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Court Decision Makes National Law Journal's List of Top Defense Verdicts of 2000

ŠNational Law Journal, March 13, 2001

Defense Verdicts of the Year

Margaret Cronin Fisk
The National Law Journal

For 11 years, The National Law Journal has attempted to shine a spotlight on the usually unheralded efforts of the nation's defense litigators by publishing a list of the top defense verdicts for the year

This year, as in the past, the lawyers who won these cases prevailed despite substantial hurdles.

This list of the biggest defense wins of the year 2000 is necessarily subjective. Plaintiffs' verdicts are more easily ranked -- biggest is biggest. But the best defense wins are, on the surface, identical: no liability and no damages.

A PIRATING CONSPIRACY THEORY IS SUNK

CASE TYPE: Tortious interference, breach of fiduciary duty, conspiracy case: Avnet Inc. v. Wyle Laboratories, No. 93-4396-D (Hillsborough Co., Fla., Cir. Ct.)

PLAINTIFF'S ATTORNEYS: Benjamin H. Hill III and David L. Kian of Tampa, Fla.'s Hill, Ward & Henderson; and Roger L. Longtin, Stephen L. Agin, Lawrence A. Wojcikand, Sonya D. Naar of the Chicago office of Piper Marbury Rudnick & Wolfe

DEFENSE ATTORNEYS: Emmet J. Bondurant and P. Richard Game of Atlanta's Bondurant, Mixson & Elmore; and John E. Johnson and William H. Harrell of Tampa's Trenam, Kemker, Scharf, Barkin, Frye, O'Neill & Mullis

DATE OF VERDICT: Feb. 4, 2000

In April 1993, Avnet Inc., the nation's largest electronics distributor, purchased Dallas-based Hall-Mark Electronics Corp., then the No. 3 electronics distributor, said defense counsel Emmet J. Bondurant. Within three weeks of this acquisition, 78 Hall-Mark employees left that company and went to work for Wyle Laboratories Inc., which at the time was the No. 8 electronics distributor in the United States, he said.

Avnet quickly sued eight of these former Hall-Mark employees and Wyle as well, charging, among other things, a conspiracy between these employees and Wyle to spirit off the Hall-Mark workers and, subsequently, Hall-Mark customers. At the center of Avnet's conspiracy theory, Bondurant said, were "notes made by a Wyle human resources employee, handwritten on a typed memorandum, which Avnet characterized as the minutes of a Wyle strategy meeting, in which Wyle allegedly hatched its plan to pirate away Hall-Mark's employees." The typed memorandum, he added, "stated that Jim Haraway, a Hall-Mark senior vice president who joined Wyle, hope[d] to close on at least five managers within Hall-Mark and feels each can bring about 10 good people with them."

Wyle's director of human resources placed the following handwritten notes on the memorandum to his superior, which read: "Raid. Dangerous! -- I see potential problems with these notes -- Can we retract?"

"Avnet bolstered its conspiracy theory by pointing to thousands of telephone records reflecting repeated calls between Haraway and the managers who worked for him at Hall-Mark, and between managers and salespeople in nine of Hall-Mark's branch offices," Bondurant said.

The defense set several basic themes: there was no conspiracy; there was no interference with the employer/employee relationships; the individual managers who came to Wyle and recruited former coworkers violated no duties of loyalty to Avnet or Hall-Mark; and the Hall-Mark employees left because they didn't want to work for Avnet.

The Wyle defense attorneys concentrated much of their time countering the effect of the memorandum and the notes, he reported. "Wyle argued that by the time of the meeting recorded in the 'raid' memorandum, Haraway had already accepted a job with Wyle, and therefore, owed no duties of loyalty to Hall-Mark at all and could freely solicit former Hall-Mark branch managers to join Wyle." The memo, he said, "was simply recording Haraway's post-resignation plans to solicit his former subordinates at Hall-Mark, all of which was perfectly legal." The handwritten notes, while apparently damaging, Bondurant said, "were made by an employee who was simply misinformed as to the legality of Haraway's plans after joining Wyle." The employee, he said, didn't realize "that recruiting from another company is not in fact a tort." The telephone calls back and forth between Hall-Mark branch managers and their subordinates "were the natural and expected consequence of a merger announcement."

When Haraway and the other managers offered jobs to Hall-Mark employees, he added, this was not evidence of disloyalty toward Hall-Mark, but of loyalty to their subordinates, in insuring they would have work following the merger. The defense also concentrated on showing the Hall-Mark employees' pre-acquisition opinions of the acquiring company to prove a primary point -- that Wyle did not have to conspire to pirate away any Hall-Mark employees; the employees should have been expected to leave. "They thought Avnet was the Darth Vader of the industry. These people didn't want to work for Avnet." Avnet contended that the loss of Hall-Mark employees "essentially destroyed 25 percent of the value of Hall-Mark," Bondurant added, and sought $154 million in compensatory damages. But on Feb. 4, 2000, a Tampa, Fla., jury rejected all the plaintiff's claims. There was no appeal.

The article first appeared on the Web on law.com.