August 18, 2026  ·  Complaint filed August 4, 2026  ·  mied, No. 2:26-cv-12697

Newman News, By David Brunk

Read the filing

GSI v. Switchback Tests Whether Founding a Rival While Still Employed Breaches Fiduciary Duty

Former Executives Allegedly Formed Switchback While Still Employed by GSI

Global Systems Integration Inc. has sued Switchback Advisors LLC and four of its former executives in the U.S. District Court for the Eastern District of Michigan, alleging they breached fiduciary duties, employment contracts, and trade secret laws by founding a direct competitor while still employed by GSI and misappropriating its confidential information to launch the rival firm. The complaint, filed on August 4, 2026, highlights critical contractual timelines under the Kountouriotis Agreement, which could influence the validity of any contractual communications between the parties.

The complaint focuses on the actions of Jonathan Kozell, Ryan Fast, Emerald Morgan, and Perry Kountouriotis, all of whom held senior roles at GSI before resigning between April 2025 and January 2026. Kozell served as GSI’s Solutions Director—NetSuite, while Kountouriotis held the role of Director of NetSuite Services—SMB, a position that granted him access to GSI’s confidential client lists, pricing strategies, and implementation methodologies (Compl. ¶105). Fast’s tenure at GSI included three progressively senior roles: Senior NetSuite Consultant (through April 2023), Manager of NetSuite Professional Services (through November 2024), and Director of NetSuite Services (through May 2025) (Compl. ¶59). The filing alleges that Kozell and Fast signed Switchback’s Articles of Organization on February 3, 2025, while still employed by GSI, and that the four former executives downloaded GSI’s proprietary information and used it to solicit GSI’s clients and employees for Switchback.

Switchback Founded While Executives Still Worked at GSI

The timeline of the alleged scheme begins in early 2025, when Kozell and Fast, both still employed by GSI, signed Switchback’s Articles of Organization in Michigan on February 3, 2025. The complaint alleges that Kountouriotis and Kozell helped found Switchback while still employed by GSI, with Kountouriotis specifically accused of encouraging Morgan and Fast to join the rival firm (Compl. ¶43, ¶109, ¶110). Kozell resigned from GSI on April 30, 2025, followed by Fast on May 30, 2025, and Morgan in June 2025. Kountouriotis, the last to depart, gave notice on January 5, 2026, and left on January 30, 2026.

The complaint alleges the Defendants concealed Switchback’s existence while still employed by GSI, violating their duty of loyalty. GSI contends that Kozell’s signing of Switchback’s formation documents while still employed by GSI breached a provision in his employment agreement that prohibited competing activities. Fast’s role in facilitating the signing is similarly alleged to violate his agreement. The complaint further asserts that the Defendants’ actions demonstrate a coordinated effort to undermine GSI, stating, “The individual Defendants’ conduct constitutes a willful and malicious misappropriation of GSI’s trade secrets.” (Compl. ¶206).

Employment Agreements Prohibited Competing Activities and Solicitation

GSI’s employment agreements with the individual Defendants contained broad confidentiality, non-compete, and non-solicitation provisions, along with specific notice requirements for contractual compliance. The Kountouriotis Agreement, for example, stipulates a one business day notice period for nationally recognized overnight delivery service and a five days notice period for certified or registered mail (Compl. ¶18).

The agreements defined “Confidential Information” to include “information not generally known to or by Competing Business about the Business of the Company or the Company’s financial affairs,” such as client lists, pricing strategies, implementation methodologies, and marketing strategies. Kozell’s agreement, for example, stated: “The term ‘Confidential Information’ as used herein means information disclosed to, acquired or learned by the Employee as a consequence of his employment by the Company and not generally known to or by Competing Business...” (Compl. ¶24).

The agreements also prohibited the Defendants from engaging in competing activities during their employment. Kozell’s agreement, for example, stated: “Employee acknowledges that the Company is in a highly competitive industry and that Employee will have access to information that is proprietary and confidential. Employee agrees not to engage in any activities whatsoever that are in competition with the Company, or which are in any way detrimental to or in conflict with the business interests of the Company.” The complaint alleges that Kozell’s actions violated this provision by forming Switchback while still employed by GSI (Compl. ¶26-27).

