Case 3:24-cv-00012-DJN Document 1 Filed 01/05/24 Page 1 of 20 PageID# 89

UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF VIRGINIA
RICHMOND DIVISION

)
BDO USA, P.C., )
) Case No.: 3:24cv12
Plaintiff, )
)
v. )
) JURY DEMAND
Caleb Crandell, )
)
Defendant. )
)

COMPLAINT

Plaintiff BDO USA, P.C. (“BDO”) files this Complaint against Caleb Crandell

(“Crandell”) for breach of contract and breach of duty of loyalty and fiduciary duties. In support,

BDO alleges as follows:

NATURE OF THE CASE

1. This case arises out of former BDO employee Crandell’s departure to Armanino

LLP (“Armanino”)—a competitor of BDO—and subsequent raiding of BDO clients and

employees in violation of Crandell’s restrictive covenant obligations to BDO.

2. Those restrictive covenants state that Crandell may not, directly or indirectly, solicit

or perform accounting, auditing, tax, and/or consulting services for BDO clients for whom he

directly provided substantive services during his partnership in and later employment with BDO.

3. Crandell is also bound to an employee non-solicitation clause, under which

Crandell is prohibited from soliciting BDO employees with whom he had contact during his

employment with BDO to leave BDO’s employ.

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4. Crandell left BDO for Armanino in early November 2023. That very same week,

Justin Rojas (“Rojas”), one of Crandell’s direct reports, also left BDO for Armanino.

5. Three more BDO employees that worked with and reported to Crandell, Timothy

Vacchi (“Vacchi”), Kaylin Koopmans (“Koopmans”), and Tara Dunphy (“Dunphy”), have since

departed BDO for Armanino.

6. Upon information and belief, Crandell either directly solicited Rojas, Vacchi,

Koopmans, and Dunphy or indirectly aided Armanino’s solicitation of these employees.

7. On or about December 12, 2023, three BDO clients to whom Crandell and Rojas

had directly provided substantive services informed BDO that they would no longer use BDO’s

services.

8. One of these clients, Client A, specifically informed BDO on a call that it was

following Crandell and his team to Armanino. The other two clients, Client B and Client C, are

also following Crandell, Rojas, and the rest of that team to Armanino.

9. Further, Crandell scheduled a happy hour with Client B’s Chief Financial Officer

(“CFO”) in the days leading up to his departure from BDO.

10. Just days after that meeting, Client B’s CFO emailed Crandell, asking Crandell to

put him in contact with Armanino.

11. Crandell (as well as Rojas) directly solicited Client A, Client B, and Client C or

indirectly aided Armanino’s solicitation of these clients in direct violation of his restrictive

covenant’s prohibition on soliciting clients he served at BDO.

12. Crandell is now providing tax services to Client A, Client B, and Client C at

Armanino in direct violation of his restrictive covenant’s prohibition on servicing clients he served

at BDO.

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13. In fact, when given the opportunity to submit a sworn affirmation that he had not

solicited Client A, Client B, and Client C and Rojas, Vacchi, Koopmans, and Dunphy, Crandell

declined.

14. Client A, Client B, and Client C provide, in total, nearly $1.8 million in annual fees

for BDO.

15. BDO further had expended resources in recruiting and training the employees

solicited by Crandell to join Armanino.

16. Crandell’s conduct violates the contractual obligations he owes to BDO and has

caused and will continue to cause BDO substantial financial damage.

17. Crandell’s conduct while still employed at BDO constitutes a breach of the duty of

loyalty he owed to BDO.

18. BDO seeks damages and equitable relief from Crandell for his breach of contract,

breach of duty of loyalty, and breach of fiduciary duties.

PARTIES, JURISDICTION & VENUE

19. Plaintiff BDO is a professional corporation incorporated under the laws of the state

of Virginia with its principal place of business in Chicago, Illinois. BDO operates an office in

Denver, Colorado.

20. Upon information and belief, Defendant Crandell is an individual domiciled in the

state of Colorado. Crandell is a former employee of BDO’s Denver, Colorado office and current

employee of Armanino’s Denver, Colorado office.

21. This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. §

1332 because Plaintiff and Defendant are citizens of different states and the amount in controversy

exceeds the sum or value of $75,000.

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22. This Court has personal jurisdiction over Crandell, who agreed to “submit to venue

and jurisdiction solely before any state or federal court in Virginia” in the First Amendment to the

BDO Partner/Principal Employment Agreement. (Ex. 3.) BDO further is a citizen of Virginia.

