New Jersey Appellate Division Affirms Dismissal of Claims Against Former Employee Who Shared His Former Employer’s Documents With His Subsequent Employer

Authored by: Robin Koshy, Evan J. Shenkman, and Steven J. Luckner

The recent decision in Spencer Savings Bank SLA v. McGrover, 2015 WL 966151 (App. Div. Jan. 5, 2015) recognizes that merely because a former employee takes company records to a competitor is not sufficient to state a claim. In this case, the Appellate Division found that an employee who shared his former employer’s documents with his current employer was not liable for (1) breach of his confidentiality agreement; (2) breach of the implied covenant of good faith and fair dealing; (3) breach of the duty of loyalty; (4) breach of his fiduciary duty; (5) unfair competition; (6) common law misappropriation; (7) violation of the New Jersey Trade Secrets Act; or (8) violation of the Computer Related Offenses Act (CROA).

The Appellate Division dismissed the former employer’s claims because the documents in question were authored by the former employee himself, they contained only generic information of common knowledge in the banking industry, they were not confidential, and the disclosure caused the former employer no damages. In essence, the court held that—barring information that is specifically confidential and damaging to the former employer—claims sounding in unfair competition based upon contractual and fiduciary obligations may not be maintained.