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Former Ulteig workers deny lawsuit allegations

FARGO - A group of 21 former Ulteig Engineers employees who left to form a splinter company recently fired back against allegations of corporate espionage, calling a lawsuit by Ulteig frivolous and filing a countersuit seeking tens of thousands of dollars in unpaid fees.

The Fargo company's former employees, now of Apex Engineering Group, were accused by Ulteig last month of stealing company property while conspiring for months to form Apex. Nineteen of them - including then-Ulteig board member Thomas Welle - resigned en masse on Nov. 2, days after Apex was incorporated.

That group and two other former Ulteig employees who joined Apex were all named as defendants in the lawsuit filed March 10 in Cass County District Court.

Ulteig claims the plans for the new company were hatched as early as March 2010, and that the departing employees misappropriated confidential information including bid proposals, drawings and designs, and customer lists.

Apex and the defendants - which through attorney Michael Geiermann, who is representing the company, declined to comment - denied those allegations in responses filed last week.

According to those responses, the former employees left the company "based on their dissatisfaction with Ulteig" and amid "concerns about Ulteig's economic viability." The defendants say they and other Ulteig employees had concerns about "various management decisions" made by the company.

In one filing, the defendants say they decided to leave Ulteig and join Apex "at various times and for various reasons."

Those defendants with an ownership interest in Apex say they held no such interest until after they left Ulteig. The defendants also denied an allegation that they submitted time records for work that wasn't done while unlawfully stealing company secrets.

The defendants specifically denied doing "anything unlawful or improper regarding electronically stored information or otherwise misappropriating Ulteig's confidential information." That denial comes after Charles Rogers, one of Ulteig's attorneys, sent a letter to the defendants in March requesting the contents of a number of digital drives Ulteig says were used by the defendants to access its computers.

Rogers' letter also requested the contents of Apex computers and the defendants' personal computers, seeking Ulteig files that had been copied. In a subsequent letter to a Cass County District Court judge, Rogers said digital forensics indicated the defendants had copied Ulteig information onto external devices.

Apex and the defendants also denied acting improperly in obtaining information related to a handful of engineering projects, including Fargo's wastewater treatment plant, and sewage and water-flow projects in Jamestown and Minot in North Dakota. Apex says the information was a matter of public record, and that Ulteig also furnished information as part of a subcontract arrangement.

In claiming Ulteig's accusations are frivolous, Apex and the defendants are seeking to recoup legal costs. They're also seeking $31,740 in unpaid subcontracting fees from the Jamestown and Minot projects.

In a letter responding to the countersuit, Rogers urged Apex attorney Geiermann to drop the frivolity allegations, saying there is "simply no basis" for the claim and that Ulteig would pursue sanctions if it was not withdrawn. He also shrugged off the fees claim, saying Ulteig has not yet paid Apex because Jamestown and Minot have not yet paid Ulteig.

The letter asked Apex to withdraw its counterclaims by April 1. An Ulteig spokesman said Apex did not do so.