Law Firm Loses Most Of Its Lawsuit Against Ex-Associate, ClickUp

Bizar Male

A San Diego business law firm saw its copyright and trade secret claims against a former associate and the software maker ClickUp dismissed by a federal judge in California, leaving only breach of contract claims.

Derek Dahlin, who worked for Slate Law Group first as an independent contractor and then as a full-time associate, left the firm for ClickUp, a client he had serviced while working at the law firm. ClickUp, which was valued at $1 billion in a $100 million funding round led by a Canadian venture capital firm, is accused of receiving confidential documents from Dahlin after he was hired.

Slate sued Dahlin and ClickUp, as well as ClickUp CEO Brian Evans, CFO Robert Smith, and agent for service of process Wes Brummette, in September 2020. The suit included claims for misappropriation of trade secrets, copyright infringement, vicarious copyright infringement, and contributory copyright infringement.

Judge Thomas J. Whelan of the U.S. District Court for the Southern District of California mostly granted the defendants’ motion to dismiss on Wednesday.

Slate’s claims against Evans, Smith, and Brummette in their individual capacities failed because it didn’t explain how they were individually liable. The alleged trade secret pleaded by the firm also lacks the necessary specificity to constitute a valid trade secret, and so its misappropriation of trade secrets claim failed, the court said.

Whelan concluded that the firm’s various copyright claims, based on alleged infringement on Slate’s copyrighted contracts and work-product, were preempted by the Federal Copyright Act because both the state common law and federal law entitle the owner to equivalent rights.

Its claims under the California Computer Data Access and Fraud Act failed because they merely restate the language of the California Penal Code and are thus to vague to constitute a claim. The fraudulent misrepresentation claims, based on allegations that Dahlin intentionally misrepresented himself at various times, were dismissed because the statements weren’t considered actionable due to being labeled opinions and “general statements of optimism.”

The court also dismissed the law firm’s claim of fraudulent concealment—based on the allegations that Dahlin intentionally failed to disclose to Slate that he was getting poached by and starting work with ClickUp—because it didn’t present facts showing concealment or suppression of material fact. Dahlin ultimately disclosed ClickUp’s interest and that he would be taking a job with the company, according to the judge.

However, the claim alleging Dahlin breached a non-disclosure agreement by disclosing alleged trade secrets to ClickUp can advance. Although the trade secret claim failed, the NDA defined the information Dahlin could and couldn’t disclose differently than trade secret law.

Whelan also granted defendants’ motion to dismiss several other contract- and tort-based claims.

Slate can refile all claims except those for copyright infringement, vicarious copyright infringement, contributory copyright infringement, and negligent interference with contractual relations.

Slate Law Group represents itself. The defendants are represented by Cooley LLP.

The case is Whiteslate LLP v. Dahlin, S.D. Cal., No. 3:20-cv-01782, 7/7/21.

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