Some say you shouldn't kick a man when he's down. Others assert that when he's down is, in fact, the safest time to kick him.
Judging from a lawsuit just filed against rival Protected Vehicles, it seems that armored vehicle maker Force Protection (Nasdaq: FRPT ) sides with the latter camp. Last Tuesday, Force Protection marched into U.S. District Court in Charleston, S.C., and slapped Garth Barrett with a lawsuit alleging everything from unfair competition to copyright infringement to tortious interference with contractual relations. Barrett is the company's former founder, president, chief technology officer, facility security officer, and, presumably, head janitor and senior administrative assistant at one time or another. Also sued were Barrett's new company, Protected Vehicles, which Barrett set up just days after leaving the employ of Force Protection -- and which stands as perhaps the tiniest participant to actually have won a contract in the MRAP game dominated by larger companies such as Navistar, BAE, and General Dynamics (NYSE: GD ) .
Now, I could go into a lot of detail about the merits of this case, but I'll leave that to others. Suffice it to say that Barrett's conduct in allegedly (always allegedly) downloading a lot of confidential information about Force Protection's products and their technical specifications, before leaving his office for the last time, stinks to high heaven. Also, let me add that I don't envy Force Protection's lawyers the task of proving that one of the company's founders had to steal information in order to set up a rival firm.
More interesting to me is the timing of the lawsuit. The fact that Force Protection filed it almost precisely two years to the day after Barrett left the firm suggests to me that there was a statute of limitations restriction on at least one of the complaints lodged against Barrett and his new company. But even if there wasn't, the timing alone justifies a remark about how clever Force Protection is being here.
You see, after winning an initial production order from the U.S. Marine Corps to produce 60 Category II MRAPs, Protected Vehicles has failed to secure any additional orders. To the contrary, the "Alpha" vehicle it was producing in cooperation with Oshkosh (NYSE: OSK ) raised concerns with the USMC as to its "overall vehicle survivability" -- concerns that soon had Oshkosh running to Ceradyne (Nasdaq: CRDN ) and its BULL for comfort. And without orders to fulfill, Protected Vehicles laid off roughly half its 500 employees earlier this month. Workers it had apparently hired through a temp agency. Workers who, apparently, included 67 inmates from the local county jail, who were doing welding work for Protected Vehicles.
Hmm. So things are so bad at Protected Vehicles that it can't afford to pay jailhouse wages? I'm betting this company wasn't thrilled to learn it will now have to ante up for costly litigation. In fact, I'm betting that within a matter of months, if not weeks, Force Protection will have one fewer solvent competitor to worry about -- whether or not it wins its lawsuit.
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Fool contributor Rich Smith does not own shares of any company named above. And according to The Motley Fool's disclosure policy, if he keeps on writing about them, he may never get the chance! How do we keep our writers purer than Caesar's wife? Check out the policy and find out.
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