Post-employment restrictions included:

• A one-year prohibition on soliciting GSI clients with whom the employee had “material contact” during the last 12 months of employment, defined as a 12-month look-back period for “Material Contact” (Compl. ¶9(B)).
• A two-year prohibition on soliciting GSI employees, as outlined in Section 9(C) of the Kozell and Fast Agreements.
• A one-year prohibition on performing work for any GSI client without written consent, as specified in Section 10 of the agreements (Compl. ¶10).

The complaint alleges the Defendants violated these provisions by soliciting GSI clients, including Oakwood Veneer Company, and poaching GSI employees. Kozell is accused of encouraging other Defendants to download GSI’s confidential information before leaving, and Fast is alleged to have encouraged Morgan to join Switchback. The complaint further alleges that the Defendants’ actions were not merely opportunistic but part of a deliberate scheme, stating, “There is no legitimate business purpose for Kountouriotis syncing and uploading all the data...” (Compl. ¶120).

Defendants Allegedly Downloaded GSI’s Confidential Information Before Leaving

The complaint details multiple instances in which the Defendants allegedly copied or downloaded GSI’s confidential information before resigning. Kozell is accused of downloading or copying GSI’s confidential information before leaving on April 30, 2025. Fast allegedly downloaded GSI’s confidential information between forming Switchback in February 2025 and his departure on May 30, 2025. Morgan is accused of copying GSI’s confidential information before leaving in June 2025. The complaint also alleges that the Defendants frequently circumvented GSI’s security measures, including ThreatLocker, multi-factor authentication (MFA), and Bitlocker, to access and misappropriate confidential information (Compl. ¶139).

The complaint also alleges that Kountouriotis, who gave notice of resignation on January 5, 2026, synced a non-GSI device with GSI’s OneDrive using his work email on January 9, 2026. GSI alleges there was “no legitimate business purpose for Kountouriotis syncing and uploading all the data.” Kountouriotis returned his GSI-issued laptop on February 11, 2026. As part of its investigation, GSI intends to image the personal devices and emails of Kozell, Fast, and Morgan to identify any improper conversion, retention, or sharing of GSI’s confidential information and trade secrets (Compl. ¶44, ¶68, ¶93).

GSI claims it implemented security measures, including ThreatLocker, multi-factor authentication, and Bitlocker, to protect its confidential information. However, the complaint alleges the Defendants “frequently circumvented GSI’s security measures,” underscoring the intentional nature of their misconduct (Compl. ¶139).

GSI Seeks Accounting, Injunctive Relief, and Damages

The complaint asserts eight claims against the Defendants, including:

• COUNT I: Breach of Fiduciary Duty of Loyalty – All Individual Defendants (Kozell, Fast, Morgan, Kountouriotis), alleging the Defendants breached their duty of loyalty by forming Switchback and misappropriating GSI’s confidential information while still employed.
• COUNT II: Breach of Contract – Fast (Fast Agreement: Sections 2(B)(iii), 4–5, 9(A)–(B), 10), alleging Fast violated multiple provisions of his employment agreement, including those prohibiting competing activities and solicitation of GSI clients and employees.
• COUNT III: Breach of Contract – Kozell (Kozell Agreement: Sections 2(B)(iii), 4–5, 9(A)–(C), 10), alleging Kozell breached his agreement by forming Switchback and soliciting GSI clients and employees.
• COUNT IV: Breach of Contract – Morgan (Morgan Agreement: Sections 2(B)(iii), 4–5, 9(A)–(C), 10), alleging Morgan violated her agreement by engaging in competing activities and soliciting GSI clients.
• COUNT V: Breach of Contract – Kountouriotis (Kountouriotis Agreement: Sections 6, 8, 18), alleging Kountouriotis breached his agreement by misappropriating GSI’s confidential information and failing to return GSI property.
• COUNT VI: Violation of Defend Trade Secrets Act (DTSA), 18 U.S.C. § 1831 – All Individual Defendants, alleging the Defendants misappropriated GSI’s trade secrets for the benefit of Switchback.
• COUNT VII: Violation of Michigan Uniform Trade Secrets Act (MUTSA), MCL 445.1901 et seq. – All Defendants, alleging the Defendants willfully and maliciously acquired GSI’s trade secrets, as stated in the complaint: “Defendants willfully and maliciously acquired GSI’s trade secrets” (Compl. ¶224).
• COUNT VIII: Tortious Interference with Existing Business Relationships – All Defendants, alleging the Defendants intentionally interfered with GSI’s business relationships by soliciting its clients using misappropriated confidential information.

