In Moore v. Commercial Aircraft Interiors, 2012 WL 1947890 (Wash. Ct. App., May 29, 2012), a Washington Appeals Court held that a former employee suing his former employer for tortious interference with business expectancy must show actual evidence and not simply conclusory statements of his alleged former employer’s improper purpose, in order to recover.
Robert Moore (“Moore”) worked for Commercial Aircraft Interiors (“CAI”) from 2003 until his voluntary resignation in 2008. Moore never signed a non-compete agreement with the company, but did sign a non-disclosure agreement intended to protect CAI’s confidential, proprietary, and trade secret information.
A few months after his resignation from CAI, CAI began merger negotiations with a competitor, Volant Aerospace Holdings LLC (“Volant”). The companies hired Moore as an “independent consultant” to assist with negotiations. As part of his employment, Moore signed contracts with both companies prohibiting the disclosure of trade secrets, finances or “other know-how” to third parties.
After a few months, negotiations between the parties broke down. Moore went back to work at CAI., but was laid off by about three months later. Later that year, Moore applied to Volant, which seriously considered hiring him, but was hesitant to do so without CAI’s blessing. As a result, Volant’s president wrote to CAI asking for the company’s acknowledgement that hiring Moore was not objectionable and would not violate any legal agreement. CAI responded, via counsel, that the company opposed Moore’s hiring, and that as a Volant employee, Moore could not “avoid the use of or disregard the infinite knowledge he possesse[d] of CAI’s confidential information and trade secrets.” CAI threatened litigation for unfair competition if Volant were to hire Moore.
As a result of the letter, Moore failed to obtain employment with Volant, and sued CAI, alleging tortious interference with a business expectancy and blacklisting. The trial court granted summary judgment for CAI, finding Moore had failed to state sufficient evidence that CAI had acted in bad faith or with malice. Moore appealed to the Court of Appeals, which affirmed the summary judgment.
In affirming the trial court’s ruling, the Court of Appeals found the burden was on Moore to establish the elements of tortious interference. To do so, he would need to prove the existence of five elements: “(1)existence of a valid contractual relationship or business expectancy, (2) that defendants had knowledge of that relationship, (3) an intentional interference inducing or causing a breach or termination of the relationship or expectancy, (4) that defendants interfered for an improper purpose or used improper means, and (5) resultant damage.
Here, however, the court found Moore failed to show improper means or purpose. Although Moore argues CAI’s threat of litigation provided sufficient proof, the court found “threatened lawsuits may constitute an interference by improper means only where the interferor has no belief in the merit of the litigation or threatens litigation only to harass the third parties and not to bring his claim to definitive adjudication.” Here, the burden of proof was on Moore to show the litigation was not in good faith, and the two sworn declarations provided were merely conclusory, and as such, insufficient evidence.
Similarly, the court dismissed Moore’s argument that CAI failed to act in good faith, because their reasons for legal action relied on the inevitable disclosure doctrine, rather than any actual threat of trade secret disclosure. This doctrine, which, in some jurisdictions, prevents an employee from going to work for a competitor by demonstrating the employee would inevitably disclose trade secrets, has never been expressly adopted by the Washington courts. The court rejected Moore’s argument, finding the inevitable disclosure doctrine irrelevant, since the case at issue did not allege trade secret misappropriation, and neither party sought an injunction.
Similarly, the court dismissed Moore’s claim of blacklisting, finding the only evidence Moore could provide to support the claim were the statements from his own conclusory declarations, which were insufficient to support a claim.
Ultimately, the court found the evidence suggested CAI was simply asserting in “good faith, an arguable interpretation of existing law” which did not make the company liable for tortious interference or blacklisting. Here, no evidence showed threatened frivolous litigation based on a desire to harass or harm Moore according to the court.
Moore v. Commercial Aircraft Interiors provides some important lessons for both employers and employees regarding cases where an employee leaves to work for a competitor. From an employer’s perspective, this ruling seems to suggest a former employer has some leeway in the types of litigation threats made against a former employee who tries to work for a direct competitor so long as they rely on "arguable interpretation[s] of existing law."