IP Law Daily, TRADE SECRETS—E.D. Wash.: Staffing firm’s trade secrets claims against former employees partially survive summary judgment, (Feb 9, 2026)

By Saurabh Kashyap, B.A., M.A., LL.B., LL.M.

The court found no evidence of misuse of the asserted employee list but held that disputed facts over pre-departure solicitation precluded full dismissal.

A federal district court in Washington granted in part a renewed summary judgment motion and partially excluded expert testimony in a staffing firm’s trade secrets lawsuit against former employees and their competing venture, holding that only the theory alleging misuse of confidential client pricing and staffing needs raised triable factual disputes. The court dismissed the claim based on an alleged temporary-employee list, finding no evidence of unlawful acquisition or use, but allowed the pricing-and-needs theory to proceed based on circumstantial evidence of pre-departure client solicitation. On damages, the court permitted a narrowed lost-profits and disgorgement theory tied to revenues actually earned from former clients, while excluding speculative branch-wide revenue declines and long-term future loss projections. The court also rejected the request for attorney fees, finding no bad faith (Barrett Business Services, Inc. v. Colmenero, No. 1:22-cv-03122-TOR (E.D. Wash. Feb. 5, 2026)).

Background. The plaintiff, Barrett Business Services, Inc. (BBSI), provides human resources management and staffing services to small and medium-sized businesses. The defendants included former BBSI managers Charles Colmenero and Santiago Alejo and their newly formed staffing company, Repsel Associates, Inc., doing business as Personna Employer Services. Colmenero and Alejo resigned from BBSI in July 2022 and soon launched Personna, which later serviced several agricultural clients that had previously worked with BBSI.

The asserted trade secrets were limited on remand to two alleged compilations: (1) a temporary-employee list containing contact information, availability, work preferences, and skills; and (2) a compilation of clients’ pricing structures and staffing needs. Earlier, the district court had dismissed all trade secret claims for failure to show protectable secrets. The appellate court reversed in part, holding that genuine disputes existed as to whether the two compilations qualified as trade secrets. On remand, the district court assumed, solely for purposes of summary judgment, that both compilations constituted trade secrets and focused on misappropriation and damages.

The dispute arose after BBSI alleged that its former employees used confidential information to solicit BBSI clients and workers for Personna. BBSI filed suit under the Washington Uniform Trade Secrets Act (UTSA) and the federal Defend Trade Secrets Act (DTSA), among other claims. Following the appellate remand, the defendants moved again for summary judgment, arguing that BBSI lacked evidence of misappropriation and damages, and separately sought to exclude the opinions of BBSI’s damages expert, William Partin, under Rule 702 and Daubert. The court addressed both motions in a single order.

Rule of mandate. BBSI first argued that the appellate mandate barred a renewed summary judgment motion. The court rejected that contention, explaining that the appellate decision resolved only whether factual disputes existed as to the existence of trade secrets, not whether the defendants misappropriated them or caused damages. Citing United States v. Miller, 822 F.2d 828 (9th Cir. 1987), the court held that issues not expressly or implicitly decided on appeal remained open. Because misappropriation and damages are distinct elements under UTSA and DTSA, the mandate did not foreclose renewed summary judgment on those elements.

Misappropriation. Applying the statutory definitions of misappropriation under 18 U.S.C. § 1839(5) and RCW 19.108.010(2), the court held that BBSI failed to raise a genuine dispute that the defendants improperly acquired or used its temporary-employee list. BBSI relied largely on speculation that the defendants memorized or copied worker contact information. The record, however, showed that certain agricultural clients circulated position lists to multiple staffing agencies, sometimes identifying workers who had previously filled those roles. Where a client disclosed worker names to competing agencies, the court reasoned, a jury could not infer misappropriation by former employees. Viewing the evidence in the light most favorable to BBSI, the court concluded that no reasonable juror could find unlawful acquisition or use of the employee list and granted summary judgment on that theory.

However, the court reached a different conclusion on the pricing-and-needs compilation. Although ownership of that compilation as a trade secret remained a jury question under the appellate mandate, the court held that BBSI presented sufficient circumstantial evidence of use or disclosure to survive summary judgment. The court emphasized that, while employees may generally compete after departure, they remain under a duty not to use or disclose trade secrets to solicit customers. Citing Ed Nowogroski Ins., Inc. v. Rucker, 137 Wash. 2d 427 (1999), the court noted that solicitation based on confidential customer information may constitute misappropriation, even if the information is used piecemeal.

Here, deposition testimony supported an inference that Alejo met with a major BBSI client before resigning and pitched Personna by referencing service levels and cost advantages informed by BBSI’s confidential knowledge. Additional evidence showed that, months before Personna began operations, the defendants presented a “Personna Client List” to a payroll provider identifying several BBSI clients as “initial” or “future” targets. All listed companies were then current BBSI clients managed by the defendants. Combined with testimony that a confidential client list went missing from BBSI after the defendants’ departure, the court held that a reasonable juror could infer use of confidential pricing and need information to solicit clients. Summary judgment was therefore denied on that theory.

Damages and expert testimony. Turning to damages, the court addressed the admissibility of Partin’s expert opinions under Rule 702 and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). The court reiterated that lost profits must be proven with reasonable certainty, citing Eagle Group, Inc. v. Pullen, 114 Wash. App. 409 (2002). It also excluded any expert legal conclusions, citing United States v. Tamman, 782 F.3d 543 (9th Cir. 2015).

The court upheld Partin’s calculation of damages tied to revenues Personna earned from nine former BBSI clients managed by the defendants, reasoning that disgorgement is a recognized remedy for trade secret misappropriation. Citing Mason v. Sybron Corp., 955 F.2d 48 (9th Cir. 1992), the court held that this methodology rested on concrete invoices and historical contribution margins and could be tested on cross-examination. By contrast, the court excluded Partin’s broader analysis, attributing a multi-branch revenue decline and ten years of future losses to the alleged misappropriation. Those projections assumed misappropriation far beyond the narrowed trade secret theory and failed to isolate losses attributable to the pricing-and-needs compilation, rendering them speculative. The court therefore granted the exclusion motion in part while holding that the remaining damages evidence sufficed to create a triable issue.

Attorney fees. Finally, the court denied the defendants’ request for attorney fees under UTSA and DTSA, finding that BBSI’s partial survival of summary judgment precluded a finding of bad faith.

The Case is No. 1:22-cv-03122-TOR.

Judge: Rice, T.

Attorneys: Matthew J. Macario (Fisher & Phillips LLP) for Barrett Business Services Inc. Brendan Victor Monahan (Stokes Lawrence Velikanje Moore & Shore) for Charles Colmenero, Denell Hopkins, Santiago Alejo, Fatima Alejo, Respel Associates Inc. d/b/a Personna Employer Services.

Companies: Barrett Business Services Inc.; Respel Associates Inc. d/b/a Personna Employer Services

Cases: TradeSecrets WashingtonNews