By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Contract Attorney

In Part 1, Part 2 and Part 3 of this series I introduced you to, and discussed, an interesting case involving a breach of contract and tortious interference with economic benefits. In this final part we will conclude the case as well as my take away.

Plaintiff was also not entitled to the protection of non-confidential proprietary information available in the public domain.  Furthermore, there was no evidence produced during discovery that showed the employer took precautions to maintain the secrecy of the alleged confidential trade secrets.

It was undisputed in this case that any agreement(s) between the company and its candidates, customers, employees, clients and/or consultants were terminable at will by either party.  As such, there was no showing of interference with its agreements with such customers.   In fact, it was undisputed that customers left because of their preexisting relationships with the former employees due to their dissatisfaction with plaintiff.

Furthermore, there was insufficient evidence of any monetary damages suffered.  In New Jersey, the law is well-settled that “[c]onjecture and speculation cannot be used as a basis for damages.”   An essential element for a claim of lost profit damages is proof of the actual costs or expenses that must be set-off form the gross revenues.   Specifically,

To recover lost profits, a party must show that profits were

Lost as a result of the actionable conduct complained of.

“Lost Profits” signifies the difference between gross income

and the costs or expenses which had to be expended to

produce the income.   Proof of relevant costs or expenses

is not a matter of mitigation.  It is part of the damage case

of the party seeking to recover lost profits.

During the discovery period, plaintiff produced no information substantiating its claim of lost profits.  Therefore, its claims failed as it could not prove monetary damages.

My Takeaway of the Case

The take away of this case in my opinion is the following:

  • To establish a breach of contract case you need to prove all of the elements of the breach. The Court discusses this extensively in the opinion.  Also the case re-enforces the importance of having contracts in writing and what is particularly interesting in the case is the argument regarding disclosure of confidential information.  The case is instructive in that if you wish to protect your confidential information, you need to generally describe what confidential means.   Here there was no such effort to provide a definition and the Court jumped on that omission as a basis for denying the relief.

To discuss your NJ Contract matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com.  Please ask us about our video conferencing consultations if you are unable to come to our office.