Paychex alleges former employee planned to share ‘playbook’ for new product launch

Paychex Inc. has sued a former mid-level manager in the payment products division, alleging he intends to pass confidential trade secrets to a competitor.

Paychex claims Eric Wade of Webster downloaded to his personal email account details and documents relating to a yet-to-be-launched product “that would be wholly unique in the payroll industry.”

The company is alleging breach of contract, breach of fiduciary duties and misappropriation of trade secrets.

In court papers filed Monday in State Supreme Court in Monroe County, the Fortune 1000 company contends Wade transferred from his Paychex email address to a private Gmail address an entire PowerPoint presentation detailing the specifics about upcoming new products.

The suit alleges Wade intended to take the information about real-time and pay-on-demand payroll features to his new employer, Patriot Software LLC of Canton, Ohio, a direct competitor, according to Paychex.

Wade had worked at Paychex since 1994 and moved into his most recent role, as product strategy manager for payroll products, in January 2020. He submitted his resignation on Oct. 11, with the intention of leaving the company on Oct. 28, but Paychex moved him out on Oct. 13 following discovery of the alleged theft of company secrets, court papers say.

The PowerPoint presentation allegedly taken by Wade included “confidential, proprietary and trade secret information” detailing the market need for the products, project build-out and launch costs, technical details on implementation, and a launch timeline, the lawsuit says.

“In short, the presentation contains the entire playbook and roadmap for the development and launch of a new Paychex product,” states the complaint, filed by Stephen J. Jones and Eric M. Ferrante of Nixon Peabody.

The complaint states Wade knew of the restrictions regarding proprietary information, and that he signed both a Confidentiality, Non-Solicitation and Non-Compete Agreement as well as a Restricted Stock Unit Award Agreements.

Paychex contends in the complaint that Patriot Software does not offer the products detailed in the PowerPoint presentation, and that Wade “was particularly keen on joining a company that would have an interest in — and need for — real time and pay-on-demand products.”

The lawsuit also alleges that Wade’s knowledge of Paychex’s confidential, proprietary and trade secret information and new product strategies “would give Patriot a distinctly unfair advantage in competing with Paychex for business,” and that his new employer would be able to launch a similar product.

Paychex is seeking monetary damages as well as injunctive relief, plus cancellation of all restricted stock awards in the previous 24 months.

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