Thursday, September 6, 2007
A corporation that publishes a car modification magazine hired a person to sell advertising space. The employee executed a confidentiality and non-competetion agreement with a fee shifting/indemnification clause. The employee was terminated and the corporation filed suit against him for disclosing confidential information.
A Delaware Chancellor found that the employee had breached the agreement and that the corporation was entitled the full legal fees and costs. On appeal, the Delaware Supreme Court affirmed the fee award. Although the corporation achieved "limited trial success ...[the employee's] refusal to cooperate at every stage of the proceedings outweighed [the corporation's] limited trial success and contributed significantly to the excessive number of hours [the corporation] spent litigating the case." The Chancellor properly considered the factors listed in Rule 1.5 and did not abuse his discretion in awarding the full amount of fees and expenses. (Mike Frisch)