Claims by Booz Allen Hamilton Inc. that Deloitte used stolen proprietary information to recruit away an entire team and target Booz Allen contracts is nothing more than an attempt to punish former employees for seeking greener pastures. That's the claim of the New York-based consulting giant and its employees in a motion to dismiss the lawsuit.
Among other things, Deloitte and its employees, which joined the firm from Booz Allen a couple years ago, said in an Aug. 1 filing with the U.S. District Court in New Jersey that allegations made by McLean-based Booz Allen in an amended complaint fail to identify any specific client or business opportunity that it lost on account of Deloitte’s alleged conduct. Nor does Booz Allen explain how supposed access to the proprietary information could cause the alleged “mass defection” of employees, the suit states.
The motion also claims the complaint fell short of proving the former Booz Allen employees broke the law when they went to Deloitte, or argues a good case for a permanent injunction on the use of the Booz Allen information that supposedly landed in the hands of Deloitte.
“This case arises out of Booz Allen's frustration with several former employees who left to go work for a competitor,” the motion claims. “These at-will employees were not subject to any non-compete or non-solicitation agreements, and therefore were free to leave one employer for what they perceive to be greener pastures at another.”
But Booz Allen stands by its claims.
"Booz Allen's lawsuit is based on evidence that strongly suggests Deloitte and some of its senior executives improperly obtained Booz Allen proprietary information and used it to interfere with Booz Allen's employee and customer relationships," said William Meyers, Booz Allen's vice president and deputy general counsel in a statement provided to Washington Business Journal. "Their actions go well outside the bounds of proper business conduct and fair competition between companies. Booz Allen invests considerable resources in the development of our professionals and the protection of our proprietary business information, and we will continue to seek redress for Deloitte's misconduct."
The June amended complaint that added Deloitte and four of its managers to a complaint it filed more than a year ago against former employees pointed to a Booz Allen investigation showing Deloitte directors and managers conspired with the Booz Allen employees beginning in 2012 to steal proprietary information about salaries, roles and security clearances. The information pertained to the team that supports Booz Allen’s delivery of 3-D models, animations, interactive simulations, games and videos to government customers. Booz Allen also claimed the former employees gave Deloitte revenue projections and analyses of near-term Booz Allen contracts, a demonstration of a simulation that was still in development by Booz Allen, and screenshots and videos of work performed for clients.
While the alleged action of Deloitte, if true, would be more brazen than most, it would not be the first time a government contractor was accused by a competitor of stealing proprietary information, as I detailed in a June blog. As for potential outcomes, Alan Chvotkin, executive vice president and general counsel at the Professional Services Council, had this to say at the time: “While it is true that, in the professional services marketplace, the intellectual capital leaves the office every day and employers hope it returns the next day, the number of reported and proven incidents is pretty small.”
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