Former Employee Soliciting Former Employer’s Employees
College faculty have fiduciary responsibilities to their employers just like any other employees. A decision entered by the New Hampshire Federal Court on October 23, 2009 sets forth a set of circumstances upon which a college sued its former faculty member and that faculty member’s new college for attempting to take an academic program, along with faculty and students, to her new college.
The facts as alleged by New England College (“NEC”) are as follows. NEC sued Drew University (“Drew”) and Anne Marie Macari (“Macari”) alleging that while Macari served as the interim director of NEC’s graduate poetry program, she secretly conspired with Drew to develop a similar program and solicit NEC faculty and students to affiliate with Drew. NEC brought claims of breach of fiduciary duty, breach of contract, and intentional interference with various contractual and other relationships including between NEC, its faculty, and students. The Court humorously categorized the case as a dispute over “poetry in motion.” While the actual decision only denied Drew’s request that the litigation occur in New Jersey rather than in New Hampshire, a review of the facts as alleged by NEC provides employers and employees with a good example of when competitive acts have gone too far and will result in litigation.
In March 2007, Macari had accepted an offer to become the Interim Director of the poetry program at NEC in Henniker, New Hampshire where she had been a faculty member. The program involved long-distance learning punctuated by brief periods of residency with prominent poets and was billed by NEC as the only all-poetry program of its kind. Macari one month later, without telling NEC, met with Drew’s President and other representatives of Drew to discuss the possibility of developing a similar poetry program there. In advance of her plan to move the poetry program to Drew, Macari provided Drew with background materials regarding the proposed program such as a potential faculty list that included various NEC faculty members, budget notes that were based in part on the budget from NEC, and a curriculum similar to that of NEC’s program. At the meeting, Macari discussed with Drew’s representatives bringing most of the faculty from NEC. Drew also agreed to accept NEC transfer students with full credit for their prior course work and the “same tuition and scholarships that were given to them at NEC.” At a later meeting, Macari provided a budget which included detailed information about NEC’s tuition rates, scholarship funding, advertising methods, and faculty salaries.
Macari told Drew that the cost of linens during residency periods were the only details she could not pin down without giving herself away too much to her coworker who is the Program Administrator at NEC. Macari’s sales pitch to Drew was that the program had used NEC as the institutional home for the past 15 years and that she was seeking to find a new institutional home for the program. Ultimately, Macari made the move that attracted both faculty and students to Drew’s program.
Macari was free to leave NEC and go to work for Drew and thereafter validly compete, but if the allegations alleged by NEC are true that she took confidential information of NEC while working there and used it to directly compete with NEC and Drew knowingly accepted that confidential information, Drew and she may be liable for damages to NEC. The courts, in general, will readily protect a company’s confidential information from being misappropriated by an employee for use in competition against that employer. Further, an employee’s duty of loyalty to her employer prevents her from setting up competition with her employer while still employed by that employer. If the facts as alleged against Macari and Drew are true, this is a perfect example of what an employee should not do when transitioning from one employer to another.
J. DANIEL MARR IS A DIRECTOR AND SHAREHOLDER AT HAMBLETT & KERRIGAN, P.A. WHOSE LEGAL PRACTICE INCLUDES COUNSELING BUSINESSES AND BUSINESS PERSONS INCLUDING PROFESSIONALS ON A VARIETY OF LEGAL ISSUES AND ADVOCATING ON THEIR BEHALF. ATTORNEY MARR IS LICENSED AND PRACTICES IN BOTH NEW HAMPSHIRE AND MASSACHUSETTS. ATTORNEY MARR CAN BE REACHED AT: email@example.com
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