' use of ContactPointe's confidential information.

Samuel M. Brock II and Richard M. Wallace of Spilman, Thomas and Battle in Charleston and Stephen Richey and Heather Muzumdar of Thompson Hine in Cincinnati will be representing ContactPointe and Netech.

U.S. District Court case number: 2:09-997