Title: Williams v. Dominion Technology Partners

State: virginia

Issuer: Virginia Supreme Court

Document:

Present:  Hassell, C.J., Lacy, Keenan, Koontz, Kinser, and 
Lemons, JJ., and Carrico,1 S.J. 
 
DONALD WILLIAMS 
 
OPINION BY 
v.  Record No. 020392 
JUSTICE LAWRENCE L. KOONTZ, JR. 
 
February 28, 2003 
DOMINION TECHNOLOGY PARTNERS, L.L.C. 
 
FROM THE CIRCUIT COURT OF CHESTERFIELD COUNTY 
Cleo E. Powell, Judge 
 
This appeal arises from a judgment in favor of an employer 
against a former at-will employee on a motion for judgment 
seeking damages for an alleged breach of a fiduciary duty, 
tortious interference with a business relationship, and business 
conspiracy in violation of Code §§ 18.2-499 and 18.2-500. 
BACKGROUND 
Under well-settled principles of appellate procedure, we 
“consider the facts, some of which are disputed, in the light 
most favorable to the plaintiff, who is here armed with a jury 
verdict confirmed by the trial judge.”  Norfolk Southern Railway 
Co. v. Trimiew, 253 Va. 22, 25, 480 S.E.2d 104, 107 (1997). 
Dominion Technology Partners, L.L.C. (Dominion), based in 
Chesterfield County, is an employment firm specializing in 
recruiting qualified computer consultants and placing them, 
either directly or through third-party brokers, on a temporary 
                     
1 Chief Justice Carrico presided and participated in the 
hearing and decision of this case prior to the effective date of 
his retirement on January 31, 2003. 
basis with various companies.  Sometime in late 1998 or early 
1999, Dominion learned that Stihl, Inc. (Stihl), a power tool 
manufacturing firm, was seeking a computer consultant to oversee 
the installation of a new software package on computer systems 
at Stihl’s facilities in Virginia Beach. 
Dominion recruited Donald Williams as a possible candidate 
to fill the position at Stihl.  At that time, Dominion prepared 
two employment offers and presented them to Williams.  One offer 
provided that Williams would be a salaried employee of Dominion 
and receive compensation of $100,000 per year and various fringe 
benefits, regardless of whether Dominion was actually able to 
place Williams in a temporary position during the year.  This 
offer further provided that Williams would be required to “sign 
the standard confidentiality agreement” at a later date.  
Alternately, Dominion offered to employ Williams as an at-will 
employee, paying Williams $80 per hour.  As an at-will employee, 
Williams would receive no fringe benefits and would receive 
compensation only for work actually performed for a Dominion 
client.  Williams elected to work as an at-will employee. 
Williams was referred to Stihl for a placement interview. 
Stihl found that Williams was qualified to provide the computer 
consulting services that it required.  On January 22, 1999, 
                                                                  
 
 
2
Stihl entered into a contract with ACSYS Information Technology, 
Inc. (ACSYS), an employment brokerage company with its principal 
offices in the State of Georgia, to employ Williams for an 
initial period of three months.  The contract provided that if 
Stihl chose to directly employ Williams at a later date, ACSYS 
would receive a “conversion fee.”  The contract made no 
reference to Williams’ employment by Dominion. 
On January 28, 1999, ACSYS entered into a contract with 
Dominion for Williams’ services.2  The contract provided that 
ACSYS would “act as a brokering agent for [Dominion] to provide 
Information Systems Services . . . to clients of ACSYS.”  The 
contract was terminable by either party upon thirty days written 
notice, and included a provision requiring Dominion not to 
solicit business from any client of ACSYS during the term of the 
contract or for one year thereafter.  The contract did not 
include any terms prohibiting ACSYS from recruiting or directly 
employing current or former employees of Dominion. 
Subsequently, Williams performed computer consulting 
services for Stihl under a work order from ACSYS to Dominion 
beginning in January 1999.  Shortly after he began work at 
                     
2 The dates of the contracts seem to be inconsistent.  
However, the parties do not dispute that these dates are not 
significant because from the beginning, “ACSYS had the position 
at STIHL.  [It] did not have a person [to fill the position].” 
 