23. Venue is proper in this Court because Crandell agreed to “submit to venue and

jurisdiction solely before any state or federal court in Virginia” in the First Amendment to the

BDO Partner/Principal Employment Agreement. (Ex. 3.) BDO further is a citizen of Virginia.

FACTUAL ALLEGATIONS

A. BDO’s Business & Employment of Crandell

24. BDO is a professional services corporation that provides accounting, auditing, tax,

and consulting services to clients across the country. BDO has offices in over thirty states,

including in Denver, Colorado.

25. BDO invests substantial time and financial resources in acquiring, developing, and

maintaining client relationships through its employees. Employees are granted access to BDO’s

confidential and trade secret information used in servicing clients and in further developing lasting

relationships with clients on behalf of BDO.

26. To protect BDO’s trade secrets and client relationships, BDO requires senior level

employees to enter into employment agreements containing restrictive covenants that bar

employees from soliciting BDO clients, prospective clients, and BDO employees.

27. Crandell entered into an Amended and Restated Partnership Agreement (the

“Partnership Agreement,” attached hereto as Exhibit 1) with BDO’s predecessor, BDO USA, LLP

on August 1, 2020, that contains the following client and prospective client non-solicitation

covenant:

[I]f, without the specific consent of the Board of Directors, a Partner at, prior to, or
within two years after, his/her termination from the Partnership:

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(a) Directly or indirectly solicits or obtains for himself/herself, or for a firm with
which he/she is or becomes associated, engagements to perform, or if he/she or a
firm with which he/she is associated does perform, accounting, auditing, tax and/or
consulting services, or related services, or any other services which the Partnership
then offers directly or through an affiliate, for a client of the Partnership for whom
such Partner directly provided substantive services during his/her employment by
or membership with the Partnership (other than personal clients developed by such
Partner only as a result of his/her independent recruitment efforts which the
Partnership neither subsidized nor otherwise financially supported as part a
program of client development) (a “Direct Client”), or a prospective client that such
Partner directly recruited or solicited during such Partner's employment by or
membership with the Partnership (a “Direct Prospective Client”), or causes a Direct
Client or any person, company, partnership or other entity who provides, has
provided or would reasonably be expected to provide referrals of clients or
prospective clients to the Partnership to terminate that relationship. . . the said
Partner shall compensate the Partnership for any loss, damage and expense suffered
by the Partnership (the “Damages”).

(Ex. 1 ¶ 14.5(a).)

28. The Partnership Agreement also contains the following employee non-solicitation

agreement:

[I]f, without the specific consent of the Board of Directors, a Partner at, prior to, or
within two years after, his/her termination from the Partnership. . .

(b) Lures away or causes an employee or Partner of the Partnership to leave its
employ. . . the said Partner shall compensate the Partnership for any loss, damage
and expense suffered by the Partnership (the “Damages”).

(Ex. 1 ¶ 14.5(b).)

29. The damages for a breach of either of the non-solicitation covenants are set forth in

the Partnership Agreement as follows:

(i) For any engagements lost by the Partnership under (a) above an amount equal
to one hundred fifty percent (150%) of the fees charged by the Partnership either
(x) during the last full fiscal year during which the Direct Client was a client of the
Partnership or (y) during the twelve (12) month period prior to the last date upon
which the Partnership performed services for the Direct Client, whichever is
greater;

(ii) For Direct Prospective Clients, one hundred fifty percent (150%) of the
proposed fee;

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(iii) Under (b) above, an amount equal to thirty percent (30%) of the annual
earnings of each employee or Partner who leaves, to cover recruiting replacements,
plus an additional ten percent (10%) for each year of service of the employee to
cover training costs.

(Ex. 1 ¶¶ 14.5(d)(i)–(iii).)

30. The Partnership Agreement further provides that it “shall be binding upon and shall

inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors

and assigns.” (Ex. 1 ¶ 16.8.)

31. In exchange for his consent to the Partnership Agreement, Crandell was made a

Partner at BDO USA, LLP and received significant compensation, benefits, and access to

confidential and trade secret information.

32. On July 1, 2023, BDO USA, LLP converted to a Delaware professional services

corporation, changing its name from BDO USA, LLP to BDO USA, P.A. with the same federal

employer identification number. Through this conversion, BDO USA, LLP changed its legal

structure while continuing to exist and operate as the same entity. Under Delaware law, BDO’s

conversion to a professional corporation did not constitute the dissolution of the firm and the

creation of an entirely new firm; rather, it was a continuation of the existence of the firm in the

form of a professional corporation.

