The verdict is in. Robert Choi has been found guilty of breaching his Specialized employment contract, while the jury found for Barley Forsman, clearing him of any claims by Specialized against him. On the other side, the jury sent Specialized a message that speaks volumes, awarding them a mere $1 in damage.
As I discussed yesterday, I was conflicted in how I would decide if I were a juror. The good news was that only one simple claim, that of breach of contract, remained. The bad news was that given all the damaging emails that Specialized discovered in which Choi sent sales report to the Volagi team, it would have been very hard for me as a juror to say that he did nothing wrong at all. The story was obviously easier for Forsman, who left pretty much right after his resignation.
I can’t look into the jurors mind; I read this post from Bike Radar.com, where Choi was speculating that he was found guilty because of the overlap of contract, in other words for pursuing a bike business while still working under contract for Specialized. I do strongly believe that Choi was just trying to help Specialized in good faith to finish up projects. I don’t buy the Specialized story at all, where they claimed that Choi just stayed on in order to get more access to confidential information. I also don’t believe that Specialized “enticed” him to stay with any wicked motives. Maybe the company or at least some managers really wanted to find an arrangement that worked for both their as well as Choi’s passion to pursue an entrepreneurial career. Be as it may, once the Volagi bike came out, things got pretty nasty.
Robert Choi presented plenty of evidence that showed that he was acting in good faith and told Specialized repeatedly that he was working on his company in parallel. Specialized tried to portray him as building his bike company on their dime by going on business trips for Specialized, yet at the same time visiting future Volagi suppliers. Robert Choi came across credible when he said that he told them about the dual purpose of his visits. They presented hard evidence because Choi gave Specialized a check for the portion of the trip that he did on Volagi business. All that in my view was completely fine.
Because of all of this, I found the Volagi folks credible when they said that they tried to avoid a conflict of interest. As a result, if I were a juror, I would not find either Choi or Forsman guilty because they created their business, even if it was competing. I also wouldn’t care that Choi waited until August 2010 to tell Specialized that it Volagi bike was competing with the Roubaix. The judge specifically advised the jurors that as long as employees are loyal to their employer, in other words were working dutifully on their assignments, they don’t violate the law and have no obligation to tell their employer, even if they are working on a competing business.
But, when Robert Choi while he was still an employee sends company-confidential sales reports to his Volagi team, even making specific reference that those report demonstrate the success of the Volagi company in the marketplace, it is really hard to deny that a company confidentially agreement was breached. Even worse, when Robert Choi, from his Specialized email account, introduces a fictitious person named “Robert Volagi” to a Specialized supplier for potential Volagi business opportunities, it is also very hard to say that nothing was done wrong.
So, in the end I think the jury found Choi guilty of breach of contract, because they just couldn’t possibly look the other way and pretend that none of this evidence was ever presented by Specialized. At the same time, they used their good judgement and scoffed at Specialized’ sob stories and outrageous claims against the Volagi folks and just awarded them $1. That was necessary because as we learned, a breach of contract had to meet a multiple point test, and one of those conditions was that Specialized indeed suffered damages. But I don’t think any of the jurors believed that Specialized was truly harmed, particularly because it was also proven that no confidential information or trade secrets were used to design and produce the Volagi bike.
In summary, I’m strongly convinced that justice prevailed, and most importantly, that the judiciary system has worked as designed. I spent a good part of my week at the trial, and took vacation from my company job. I think it was well worth it. I am very excited to have seen how the judiciary process works in the United States. I learned a lot about the bicycle industry. I’m glad that I got to know the Volagi founders a bit better, and wish them the very best. I’m sure now the big question is whether Specialized will appeal, and whether they will attempt to recover some of their lawyer fees. I keep a last bit of hope that Specialized now finally comes to their senses, their CEO has a bit of decency left and lets this go. If not, I think they are just every bit the litigious company that they are rumored to be, and I will view every attempt to damage Volagi financially as a confirmation of exactly what Volagi’s lawyer Chuck Smith claimed: That this was all about stifling competition and nothing else.
My biggest problem right now: I want a Volagi bike, and don’t know how to tell my wife :-)