ZipBy USA LLC et al. v. Parzych (D. Mass. 20-cv-10926).

ZipBy, which provides ticketless parking systems, accused Gregory Parzych, a former ZipBy executive, of breach of fiduciary duty, breach of contract, misappropriation of trade secrets under state and federal law, trademark infringement and false designation of origin, trespass, and conversion.

ZipBy says that Parzych, while serving as President of ZipBy, worked to disrupt potential ZipBy acquisitions and to purchase those companies for himself and wrongfully accessed ZipBy trade secret information, after which he was terminated.  ZipBy says that following termination, Parzych (who is alleged to have retained keys to the office) accessed their facility and removed confidential information.

At trial, the jury awarded a verdict in favor of ZipBy on all counts, and awarded $1.5 million in damages and another $1 million in exemplary damages.  Parzych claimed a violation of procedural due process because one of his lawyers was required to quarantine after testing positive for COVID on the third day of the trial, which took place at the end of November 2023.  Judge Talwani had offered to recess the trial for the required five-day quarantine period, but expressed concern that they would have to re-empanel a new jury, and offered to allow the attorney to proceed remotely, which was agreed upon by the attorney.  Judge Talwani deemed this to be a waiver of Parzych’s objection, but also held that the attorney’s participation remotely did not deprive Parzych of due process representation of counsel.

Judge Talwani also denied Parzych’s motion for a new trial pursuant to Rule 59 and for judgment as a matter of law.  She determined that a jury could reasonably have found that Parzych, while President of ZipBy, interfered with potential ZipBy acquisitions while attempting to acquire those entities himself, secretly purchasing the building where ZipBy was based and then renegotiating the ZipBy lease without ZipBy knowing of his ownership of the property, and of (following his termination) continuing to use ZipBy logos and offering parking solutions based on misappropriated ZipBy trade secret and confidential information.  She rejected his notion that he was an “at-will” employee free to pursue other opportunities, noting that as President he was bound as a fiduciary to ZipBy and by his noncompete agreement with the company.  She further found that the evidence that Parzych used the ZipBy logo following termination on his personal website to advertise his parking technology expertise was sufficient to sustain the finding of trademark infringement.

Judge Talwani did agree with Parzych that the trade secret misappropriation holding could not stand.  He had been found liable for misappropriating financial information concerning one potential ZipBy acquisition and the minutes of a ZipBy board meeting where it was determined not to proceed with that acquisition.  Judge Talwani found that the complained-of activities took place while Parzych was still President of the company and that his use of this information was not improper at the time (albeit his subsequent actions supported liability on other counts) as he was authorized to use the information to communicate with the potential acquiree the information that the purchase would not be moving forward.  Given the removal of the trade secret finding, Judge Talwani reversed the $1 million exemplary damages award, which had been based on that count.  She upheld the $1.5 million in normal damages, however, rejecting Parzych’s argument that ZipBy’s damages analysis had failed to account for downturns brought about by the COVID pandemic.  She noted that ZipBy’s expert had expressly considered industry sources that addressed the impact of COVID on profitability.  She also found that a jury could have properly discounted Parzych’s expert where the evidence show him to be a close friend of Parzych who was involved with Parzych’s improper attempt to acquire one of the companies that Parzych had improperly tried to obtain.