 
3
Stihl, ACSYS required Williams to sign a “project assignment” 
letter that included provisions, similar to those in the 
contract between ACSYS and Dominion, that Williams could not 
directly solicit Stihl or any other ACSYS client for additional 
work during the term of his assignment or for one year 
afterwards. 
According to Walt Yancey, information systems manager for 
Stihl’s Virginia Beach facility, Williams was responsible for 
the installation of a new software package related to Stihl’s 
computer word processing, production and materials planning, and 
customer shipment functions.  The installation was to be 
completed by April 1999 at the end of Williams’ initial three-
month assignment at Stihl.  The installation was completed on 
time, and Stihl decided to retain Williams in “a support and 
maintenance role” for an indeterminate period.  Williams’ 
assignment at Stihl was extended by agreement with ACSYS as 
reflected in a series of work orders from ACSYS to Dominion.  
The final work order, accepted by Dominion on January 14, 2000, 
provided that the duration of the assignment would be on “a 
monthly basis as dictated by client.” 
Under its contract with Stihl, ACSYS received $165 for each 
hour of work performed by Williams.  Dominion billed ACSYS $115 
for each hour of work performed by Williams, and, in turn, paid 
 
4
Williams $80 per hour.3  At some point during his work at Stihl, 
a copy of a work order from ACSYS to Dominion was mistakenly 
sent to Williams.  As a result, Williams learned that Dominion 
received $115 for each hour that he worked at Stihl. 
ACSYS learned that Stihl was considering a further software 
upgrade to its computer systems.  On February 17, 2000, Ryan 
Lenox, the “asset retention manager” for ACSYS,4 contacted 
Williams in an effort to determine whether Stihl had decided to 
go ahead with the software upgrade.  Williams told Lenox that, 
although no firm decision had been made, Yancey had indicated 
that Stihl would probably delay making the upgrade until 
sometime in June 2000 when a new version of the software was 
expected to be released.  Williams indicated to Lenox that “this 
is just an idea floating around STIHL.” 
During their conversation, Williams told Lenox that there 
had been a change in the ownership and management of Dominion 
and that, because of personality conflicts with the new 
management, Williams wanted to terminate his employment with 
                     
3 The work orders from ACSYS to Dominion also provided for 
an expense per diem, and Dominion billed ACSYS for Williams’ 
travel, lodging, and meals. 
 
4 Lenox’s duties as asset retention manager required him to 
contact clients and the employees placed by ACSYS to determine 
the status of their projects and to learn of any possible 
extensions or new business opportunities. 
 
 
5
Dominion.  Williams indicated that he would prefer to continue 
working at Stihl under a direct agreement with ACSYS.  However, 
he also told Lenox that he would seek other employment if that 
agreement could not be reached. 
Lenox was concerned initially that directly employing 
Williams might violate ACSYS’s contract with Dominion and 
advised Williams that he would “look into the matter.”  
Apparently after determining that the contract with Dominion did 
not bar ACSYS from recruiting Williams, Lenox called Williams 
later that same day.  He then inquired whether Williams was free 
to leave Dominion to work directly for ACSYS and, if so, what 
hourly rate of compensation Williams would want from ACSYS.  
Williams told Lenox about having learned that Dominion was paid 
$115 per hour for Williams’ work at Stihl and stated that he 
would accept $100 per hour from ACSYS.  Williams also told Lenox 
that he was “99.9% certain that he did not sign anything with 
Dominion” which would prohibit him from leaving his employment 
with Dominion to work directly for ACSYS. 
On February 21, 2000, Williams and Lenox had several 
telephone conversations concerning Williams’ desire to terminate 
his employment with Dominion, and Lenox subsequently was 
contacted by Dominion the following day.  Lenox recorded the 
substance of these conversations in a memorandum dated February 
22, 2000: 
 
6
Talked with Donald [Williams] yesterday several times.  
He has signed no paperwork with Dominion Technology.  
He wants to move ahead & come on board with us as a W2 
at $100@hr pay rate.  Discussed with [another ACSYS 
employee] & came up with following plan: Donald will 
contact Dominion and ask how much notice they have to 
give us—two weeks or longer (our contract with 
Dominion has a 30 day notice).  Donald plans not to 
tell them that he [is] staying at Stihl via us.  Got a 
call today from [Joseph] Delfino @ Dominion.  He said 
he was calling to let me know that Scott Webster [was] 
no longer at Dominion . . . “we got rid of him he did 
not leave us.”  He then asked whether we [were] still 
active in SAP marketplace as he was going to be in 
Atlanta next month and would like to come by and see 
us (This was his story since he did not know where 
ACSYS IT was located until he asked me – he thought we 
were in Richmond, VA).  He then asked how much longer 
Donald was going to be at Stihl.  I told him it was a 
month to month setup based on Stihl.  He wanted to 
know how often I talked with Stihl – every other 
month.  How often I talked with Donald – about once a 
month.  I called Donald after hanging up with Joe.  
Donald talked with [James] Delfino (Joe’s son who 
really runs Dominion Technology) last night and asked 
him how much notice he had to give them to give us as 
he was thinking about leaving.  I am sure that this is 
what triggered call from Joe.  Jim Delfino is going to 
get back with Donald later today. 
 
