Direct Supply accuses former employee of giving trade secrets to competitor

More than 50 documents downloaded at end of employment, company alleges

Milwaukee-based Direct Supply Inc. is accusing a former employee of downloading more than 50 company documents containing technology trade secrets before becoming the chief information officer at a competitor.

Direct Supply filed a lawsuit at the end of January in Milwaukee County Circuit Court seeking to block Travis Stevenson from using any of the information in his new role as chief information officer at Duluth, Georgia-based Prime Care Technologies.

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The two sides have since agreed to a temporary restraining order that calls for Stevenson to not disclose or destroy any Direct Supply records or files he has in his possession. It also sets up a procedure for him to make any devices with Direct Supply records on them available for inspection.

But the parties also acknowledge in the order that Stevenson disputes he violated any confidentially or work for hire agreements he had with Direct Supply.

Attorneys for both sides did not immediately respond to requests for comment.

The dispute dates back to July 29 last year when Stevenson was informed his employment would be terminated by Direct Supply. The company’s lawsuit does not say why Stevenson was terminated, but his separation agreement allowed him to remain with the company until Dec. 31 or until he found other employment. It also provided for a lump sum payment of $85,000, representing 26 weeks of pay, a $22,000 bonus payment and $7,200 in outplacement services.

The company also says the terms of Stevenson’s employment included a 12-month non-compete agreement.

According to court documents filed by Direct Supply, Stevenson had been with the company since September 2013 and as director of platform engineering was responsible for technical development of infrastructure services and platforms for Direct Supply’s software-as-a-service product platforms. He was also provided with strategy and development plans, participated in the engineering senior leadership team and was a system administrator with access to all system files, code and operations of the company’s DSSI eProcurement system.

The documents allege that on Aug. 24, roughly a month after he was told of his termination, Stevenson asked Bill Avery, Direct Supply executive vice president of technology and chief information officer, if he would be allowed to take a position with Prime Care working on the company’s primeCLOUD product offering.

Avery told Stevenson working at Prime Care would constitute a direct violation of the non-compete. According to court documents filed by Direct Supply, Stevenson said he would cancel his interview with Prime Care and “expressly stated that he did not want to do anything to violate his non-compete agreement or disrupt his post-employment relationship with Direct Supply.”

But the documents filed by the company also say he emailed Direct Supply president and chief executive officer Robert Hillis the next day seeking permission to join Prime Care and was again told it would violate the non-compete.

Stevenson continued his employment with Direct Supply through Dec. 31 and on Jan. 20, Direct Supply paid out his separation payments, according to court documents.

Prime Care announced Stevenson as its new CIO on Jan. 25, which Direct Supply says is when it learned he was joining a competitor.

When Direct Supply reviewed Stevenson’s activity on its systems, it allegedly found that between Nov. 23 and Dec. 29 he had downloaded more than 50 files with confidential information, including technology infrastructure strategy documents, IT incident reports and software architecture information.

The temporary restraining order calls for Stevenson to provide additional information in the coming days and the two sides are to work together on having any devices examined. A scheduling conference is set for May.

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Arthur covers banking and finance and the economy at BizTimes while also leading special projects as an associate editor. He spent also five years covering manufacturing at BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.

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