First American Title Company of Napa is suing at least three of its former employees, alleging that they resigned at the same time and took confidential information with them to competitor Placer Title Company, according to the lawsuit filed in Napa County Superior Court on Tuesday.
The suit alleges that Larry Frattini, former senior escrow officer, president and longtime member of the company’s corporate board, and Mitchell Glotzer, former chief administrative officer, vice president and member of the board of directors, both knew that Placer Title Company would be opening a branch in Napa while they were still employed with and/or active in the board between Jan. 1, 2017 and Jan. 3, 2018.
Despite this, the suit says, neither Frattini nor Glotzer informed First American Title that the competitor was planning to open in Napa. On top of that, the suit alleges, both men secured positions with the competitor and assisted in recruiting other First American Title employees to also work with Placer.
Frattini then approached Leilani Sue Burguin, former marketing director at First American, and solicited her for the company’s existing list of high-end brokers whose clients did business with the company, according to the suit. Burguin provided this list, alleges the suit.
First American believes that Frattini intended to use the information in preparation for his new position at Placer and that Burguin was aware of his intention.
Burguin later forwarded the company’s’ entire 244-page confidential contact list to her own personal email account, the suit alleges, violating First American’s company policies. She also used First American computer resources to compile a list of employees who were planning a coordinated departure from the company, according to the suit.
Several employees, including Frattini and Burguin, left the company on Jan. 3, soon after receiving their year-end incentives, the suit alleges.
First American Title of Napa, which has offices in Napa, St. Helena, Benicia and Walnut Creek, is suing all three former employees for alleged misappropriation of trade secrets, breach of duty of loyalty, intentional interference with prospective economic benefit, unfair competition and conspiracy. In the same suit, the company is suing Frattini and Glotzer for an alleged breach of fiduciary duty and Burguin for alleged computer fraud.
Frattini, Glotzer, and Burguin’s Napa attorney, Kevin Block, said that they deny the allegations, but confirmed that all three former employees now hold positions at Placer Title Company’s Napa branch.
Block is considering filing a cross-complaint against First American alleging infliction of emotional distress, a toxic work environment, mismanagement and other employment infractions, Block said.
“There’s a reason a number of employees left and it has nothing to do with Placer,” he said. Block said that the blame falls on First American’s CEO Johnny Karpuk. “It was a great place to work until Karpuk took over.”
Karpuk denies that there was a toxic work environment at First American, and said he was “taken aback” by the accusation.
“I definitely thought everything seemed fine and good,” he said. “We just finished our best year ever in 2017 … As far as I could tell, the team was in great shape, everyone was committed and everyone was happy.”
Karpuk said that he considers Frattini, Glotzer, and Burguin “family,” but he felt obligated to file the lawsuit.
“It’s heartbreaking,” he said. “I firmly believe they’re all good people — good people that simply made a poor choice, and I look forward to bringing it to a quick resolution.”
Karpuk came to the company as the chief operating officer in September 2013. He has been the CEO at First American for nearly two years.
Since then, he said, he has taken a lot of responsibility for improving company culture. He and some of the employees who left the company had even worked together to develop new core values, he said, including teamwork, respect, reputation, quality and customers first.
Karpuk said that he strives to make First American the best place to work in Napa and the North Bay.
A case management conference is scheduled for July 17.