Williams told James Delfino that he wanted to terminate his 
employment with Dominion in order to pursue work opportunities 
closer to his home in the Richmond area.  James Delfino advised 
Williams that he was required to give Dominion at least 30 days 
notice before terminating his employment.  In a letter dated 
March 4, 2000, Williams formally tendered his resignation as an 
at-will employee of Dominion to be effective April 14, 2000.  
Williams stated in the letter that Dominion should advise ACSYS 
of his decision. 
 
7
James Delfino thereafter made inquiries to ACSYS concerning 
the possibility of “backfilling” Williams’ position at Stihl, 
that is, having Dominion supply another employee to take 
Williams’ place.  Although ACSYS did not expressly tell Dominion 
so, James Delfino concluded from the response to his inquiries 
“that there was no opportunity for us to fill the position.”  In 
May 2000, Dominion learned that Williams had continued working 
at Stihl as an ACSYS employee after April 14, 2000.  Ultimately, 
Williams remained at Stihl as an ACSYS employee until June 1, 
2001.  During that time, ACSYS paid Williams $115 per hour, 
rather than the $100 per hour that had been previously 
discussed, and Stihl continued to pay $165 per hour to ACSYS for 
Williams’ work at Stihl. 
On July 11, 2000, Dominion filed a motion for judgment 
against Williams alleging breach of contract, tortious 
interference with business relationships and prospective 
business relationships, breach of fiduciary duty, and business 
conspiracy in violation of Code §§ 18.2-499 and 18.2-500.  
Although the allegations of the motion for judgment relevant to 
the business conspiracy count named ACSYS as a party to the 
alleged conspiracy, ACSYS was not named as a defendant in the 
suit.  For each theory of liability, Dominion sought damages of 
“$150,000, an amount Dominion estimates it would have earned 
under its ACSYS contract with Williams, or another employee 
 
8
performing the service Williams now provides to Stihl.”  
Dominion also sought punitive damages of $100,000 for breach of 
fiduciary duty and business conspiracy.  Finally, Dominion 
sought an award of treble damages for the business conspiracy 
pursuant to Code § 18.2-500, and requested that it be awarded 
attorneys’ fees. 
Williams filed a demurrer to the claim for breach of 
contract and grounds of defense asserting general denials 
regarding all counts of the motion for judgment.  In a letter 
opinion dated September 13, 2000, the trial court opined that 
there were insufficient allegations of a contract between 
Williams and Dominion in the motion for judgment and that the 
demurrer to the breach of contract claim would be sustained.  
Although the trial court never entered an order memorializing 
this ruling, the parties thereafter agreed that Williams was an 
employee-at-will and that he was not bound by any express 
confidentiality or non-compete agreement with Dominion. 
A jury trial was held on August 22, 2001, at which evidence 
in accord with the above-recited facts was received.  At the 
conclusion of Dominion’s case-in-chief and again at the 
conclusion of the presentation of all evidence, Williams moved 
to strike Dominion’s evidence on the ground that it had not 
proved the existence of a fiduciary duty owed by him as an at-
will employee to Dominion or that his actions had breached any 
 
9
duty.  Williams further asserted that he could not be guilty of 
a business conspiracy with ACSYS because he was effectively an 
agent of ACSYS, and an agent cannot conspire with a principal.  
The trial court denied the first motion to strike, but took the 
remaining motion to strike under advisement and submitted the 
case to the jury.  The jury returned its verdict in favor of 
Dominion, awarding it $27,000 compensatory damages and $20,000 
punitive damages for breach of fiduciary duty, $27,000 damages 
for tortious interference with business relationships, and 
$27,000 damages for participation in a business conspiracy in 
violation of Code §§ 18.2-499 and 18.2-500. 
Williams filed a motion to set aside the jury’s verdict.  
In a letter opinion dated October 26, 2001, the trial court 
addressed the argument made by Williams in moving to strike the 
business conspiracy claim.  The trial court concluded that 
whether Williams was an agent of ACSYS during his employment by 
Dominion was a factual matter and that the jury had resolved the 
issue against Williams.  The trial court further opined that 
Williams’ breach of fiduciary duty constituted sufficient “lack 
of legal justification” to support finding a business 
conspiracy. 
In a final order dated November 14, 2001, the trial court 
entered judgment on the jury’s verdict, awarding treble damages 
for the business conspiracy under Code § 18.2-500, and 
 
