A Pennsylvania federal judge has ordered a former EQT employee to turn over his cell phone to EQT so they can have experts examine it for deleted text messages to Toby Rice and others helping him. You may recall EQT accused two fired workers of stealing company secrets and sharing those secrets with Toby and Derek Rice, who are trying to take over EQT (see EQT Accuses Fired Employees of Colluding with Rice Boys). EQT maintains one of the fired workers has evidence on his phone that can corroborate their claims of collusion. Hence the judge’s order.
EQT sued the two employees: reservoir engineer Jeffrey Lo and production engineering manager Charles Cunningham. It is Lo’s cell phone EQT wants to examine for deleted communications with the Rice boys.
In the lawsuit against Lo, EQT claims: “Sensing his employment at EQT was nearing its end, natural gas reservoir engineer Lo entered EQT headquarters in the dark of night in the early morning hours on January 7, 2019 with a singular purpose: to steal EQT’s trade secrets and other confidential and proprietary information. EQT’s recent forensic analysis shows that Lo had been downloading for several months EQT’s trade secrets, confidential documents and data and proprietary operating files on hard drive until he removed it in the hours preceding his termination.”
Lo maintains he took with him what was rightfully his own property (intellectual and physical). Lo is the guy who created the program EQT accuses him of stealing. Tough, complex issues here. Or are they? Is it just a case of simple theft of company property?
Forensic investigators can examine a former EQT Corp. employee’s cellphone for messages and trade secrets he may have exchanged with former Rice Energy executives now fighting to take over EQT’s board of directors, after a Pennsylvania federal judge ordered the phone be turned over Tuesday.
An attorney for EQT said Jeffrey Lo, a former reservoir engineer accused of stealing a hard drive with a copy of the program and data EQT used to track information about its gas wells, had deleted communications on his phone with Toby Rice and Derek Rice, who have been leading an effort to elect a new majority of directors to EQT’s board.
Lo had previously worked for Rice Energy and said he developed the program he was accused of stealing; he and the program became part of EQT when the company bought Rice in November 2017.
“The [forensic] analysis recovered metadata showing he deleted texts from his phone to these people,” said Brad Funari of Reed Smith LLP, representing EQT, in a discovery hearing Tuesday. “He sent a March 2 email and deleted it, in violation of the court’s order to preserve records … There were other texts deleted, including to Toby Rice, in the week before his firing … The only way to figure out their content is to examine his phone.”
U.S. District Judge Cathy Bissoon ordered Lo to bring his phone to forensic data company Bit By Bit for a direct examination, but she denied EQT’s request to also look at a pair of old email addresses that Lo’s lawyer said he hadn’t originally disclosed because they hadn’t been used since before he worked for the company. EQT could ask Lo about whether he used those accounts during his deposition later this month, Judge Bissoon said, though she expressed her concern that he appeared to have deleted some conversations after the court began its discovery process.
“I am troubled it appears your client is actively trying to cloak his activities here,” she told Lo’s attorney, James W. Carroll Jr. of Rothman Gordon PC.
EQT has accused Lo and another employee, production engineering manager Charles Cunningham, of stealing trade secrets by copying and taking confidential files in the hours before a meeting at which they and other employees were fired Jan. 7. The case against Lo was filed in federal court, while the case against Cunningham was filed in the Court of Common Pleas of Allegheny County.
Funari also complained that Lo had denied taking the hard drives with EQT’s confidential information in his written responses to EQT’s questions, but had contradicted that in statements to the media and on a GoFundMe page trying to raise money for his defense.
In his fundraising plea, Lo compared himself to a janitor, who, on the verge of being fired, gathered all his things along with a broom, which the company then accused him of taking with malicious intent.
“He did it, he admits that he did it,” Funari said. “But, your honor, he wouldn’t admit it to us.”
Funari said that if he can’t recover the communications with Rice and others from Lo’s phone, he would seek third-party subpoenas of the recipients.*
There’s more. Click the link below to read the full article (requires a Law360 subscription).
And so it goes in our ongoing soap opera of the fight for who will control EQT.
*Law360 (May 7, 2019) – EQT To Search Ex-Worker’s Phone For Rice Communications
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