Acclaim Systems Inc v. Infosys Limited
679 F. App'x 207
| 3rd Cir. | 2017Background
- Acclaim and Infosys both provided IT services to Time Warner Cable (TWC) on a Sales Force Dot Com (SFDC) project; TWC transferred the project from Acclaim to Infosys in 2013 for cost reasons.
- Four SFDC team members (employee Timothy Blackwell and subcontractors Santhosh Nellutla, Pavan Jasthi, Leslie Mendonca) had non-compete agreements with Acclaim restricting work on the project.
- Infosys knew the four previously worked for Acclaim but, during hiring, asked each whether they had non-competes and was told "no." Blackwell completed an application denying restrictions; the three subcontractors’ employers (Global InfoTech, SysIntelli) likewise failed to disclose non-competes.
- Infosys onboarded the subcontractors through its vendor VedaInfo; whether VedaInfo independently checked non-competes is disputed.
- Acclaim sued after TWC cancelled Acclaim’s contract and transferred the work; the district court granted summary judgment for Infosys on tortious interference for lack of evidence Infosys knew of the non-competes.
- The Third Circuit affirmed, holding Acclaim produced insufficient evidence of actual knowledge or willful blindness by Infosys to survive summary judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Infosys had actual knowledge of non-competes (intent element for tortious interference) | Infosys should be charged with knowledge via circumstantial evidence (industry practice, flawed questioning, use of VedaInfo) | Infosys asked each worker and intermediaries and was affirmatively told there were no non-competes; no direct evidence of knowledge | No — plaintiff failed to show genuine dispute of actual knowledge; summary judgment affirmed |
| Whether willful blindness can substitute for actual knowledge | Infosys deliberately avoided learning the truth (sham due diligence; use of VedaInfo) | Infosys made direct inquiries; no evidence of conscious purpose to avoid the truth | No — record lacks evidence of conscious avoidance; speculative arguments insufficient |
| Whether inadequate questioning establishes liability (negligent interference) | Infosys asked the "wrong" questions and should have dug deeper into contracts of intermediaries | Infosys’ inquiries asked whether restrictions existed; answers were negative, and negligent inquiry is not tort | Court treated this as negligence, not sufficient for tortious interference; plaintiff fails |
| Whether using VedaInfo created a pretext for hiding knowledge | VedaInfo acted as a smokescreen; low margin suggests sham and concealing info | No evidence Infosys used VedaInfo to hide knowledge; argument is circular speculation | No — speculative inferences about VedaInfo cannot create a genuine fact issue |
Key Cases Cited
- Giles v. Kearney, 571 F.3d 318 (3d Cir. 2009) (standard of appellate review on summary judgment)
- Anderson v. Liberty Lobby, 477 U.S. 242 (U.S. 1986) (summary judgment and the reasonable jury standard)
- Burton v. Teleflex Inc., 707 F.3d 417 (3d Cir. 2013) (elements of tortious interference under Pennsylvania law)
- Mylan Inc. v. SmithKline Beecham Corp., 723 F.3d 413 (3d Cir. 2013) (requirement of actual knowledge of contract for tortious interference)
- Acumed LLC v. Advanced Surgical Servs., Inc., 561 F.3d 199 (3d Cir. 2009) (Pennsylvania follows Restatement for interference claims)
- Lexington Ins. Co. v. W. Pa. Hosp., 423 F.3d 318 (3d Cir. 2005) (speculation cannot create genuine issue of material fact)
- Aikens v. Balt. & Ohio R.R. Co., 501 A.2d 277 (Pa. Super. Ct. 1985) (negligent interference is not a tort)
- Posner v. Lankenau Hosp., 645 F. Supp. 1102 (E.D. Pa. 1986) (defendant need not know precise contract terms to be liable, but must know the contract right)