10
attorneys’ fees and costs totaling $22,801.05.  In an order 
dated April 23, 2002, we awarded Williams this appeal. 
DISCUSSION 
Although the judgment awarded to Dominion against Williams 
in the trial court was founded upon three different theories of 
liability:  breach of a fiduciary duty, interference with 
business relationships, and statutory business conspiracy, the 
essential facts asserted to support each theory are intricately 
interrelated in this particular case.  The significance of that 
interrelationship will become apparent hereafter as we consider 
each of these theories of liability. 
We have long recognized that under the common law an 
employee, including an employee-at-will, owes a fiduciary duty 
of loyalty to his employer during his employment.  See, e.g., 
Horne v. Holley, 167 Va. 234, 241, 188 S.E. 169, 172 (1936).  
Subsumed within this general duty of loyalty is the more 
specific duty that the employee not compete with his employer 
during his employment.  Hilb, Rogal & Hamilton Co. of Richmond 
v. DePew, 247 Va. 240, 249, 440 S.E.2d 918, 923 (1994).  
Nonetheless, in the absence of a contract restriction regarding 
this duty of loyalty, an employee has the right to make 
arrangements during his employment to compete with his employer 
after resigning his post.  The employee’s right in such 
circumstances is not absolute.  Rather, “[t]his right, based on 
 
11
a policy of free competition, must be balanced with the 
importance of the integrity and fairness attaching to the 
relationship between employer and employee.”  Feddeman & Co. v. 
Langan Assoc., 260 Va. 35, 42, 530 S.E.2d 668, 672 (2000).  
Thus, “[u]nder certain circumstances, the exercise of the right 
may constitute a breach of fiduciary duty. . . .  Whether 
specific conduct taken prior to resignation breaches a fiduciary 
duty requires a case by case analysis.”  Id.
In Glass v. Glass, 228 Va. 39, 51, 321 S.E.2d 69, 76-77 
(1984), we recognized the existence of the tort of interference 
with a business relationship.  We summarized the elements of a 
cause of action for this tort as follows:  “(1) the existence of 
a business relationship or expectancy, with a probability of 
future economic benefit to plaintiff;  (2) defendant’s knowledge 
of the relationship or expectancy;  (3) a reasonable certainty 
that absent defendant’s intentional misconduct, plaintiff would 
have continued in the relationship or realized the expectancy; 
and (4) damage to plaintiff.”  Id. at 51-52, 321 S.E.2d at 77. 
Code § 18.2-500 provides civil damages for violation of 
Code § 18.2-499, which, in pertinent part, imposes such 
liability against “[a]ny two or more persons who combine, 
associate, agree, mutually undertake or concert together for the 
purpose of (i) willfully and maliciously injuring another in his 
. . . business . . . by any means whatever.”  In order to 
 
12
sustain a claim for this statutory business conspiracy, the 
plaintiff must prove by clear and convincing evidence that the 
defendants acted with legal malice, that is, proof that the 
defendants acted intentionally, purposefully, and without lawful 
justification, and that such actions injured the plaintiff’s 
business.  See Feddeman & Co., 260 Va. at 44, 530 S.E.2d at 673-
74. 
Dominion concedes that because he was an at-will employee, 
Williams could have terminated his employment with Dominion at 
any time and without any requirement, in terms of a fiduciary 
duty, to show good cause for doing so.  Moreover, Dominion also 
concedes that had Williams terminated his employment and then 
immediately offered his services to ACSYS, there would be no 
basis for asserting that this constituted a breach of a 
fiduciary duty to his former employer.  Thus, the essence of 
Dominion’s assertions against Williams for damages under each 
theory of liability, whether denominated as a “breach of a 
fiduciary duty,” “intentional misconduct,” or a conspiratorial 
act of “legal malice,” is that Williams, after having learned 
that his services as a computer consultant were likely to be 
needed at Stihl for an extended period of time, and while still 
an employee of Dominion, arranged with ACSYS to become its 
employee effective upon his resignation from Dominion. 
 
