## Facts

- Riggs Investment Management Corporation (RIMCO), a Riggs Bank subsidiary, provided investment management services and grew assets under management substantially during 1990–1995.
- Robert von Pentz held senior leadership roles at RIMCO, and Philip Tasho led the equities group before leaving RIMCO after a dispute with Riggs management.
- After departures of key personnel, von Pentz, Tasho, and others formed a competing investment management firm, Columbia Partners, L.L.C.
- Many RIMCO clients moved their accounts to Columbia Partners after the new firm began operations.
- RIMCO and Riggs alleged that defendants used disloyal pre-departure conduct, misappropriated confidential information and trade secrets, violated contractual/confidentiality obligations, and committed unfair competition and related business torts.
- The case proceeded to a bench trial in January 1997, followed by findings of fact and conclusions of law under Federal Rule of Civil Procedure 52.

## Issues

1. Whether former senior officers and employees breached fiduciary duties and the duty of loyalty by planning a competing firm and soliciting clients.
2. Whether defendants misappropriated protectable confidential information or trade secrets (including client-related information and investment strategies).
3. Whether defendants breached employment-related contractual or policy-based confidentiality or restrictive obligations.
4. Whether defendants’ conduct constituted unfair competition, tortious interference, or similar business torts based on improper means.

## Decision

- The court largely ruled for defendants on the core theory that they unlawfully “stole” plaintiffs’ business.
- The court held that, although senior personnel owed strong loyalty duties while employed, defendants’ conduct primarily fit within permissible pre-departure preparation to compete and lawful competition after leaving.
- The court found plaintiffs failed to prove broad, actionable misappropriation of trade secrets or confidential information supporting sweeping relief.
- The court declined to award the extensive damages and injunctive relief sought based on the evidentiary record developed at trial.

## Legal Principles

- Corporate officers and key employees owe an undivided duty of loyalty and may not compete directly with their employer or act against the employer’s interests while still employed.
- Pre-departure preparation to compete may be lawful if it does not involve disloyal client solicitation while employed, sabotage, or taking clearly confidential materials.
- Client relationships and information are not automatically trade secrets; protectability depends on secrecy, reasonable measures to maintain confidentiality, and whether the information is readily ascertainable.
- In the absence of enforceable non-competition restrictions, former employees may solicit business after departure if they do not use improper means (e.g., misappropriating confidential documents or engaging in deception).
- Restrictive covenants and confidentiality obligations are construed narrowly, and liability generally requires proof of specific protected information taken or used неправfully, not merely generalized knowledge and experience.

## Conclusion

After a Rule 52 bench trial, the court rejected most claims that former RIMCO leaders and employees breached loyalty duties or committed trade-secret and unfair-competition torts by forming a competitor and attracting clients, concluding the plaintiffs did not prove unlawful conduct beyond lawful preparation and post-departure competition.


Riggs Inv. Mgmt. Corp. v. Columbia Partners, L.L.C., 966 F. Supp. 1250 (D.D.C. 1997)