33. On August 30, 2023, BDO USA, P.A. transferred its jurisdiction of formation from

Delaware to Virginia, changing its name to BDO USA, P.C. with the same federal employer

identification number. As with its conversion to a professional corporation, BDO’s domestication

in Virginia constituted neither a dissolution of the company nor the formation of a new entity.

BDO continued to exist and operate as the same entity, only with a different state of incorporation.

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34. All assets, rights, and obligations of BDO USA, LLP are now assets, rights, and

obligations of BDO USA, P.C.

35. On June 30, 2023, Crandell’s partnership terminated.

36. Crandell then entered into the BDO Partner/Principal Employment Agreement (the

“Employment Agreement,” attached hereto as Exhibit 2) effective July 1, 2023.

37. In the Employment Agreement, Crandell re-affirmed his restrictive covenants.

38. In exchange for reaffirming his restrictive covenants by signing the Employment

Agreement, Crandell received continued employment with BDO, compensation in excess of

$672,600, benefits, and continued access to BDO’s trade secrets.

39. Crandell’s Employment Agreement contains a restrictive covenant substantively

identical to the Partnership Agreement’s covenant in an incorporated Agreement Regarding

Competition and Protection of Proprietary Interests:

I agree that, so long as I am employed by [BDO] or any of its affiliates and

continuing for two (2) years thereafter (regardless of the reason of my termination
of employment) (the “Restricted Period”), if:

(i) I directly or indirectly solicit or obtain for myself, or for a firm with which I am
or become associated, engagements to perform, or if I or a firm with which I am
associated does perform, accounting, auditing, tax and/or consulting services, or
related services, or any other services which [BDO] then offers directly or through
a subsidiary or an affiliate, for a client of [BDO] for whom I directly provided
substantive services, during my employment by [BDO] (or in my prior position as
a partner of BDO USA, LLP prior to its conversion to BDO USA, P.A.), (other than
personal clients developed by me only as a result of my independent recruitment
efforts which neither BDO USA, LLP nor [BDO] subsidized or otherwise
financially supported as part a program of client development) (a “Direct Client”),
or a prospective client that I directly recruited or solicited during my employment
with [BDO] (or in my prior position as a partner of BDO USA, LLP prior to its
conversion into BDO USA, P.A.) (a “Direct Prospective Client”), or cause a Direct
Client or any person, company, partnership or other entity who provides, has
provided or would reasonably be expected to provide referrals of clients or
prospective clients to [BDO] to terminate that relationship, then I shall compensate
[BDO] for any loss, damage, and expense suffered by [BDO] (the “Damages”).

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(Ex. 2, Agreement Regarding Competition and Protection of Proprietary Interests ¶ 2(a)(i).)

40. Crandell further reaffirmed the same damages that he would owe BDO in the event

of a breach:

(1) for any Direct Client engagements lost by [BDO], an amount equal to one
hundred fifty percent (150%) of the fees charged by [BDO] either (x) during the
last full fiscal year during which the Direct Client was a client of [BDO] (or its
predecessor) or (y) during the twelve (12) month period prior to the last date upon
which [BDO] (or its predecessor) performed services for the Direct Client,
whichever is greater;

(2) for any Direct Prospective Clients, one hundred fifty percent (150%) of the
proposed fee.

(Ex. 2, Agreement Regarding Competition and Protection of Proprietary Interests ¶ 2(a)(i).)

41. Crandell also reaffirmed his agreement to a near-identical employee non-

solicitation covenant, stating that for two years following the termination of his employment, he

will not “solicit, lure away, or cause an officer, director or employee of [BDO] with whom I had

contact during my employment with [BDO] . . . to leave its employ” or else compensate BDO for

damages in “an amount equal to thirty percent (30%) of the annual earnings of each officer,

director or employee who leaves, to cover recruiting replacements, plus an additional ten percent

(10%) for each year of service of the officer, director or employee to cover training costs.” (Ex. 2,

Agreement Regarding Competition and Protection of Proprietary Interests ¶ 2(a)(ii).)

42. The Employment Agreement further states that Crandell will reimburse BDO for

all attorneys’ fees, costs, and expenses incurred by BDO to enforce the agreement. (Ex. 2,

Agreement Regarding Competition and Protection of Proprietary Interests ¶ 9.)