Under the trade secret laws, GSI alleges the Defendants misappropriated its trade secrets “without GSI’s consent” and that their conduct constitutes “willful and malicious misappropriation.” The complaint defines GSI’s trade secrets to include “detailed client lists; detailed implementation processes and procedures; pricing strategies; marketing strategies; client leads; and other confidential, proprietary, and trade secret information.” The complaint further asserts that “Switchback knew that it acquired GSI’s trade secret information through the individual Defendants’ unlawful conduct.” (Compl. ¶219).

GSI seeks an accounting of all confidential and trade secret information taken by the Defendants, as well as the return or destruction of such information. The complaint also requests a permanent injunction prohibiting the Defendants from possessing, using, or disclosing GSI’s confidential information and an extension of the non-solicitation and non-compete clauses in the employment agreements. Specifically, GSI requests an order requiring the Defendants to provide an accounting of all GSI customers they contacted or solicited, as well as the destruction or deletion of all misappropriated information (Compl. ¶168, ¶179).

Monetarily, GSI seeks compensatory damages for lost profits, lost revenue, and remediation costs, as well as disgorgement of profits obtained by Switchback since its formation, a demand that underscores the financial impact of the alleged misconduct. The complaint also requests exemplary and punitive damages, costs, disbursements, reasonable attorneys’ fees, and expenses. GSI contends that the Defendants’ actions have caused irreparable harm, stating, “Defendants’ continued possession of and access to GSI’s confidential, proprietary, and trade secret information is causing irreparable injury to GSI.” (Compl. ¶226).

Employment Agreements Governed by Georgia and Michigan Law

The employment agreements at issue are governed by the laws of Georgia and Michigan, which could influence the interpretation and enforcement of their provisions. Kozell’s and Morgan’s agreements specify Georgia law as the governing jurisdiction (Compl. ¶32, ¶82), while Kountouriotis’s agreement specifies Michigan law (Compl. ¶102). The Kountouriotis Agreement also includes an arbitration clause, requiring disputes to be resolved through binding arbitration in Oakland County, Michigan, except for matters seeking injunctive relief (Compl. ¶19).

Kountouriotis’s agreement requires the return of all GSI property, including electronic devices, upon termination. The complaint alleges Kountouriotis breached provisions of his agreement by failing to return GSI property and misappropriating confidential information. His agreement provided for a base annual salary of $200,000, and severance pay was contingent on compliance with the agreement’s terms, including the execution of a release within 60 days of the Employment Termination Date (Compl. ¶3(a), ¶5). The agreement also included a termination for cause provision, which encompassed “misappropriation of the Company’s property” (Compl. ¶5(c)(iii)).

GSI Sent Cease-and-Desist Letters, Demanding Assurances

After discovering the Defendants’ alleged misconduct, GSI sent cease-and-desist letters to Kozell and Fast on February 10, 2026, and to Kountouriotis on March 27, 2026. The letters demanded written assurances that the Defendants would comply with their employment agreements, including the non-solicitation and non-compete provisions. The Defendants allegedly failed to provide the requested assurances by the specified deadlines, which were February 20, 2026, for Fast and Kozell and April 8, 2026, for Kountouriotis (Compl. ¶7).

The complaint alleges Switchback has been performing “substantially similar services” for GSI clients since its formation and that Switchback competes with GSI in the NetSuite Consultant Services industry, a market context that underscores the direct threat posed by the rival firm (Compl. ¶221). GSI contends the Defendants’ continued possession of its confidential information is causing “irreparable injury.”

The allegations described here are taken from the filing and remain unproven; no responsive pleading is reflected in the source document.

David Brunk is a civil litigation attorney. He can be reached at david@newmanbrunk.com.