Zagg, Inc. v. Dermot Keogh
C.A. No 2023-1275-KSJM
Del. Ch.Apr 7, 2025Background
- Dermot Keogh worked for ZAGG, Inc. for twelve years, rising to Associate Vice President, and signed a restrictive covenant agreement in 2023 following a promotion.
- Disappointed after being passed over for another promotion, Keogh resigned and joined myCharge, a ZAGG competitor.
- Upon learning of Keogh’s move, ZAGG sued Keogh (and initially myCharge) for alleged breaches of non-compete, non-interference, non-disparagement, and confidentiality provisions, as well as trade secret misappropriation.
- After litigation began, myCharge fired Keogh as part of a settlement; Keogh returned all ZAGG documents found on his home computer, at the court's direction.
- After his one-year non-compete expired, Keogh joined another competitor (PanzerGlass), prompting ZAGG to argue the non-compete should be "tolled" during litigation; PanzerGlass also terminated Keogh following ZAGG’s threats.
- The court held a one-day trial and, based on lack of proof from ZAGG, ruled in Keogh’s favor on all claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of Non-Compete | Keogh’s employment at myCharge and PanzerGlass was prohibited competitive activity | Keogh did not engage in any prohibited competitive activities; worked in unrelated roles | For Keogh: ZAGG failed to prove prohibited competition |
| Breach of Non-Interference | Keogh solicited ZAGG employees to leave/otherwise interfered | Keogh denied improper solicitation; no evidence of solicitation provided | For Keogh: No evidence of interference or spoliation |
| Breach of Non-Disparagement | Keogh made disparaging comments about ZAGG and its executives | Comments were private expressions of frustration and not actionable/harmful | For Keogh: No evidence of harm, damages, or actionable disparagement |
| Breach of Confidentiality/Trade Secrets | Keogh wrongfully retained/disclosed confidential info and trade secrets | Download/retention was unintentional, not prohibited; no use or disclosure occurred | For Keogh: No proof of use/disclosure or existence of protectable trade secrets |
| Tolling of Non-Compete | Non-compete period should be tolled during litigation | Restrictive period expired without breach; tolling unwarranted | For Keogh: Tolling arguments moot since no breach proved |
| Attorneys’ Fees | Sought fees under trade secret law | ZAGG’s conduct did not merit fee-shifting | No party awarded fees (no bad faith by ZAGG) |
Key Cases Cited
- Elenza, Inc. v. Alcon Lab’ys Hldg. Corp., 183 A.3d 717 (Del. 2018) (outlines elements for trade secret misappropriation under Delaware law)
- Montgomery Cellular Hldg. Co. v. Dobler, 880 A.2d 206 (Del. 2005) (explains the bad-faith exception to the American Rule for attorneys’ fees)
- Goodrich v. E.F. Hutton Gp., Inc., 681 A.2d 1039 (Del. 1996) (reiterates general presumption that parties bear their own attorneys’ fees)
- Johnston v. Arbitrium (Cayman Islands) Handels AG, 720 A.2d 542 (Del. 1998) (bad faith fee shifting should be applied in extraordinary circumstances)