November 13, 2018

November 12, 2018

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7th Circuit Shows Zero Tolerance for Dishonesty or Disrespect in Recent Trade Secrets Case

Following what it described as a three year “one-man legal circus,” a Seventh Circuit panel recently affirmed a sanction award of over $440,000 in a trade secret misappropriation case, after finding that the defendant, Raj Shekar, “demonstrated nothing but disrespect, deceit, and flat-out hostility[.]” Teledyne Technologies Incorporated v. Raj Shekar, No. 17-2171, 2018 U.S. App. LEXIS 17153, at *13 (7th Cir. June 25, 2018).

Shekar worked at Teledyne Technologies as a marketing and sales manager from June 2013 until he was fired less than two years later. Following his termination, Teledyne sued him for allegedly stealing trade secrets, among other common law and statutory claims. The district court granted a temporary restraining order and a preliminary injunction, ordering Shekar to turn over all of his electronic devices for inspection. Shekar did not comply with any of the court’s orders, and even produced what the court found to be a “fake” hard drive that appeared “totally blank” and “fresh from the electronics store.” As a result, the district court found Shekar in civil contempt and, when Shekar failed to purge himself of contempt, the district court ultimately issued a default judgment and awarded attorneys’ fees and damages totaling more than $441,000.

The Seventh Circuit found the sanction award appropriate, and acknowledged that the large amount determined was “due solely to Shekar’s decision to drag opposing counsel (not to mention the court) through a disingenuous legal battle rather than comply with the court’s clear order.” The panel found no abuse of discretion in the district court’s calculation of attorney’s fees or in the amount of damages awarded.

In so ruling, the court sent a very strong message that attempting to abuse the judicial system in an effort to stall or prolong litigation may result in costly consequences. Parties who face obstructionist behavior during trade secret litigation may want to consider raising a motion for sanctions when appropriate.

©2018 Epstein Becker & Green, P.C. All rights reserved.

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About this Author

Peter Steinmeyer, Labor Attorney, Epstein Becker Law Firm
Member

PETER A. STEINMEYER is a Member of the Firm in the Labor and Employment practice of Epstein Becker Green and serves as the Chicago office Managing Shareholder. Practicing in all aspects of labor and employment law, he is also Co-Chair of the firm's Non-Competes, Unfair Competition and Trade Secrets Practice Group.

Mr. Steinmeyer advises clients on the enforcement and drafting of non-compete, non-solicitation, and employment agreements, litigates trade secret, non-compete, non-solicitation, raiding, and other restrictive covenant matters in...

312-499-1417
Erica McKinney, Epstein Becker, labor and employment lawyer
Associate

ERICA R. McKINNEY is an Associate in the Employment, Labor & Workforce Management practice, in the Chicago office of Epstein Becker Green.

Ms. McKinney:

  • Represents clients in labor and employment law litigation matters involving harassment, discrimination, retaliation, breach of employment contracts, and tort claims
  • Counsels clients on all aspects of compliance with federal, state, and local laws affecting labor and employment relations
  • Drafts employment agreements, severance agreements, settlement agreements, confidentiality agreements, and restrictive covenants

Before joining Epstein Becker Green, Ms. McKinney served as a law clerk to the Honorable Margaret B. Seymour of the U.S. District Court for the District of South Carolina and the Honorable Zoe Bush of the Superior Court of the District of Columbia.

312-499-1401