Gab

Introduction

GAB Business Services, Inc. (GAB) sued its former officer and employee, C. Randall (Randy) Neal, and Neal’s new employer, Lindsey & Newsom Claim Services, Inc. (Lindsey), for their respective roles in soliciting 17 key GAB employees to resign en masse in order to join Neal in new positions at Lindsey. GAB claimed Neal breached his fiduciary duty in orchestrating the exodus while still an officer at GAB. GAB accused its competitor Lindsey of unfair competition in assisting and benefiting from Neal’s breach of fiduciary duty. GAB also sued both Neal and Lindsey on the novel claim of intentional interference with an employer’s contract with its employees, along with misappropriation of trade secrets and other torts. A jury unanimously rejected all of GAB’s claim. GAB complains, rightly, of instructional error. We reverse in part.

Facts

GAB is an independent adjusting company, operating since 1885. In 1991, when the relevant events took place, GAB employed over 3,000 people in about 120 branch offices nationwide. Randy Neal began his career at GAB in 1970 in an entry-level position. He steadily marched up the corporate ladder and by 1986, when GAB was acquired…