Kratos Defense Engineering Solutions, a San Diego-based defense contractor, says that a competing contractor has poached two of its employees in violation of non-compete agreements signed by both parties. Kratos, which is seeking an injunction barring NES Associates from engaging in unfair competition, has turned to Foley & Lardner partner Michael Lockerby, who chairs the firm’s litigation practice in Washington.
The dispute is between Kratos, which provides weapons systems technology to the Department of Defense, and NES, a Glen Allen, Va., contractor that provides similar systems to the federal government and which was spun off from Kratos in 2005.
Lockerby writes in Kratos’ Dec. 23 complaint, filed in the U.S. District Court for the Eastern District of Virginia, that his client acquired JMA Associates in 2005 at a cost of $34 million. At the time of that transaction, JMA was headed by Andrew Gomer, who received $6.6 million when the deal closed and a bonus of more than $570,000. According to the complaint, Gomer signed an employment agreement with Kratos that prohibited him from competing with or disparaging Kratos.
Twelve months later, Gomer resigned from Kratos and formed NES. The complaint says that in 2006, Gomer signed two additional noncompete agreements with Kratos and extended them with an additional agreement in 2008, which allegedly remains in effect.
Despite those agreements, Kratos contends, Gomer solicited two of Kratos’ employees, Vikram Khemani and Michael Donahue, to join NES. Kratos alleges that the additions of Khemani and Donahue were motivated by Gomer’s desire to misappropriate trade secrets. Kratos contends that it has already lost “key employees, federal government contracts, and customers” as a result of NES’ conduct.
“Kratos faces injury to current and prospective customer relationships—primarily within DoD—that is incalculable because, once damaged or lost, the customer relationships in question will not generate future contract awards, referrals, and revenue,” Lockerby writes.
The complaint, which names NES, Gomer, Khemani and Donahue as defendants, alleges unfair competition in violation of the Lanham Act, misappropriation of trade secrets, tortuous interference with contract and business relations, tortuous interference with prospective economic advantage, violation of the Virginia business conspiracy statute and breach of contract.
Kratos has asked that a federal judge enjoin NES from engaging in unfair competition or misappropriating trade secrets. Kratos is also seeking unnamed compensatory, punitive and treble damages, as well as attorneys’ fees.
No attorneys have yet entered an appearance on behalf of NES.