43. The restrictive covenants and the corresponding damages formulas in the

Employment Agreement are substantively similar to the covenants in the Partnership Agreement.

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44. On August 14, 2023, Crandell consented to the First Amendment, which amended

all terms and conditions in his Employment Agreement and the incorporated Agreement Regarding

Competition and Protection of Proprietary Interests regarding governing law, venue, and

jurisdiction as follows:

This Agreement will be governed by the laws of the State of Virginia, irrespective
of the residence of the parties. Employee agrees to and hereby does submit to venue
and jurisdiction solely before any state or federal court in Virginia, and Employee
hereby waives any right to raise the questions of jurisdiction and venue in any
action that [BDO] may bring. Employee agrees to accept process in any such action.
Note: this paragraph shall not apply to any employee residing in California.

(Ex. 3, First Amendment.)

45. Crandell was the Tax Practice Leader at BDO’s Denver, Colorado office, where he

directly supervised the majority of the office’s tax employees.

46. Crandell provided direct tax advising services to many of BDO’s Colorado clients,

including Client A, Client B, and Client C.

B. Crandell’s Departure & Raid on BDO’s Clients & Employees

47. In early November 2023, Crandell informed BDO that he was leaving BDO for

Armanino’s Denver tax practice.

48. That same week, Rojas, one of BDO’s Tax Managing Directors and Crandell’s

direct report, informed BDO he was also leaving BDO for Armanino. Rojas also has client and

employee non-solicitation agreements with BDO.

49. Concerned by these near-simultaneous departures for Armanino, BDO sent both

Crandell and Rojas letters on November 9, 2023, reminding them of their post-employment

obligations not to solicit BDO’s clients or employees, and the corresponding contractual damages

they owed BDO in the event of a breach.

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50. Meanwhile, three other employees that were part of Crandell’s and Rojas’s team—

Vacchi, Koopmans, and Dunphy—informed BDO that they were leaving BDO for Armanino.

Vacchi also has restrictive covenants with BDO, while Koopmans and Dunphy have non-

disclosure agreements.

51. Upon information and belief, Crandell directly or indirectly solicited Rojas, Vacchi,

Koopmans, and Dunphy to join him at Armanino in direct violation of his employee non-

solicitation agreement.

52. BDO took swift action, sending an additional cease and desist letter to Vacchi as

well as a cease-and-desist letter to Armanino asking for assurances that the former BDO employees

were complying with their restrictive covenant obligations.

53. BDO also provided an affirmation to Crandell to sign stating that he was in

compliance with his non-solicitation agreement.

54. Crandell never signed that affirmation.

55. Shortly afterward, BDO learned that three clients to whom Crandell provided direct

services during his employment at BDO were taking their business to Armanino.

56. On October 26, 2023, Crandell had a happy hour with the CFO of Client B.

57. Upon information and belief, Crandell discussed his intent to join Armanino at this

happy hour, made statements painting Armanino in a positive light compared with BDO, and

further asked Client B to move its business to Armanino.

58. On November 2, 2023, just days after the happy hour meeting, Client B’s CFO sent

Crandell the below email regarding Crandell’s departure and asked Crandell to put him in contact

with Armanino to discuss providing tax services to Client B:

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Redacted

59. On November 27, 2023, after Crandell and Rojas had already left BDO for

Armanino, Client B sent an email to Rojas’s Armanino email address and Crandell’s former

BDO email address asking for their advice and consulting services on a tax matter.

60. On December 12, 2023, Client B informed BDO that it was leaving BDO.

61. Client B further stated that Crandell, Rojas, and Armanino were servicing Client B.

62. Crandell had an established relationship with Client B while at BDO. Crandell

provided direct tax services to Client B on behalf of BDO.

63. Crandell—either directly or indirectly—solicited Client B to move its business

from BDO to Armanino.

64. Client B has decided to move the remainder of its tax business to Crandell and

Armanino.

65. This is in direct violation of Crandell’s restrictive covenant not to solicit or perform

services for BDO clients whom he served at BDO.

66. On December 6, 2023, Client C informed BDO that it had decided to move its tax

work to another firm. Upon information and belief, that firm is Armanino.

67. Crandell had an established relationship with Client C while at BDO. Crandell

regularly provided direct tax planning services to Client C on behalf of BDO.

