Appeals court affirms ruling mostly clearing Dataium execs

Founders broke off from Dealerskins buyer in ’09

A local website data aggregator and its co-founders have dodged a state appeals court appeal by a Virginia company that had accused them of breaking various non-compete and non-solicitation agreements and conspiracy in launching their venture more than four years ago.

In an opinion authored by Judge Thomas Frierson II, the appeals court last week said Chancellor Russell Perkins was correct in saying that Dataium CEO Eric Brown and President Jason Ezell didn’t breach their fiduciary duty to Dominion Enterprises by hatching the concept behind their new company while still at Dominion. The appeals judges also backed Perkins’ other rulings in the case, including that Ezell illegally solicited some of his former colleagues.

Dominion in 2005 acquired local auto dealer marketing firm Dealerskins — which Ezell had founded six years earlier — and recruited Brown to be the division’s general manager in early 2008. Brown’s team that year began developing a web data collection tool that catered to car dealers. A year later, he and Ezell also began working on Dataium, looking to develop a broader website data mining application.

Dominion sued in early 2010, calling for compensatory damages of more than $7 million plus at least $600,00 in attorneys’ fees. But Perkins said Brown, Ezell (left and right in photo here) and Dataium were liable for only $150,000 in damages — related mostly to Ezell’s salary and the cost of recruiting and hiring replacement employees — and a corresponding $65,000 and change in lawyer costs.

The Court of Appeals also agreed with Perkins’ opinion that some of Ezell’s actions violated his non-compete agreement, which expired in April of 2010, because there is some level of competition between the two companies. Similarly, Brown’s recruitment of some Dealerskins employees — he hosted an October 2009 meeting at his house and sent them emails while they were still at Dealerskins — was deemed to have violated his non-solicitation agreement.

The appellate judges also upheld the Chancery Court ruling that fellow Dominion alumni Aaron West, Jeffrey Dopp and Mark Krabacher did not violate the loyalty clause of their employment agreements by jumping to Dataium. Key to that ruling is that the new company was not considered to be a direct competitor to Dominion.

To view the full opinion, click here.