On January 23rd 2017, McKasson & Klein secured an 8.7 million dollar judgment for its client based on a 14 day jury trial.
The case centered around a disloyal employee who, over a period of years, built up the trust of his employer (a local perfume distributor) and placed himself in a management position with the company, only to use that position to open his own competing side business.
The employee came well-recommended and ingratiated himself with the company through good work. The company’s profits, however, began a slow decline with no obvious explanation. With sales struggling, the company discovered through a routine maintenance of its accounting and inventory-tracking system that its entries had been tampered. Specifically, the employee had systematically been altering entries for orders from the company to make it seem as though the company was receiving fewer. The employee then appropriated all of those surplus orders for his own side business.
The employer contacted McKasson & Klein who immediately arrived at the worksite, interviewed the disloyal employee and others, quarantined the employee’s work station, and fired the employee. Upon inspecting the employee’s emails, the employee’s scheme became clear. The employee had been siphoning millions of dollars from vendor and customer profits from his employer, had been funneling this money through his side business, and had even been brazen enough to fill this side business’ orders using his employer’s own inventory.
In January of 2014, McKasson & Klein (Neil Klein) filed suit against the employee for, among other things, breach of his duty of loyalty, breach of his contract regarding the employer’s trade secrets, intentional interference with economic relations, and unfair competition. Over the course of the discovery process, McKasson & Klein was also able to expose the employee’s full scheme and added to the Complaint several accomplices who helped the employee move the ill-gotten product.
After 14 full days of trial, 12 witnesses and several thousand exhibits, a 12-person jury came back with unanimous verdicts of “liable” against the employee on every count submitted to them, and even a late-added fraud charge. The total damages recovered, including costs, interests, and punitive damages, came to just over $8.7 million.
This victory represents the largest trial recovery by McKasson & Klein in its 19 years as a firm and serves as a testament to its ability to take cases “all the way” when mediation and settlement efforts do not get the job done.