Question

14.2  Taser International, Inc. v. Ward  (2010)

1. What are the facts of the case?

• Taser International makes stun guns and accessories
• Taser Inc. sold electronics including their Taser cam. Ward, an employee (who was not under an employment contract) tries to personally develop his own type of camera. After Ward resigns from Taser, he begins his own company that is later sued by Taser for breaching their fiduciary duty of loyalty through competition.

2. What is the legal issue of the case?

(violation of the fiduciary duty of loyalty) Ward began the idea of his camera marketing while still an employee under taser, therefore trying to compete with the company.

3. How did the court decide on the issues?

originally in favor of Taser for Ward's apparent direct competition against the company, but the grant summary was later reversed and further proceedings were remanded.

4. What reasoning did the court use to substantiate their findings?

5. Do you agree or disagree with how the finding by the court in this matter? Please discuss why you decided as you did.

Answer 1

Taser International, Inc. v. Ward, (2010)

Fact :Taser Inc. sold electronics including their Taser cam. Ward, an employee but he was not under an employment contract. He tries to personally develop his own type of camera. After Ward resigns from Taser, he begins his own company that is later sued by Taser. Ward began the idea of his camera marketing while still an employee under taser, therefore trying to compete with the company.

Issue: Had the former employee breached his duty of loyalty by planning a competing business while still working for the employer?

Rules: Loyalty is one of the most fundamental duties in a fiduciary relationship. Basically, the agent has the duty to act solely for the benefit of his or her principal and not in the interest of the agent or a third party. For instance, an agent cannot represent two principals in the same transaction unless both know of the dual capacity and consent to it. The duty of loyalty also means that any information or knowledge acquired through the agency relationship is confidential. It is a breach of loyalty to disclose such information either during the agency relationship or after its termination. Typical examples of confidential information are trade secrets and customer lists compiled by the principal. The agent’s loyalty must be undivided. The agent’s actions must be strictly for the benefit of the principal and must not result in any secret profit for the agent.

Reason of court use to substantiate their findings :Taser employed Steve Ward as the VP of marketing. Ward never signed any employment contract, non-compete agreement, or nondisclosure agreement. Ward started designing an eyeglass mounted camera while employed by Taser. He later left Taser. Taser felt that he was unloyal and had violated his duty of loyalty.

Conclusion: There was not enough evidence to prove that Ward was unloyal to Taser.