A suburban company, which works with insurance carriers to arrange housing for catastrophe victims, is claiming in Chicago federal court a former employee committed corporate espionage by swiping a secret list of adjustors, setting up a competing company and poaching customers.
St. Charles-based ALE Solutions filed a 10-count, 47-page lawsuit Oct. 14 against Starpoint Digital, Inc., and two former ALE employees, identified in the complaint as Theresa Palazzo and Alfredo Garcia, as well as against Palazzo's boyfriend, Daniel C. Marlow, alleging violations of the U.S. Computer Fraud and Abuse Act and the Illinois Trade Secret Act. ALE has also alleged breaches of fiduciary duty and contract, and acts of civil conspiracy, unfair competition and tortious interference.
ALE described itself as the leading provider in the U.S. and Canada of temporary housing for people displaced by such events as fires, hurricanes and tornadoes, primarily working through insurance companies. ALE has worked amid a number of major catastrophes in North America, including the 2010 Gulf of Mexico oil spill. In some cases, ALE arranges for the displaced to be put up in hotels, managing all aspects of the hotel stays.
ALE said it has grown since it was founded in 2001, developing relationships through the years with insurance adjustors and claims managers. ALE's digital database contains names and contact information for more than 20,000 adjustors, which is not available to the general public.
According to ALE, Palazzo and Garcia worked in the company's hotel program, Palazzo as a "Hotel National Account Manager" and Garcia as a "Client Rapid Response Supervisor.”
ALE said Palazzo and Garcia had access to the database of adjustors, as well as other proprietary and confidential ALE information. As part of their positions, Palazzo and Garcia signed agreements with ALE establishing rules about maintaining secrecy and not using ALE's confidential information to the detriment of ALE.
Palazzo and Garcia were further prohibited from soliciting ALE employees and customers for at least 24 months, should they depart ALE. Palazzo quit Aug. 7, and Garcia quit Aug. 27.
ALE said it learned, soon after Palazzo and Garcia left, the pair -- along with Marlow -- had created in June a rival company, Express Hotel Housing. Palazzo allegedly lured Garcia from ALE to work with Express Hotel.
Express Hotel is part of Schaumburg-based Starpoint Digital and provides many of the same services as ALE. According to ALE, Palazzo had downloaded and copied ALE's confidential list of adjustors in her final months with ALE, which defendants have purportedly used to try to poach ALE’s customers.
ALE further alleged defendants set up a website for Express Hotel mimicking ALE's website, using the same color scheme and layout. ALE said Express Hotel went further by directly lifting text from ALE's site. As an example, ALE drew attention to a line on the Express Hotel site that contained the name "ALE Solutions" - ALE surmised Express Hotel's web designer neglected to replace "ALE Solutions" with "Express Hotel."
ALE explained it has a MyALE web portal for claims adjustors to use for filing and processing claims with ALE. Palazzo allegedly gave her portal username to Marlow for the purpose of copying the operating program source code and other data. To this end, ALE alleged defendants established their own portal for adjustors, called Express Trak, which was copied from the MyALE portal.
ALE also contended Palazzo and Marlow invited Garcia to join Express Hotel, in violation of Palazzo’s agreement with ALE to refrain from drawing away ALE’s employees. In turn, Garcia also allegedly violated his agreement by accepting the offer. According to ALE, defendants have tried to solicit another employee to change companies.
ALE further contended defendants are using a direct marketing email campaign to lure adjustors from ALE and into the arms of Express Hotel.
ALE has asked the court for an injunction preventing defendants from continuing to approach its customers and employees, and to remove the Express Hotel website and Express Trak portal. ALE also has demanded Palazzo and Garcia cease competing against ALE and for all defendants to return copies of all confidential and proprietary information. ALE is seeking damages to be determined at trial.
ALE is represented by the Chicago firm of Aronberg, Goldgehn, Davis & Garmisa. The case is assigned to U.S. District Judge Thomas M. Durkin.