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68. On December 12, 2023, Client A informed BDO that it was moving its business to

Armanino.

69. Crandell had an established relationship with Client A while at BDO. Crandell

directly provided specialty tax services to Client A.

70. Client A told BDO that Crandell and Rojas were the reason why Client A was going

to Armanino.

71. Upon information and belief, Crandell persuaded Client A, Client B, and Client C

to stop doing business with BDO and to move their business to Armanino.

72. Upon information and belief, Crandell is providing services to Client A, Client B,

and Client C on behalf of Armanino.

73. On December 14, 2023, BDO sent a letter to Crandell demanding that he

compensate BDO for the lost clients—Client A, Client B, and Client C—in accordance with the

terms of his agreements with BDO.

74. Specifically, the letter demanded that Crandell compensate BDO (a) $378,003.20

for the loss of Client A’s business; (b) $1,895,806.46 for the loss of Client B’s business; and (c)

$346,591.43 for the loss of Client C’s business.

75. These amounts constitute 150 percent of the fees charged by BDO during the

twelve-month period prior to the last date upon which BDO performed services for these clients.

76. Crandell contractually agreed to compensate BDO according to this formula upon

the loss of client relationships due to a breach of his restrictive covenants. (Ex. 1 ¶ 14.5(d)(i); Ex.

2, Agreement Regarding Competition and Protection of Proprietary Interests ¶ 2(a)(i).)

77. BDO gave Crandell until Thursday, December 21, 2023, to confirm that he would

honor his promise to BDO and compensate BDO a total of $2,620,401.08 for these lost clients.

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78. BDO stated that, in the alternative, if Crandell claims he has not breached his non-

solicitation covenants, he must sign and return a declaration under penalty of perjury to that effect

by December 21, 2023.

79. As of the date of this filing, Crandell has refused to confirm that he will compensate

BDO for the lost business from Client A, Client B, and Client C as he is contractually obligated to

do.

80. As of the date of this filing, Crandell has refused to sign a sworn declaration stating

that he has not breached his agreements with BDO and has not solicited BDO’s clients or

employees.

81. Crandell violated his duty of loyalty to BDO by soliciting clients while still

employed at BDO.

82. Crandell is continuing to solicit BDO clients to move their business to Armanino

in violation of his restrictive covenants with BDO.

CLAIMS FOR RELIEF

COUNT I
(Breach of Contract: Partnership Agreement)

83. BDO incorporates and re-alleges all the previous paragraphs as though fully set

forth herein.

84. On August 1, 2020, BDO USA, LLP and Crandell entered into a valid, enforceable,

and binding Partnership Agreement.

85. Crandell entered into his contract with BDO USA, LLP for good and valuable

consideration, including but not limited to, a position as a Partner with BDO USA, LLP;

compensation; insurance, retirement, and healthcare benefits; and access to BDO USA, LLP’s

confidential information and trade secrets.

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86. As a Partner of BDO USA, LLP and for a period of two years after the termination

of his status as a Partner, Crandell owes BDO USA, LLP a contractual duty not to solicit clients

to whom he directly provided substantive services during his employment with BDO USA, LLP

for engagements to perform accounting, auditing, tax, and/or consulting services on behalf of

himself or another firm, or to provide accounting, auditing, tax, and/or consulting services on

behalf of himself or another firm.

87. In the event of a breach, Crandell’s contract states he must compensate BDO USA,

LLP in an amount equal to 150 percent of the fees charged by BDO USA, LLP to the lost clients

in the last full fiscal year or the prior twelve-month period, whichever is greater.

88. As a Partner of BDO USA, LLP and for a period of two years after the termination

of his status as a Partner, Crandell owes BDO USA, LLP a contractual duty not to solicit BDO

USA, LLP employees with whom he had contact during his employment with BDO USA, LLP to

leave BDO USA, LLP’s employ.

89. In the event of a breach, Crandell’s contract states he must compensate BDO USA,

LLP in an amount equal to thirty percent of the annual earnings of each lost employee, plus an

additional ten percent for each year of service of the lost employee to cover training costs.

90. Crandell’s partnership with BDO USA, LLP ended on June 30, 2023. Crandell

owes these contractual obligations to BDO USA, LLP until June 30, 2025.

91. BDO is the successor of BDO USA, LLP and entitled to enforce the terms of the

Partnership Agreement under Section 16.8 of the Partnership Agreement.

