According to this article in the Chicago Tribune, Clear Channel filed suit against Tribune Co. and former employee and VP Andrew Friedman on May 19, 2008, based on allegations that Mr. Friedman had taken documents, data and files belonging to Clear Channel with him and that Mr. Friedman would use knowledge of Clear Channel’s strategies for the benefit of Tribune Co. Tribune Co. was taken private last year by Sam Zell and has been restructuring its operations since. This is only the latest hire by Tribune Co. of former Clear Channel high-level executives and apparently Clear Channel is fed up.
The article states: “Friedman was deeply involved in the formulation and implementation of the confidential plans and strategies that Clear Channel uses to develop, market, implement, and distribute its online offerings,” the suit said. The information “is of particular competitive significance and value.”
“Before leaving Clear Channel, Friedman allegedly shared information with Tribune employees about business strategies and vendors, said court papers, which included alleged transcripts of e-mails. Friedman also deleted thousands of files from his computer, Clear Channel claims.”
Clear Channel also sought a Temporary Restraining Order (TRO) which would restrain Mr. Friedman from beginning work for Tribune Co.
ChicagoBusiness.com is now reporting that U.S. District Court Judge Joan Gottshall in Chicago granted the TRO and made findings that Clear Channel would “undoubtedly suffer irreparable harm if the (temporary restraining order) is denied and (Mr.) Friedman uses the knowledge of interactive content strategies for the benefit of Tribune.” Mr. Friedman, she wrote, “will suffer little to no harm, other than being unable to work in his chosen profession for a few weeks.”
ChicagoBusiness.com further reports: “Mr. Friedman is also temporarily barred from using confidential information he gleaned during his employment at Clear Channel Communications Inc. and from hiring away other Clear Channel employees. He is also to “immediately return” to Clear Channel any documents, data and files as well as portable storage devices used to transfer proprietary information.”
The Chicago Tribune reports, “Tribune spokesman Gary Weitman described the suit as worthless. “We’re finding that there are a lot of people who want to come work for the new Tribune, and we’re going to hire the best of them, we’re going to do it lawfully and we’re not going to be intimidated by frivolous lawsuits,” he said.”
The question lies in the last statement–was it done lawfully. Of course the Tribune Co. can hire employees of Clear Channel and Clear Channel can ordinarily not prevent its employees from moving on, but if the employee is sharing confidential information, then the question of lawfulness becomes a little more murky. I don’t find that the suit is frivolous if there is evidence that Friedman shared information with Tribune that he acquired only as a result of his employment with Clear Channel.
I’m sure we will hear more facts about this case in the future–was there a confidentiality agreement, a non-compete agreement (the article appears to state that there was a one-year non-compete). I’m not saying that there is no way to recover in the absence of these trade secret strategies, but it makes it more difficult.