CHARLOTTE, N.C. (CN) – General Dynamics claims two employees formed a competing defense technology firm but kept working for 2½ for their unsuspecting employer, using proprietary information to sabotage General Dynamics’ business while building up their own.
Defendants Gerard Snyder and Kenneth Morrison vigorously deny these accusations, saying they merely pursued new technologies and business opportunities that their longtime employer had either expressed no interest in or rejected.
According to General Dynamics’ federal complaint, Snyder and Morrison were members of the advanced program team at General Dynamics Armament and Technical Products, which designs, develops and produces high-performance weapon and armament systems, defensive armor, and biological and chemical detection systems.
In 2006 the two men established Advanced Mission Systems, and used General Dynamics computers to gather information about new products, applications in development, and the current and future needs of its military and security industry clients, the complaint states.
Relying on this information, and that gathered at internal company strategy sessions, the men were able to stymie potential development deals between General Dynamics and industry partners in the surveillance, reconnaissance and force protection industries, and redirect the deals to their firm, General Dynamics says.
Among the entities they solicited in this way were the U.S. Special Operations Command Mission, the Technical Support Working Group of the Combating Terrorism Technical Support Office, the U.S. Army’s Night Vision and Electronic Sensors Directorate, and the U.S. Navy’s Space and Naval Warfare Systems Command, according to the complaint.
To advance their scheme, Snyder went so far as to install an Advanced Mission Systems email account directly onto his General Dynamics computer, used General Dynamics templates for agreements with Advanced Mission Systems business partners, and both Snyder and Morrison took advantage of General Dynamics-financed business trips to lure business to their company, the complaint states.
While travelling on General Dynamics’ dime, the men lobbied a number of federal lawmakers, including Sen. Lindsay Graham, (R-S.C.), and secured a $3 million earmark for one of their personnel protective systems from Rep. John Spratt Jr., (D-S.C.), according to the complaint.
General Dynamics says Snyder and Morrison did all this despite having signed conflict-of-interest certificates that required them to notify General Dynamics legal counsel of any conflicts of interest should they arise. General Dynamics says it discovered the scheme after it received ethics complaints from customers. It claims that since their termination, Snyder and Morrison have continued to use information, money, trade secrets and goodwill they fraudulently acquired while working at General Dynamics.
Snyder and Morrison seek dismissal of the suit. They concede that they formed Advanced Mission Systems while still working for General Dynamics, but say they had no obligation to tell their employer of their activities.
Both men admit they signed conflict-of-interest certificates at the time of their employment and that they were later terminated by the company, but they deny knowledge of ethics complaints lodged against them by customers of the defense contractor.
Snyder further admits to using a laptop belonging to General Dynamics to send personal emails from a personal email account.
But when it comes to the crux of the case, whether or not they stole trade secrets, Snyder and Morrison say General Dynamics failed to specify what trade secrets were allegedly stolen and how they were used. They allege that, given their former positions and the broadness of the allegation made against them, it is impossible for the court to reach any legal conclusion about the claim.
“To the extent a response is required, such allegations are denied,” the answer said.
The plaintiff seeks compensatory damages and an injunction. It is represented by Scott Humphrey of Ogletree, Deakins & Nash.