Plitt Wins IPAC Arbitration Case

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Plitt Wins IPAC Arbitration Case

An arbitrator last month issued a final award exonerating a former executive of International Petroleum Products & Additives Co. of violating terms of his employment after leaving the company in 2016.

The decision may wrap up the case of for the former executive, Steven Plitt, who was originally accused of misappropriating trade secrets. IPAC dropped that claim in January of 2021, shortly before the case was heard by California arbitrator Lizbeth Hasse.

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IPAC is based in Dublin, California, and markets lube additive packages for a range of industrial and automotive applications, along with individual additive components. Plitt was vice president of international sales and vice president of marketing and new business development when he left the company in 2016. He went to work for Reladyne, one of the nation’s largest lubricant distributors.

When Plitt departed IPAC he signed a separation agreement in exchange for $94,000. The case heard by Haase was filed in 2018 and claimed that he violated three clauses in that agreement: that he failed to return all of IPAC’s property when he left the company; that he violated an agreement not to recruit any IPAC employees for three years after his departure; and that he damaged IPAC by assisting Black Gold S.A.R.L. in a related complaint brought by IPAC.

IPAC also complained that Plitt interfered with its business by trying to steal customers. It asked that he be ordered to return the $94,000 payment made as part of the separation agreement.

Haase said the additive supplier did not prove any of its claims. IPAC did not provide compelling testimony or evidence to support a claim, she said, that Plitt destroyed or erased company files from a company computer that he returned upon leaving. She said IPAC failed to rebut Plitt’s contention that a text message sent to an IPAC employee Jeff Melendez in 2018 – after Plitt moved to Reladyne – was proposing a potential RelaDyne purchase from IPAC and was not an attempt to recruit the employee.

Haase noted that the same lawyers representing Plitt also represented Black Gold in its arbitration case, but she added that Plitt did not testify in that case and that Black Gold was only defending itself against IPAC’s claims, and did not file any counterclaims against IPAC.

IPAC’s claim of tortious interference in its business was based on a January 2018 text exchange between Plitt and Melendez that IPAC officials interpreted as Plitt trying to secure business for RelaDyne with two IPAC customers – Valley Industrial Products and Tomlin – at the exclusion of IPAC. Haase said Plitt testified that his intent was to bring about a deal that would have benefited IPAC. Haase concluded that IPAC failed to make a connection between its business relationships and damages suffered by the company.

Haase denied IPAC’s claims and instead ordered that it pay Plitt $236,908 to reimburse for attorney fees and other costs incurred during the case. IPAC may appeal the ruling. The company did not respond to a request for comment.

IPAC originally accused both Black Gold and Plitt of misappropriating trade secrets. Black Gold is based in Monaco and formerly was a distributor of IPAC products in Europe from 2016 to 2018. While Plitt was at RelaDyne, he and Black Gold co-owner Lorenzo Napoleoni – along with several other individuals – formed PXL Chemicals, a lube additive supplier based in Ohio.

IPAC claimed that PXL products were based on IPAC trade secrets. Plitt denied all along retaining confidential IPAC information when he left the company and likewise denied that any confidential IPAC information was used in the development or production of PXL products. IPAC withdrew its trade secret misappropriation claim against him in January of last year.

IPAC did win its case against Black Gold and Napoleoni as another arbitrator concluded in 2020 that they did misappropriate IPAC intellectual property. Black Gold was ordered to pay $1.1 million in damages and costs, but IPAC has not collected. Black Gold filed for bankruptcy protection in 2020. IPAC claims the bankruptcy was a ruse to avoid payment and is seeking an order that the award still be paid.

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