Legal Question in Business Law in Virginia

This is a question specific to a case about which I am involved as an employer; i.e., a trusted employee designed a special system to minimize water intrusion into a warehouse utilizing company resources (company tools, truck, equipment, and designated materials needed for the prototype for the job). I have two questions: 1. Who owns the rights to the "intrusion system".

My second question is this: This same "system" was tested several times before our company (this employee) got it right; whereupon, a field test was performed for company officials to whom we were trying to sell the "system". They approved the design and asked for a proposal; we submitted a lenghty proposal giving them a cost breakdown based on facts and specifications provided us by the trusted employee. Four days after we submitted our price, this 'trusted' employee submitted his own proposal to the company for which we had been working closely to get our design approved...all unbeknown to our company, of course.

Their company officials accepted his lower bid on the project and, subsequesntly, not only gave our employee this bid, but also went back to him to do another lucrative project for them based on the fact that "he was the designer person", even though he worked for us.

We never know until the employee resigned from ouur company; only then did it all come to light.

My third question is this: Isn't there law in place, or a case like ours, where the company that allowed this employee to sell them directly knowing he worked for our company during the entire design process? Should not they also be enjoined in a legal argument that they participated in allowing this guy to surreptitiously sell to them knowing he worked for us? Should they, too, have the responsiblility to be honest with our comapny?


Asked on 6/10/11, 3:52 am

1 Answer from Attorneys
Michael Hendrickson Law Office Michael E. Hendrickson

1. Your company would own the rights to the intrusion system since it was

apparently developed by your employee during the course of his employment

and using your company's resources (in my opinion).

2. Yes, this untrustworthy (former) employee should be liable to your company

in civil damages (even though you haven't specifically asked that question).

3. Charging the other company with conspiracy to defraud, tortious interference in business relations, and/or other torts would require a detailed review of many other factual issues connected with their alleged participation in the matter

and which are not evident from the question.

Read more
Answered on 6/10/11, 6:27 am


Related Questions & Answers

More Business Law questions and answers in Virginia