In an article published in Law360 on April 16, Boston partner Matthew Lindenbaum is quoted on the sanctions handed down to three IT executives as a result of the spoliation of evidence in Act III Management LLC, et al v. Panera Bread Company et al. The Delaware Chancery Court sanctioned the three executives for deleting or destroying records sought by Panera for its case in litigation over enforcement of “no-compete” rules for its ex-employees. While rejecting a Panera call for a default judgment against company founder and ex-CEO Ronald Schaich’s Act III Management LLP, Vice Chancellor Morgan T. Zurn found “spoliation” of evidence by all three IT executives, including one instance of “reckless and likely intentional” action. During oral arguments before the ruling, Lindenbaum pointed out that former executive James Kyle Phillips declined to let Panera make an “image” of his phone’s contents, allegedly to foil discovery that he had deleted the contents. “The danger here, if the sanction is not appropriate for these actions, is the incentive this creates for spoliation of evidence,” he added. 

Panera Bread Company and Panera LLC are represented by Myron T. Steel, John A. Sensing and Jesse L. Noa of Potter Anderson & Corroon LLP and Bret A. Cohen, Robert O. Sheridan, Thomas H. Hayman, Matthew G. Lindenbaum, Patrick T. Uiterwyk, P. John Veysey, Jillian Hart, Matthew T. Brown and Timothy M. Harvey of Nelson Mullins Riley & Scarborough LLP.