Deltek lawsuit alleges violation of noncompete agreement

According to the latest Washington (D.C.) Business Journal, Deltek, Inc. is suing three former employees who established a company called Iuvo Systems Inc. Deltek alleges the employees violated noncompete agreements and unfairly use some of its trademarks.

Deltek filed its complaint against Chantilly, Virginia-based Iuvo on March 25 in U.S. District Court for the Eastern District of Virginia.

According to the article, defendant Tom Truong, a former consulting manager at Deltek, created and registered iuvosystems.com on February 1, 2008. Iuvo provides consulting services that help businesses manage databases and other software, including Deltek products. Its customers include government contractors, engineering firms, construction companies and financial businesses. Truong was employed by Deltek until March 2008.

Attorneys for Truong and two other former Deltek employees named in the lawsuit filed a motion April 20 to dismiss Deltek's claims against them.

In its suit, Deltek states that one of the employees, who was employed as a managing director until August 2008, "assisted Truong and/or (the other employee) in the formation of Iuvo." The defendants also allegedly received confidential or proprietary information from an unidentified source within Deltek.

Truong and the managing director, Edward Muldrow, signed two-year noncompete agreements preventing them from directly or indirectly competing with Deltek as "an employee or consultant of any firm or corporation engaged in a business which is in competition with the company or its subsidiaries."

The agremeent also states that employees "shall not provide consulting services to any Deltek customer other than as an employee of (the company)."

The defendants' attorneys argue that the agreements are unenforceable and that Iuvo has used Deltek trademarks in good faith to "fairly and accurately describe its services." But Deltek claims the use of its trademarks by Iuvo is confusing to customers who may think that they are getting services from Deltek or that Deltek is affiliated with or endorses Iuvo's services.

Deltek is seeking a court order that would, among other things, stop Iuvo's promotion and sale of similar products, the alleged unfair use of Deltek trademarks and alleged false representations that Iuvo and Deltek are affiliated.

The company, Deltek, is seeking at least $1 million in compensatory and punitive damages, three times the amount of Deltek's damages and Iuvo's profits, as well as attorney's fees, costs and interest.

The District Court has scheduled a hearing for May 2 to determine whether to grant the defendants' motion to dismiss the case.

Ed