Datto Lawsuit: Ex-Employee Took Trade Secrets, Confidential Info to New Job at ConnectWise

Datto says the information could give ConnectWise a competitive advantage.

Edward Gately, Senior News Editor

October 23, 2020

4 Min Read

A Datto lawsuit claims a former employee took trade secrets and confidential information he could potentially use on his job with ConnectWise.

The lawsuit was filed in U.S. District Court in Florida and Daniel Moore is the defendant. He previously was Datto’s director and head of commercial operations for APAC and EMEA. Datto deemed Moore redundant and his last day was July 31.

Moore is now vice president of sales operations at ConnectWise.


Daniel Moore

Datto said it sued due to Moore’s “unlawful misappropriation of Datto’s valuable trade secrets and other confidential information to use at a direct competitor, ConnectWise … and to unlawfully gain a competitive advantage in the marketplace.”

It also arises from Moore’s breach of a noncompete agreement with Datto Europe. He was to refrain from competing with Datto Europe for six months following his departure.

Datto claims breach of contract, and violations of the Defend Trade Secrets Act, the Florida Uniform Trade Secrets Act and the Computer Fraud and Abuse Act. It is seeking injunctive relief and damages.

We couldn’t reach Moore for comment.

Datto became a publicly traded company this week.

Highly Confidential Information

“Subsequent to leaving Datto’s employment, Moore unlawfully armed himself with dozens of documents containing highly confidential information about Datto’s customer base, pricing, sales, key customer targets and more,” the complaint said. “These documents were among the most valuable and confidential information from Datto’s sales organization, which would give an unfair competitive advantage to anyone trying to compete against Datto, including Moore’s new employer, ConnectWise.”

Moore and ConnectWise can use Datto’s confidential information to target Datto’s existing and prospective customers and partners, it said. They also can undercut Datto’s pricing without having to “invest their own time and money in market research and analysis, customer relationship development and curation of product offering,” it said.

“Furthermore, Moore’s possession of documents and knowledge regarding Datto’s global business strategies provides ConnectWise with a road map it can leverage to isolate its efforts on specific geographic markets and products that Datto has already vetted as commercially valuable and viable,” the complaint reads.

Moore was based in the United Kingdom, and responsible for Datto’s sales operations in EMEA and APAC. However, he had access to Datto’s “most sensitive and confidential information” on a global level, including financial data and metrics, the lawsuit alleges.

Global Strategies and Information

Datto said Moore has firsthand knowledge of its confidential global business strategies and information. That includes:

  • Upcoming global launch plans and road maps for new products, services and markets.

  • Sales numbers for each sales employee, in each market and for each product.

  • Commission structure and incentive plans.

  • Most recent pricing strategies.

  • Global 2020 go-t0-market strategy.

  • Cost of goods sold and profit margins on each product.

  • Global client list with each MSP’s contact information, relationship and sales history.

  • Strengths and weaknesses of Datto’s products from a selling and MSP perspective.

  • Various products Datto intends to market to certain MSP partners in the near future.

  • Business, financial, growth and investment plans for its global business over the next 12 months.

Moore’s access to Datto’s confidential information gives him a “comprehensive understanding of Datto’s strengths, weaknesses and priorities in markets throughout the world,” the suit alleges.

ConnectWise Response

Jason Magee, ConnectWise‘s CEO, said the lawsuit is “between Datto and their former employee.”


ConnectWise’s Jason Magee

“Although ConnectWise is mentioned, we are not a party to the litigation,” he said. “Based on some of the claims, which ConnectWise takes very seriously, we have taken the following immediate actions. We have made contact with the attorneys representing Datto. The employee has been placed on paid leave while ConnectWise conducts a thoughtful and fair investigation into the allegations. After it has concluded its investigation, ConnectWise will make a well-informed and balanced decision as to its next steps, taking into account all of the information ConnectWise’s investigation uncovers.”

ConnectWise “strongly rejects” any insinuation or claims that ConnectWise engaged in any inappropriate conduct, Magee said.

“At no time was ConnectWise aware of or knowingly in possession of any confidential or proprietary information belonging to Datto,” he said.

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About the Author(s)

Edward Gately

Senior News Editor, Channel Futures

As news editor, Edward Gately covers cybersecurity, new channel programs and program changes, M&A and other IT channel trends. Prior to Informa, he spent 26 years as a newspaper journalist in Texas, Louisiana and Arizona.

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