6/7/2011American Traffic Solutions Sues Former Top Executive
American Traffic Solutions files federal lawsuit accusing former VP of stealing company clients.
Photo enforcement vendor American Traffic Solutions last month filed a federal lawsuit against one of its own top employees. Michael J. Lenza worked for ATS as senior vice president for financial services from September 30, 2006 to May 13, 2011. Lenza's job was to solicit business, but ATS now charges the former executive with secretly building a client base of his own on company time.
"Upon information and belief, while working for ATS, Mr. Lenza was a dual agent -- simultaneously working for both ATS and himself and competing and/or preparing to compete directly against ATS," ATS attorney John L. Blanchard wrote in a brief to the court. "Mr. Lenza has violated his fiduciary and contractual obligations by engaging in this competition and by directly interfering with and impairing ATS's ability to compete in the Massachusetts market."
In his position at the company, Lenza had access to proprietary sales and marketing data, technical information, and techniques used to convince municipalities to choose automated ticketing machines. Lenza was paid a base salary of $156,000 plus a 0.5 percent cut of gross revenue from new red light camera and speed camera contracts in his sales territory. Depending on the per-ticket rate of compensation, Lenza was to pocket around 15 to 25 cents for every ticket issued.
Before joining ATS, Lenza worked at Affiliated Computer Services (ACS), a competitor to ATS. Lenza also set up his own business, Public Finance Strategies LLC, which offered ticketing-related collection services for municipalities. Upon joining ATS, Lenza agreed only to market the products and services of ATS with his company. Section 8.4 of his contract and a separate attachment set out a non-competition agreement imposing a one-year waiting period before Lenza could go to work for any other photo ticketing firm. ATS insists Lenza violated these stipulations by forming another company, Photo Enforcement Consultants, allegedly to steal clients.
"ATS recently discovered that while Mr. Lenza was ATS's senior vice president, Mr. Lenza was simultaneously competing directly with ATS by consulting with municipal customers and potential customers and marketing photo-traffic enforcement services," Blanchard wrote. "Mr. Lenza was directly diverting opportunities away from ATS."
ATS is seeking an injunction against Lenza plus punitive damages, compensation for lost business and loss of reputation. Goldman Sachs Group Inc. owns 31.6 percent of ATS. The next hearing will be held September 1 before Judge Susan R. Bolton in the US District Court in Phoenix, Arizona at 10am.