92. Crandell has violated his restrictive covenants by soliciting Client A, Client B, and

Client C—clients to whom he directly provided substantive services while at BDO—to switch

their business to his new employer, Armanino.

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93. Crandell has further violated his restrictive covenants by providing tax services to

Client A, Client B, and Client C on behalf of Armanino.

94. Upon information and belief, Crandell is continuing to violate his restrictive

covenants by continuing to solicit BDO clients to whom he directly provided substantive services

while at BDO.

95. Crandell also violated his restrictive covenants by soliciting Rojas, Vacchi,

Koopmans, and Dunphy—BDO employees with whom he had contact while employed with

BDO—to leave BDO and work for Armanino.

96. For any clients that Crandell solicits away from BDO or for whom he performs

services, Crandell owes BDO 150 percent of the fees charged by BDO during the twelve-month

period prior to the last date upon which BDO performed services for those clients. That amount

totals (a) $378,003.20 for the loss of Client A’s business; (b) $1,895,806.46 for the loss of Client

B’s business; and (c) $346,591.43 for the loss of Client C’s business.

97. Crandell further owes BDO thirty percent of the annual earnings of each employee

he solicited away from BDO, plus an additional ten percent for each year of service of the

employee to cover training costs. That amount totals $343,400.00 for the solicitation of Rojas,

Vacchi, Koopmans, and Dunphy.

98. Crandell has refused to compensate BDO for the lost clients and employees

according to the formulas laid out in his contract.

99. As a direct and proximate result of Crandell’s breach, BDO has suffered damages,

including interference in BDO’s business operations, damage to client relationships, and lost

profits.

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100. BDO is entitled to judgment against Crandell in an amount in excess of

$2,963,801.09, plus any additional damages that may be determined at trial; all equitable relief

including restitution; as well as attorneys’ fees, interest, costs, and other such relief and damages

as BDO may prove at trial and this Court deems just and equitable.

COUNT II
(Breach of Contract: Employment Agreement)

101. BDO incorporates and re-alleges all the previous paragraphs as though fully set

forth herein.

102. On June 14, 2023, Crandell entered into a valid, enforceable, and binding

Employment Agreement as part of BDO’s conversion from a partnership to a professional

corporation.

103. Crandell entered into his contract with BDO for good and valuable consideration,

including but not limited to, continued employment with BDO; compensation in excess of

$672,600 annually; insurance, retirement, and healthcare benefits; and continued access to BDO’s

confidential information and trade secrets.

104. During his employment with BDO and for a period of two years thereafter, Crandell

owes BDO a contractual duty not to solicit clients to whom he directly provided substantive

services during his employment with BDO for engagements to perform accounting, auditing, tax,

and/or consulting services on behalf of himself or another firm, or to provide accounting, auditing,

tax, and/or consulting services on behalf of himself or another firm.

105. In the event of a breach, Crandell’s contract states he must compensate BDO in an

amount equal to 150 percent of the fees charged by BDO to the lost clients in the last full fiscal

year or the prior twelve-month period, whichever is greater.

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106. During his employment with BDO and for a period of two years thereafter, Crandell

owes BDO a contractual duty not to solicit BDO employees with whom he had contact during his

employment with BDO to leave BDO’s employ.

107. In the event of a breach, Crandell’s contract states he must compensate BDO in an

amount equal to thirty percent of the annual earnings of each lost employee, plus an additional ten

percent for each year of service of the lost employee to cover training costs.

108. Crandell’s employment with BDO ended on November 3, 2023. Crandell owes

these contractual obligations to BDO until November 3, 2025.

109. Crandell has violated his restrictive covenants by soliciting Client A, Client B, and

Client C—clients to whom he directly provided substantive services while at BDO—to switch

their business to his new employer, Armanino.

110. Crandell has further violated his restrictive covenants by providing tax services to

Client A, Client B, and Client C on behalf of Armanino.

111. Crandell is continuing to violate his restrictive covenants and continuing to solicit

BDO clients to whom he directly provided substantive services while at BDO.

112. Crandell has violated his restrictive covenants by soliciting Rojas, Vacchi,

Koopmans, and Dunphy—BDO employees with whom he had contact while employed with

BDO—to leave BDO and work for Armanino.

113. For any clients that Crandell solicits away from BDO or for whom he performs

services, Crandell owes BDO 150 percent of the fees charged by BDO during the twelve-month

period prior to the last date upon which BDO performed services for those clients. That amount

totals (a) $378,003.20 for the loss of Client A’s business; (b) $1,895,806.46 for the loss of Client

B’s business; and (c) $346,591.43 for the loss of Client C’s business.

