Company claims senior employees took confidential data and recruited staff to launch a rival
A new lawsuit filed October 20, 2025, in Atlanta claims a group of senior employees plotted a mass exit, took trade secrets, and launched a rival firm—leaving their former employer reeling.
SGS North America, Inc., a company specializing in construction materials testing, is suing four former employees and their new company, Material TEC, LLC, in federal court. The complaint, filed in the United States District Court for the Northern District of Georgia, alleges the defendants not only left together but also took confidential files, solicited colleagues, and used a similar company name to cause confusion among customers.
According to the lawsuit, the situation began in May 2024, when Shawn McCormick, then a business development and technical manager at SGS, organized Material TEC, LLC in partnership with a former SGS customer. The complaint states that McCormick included “TEC” in the new company’s name to create confusion and mislead customers into believing Material TEC was affiliated with SGS TEC Services. SGS claims that four customers have mistakenly sent materials to SGS TEC for testing when they meant to send them to Material TEC.
The complaint further alleges that McCormick, along with William Cooper, Michael Lyon, and Caleb Howard—all of whom held key positions at SGS—coordinated their departure and the formation of a competing company while still employed. While still working at SGS, the group allegedly performed free work for a customer without permission or disclosure, solicited other employees to resign, and copied confidential business information onto personal USB drives. For example, the lawsuit claims Cooper performed or directed approximately $43,000 of services for McCormick’s business partner and did not submit bills for this work, in violation of SGS policy.
The lawsuit also describes the timeline of resignations and terminations. Cooper and Lyon notified SGS on January 3, 2025, that they were resigning effective January 31, 2025, and both joined Material TEC immediately afterward. McCormick was terminated for cause on July 31, 2025, after SGS discovered he had secretly established a competing business. Howard also left SGS for Material TEC. After their departure, the complaint alleges, the group continued to attend industry events identifying themselves as SGS representatives, which created confusion in the marketplace.
SGS claims that the loss of confidential information and key staff could result in the loss of its entire $3.5 million annual laboratory revenue once Material TEC becomes fully operational and able to use SGS’s confidential information. The complaint also alleges that some devices containing SGS’s confidential information have not been returned, raising concerns about ongoing use of proprietary data.
For HR professionals, the case highlights the risks associated with employee departures, especially when senior staff have access to sensitive information and client relationships. The complaint underscores the importance of clear codes of conduct, confidentiality agreements, and thorough offboarding procedures to protect company assets.
It is important to note that these are allegations made in a complaint. The case is pending in the United States District Court for the Northern District of Georgia, and no findings of fact have been made. The outcome remains to be determined.
