Every employee knows that it owes a duty of loyalty to an employer, must abide by agreements with an employer (in non-com0petition, provided Massachusetts law is observed), and certainly that an employee cannot steal the files, secrets and data of a former employer to start a competing business.

Most people in business in Massachusetts also are aware of “Chapter 93A,” a statute designed to protect consumers against unfair or deceptive practices in the conduct of any trade or in commerce.  Given the purpose of the statute, courts over the five-plus decades this statute has been on the books have refrained generally from applying 93A to intra-corporate matters, including claims by companies against former employees for breach of employee agreements or fiduciary duties.

However,, in a recent case (Governo) involving (of all things) a group of lawyers departing their old firm, these attorneys copied files and papers from that firm and used them in their new law practice.  Perhaps outraged that lawyers would ever (gasp!) do such a dastardly thing, the Massachusetts Supreme Court did allow the old firm to make a claim under 93A, holding that where a defecting employee uses purloined materials, that use “is not purely an internal matter; rather it comprises a  marketplace transaction” falling under the statute.

Since 93A provides extraordinary recoveries (legal fees and double or triple actual damages), the price of using a former employer’s information has just gone way up.   Short of actual litigation, this ruling also may change the balance of power in negotiations wherein a former employer is threatening a claim against a business accused of using stolen information.  Stay tuned….