Business
Astro-Med awarded damages
01:00 AM EDT on Thursday, July 31, 2008
A federal judge last week handed West Warwick-based Astro-Med Inc. a $560,000 award stemming from a lawsuit against a former employee who had gone to work for a competitor.
The financial award in punitive damages and legal fees comes almost three months after a jury in Providence awarded the company $375,800 after a four-day trial.
The company first filed the lawsuit against former employee Kevin Plant, of Lake Mary, Fla., in December 2006 after he went to work for Nihon Kohden America Inc., the California subsidiary of a Japanese manufacturer of life-sciences equipment.
Plant was a former district sales manager for Astro-Med in Florida where he sold medical diagnostic and monitoring equipment made by the company’s Grass Technologies unit. The company alleged that Plant violated a non-compete clause of his employment agreement when he took the job with Nihon Kohden.
“He was doing well, then he turned around and stepped into a Japanese competitor,” said Everett V. Pizzuti, Astro-Med’s president.
Within days of the lawsuit’s filing, Plant and Nihon Kohden sought and won the case’s transfer to U.S. District Court in Providence.
The case proceeded slowly from that point before culminating in a trial that concluded April 8, when the jury sided with Astro-Med.
“[The case] was drawn out a little bit by their jurisdictional challenge,” said Stacey Nakasian, the lawyer representing Astro-Med. “These things don’t typically go to trial.”
During the trial, she was able to draw out that Plant was calling on Astro-Med’s existing customers and those on a list of prospective customers, in violation of an injunction granted by Chief Judge Mary M. Lisi.
Astro-Med’s sales dropped after Plant left for Nihon Kohden, Nakasian said, although it was unclear how much of that money had gone to the Japanese company.
“This is why the judge came down hard on him,” Pizzuti said.
Astro-Med (ALOT:NASDAQ) sought the injunction to give the company time to train another worker to replace Plant in Florida, Pizzuti said. Plant had been selling electroencephalography (EEG) and sleep-monitoring devices to hospitals and medical laboratories in Florida, Alabama and Georgia
EEG is the measurement of electrical activity produced by the brain as recorded from electrodes placed on the scalp.
Typically, Astro-Med requires the salespeople and professionals it hires to sign agreements prohibiting them from working on or selling devices similar to ones the company makes, sharing confidential sales or technical data with competitors, or contacting companies on Astro-Med’s sales lists, for one year after leaving.
Plant could have sold other medical equipment to Astro-Med customers, Pizzuti said.
The financial awards, totaling nearly $940,000, are not as important, Pizzuti said, as enforcing the company’s employment contracts with its workers. The court also ordered Plant and Nihon Kohden to pay another $221,000 in fees to cover Astro-Med’s legal costs.
The award had no material impact on the company’s earnings, he said.
“The most important point was protecting our rights and our proprietary information. Secondary was the monetary award,” he said.
It’s unclear whether Plant or Nihon Kohden will appeal the verdict, said Nakasian and Pizzuti.
Bruce W. Gladstone, the Providence lawyer who represented Plant in the case, could not be reached for comment yesterday afternoon.
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