## Facts

- Quality Systems, Inc. (QSI) and Windermere competed as subcontractors supplying technical personnel to government agencies, including the NSA, through prime contractors (including Computer Sciences Corporation) and the Maryland Procurement Office.
- Samuel (David) Warman worked as a manager at QSI and supervised several managers informally associated with him.
- Warman resigned effective July 1, 1999 (last day July 7) and immediately joined Windermere.
- Within roughly six weeks after Warman’s departure, six managers and 31 nonmanagerial QSI employees left QSI for Windermere.
- QSI alleged Warman and Windermere orchestrated a coordinated “mass raid” and that Warman, while still employed by QSI, breached his duty of loyalty by planning and facilitating employee departures to benefit Windermere.
- Discovery included deposition testimony from certain nonmanagerial employees stating they were not solicited about Windermere while Warman and the managers were still at QSI and that their decisions to leave were independent of Warman’s conduct.
- Defendants denied wrongdoing and asserted counterclaims that QSI defamed them and engaged in unfair competition by characterizing events as a “raid” and making related negative statements.

## Issues

1. Whether Warman breached his duty of loyalty by soliciting QSI employees or otherwise competing with QSI on Windermere’s behalf while still employed by QSI.
2. Whether QSI produced sufficient admissible evidence of pre-resignation solicitation or other disloyal conduct to create a genuine dispute of material fact.
3. Whether defendants produced sufficient evidence of actionable defamation or unfair competition based on QSI’s statements and conduct.

## Decision

- The court granted defendants’ motion for summary judgment on QSI’s claims, including the duty-of-loyalty claim against Warman.
- The court granted QSI’s motion for summary judgment on defendants’ counterclaims for defamation and unfair competition.
- The court concluded that, after extensive discovery, neither side’s claims were supported by evidence sufficient to warrant trial.

## Legal Principles

- Under Maryland employment principles, an employee owes a duty of loyalty during employment and may not actively compete with the employer or solicit the employer’s employees or customers for a competitor while still employed.
- Absent restrictive covenants, an employee may prepare to compete, resign, and thereafter compete (including hiring at-will former coworkers), so long as no wrongful acts (such as pre-departure solicitation or misuse of protected information) occurred during employment.
- Summary judgment is appropriate when the record shows no genuine dispute of material fact and a reasonable factfinder could not find for the nonmovant on an essential element.
- Defamation requires proof of a false defamatory statement of fact, unprivileged publication with the requisite fault, and resulting harm; conclusory allegations and failure to identify actionable statements are insufficient.
- Unfair competition claims based on disparagement or interference require evidence of specific wrongful acts beyond ordinary competitive conduct.

## Conclusion

The court disposed of both sides’ claims on summary judgment, holding that QSI lacked specific evidence of pre-resignation disloyal solicitation to support a “raiding” theory and that defendants likewise failed to substantiate defamation and unfair-competition counterclaims with actionable statements and proof of cognizable harm.


Quality Sys., Inc. v. Warman, 132 F. Supp. 2d 349 (D. Md. 2001)