Northern Electric Company, Inc. v. Torma

819 N.E.2d 417 (2005)

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Nature of the Case

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Facts

P is a family-owned electric motor repair shop employing approximately thirty employees. P repairs servo motors for its customers. Repairing a computer malfunction in a servo motor requires between ten and fifteen bits of data that differ for each make and model. P continued to repair servo motors until the mid-1990s. D who had been an employee since 1990, approached P seeking permission to continue the repair service for servo motors. P consented and placed d in charge of the servo motor department. While D supervised the department, the servo motor repair service grew, eventually accounting for approximately 33% of P's business by the time D left the company. D assembled motor repair data in a spiral notebook. D gathered the data from readings he took or discerned during the actual repair of the motor, and from data collected by other P employees. D also gained information from personal contacts with representatives of manufacturers and other servo motor shops, manuals, service bulletins maintained by P, and various internet sites. D directed the other technicians to similarly record and maintain data readings. D eventually entered the data into a word processing file, organized by manufacturer, stored on his home computer. D took the information to work on a floppy disk. His compilation is the result of seven years of data collection for more than 650 servo motors. D never permitted another technician access to his entire compilation. D terminated his employment with P after he was unable to reach an agreement with his employer on his compensation and duties. P had unsuccessfully pursued a non-compete agreement with D. D refused to return the data he had gathered during the course of his employment with P. D began working at Hy-Tech, a competing servo motor repair company he had founded before resigning his position at P. P sued D. The trial court ordered D to return all prototypes obtained by him while in P's employment, to provide P with a copy of all servo motor specifications developed while employed, and to keep complete records as to any use of these specifications by him and any economic advantage he derives from such use. A bench trial was held for a violation of the Indiana Trade Secret Act, statutory conversion, and breach of fiduciary duty. The trial court entered judgment in favor of D and Hy-Tech. P appealed.