US education provider accuses rival of trade secrets theft
A US for-profit education services provider is suing a competitor and two former employees, alleging that they conspired to steal trade secrets and confidential information about the company.
DF Institute, doing business as Kaplan Professional, sued rival Dalton Education in the US District Court for the Western District of Wisconsin yesterday, June 3.
In the complaint, Kaplan alleged that Dalton had a policy of recruiting its employees with the aim of acquiring confidential information about Kaplan’s business strategy, revenues and 2018 product lines.
Both Kaplan and Dalton compete in the certified financial planning (CFP) industry, offering professional education services for students aiming to achieve CFP certification.
Kaplan’s trade secrets, including its client relationships and pricing structure, “are critical to its ability to perform its business and maintain its competitive position in the CFP industry,” the suit said.
According to the complaint, Dalton recruited a sales manager and wealth manager from Kaplan earlier this year. Kaplan claims that both former employees forwarded confidential documents containing company trade secrets to their personal email addresses.
Upon the return of each employees’ work laptops, Kaplan hired a third-party to conduct forensic analysis of the devices. The investigation revealed that both employees had been in close contact with senior management at Dalton prior to their resignations, Kaplan claimed.
This information allegedly included internal contact information for Kaplan clients, rosters for Kaplan’s CFP courses, training guides and reports on Kaplan’s sales.
Both employees’ conduct violated Kaplan’s confidentiality and restriction agreement, the company said, as well as trade secrets legislation.
The suit also claimed that Dalton’s director of corporate partnerships, not named as a defendant, directly asked one of the employees whether her existing client relationships at Kaplan could “have a direct impact on bringing in CFP sales for Dalton”.
The Dalton director, a former Kaplan employee himself, knew that this information was not publicly known and had economic value to Kaplan any other competitor in the CFP industry, the suit said.
“The claim against Dalton Education and the individual defendants includes nine counts of unlawful behavior, including violation of trade secrets, computer fraud and abuse, tortious interference with Kaplan Professional’s prospective economic advantage, and unfair competition,” a Kaplan press release said yesterday, June 3.
The Wisconsin company is seeking injunctive relief against Dalton prohibiting the theft of its trade secrets, and the return of all documents containing confidential information about Kaplan’s business.
Kaplan is also seeking damages and attorneys’ fees.
WIPR has contacted Kaplan and Dalton for comment.
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