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Judge issues injunction in tax preparer lawsuit

POSTED: February 27, 2009 12:43 a.m.

A tax-season tussle between a Gainesville income tax preparation office and the biggest company in the business prompted a judge to order the local company to keep its hands and pencils off the W2s of H&R Block’s customers.

At the center of the legal dispute between H&R Block and Paramount Tax & Accounting is a list of names more than 100 pages long and a woman who has worked for both companies.

Judge David Burroughs, presiding by special designation in Hall County Superior Court, issued a temporary injunction this month barring Paramount from soliciting or preparing tax documents for any of H&R Block’s Hall County customers in the company’s 2008 client database.

H&R Block filed suit against Paramount in January, alleging that a former employee at one of its Gainesville offices violated a contractual agreement and made off with trade secrets from a customer database when she left the company last year.

Mary Squire, who was hired as a tax preparer for H&R Block in December 2007 and became office manager the following January, left the company in December 2008, saying she was ready to stop working and spend more time with her grandchildren, according to the lawsuit.

Squire then went to work for Paramount, which is owned by a former H&R Block financial advisor and has hired several other former H&R Block staffers, according to the suit.

The big company soon got wind that the smaller company was soliciting its customers using “addresses only known to those with access to H&R Block’s confidential, proprietary and trade secret database,” according to the suit.

One tip-off came when a former H&R Block customer in Kansas received a solicitation mailer from Paramount, according to court records.

In his order granting the injunction, Burroughs sides with H&R Block’s position.

“The court finds sufficient evidence that Squire and Paramount acted in concert to misappropriate H&R Block’s trade secrets which has caused, and will continue to cause, H&R Block irreparable harm in the form of lost revenue and goodwill, especially now that the tax season is under way,” Burroughs wrote.

Burroughs wrote that some H&R Block customers have “already expressed concern to H&R Block about the security of their private information and how that information got into the hands of Squire and Paramount.”

Mark Alexander, a Gainesville attorney representing Squire and Paramount, said that his clients would abide by the judge’s order as long as it is in place, but that they are appealing the ruling to the Georgia Court of Appeals.

Alexander said Paramount’s employees are being restricted from doing their work at the peak of their business.

“The other victims are their customers, many of whom have enjoyed long-time professional and personal relationships with their trusted tax advisers and who are now being denied the right to choose who they want to do their taxes,” Alexander said.

“From day one, Paramount has stood up against a much larger competitor, and Paramount along with Ms. Squire have denied all allegations made by H&R Block in this lawsuit.”

An attorney for Kansas-based H&R Block referred questions to a company spokeswoman late Thursday, who was not immediately available for comment.



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