13
The dispositive question to be resolved regarding all three 
theories of liability is whether this conduct, which was 
undoubtedly proved by the evidence, was sufficient to constitute 
a breach of Williams’ fiduciary duty of loyalty to Dominion.  
Whether such a duty exists is a question of law to be determined 
by the trial court.  If the evidence is sufficient to establish 
a duty as a matter of law, only then will it become a matter for 
the jury to determine whether the duty has been breached. 
In applying a case by case analysis to determine whether 
specific conduct taken by an employee breaches a fiduciary duty 
of loyalty, the courts must be mindful that the fact that 
particular conduct of an employee caused harm to his employer 
does not establish that the conduct breached any duty to the 
employer.  This is so because the law will not provide relief to 
every “disgruntled player in the rough-and-tumble world 
comprising the competitive marketplace,” especially where, 
through more prudent business practices, the harm complained of 
could easily have been avoided.  ITT Hartford Group, Inc. v. 
Virginia Financial Assocs., Inc., 258 Va. 193, 204, 520 S.E.2d 
355, 361 (1999). 
We have recognized that certain conduct by an employee 
during the term of his employment will clearly constitute a 
breach of the duty of loyalty he owes to his employer.  
Principally, an employee must not have “misappropriated trade 
 
14
secrets, misused confidential information, [or] solicited an 
employer’s clients or other employees prior to termination of 
employment.”  Feddeman & Co., 260 Va. at 42, 530 S.E.2d at 672.  
While this list is by no means exhaustive, it is indicative of 
the types of conduct by an employee that the common law will not 
condone in an employment relationship. 
Dominion does not contend that the information that Stihl 
was considering a further upgrade to its software was a “trade 
secret” or “confidential information” that was exclusive or 
proprietary to Dominion.  To the contrary, James Delfino 
testified that Dominion subsequently obtained the same 
information from an independent source.  In his testimony, 
Delfino agreed with the characterization of the information as 
“important,” asserting that it would have led Dominion to make 
inquiries as to whether “we could help them with that.”5  In 
effect, Dominion considered the information a business 
opportunity or “lead” not unlike the information that caused 
them to seek out Williams as a potential employee in the first 
instance. 
                     
5 Delfino further maintained that because Dominion had prior 
contacts with Stihl, it could have directly solicited Stihl 
without going through ACSYS.  Although the issue is not before 
us, we note that under the terms of its contract with ACSYS, the 
prohibition on Dominion against soliciting additional work from 
ACSYS’s clients contains no express exceptions. 
 
 
15
In this context, Williams simply knew that there was a 
possibility, perhaps even a probability, that within four to six 
months Stihl would make a business decision that would require 
it to continue his services as a computer consultant or to 
acquire the services of someone equally qualified.  Williams had 
the right to make the necessary arrangements to resign from his 
employment with Dominion in such a way as to take advantage of a 
higher level of compensation if his services at Stihl were 
needed beyond the month-to-month arrangement then in place, so 
long as these arrangements were not disloyal or unfair to 
Dominion. 
Williams tendered his resignation to Dominion in such a 
manner as to permit Dominion to comply with its contractual 
obligation to ACSYS.  Williams and ACSYS both took care to 
assure that there was no contractual bar to their contemplated 
actions.  As Williams and ACSYS discovered, Dominion had not 
sought a non-compete agreement from Williams or ACSYS, which 
would have prohibited their subsequent contractual arrangement.  
In such circumstances, it cannot be said that Williams’ conduct 
to safeguard his own interests was either disloyal or unfair to 
Dominion.  Rather, we are of opinion that Dominion’s contracts 
provided it with nothing more than “a subjective belief or hope 
that the business relationship[s] would continue and merely a 
possibility that future economic benefit would accrue to it.”  
 
16
Commercial Business Systems, Inc. v. Halifax Corp., 253 Va. 292, 
303, 484 S.E.2d 892, 898 (1997). 
Moreover, Williams’ conduct, certainly taken out of self-
interest, did not rob his employer of any objective or tangible 
business opportunity or expectancy.  To the contrary, by 
providing reasonable notice of his intent to resign his post and 
permitting Dominion to fulfil its obligation to ACSYS, Williams 
allowed Dominion to receive all the benefits for which it had 
bargained.  Dominion’s disappointment that its hopes did not 
bear the expected additional benefit it might have obtained 
under a different contractual agreement with ACSYS does not 
translate into a breach of any fiduciary duty Williams owed to 
Dominion. 
CONCLUSION 
For these reasons, we hold that the trial court erred in 
ruling as a matter of law that Dominion’s evidence was 
sufficient to establish that Williams had a fiduciary duty to 
Dominion under the circumstances of this case and permitting the 
jury to determine whether Williams breached such a duty.  
Because the same conduct was alleged to constitute the proof of 
the “intentional misconduct” and “legal malice” elements of the 
two other theories of liability presented by Dominion, there was 
no basis for the jury finding for Dominion on those counts as 
 
17
well.  Accordingly, we will reverse the judgment in favor of 
Dominion, and enter final judgment for Williams. 
Reversed and final judgment. 
 
18