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Monday, February 24, 2020

Company loses lawsuit against former employees; N.J. court ruled no agreement existed

By Laura Halleman | Aug 28, 2017

General court 07

TRENTON, N.J. (Legal Newsline) – The New Jersey Superior Court Law Division has found in favor of two former employees of Technology Dynamics Inc., doing business as Nova Battery Systems (NBS), in a lawsuit brought by NBS that alleged a scheme to steal employees away from the company.

Anwar Master, NBS’ general manager, chief engineer and chief operating officer, and Walter Beringer, a former employee of NBS, were sued by NBS in the Chancery Division in 2015 for conducting “an unlawful scheme to steal customers, employees, and the goodwill of NBS for NBS’ direct competitor Emerging Power Inc.,” the court's Aug. 9 opinion stated.

Master and Beringer denied the allegations by NBS, stating they were never held by a non-compete agreement.

The court ruled that there was no confidentiality agreement between Beringer, Master and NBS. NBS also bears the responsibility of proving breach of contract and they did not, the court stated.

New Jersey law states, “a plaintiff must plead and prove the following elements for a valid breach of contract claim, a contract between the parties; a breach of that contract; damages flowing therefrom; and that the party stating the claim performed its own contractual obligations,” according to the opinion

The court found that NBS did not show facts that a contract between all parties existed and a written agreement was never signed by Master and Beringer preventing them from customer solicitation or competition.

The court also found that Master and Beringer had no devious plan to take customers away from NBS. 

“Several customers left NBS because of their preexisting relationships with Master and Beringer and due to their dissatisfaction with NBS,” the opinion states.

In terms of monetary damages suffered by NBS, the court determined there was none in the case. NBS had proven nothing to substantiate its lost profit claims.

“An essential element for a claim of lost profit damages is proof of the relevant costs or expenses that must be set-off from the gross revenues. Specifically, to recover lost profits, a party must show that profits were lost as a result of the actionable conduct complained of. 'Lost Profits' signifies the difference between gross income and the costs or expenses which had to be expended to produce the income. Proof of relevant costs or expenses is not a matter of mitigation. It is part of the damage case of the party seeking to recover lost profits,” the opinion states.

For these reasons, summary judgment was granted to Master and Beringer.

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New Jersey Superior Court Law Division