H&R Block files for default judgment against former employee who allegedly used company information to open own tax service

By Russell Boniface | Jun 5, 2017

PHILADELPHIA — On April 6, H&R Block Eastern Enterprises Inc. filed a motion for default judgement in the U.S. District Court for the Eastern District of Pennsylvania against a former employee for failing to answer an allegation of breach of contract for operating a similar tax preparation business using H&R information and client lists.

H&R Block, a nationwide tax preparation company, sued former employee James Shedrick in February alleging breach of contract.

Shedrick worked as a seasonal tax professional in 2015 for Quick Professionals in Philadelphia before it became an H&R Block franchisee in September.

Shedrick prepared tax returns and offered electronic filing of returns and other pertinent tax and financial information to taxpayers. Shedrick had access to confidential customer lists, marketing strategies and pricing information developed by H&R Block at substantial expense.

Shedrick entered into an agreement with Quick Professionals that all business information was confidential and that he would not misappropriate, divulge or communicate property belonging to H&R Block.

As a condition of his agreement, Shedrick acknowledged that for two years he would not directly or indirectly provide tax services to any company or client or solicit clients. In addition, he agreed that H&R Block was “an intended third-party beneficiary” that can enforce the agreements.

Soon after acquiring Quick Professionals on Sept. 15, H&R Block discovered Shedrick was operating his own office six miles away and offering tax preparation similar to those provided by H&R Block.

H&R Block learned Shedrick had misappropriated H&R Block’s confidential business information and had successfully contacted H&R Block clients served through Quick Professionals.

On Jan. 19, H&R Block sent Shedrick a cease and desist letter with a request that he return any confidential information in his possession. Shedrick failed to respond.

H&R Block is seeking damages, injunctive relief and court costs.

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