Chancery Awards Fees For First Time Based on Delaware Computer Misuse Act

Wayman Fire Protection, Inc. v. Premium Fire & Security, LLC, C.A. No. 7866-VCP (Del. Ch. June 27, 2014). 

This Delaware Court of Chancery ruling is noteworthy for at least two reasons: (I) it applies a powerful tool that businesses can use against competitors who hire executives or other employees who leave to work for competitors and take with them electronically-stored data from their former company; and (II) because, for the first time, the amount of attorneys’ fees awarded is quantified in a civil case pursuant to Delaware’s Misuse of Computer System Information Act, 11 Del. C. Section 941. The underlying claims relate to a former employee taking data from the computer of his former employer and using it for the benefit of his competing new employer.

One of the factors the court considered is that this statutory breach was only one of several claims made, and this award of fees was virtually the only recovery in the case. The $200,000 award was about 20% of the total fees incurred, net of expert fees which were also awarded.

The post-trial opinion in this case was previously highlighted on these pages.