Louis Vuitton sues former Vice President for copying files

On April 4, 2014, June Ma resigned from a position in which she made over $400,000 as a Vice President for design house Louis Vuitton.  Her plan was to begin a new position as a Senior Vice President for Coach on April 28, 2014, which presumably was intended to advance her career.  However, on May 7, 2014,  just nine-days after starting with Coach, Louis Vuitton filed a lawsuit against both Ma and Coach in the New York State Supreme Court.  So what’s the hubbub amongst these peddlers of luxury goods?

Regrettably, it presents a fact pattern that has become frighteningly commonplace.  And while this case involves glitzy fashion designers, it ultimately boils down to a scenario that I and every other executive employment lawyer see all too often: allegations of trade secret theft via download to external drives (particularly when the executive already has one foot out the door).

The Complaint alleges that during the final days of her six-year tenure, Ma transferred confidential information belonging to Louis Vuitton from her company laptop to a variety of external storage devices.  Louis Vuitton further alleges that Ma then proceeded to delete files and emails from her company laptop and email account in order to cover her tracks.  Louis Vuitton also claims that Ma violated her covenant not to compete by going to work for Coach, as she was restricted from accepting employment with a competitor for a period of six-months.

Even more alarming is that on May 21, 2014, just two-weeks after the suit was filed, Louis Vuitton persuaded the Court to grant it an immediate preliminary injunction.  By the time this hearing took place, Ma had barely been afforded the opportunity to even interview counsel, much less prepare a comprehensive response to these serious allegations (which seek an award of more than $500,000).  In granting the preliminary injunction, the Court ordered Ma to immediately return all information copied from Louis Vuitton which relates to its operations, held that Ma is bound by the terms of the noncompete agreement restricting her from working for competitors, and that she had to appear for a deposition before Louis Vuitton’s attorneys for further interrogation.

Wow.  In a span of less than a month, Ma went from resigning from one prestigious position in order to smoothly sail into another, to being embroiled in a legal nightmare with the former employer she believed was left in the past.  Unfortunately, this scenario plays out more often than you would believe.  And it is not reserved to the industries that hustle $2,500 handbags — it is a modern day issue that all executives must be cognizant of, no matter their field.

Takeaways for Executives.

  1. Highly placed employees need to be aware of their companies’ policies and procedures regarding the copying of confidential information to external devices or email accounts, and when they are obligated to return those materials.
  2. Executives must take it upon themselves to be beyond reproach in this regard.  You must know that, in today’s age, all of your email and file transfers are easily traceable by the company, even those transferred to external drives.  Any such activity is going to be closely scrutinized upon your departure, particularly when the data transfer occurs shortly prior to your exit.
  3. Know that you must avoid even the appearance of impropriety.  This applies even more so once you have made a decision to change jobs, irrespective of whether you have announced your plans. 
  4. If you find it necessary to transfer electronic data or otherwise copy files, consider carefully documenting your actions and the reasons for them.  Also consider making a record of any return or deletion of the data.
  5. When you leave, err on the side of the caution with regard to what you take.  Aside from a copy of your employment agreement and other personal belongings, operate under the presumption that the company will claim it owns everything else.
  6. Lastly, always handle proprietary information with care, particularly in electronic form.

The case discussed above is Louis Vuitton North America Inc. v. Joon Ma, et al., civil action number 651421/2014, and it is pending in the Supreme Court of the State of New York.