1. Based on your sense of fair play and justice, does it sound “right” or sensible to think that one officer, while still employed by her employer, could arrange to recruit all 40 of her coworkers to leave for a competitive firm and not be in violation of some law?

2. Assess Pope’s defense that she was merely making arrangements to compete in the future.

Linda Pope ran one of the largest and most successful title insurance branches in the title insurance industry for Security Title Insurance. First American Title Insurance sought to regain its top position in title insurance sales through its Talon division by recruiting key people from other companies who had relationships with key customers and other key employees. Talon recruited Pope. While still employed by Security Title, Pope secretly solicited key management employees to join Talon–First American and planned to bring all 40 employees with her. She arranged for a Talon official, over drinks and dinners, to help with the recruiting by telling Security Title employees about Talon’s beneficial compensation, signing bonuses, medical benefits, and superior computer system. Security Title asserted that Pope’s actions, aided and abetted by Talon, resulted in $12,194,335 in lost profits after 35 employees walked out on October 20, when Security Title “walked her out”— i.e., fired Pope—having discovered her plans to leave. Security Title sued Pope for breach of fiduciary duty of loyalty and sued Talon–First American as an aider and abettor. Pope defended that she was merely making arrangements to compete in the future.

JUDICIAL OPINION

JOHNSEN, P. J.… We conclude that…substantial evidence supports a conclusion that Pope breached her fiduciary duty by improperly recruiting Security Title employees for Talon while she was still employed by Security Title. First American’s argument that Pope merely discussed her plans with the other employees and was only preparing to compete with Security Title flies in the face of a wealth of evidence presented to the jury. First American relies on Motorola, Inc. v. Fairchild Camera., 366 F. Supp 1173 (D. Ariz. 1973) but the defendant in that case merely discussed with co-workers his plan to join a competing company and gave the competing company’s contact information to those who asked for it. Indeed, the defendant in that case refused to discuss with his co-workers their own possible employment at the competing company. 366 F. Supp. at 1177. By contrast, Pope… secretly solicited key managerial employees to join a competitor. She arranged for Clifford [Talon, senior vice president] to help her recruit key Security Title employees and enticed other Branch66 employees to leave Security-Title by telling them about Talon’s “beneficial” compensation, signing bonuses, medical benefits and superior computer system. We conclude the evidence easily supports the conclusion that Pope breached her fiduciary duty by improperly recruiting Security Title’s employees for Talon while she was still employed by Security Title.

Judgment for Security Title affirmed. Punitive damages awarded, $6,100,290.