Foss: Employee Stole Secrets

By Patrick Cronin

Hampton Union, Tuesday, January 24, 2006

[The following article is courtesy of the Hampton Union and Seacoast Online.]

HAMPTON -- The bankrupt Foss Manufacturing is suing a former employee who left in December alleging he stole confidential information to benefit his new employer.

Patrick O'Malley, the trustee overseeing the company during bankruptcy proceedings, filed the suit against Steven Eisendrath, who worked in the company's Decorative Products Division until the beginning of January.

The suit also names Eisndrath's new employer, Rontex America.

According to court documents, O'Malley is accusing Eisendrath of working with Rontex while he was a Foss employee to steal a contract Foss had with Truck Accessories Group.

Foss, which manufactures non-woven fabrics and synthetic fibers, provided Truck with Fossliner as the interior liner for the tuck caps the company sells.

Losing the contract cost Foss roughly $857,000 in annual sales.

Foss Manufacturing claims Eisendrath was negotiating with Truck Accessories Group to renew its annual contract with the company before he resigned from Foss.

On the day he resigned from Foss, Eisendrath sent out an e-mail to Truck Accessories to persuade the company to give the contract to Rontex, which never competed in the truck cap market before.

The Rontex bid was 27 percent below what Foss bid on the contract.

O'Malley stated there were several phone calls between Rontex and Eisendrath made on Foss company cell phones.

Eisendrath also is accused of copying the company's trade secrets that were on computer files that he allegedly used to underbid Foss and get the contract for Rontex.

Foss Manufacturing is seeking damages and lawyer fees for what transpired and to force Eisendrath to return the company's trade secrets and other Foss property to the company.

"The actions by Eisendrath and Rontex have and will continue to have a material and adverse effect upon Foss's efforts to sell its business," O'Malley stated in court documents. "The possible loss of customers, the disclosure of trade secrets and unfair competition by Rontex all will diminish the value of Foss in the marketplace."