An Iowa appeals court said Wednesday an insurance agency’s $37,868 liquidated damages award could stand after finding it did not constitute a penalty for a former employee who emailed herself a client list before leaving.
The three-judge appeals court panel in Miltner Insurance Services LLC v. Casey M. Roberts said Ms. Roberts failed to meet her burden of proving the damages, which were equivalent to her annual salary, were unreasonable.
Ms. Roberts began working for Miltner in 2012 as a customer service representative. Miltner employees Jayne Templeton and Katrina Ogburn purchased the agency in January 2018 and required employees to sign a nonpiracy agreement that prohibited the disclosure of proprietary information, such as company records and client lists, court records show.
The agreement included a liquidated damages provision that provided different remedies to Miltner depending on when a breach occurred. If the breach occurred in the first year after an employee’s departure, the agency could seek an amount equal to the former worker’s annual salary, court records show.
Shortly before resigning in January 2019 to work for a competing insurance group, Ms. Roberts “buccaneered” a copy of Miltner’s client list by emailing it to her personal account. Miltner sued Ms. Roberts in May 2020 for violations of the nonpiracy agreement, court records say.
Following a May 2021 trial, the lower court found the nonpiracy agreement was enforceable but it said Ms. Roberts’ possession of the client list was not a violation. Miltner appealed, and the decision was reversed, with the trial court being instructed to determine damages for Miltner.
On remand, the agency told the trial court it was entitled to $85,203, the total of all three remedies available under the liquidated damages provision. The trial court ruled the agency was entitled to the equivalent of Ms. Roberts’ annual salary. The parties appealed.
The appellate panel concluded that the liquidated damages award was not a penalty and that the trial court should decide if Miltner was entitled to attorney fees.
Representatives for the parties did not respond to requests for comment.
