Syntel Sterling Best Shores Mauritius Limited v. The Trizetto Group, Inc.

Background

Syntel Sterling Best Shores Mauritius Limited and Syntel, Inc. sued The TriZetto Group and Cognizant Technology Solutions Corp. after the termination of a Master Services Agreement involving customization and implementation services for TriZetto’s Facets software. Syntel asserted claims for breach of contract, intentional interference with contractual relations, and misappropriation of confidential information. The defendants asserted counterclaims for breach of contract, breach of the implied covenant of good faith and fair dealing, misappropriation of trade secrets, unfair competition, tortious interference with prospective business relations, and copyright infringement.

The parties filed cross-motions for partial summary judgment, which asks the court to decide whether the evidence presents any genuine dispute requiring a trial on particular claims. A magistrate judge recommended denying Plaintiffs’ motion and granting Defendants’ motion in part and denying it in part. The parties objected to portions of that recommendation.

Rulings on the Objections

The court adopted the report and recommendation in full. It agreed that the Master Services Agreement’s non-solicitation provision referred to employees of Syntel Mauritius, the entity defined as the “Service Provider.” The court rejected Syntel’s argument that the provision covered employees of Syntel, Inc. and Syntel affiliates or was ambiguous because Syntel Mauritius had no employees. Summary judgment was therefore granted to Defendants on Syntel’s breach-of-contract claim based on the non-solicitation provision.

The court declined to grant summary judgment to Defendants on Syntel’s confidential-information claims. It found that Syntel had identified information that could be confidential, including employee salaries, assignments, project history, evaluations, grade levels, billing rates, and strategic placements. The court also found that Syntel had presented sufficient damages evidence, while stating that disputes concerning the credibility and reliability of the evidence were for the factfinder. Defendants could raise their argument about whether the information was used to recruit employees at trial.

The court also declined to grant Syntel summary judgment on Defendants’ copyright counterclaim involving the Data Dictionary product. The court found factual disputes about whether Data Dictionary was part of Facets and whether it incorporated protected elements of Facets. It rejected Syntel’s objections to customer documents and testimony, concluding that the documents could be admissible business records and that the testimony and documents created an issue for a jury.

The court found no clear error in the unchallenged portions of the report. Those portions included denying Defendants’ motion for summary judgment on the trade-secrets counterclaim because factual disputes existed about whether the Facets test cases and automation scripts were trade secrets and whether Plaintiffs misappropriated them. The report also granted Defendants’ motion on Syntel’s tortious-interference claims except for the claim involving Defendants’ alleged inducement of five Syntel employees to breach their employment agreements and work for Defendants. It denied Syntel’s motion on the transition-rebates contract claim because factual disputes existed about whether Syntel adequately performed under the contract.

Disposition

Defendants’ motion for summary judgment was granted in part and denied in part. Summary judgment was granted to Defendants on the non-solicitation contract claim and on the tortious-interference claims, except for the claim involving the five employment agreements. Summary judgment was denied to Defendants on the confidential-information claims and the trade-secrets counterclaim.

Plaintiffs’ motion for summary judgment was denied as to the transition-rebates contract claim and Defendants’ copyright-infringement counterclaim.

The surviving claims and counterclaims were: Syntel’s contract claims based on confidentiality and transition rebates; tortious-interference claims concerning the five employment agreements; misappropriation of confidential information; Defendants’ contract and implied-covenant counterclaims against Syntel Mauritius; trade-secrets counterclaims against both Plaintiffs; unfair-competition and tortious-interference counterclaims against both Plaintiffs; and the copyright-infringement counterclaim against both Plaintiffs.