A signed loyalty pledge, a shared resume, and split placement fees drove the ruling
A New York appeals court on June 30, 2026 upheld a ruling against a recruiting firm that misused a rival's confidential candidate data.
For anyone who runs a talent function, the case is a cautionary one. A recruiter was passing his employer's candidate information to a competitor - and a New York court has now made that competitor pay.
At the center is Columbia Technology Corp, an information technology recruiting and staffing company that placed candidates with financial services clients and earned a commission on each successful hire. The company treated its candidate database as confidential information and a trade secret.
According to the company, one of its own recruiters passed candidate names from that database to EJR Search Partners, a rival firm run by two principals. EJR then placed those candidates with its own clients and kept the fees.
Two placements sat at the heart of the case, and the court treated them differently.
The first was a trade-secret question. EJR used one candidate's information, pulled from Columbia Technology's database, to place him and earned a $45,787 commission. EJR's principals argued they had known the candidate and his availability all along, so no secret was in play. The court was not persuaded. The secret, it said, was never the candidate's existence. It was the up-to-date resume the recruiter had taken from the database - a document capturing recent experience an older copy would have missed.
The second placement turned on client relationships. After the recruiter was fired, he leaned on a Columbia Technology contact at Nomura to place another candidate there, then split the $22,000 fee with EJR. The trial court found that contact had belonged to Columbia Technology before the recruiter ever arrived, pointing to an email between the company's chief executive and the contact that pre-dated his hire.
Here a familiar HR document did the work. The recruiter had signed a Duty of Loyalty Agreement when he joined, promising to keep client information such as the Nomura relationship confidential, and had confirmed the promise would hold after he left. The court found he broke it, using the company's proprietary client information for EJR's benefit after his termination. On that basis, it held EJR liable for his misuse of that information.
The Appellate Division, First Department, affirmed the outcome without dissent. It left standing the finding that EJR and its principals were liable, along with a damages award of $12,951.37 and $48,614.50. Courts, the panel noted, may treat a defendant's gains as a stand-in for compensatory damages in an unfair competition case.
For the people who draft and enforce these agreements, the case shows what they are for. It turned on a signed loyalty pledge, a confidentiality promise that outlived the job, and a database the company guarded as its own. The ruling was unanimous, and no costs were awarded.
