Littler and Polsinelli’s trade secret battle is a new kind of talent war

The Polsinelli law firm’s company logo is seen at their legal offices in Manhattan, New York City, New York, U.S., April 27, 2021. REUTERS/Andrew Kelly

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(Reuters) – When a group of three associates and a client relations manager left Littler Mendelson last year to join Polsinelli, it seemed like a typical sideways move.

Home healthcare industry expert Angelo Spinola and his team told Reuters at the time they were drawn to Polsinelli’s large practice, which has 900 lawyers. While Littler, which has 1,500 lawyers, is larger, the firm focuses more narrowly on labor and employment matters.

What looked like business as usual has instead turned into a fascinating court battle – a battle that could be the harbinger of more to come as companies increasingly use technology to shape their businesses. customer offers.

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At the center of the dispute are two competing online subscription products, both providing templates, guidance documents and other resources to customers in home health care and palliative care, a growing field. rise as baby boomers age.

Littler in court papers alleges that Polsinelli, by hiring Spinola and his team, wrongfully obtained his “confidential, proprietary, and trade secret documents and information to develop and launch a product that directly competes” with the “Home Care Toolkit” offering of Littler.

The company also admits it’s not doing well against the competition, dubbed Polsinelli Online Solution for Homecare, or POSH. Littler’s toolkit “could reach obsolescence if allowed to continue at the current rate” of decline, the company said in a filing that redacts specific subscriber and revenue losses.

Littler chief executive Erin Webber did not respond to a request for comment, nor did the company’s outside attorney at Squire Patton Boggs.

Polsinelli, who is represented by BakerHostetler, denies any wrongdoing, arguing in court papers that the “injury complained of – the loss of subscribers – is simply the natural result of permitted competition between lawyers, and not something Polsinelli has done inappropriately”.

In an email, a spokeswoman for the firm said Polsinelli was “looking forward to defending itself against either of Littler’s allegations, once they decide what it is, because they are now amending their complaint for the third time.”

I asked legal recruiters for their take on the fight, which is pending in federal court in Atlanta.

“I think this case is unusual because it doesn’t appear to be about the departing partners and their customers, but rather trade secrets related to the subscription service,” said Jeffrey Lowe, who leads the practice group of the law firm at Major, Lindsey. & Africa.

In a typical dispute, he continued, “the new firm and the old firm argue over which clients the outgoing partner is trying to bring to the new firm and whether he or she has solicited those clients inappropriately. before their departure.

But such fights are almost never contentious, said legal recruiter Dan Binstock, a partner at Garrison & Sisson. That’s partly because the bar’s ethics rules don’t allow lawyers to be bound by non-compete agreements. “Generally speaking, lawyers are free to work wherever they want without restrictions,” he said.

Additionally, Binstock said, companies tend to worry about opening themselves up to discovery, as well as accusations of “unclean hands” – that is, “employing tactics similar to those which they are complaining about”.

So while companies can feel “betrayed and bitter” about a partner defection, he said, they rarely air their grievances in court.

Littler, in her original complaint filed 11 months ago, only named customer relations manager Melissa Mann, alleging she improperly downloaded confidential or proprietary materials before leaving the company on 19 February 2021 to join Polsinelli with the trio of partners.

Littler later settled with Mann, who did not respond to a request for comment via his attorney at Buckley Beal.

In a second amended complaint filed March 31, 2022, Littler expanded his case, accusing Polsinelli of inducing Mann and Spinola, who was co-chairman of Littler’s Health and Home Care Industry Group, to share “secretly and without permission” Littler proprietary information. with their new employer.

Spinola, who did not respond to a request for comment, is not named in the lawsuit, but Littler alleges he took confidential information, including a spreadsheet containing information about his Toolkit subscribers and the costs.

Polsinelli in court papers replied that he “never saw or used any material improperly uploaded by Mann or anyone” and that he created POSH on his own. The company also downplays POSH as “simply an online platform for users to log in and view or obtain sample standard legal forms and documents.”

In late July, Littler belatedly asked U.S. District Judge Michael Brown to issue a temporary restraining order ordering Polsinelli to stop marketing and selling “all Littler information” on its POSH platform.

Polsinelli protested that Littler had now broadened his definition of such information to include 30,000 customer files that Littler himself had sent to Polsinelli more than a year ago. Littler fails to show how “Polsinelli’s receipt and use of these documents amounts to misappropriation,” the company said.

According to a court docket entry, Littler at a hearing Thursday withdrew his TRO claim. The judge allowed the firm to file a third amended complaint.

All I can say is, pass the popcorn. This fight is still heating up.

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Jenna Greene

Thomson Reuters

Jenna Greene writes about legal business and culture, taking a broad look at trends in the profession, the faces behind the cases, and the quirky courtroom dramas. A longtime columnist of the legal industry and high-profile litigation, she lives in Northern California. Contact Greene at [email protected]

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