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114. Crandell further owes BDO thirty percent of the annual earnings of each employee

he solicited away from BDO, plus an additional ten percent for each year of service of the

employee to cover training costs. That amount totals $343,400.00 for the solicitation of Rojas,

Vacchi, Koopmans, and Dunphy.

115. Crandell has refused to compensate BDO for the lost clients and employees

according to the formulas laid out in his contract.

116. As a direct and proximate result of Crandell’s breach, BDO has suffered damages,

including interference in BDO’s business operations, damage to client relationships, and lost

profits.

117. BDO is entitled to relief and judgment against Crandell in an amount in excess of

$2,963,801.09, plus any additional damages that may be determined at trial; all equitable relief

including restitution; as well as attorneys’ fees, interest, costs, and other such relief and damages

as BDO may prove at trial and this Court deems just and equitable.

COUNT III
(Breach of the Common Law Duty of Loyalty)

118. BDO incorporates and realleges all the previous paragraphs as though fully set forth

herein.

119. As a BDO employee, Crandell owed BDO a common law duty of loyalty.

120. Crandell breached that duty of loyalty by disparaging BDO to clients, soliciting

clients away from BDO to Armanino, and soliciting employees to join him at Armanino in direct

violation of his non-solicitation covenants.

121. Crandell’s scheme to solicit Client B to join Armanino while Crandell was still

employed at BDO, as evidenced by his “happy hour” with Client B and Client B’s subsequent

inquiry about Armanino, constitutes a breach of the duty of loyalty.

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122. While employed by BDO, Crandell further solicited other BDO employees,

including Rojas, Vacchi, Koopmans, and Dunphy, to join him at Armanino.

123. Crandell’s breaches have caused BDO to suffer damages in the form of lost clients,

lost corporate opportunities, lost revenue, and interference in BDO’s business operations.

124. BDO is entitled to relief and judgment against Crandell and damages in an amount

to be proven at trial, all equitable relief including restitution, as well as interest, costs, and other

such relief that this Court deems just and equitable.

COUNT IV
(Breach of Fiduciary Duty)

125. BDO incorporates and re-alleges all the previous paragraphs as though fully set

forth herein.

126. As a former partner of BDO USA, LLP and then senior-level employee of BDO,

Crandell was entrusted with confidential business information of BDO, its clients, and its

employees.

127. Crandell therefore owed duties to BDO as a fiduciary, including to act solely for

the benefit of BDO in all matters connected with his employment with the firm.

128. While employed by BDO, Crandell breached his fiduciary duties to BDO by

soliciting its employees and its clients to leave BDO in favor of Armanino, including by using

confidential information about BDO, its clients, and its employees to accomplish those goals.

129. Crandell’s breaches have caused BDO to suffer damages in the form of lost clients,

lost corporate opportunities, lost revenue, and interference in BDO’s business operations.

130. BDO is entitled to relief and judgment against Crandell and damages in an amount

to be proven at trial, all equitable relief including restitution, as well as interest, costs, and other

such relief that this Court deems just and equitable.

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PRAYER FOR RELIEF

WHEREFORE, BDO requests the following relief against Defendant:

a. An award of damages in an amount to be determined at trial, but in no event less

than $2,963,801.09, as a result of Crandell’s breach of contract;

b. An award of damages in an amount to be determined at trial as a result of Crandell’s

breach of the duty of loyalty;

c. An award in an amount to be determined at trial as a result of Crandell’s breach of

fiduciary duty;

d. An award of attorneys’ fees, costs, and expenses incurred as a result of this action;

e. All equitable relief as this Court deems just and proper including restitution; and

f. Such further relief as this Court deems just and proper.

Dated: January 5, 2024 Respectfully submitted,

By: /s/ Julie H. McConnell

Julie H. McConnell (Va. Bar No. 1032352 )
Of Counsel
McDERMOTT WILL & EMERY LLP
Michael Sheehan 500 North Capitol Street, NW
Brian Mead Washington, DC 20001-1531
Barrick Bollman Tele: +1 202 756 8000
Emily Starbuck Fax: +1 202 756 8087
McDERMOTT WILL & EMERY LLP [email protected]
Chicago, Illinois
Attorneys for Plaintiff
BDO USA, P.C.

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