DuPont sues former research chemist fearing disclosure of trade secrets

By Kelly Holleran | Mar 3, 2011


DuPont has filed suit against one of its former employees, alleging the employee has revealed the company's top secrets to a competitor, which could lead to the loss of substantial revenue.

DuPont claims its former employee, defendant Wenjing Zhou, suddenly left his position as research chemist at DuPont in November to accept a position with a competing company.

Now, DuPont is concerned its exclusive, confidential formula for the coating used on TransCanada's pipelines will be used by its competitor.

Plaintiffs DuPont de Nemours & Co. and Dupont Powder Coatings USA Inc. filed suit against Zhou on Feb. 25 in Jefferson County District Court

"Only DuPont's specially-formulated powder coatings meet the specifications required by TransCanada at specific plant locations to achieve the desired results for pipe powder coatings applications manufactured by Cantak and sold to TransCanada," the suit states. "The modification is a trade secret that is not disclosed to third parties and is intended to provide DuPont with a competitive advantage."

DuPont became concerned on Nov. 30 when Zhou suddenly resigned and refused to stay on for a few additional weeks to help transition his workload and to qualify for his annual bonus, according to the complaint. He also refused to disclose his future plans to DuPont, the complaint says.

Later, DuPont claims it learned that Zhou left to work for competitor KCC Corp., which is in the business of developing powder coatings.

When DuPont learned of Zhou's new position, it immediately contacted KCC and Zhou, warning them about its concern for the legal ramifications of Zhou's work, according to the complaint.

Upon his employment with DuPont, Zhou signed a contract agreeing to keep all trade secrets confidential and to refrain from working with a competitor, the suit states.

Because of the contract, DuPont claims it is illegal for Zhou to work for KCC.

On Jan. 19, KCC informed DuPont that it had independently terminated Zhou, the complaint says.

Still, DuPont fears repercussions from Zhou's defection.

"Any dissemination by Zhou of DuPont's proprietary information and trade secrets to KCC or another has already created, and will continue to create, an unfair and ill-gotten competitive advantage in the powder coatings industry that will result in a sustained loss of revenue to DuPont, as well as the loss of the value of this business segment within the DuPont family of businesses," the suit states.

In its complaint, DuPont alleges breach of contract, breach of fiduciary duty, conversion and misappropriation and unjust enrichment against Zhou.

DuPont is seeking a temporary injunction preventing Zhou from disclosing DuPont product formulations to rival companies, from using DuPont's research for the benefit of any competitors, from disclosing the results of DuPont's research and from disclosing research processes.

It is also seeking a temporary injunction preventing Zhou from aiding a competitor from developing powder coating, from disclosing any information regarding DuPont's powder coating formula, from accepting employment with any rivals and from accepting any employment or contractual positions within the next three years without first running the position by DuPont.

In addition, DuPont wants the court to require Zhou to disgorge any records containing proprietary information, to order Zhou to maintain all e-mail and computers used by him since Jan. 1, 2010, and to permanently implement the temporary injunction orders.

DuPont will be represented by M.C. Carrington and Elizabeth B. Pratt of Mehaffyweber in Beaumont.

The case has been assigned to Judge Donald Floyd, 172nd District Court.

Case No. E189-470

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