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SJC Decision Establishes That Employees Are Not Immune From Chapter 93A Liability

Kurt Fliegauf represents Governo Law Firm in a favorable outcome, establishing that employees are not immune from Chapter 93A liability where they act in an unfair or deceptive manner toward their employer in a business context.

On Friday, April 9, 2021, the Massachusetts Supreme Judicial Court clarified for the first time that employees are not immune from Chapter 93A liability where they act in an unfair or deceptive manner towards their employer in a business context. Prior to the Court’s decision, most practitioners believed that Chapter 93A did not apply to employees.

Governo Law Firm (GLF), represented by Kurt Fliegauf, took action against six of its former attorneys and their new firm, alleging that they stole GLF property and used it at the new firm to compete. The case was tried in the summer of 2019 and GLF was awarded $900,000 in damages. The jury did not, however, find that the defendants had committed unfair or deceptive business practices as prohibited by General Laws Chapter 93A.

Prevailing on Chapter 93A would have resulted in the award of attorneys’ fees and potentially punitive damages. GLF believed that the trial judge had improperly instructed the jury on the Chapter 93A claim. Over Fliegauf’s objection, the trial court had instructed the jury that Chapter 93A does not apply to anything that the defendants did while the attorneys were employed by GLF, including the theft of GLF’s property.

Despite the fact that GLF won the case in 2019, it appealed.

The decision on April 9, 2021 resulted in a favorable outcome for GLF. The Massachusetts SJC held that the trial court’s jury instructions were in error, and that GLF is entitled to a new trial on its Chapter 93A claim.

A statement issued by Fliegauf on behalf of David Governo, Esq. of GLF discloses that GLF is pleased with the court’s decision and it validates the decision to fight for the firm’s proprietary information.

The jury in the first trial was not allowed to consider that the defendants converted the firm’s property in deciding 93A liability. We look forward to a new trial on the issue of whether the defendants’ misappropriation of Governo Law Firm’s property, and their use of the purloined materials to compete against their former firm, constitutes an unfair or deceptive business practice in which the defendants acted in a willful or knowing manner.

– Kurt Fliegauf

Massachusetts Lawyers Weekly reported on the matter in “Firm gets new trial on lawyers’ ‘theft’ of files.” Read the Lawyers Weekly article below.

Firm gets new trial on lawyers' 'theft' of files

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