- The Washington Times - Sunday, September 25, 2011

A Northern Virginia state Senate candidate who has emerged as a contender in a race that could give Democrats an unlikely victory has come under fire for his record as a small-business owner.

Shawn Mitchell, a candidate in the newly drawn District 13 in Prince William and Loudoun counties, recently settled a messy legal dispute with his former employer over claims that he breached trade secrets and violated a noncompete clause when starting a small business in 2010.

The dispute was settled under seal, and Mr. Mitchell has declined to answer questions about the charges despite emphasizing on the campaign trail his record as a business owner.

Mr. Mitchell announced his intention to run in June when the seat appeared beyond reach in the Republican-leaning district. But after Dick Black, a staunchly conservative former delegate who irked members of both parties by sending lawmakers plastic fetus models before a crucial abortion vote, emerged victorious in last month’s primary, Democrats saw an opportunity to secure a win that would in large part help them preserve their narrow majority in the Senate.

Now Mr. Mitchell, a combat veteran and owner and founder of a home ventilation and air conditioning, plumbing, generator, and solar company, is working to make the race competitive.

A business mentality

Since the primary, Mr. Mitchell has won the support of key party leaders and local business groups.

The Prince William Association of Realtors and the Dulles Area Association of Realtors have endorsed Mr. Mitchell, and former Virginia gubernatorial candidate Terry McAuliffe appeared with him at a Sept. 18 fundraiser.

Mr. Mitchell’s business background has been key to his campaign pitch about fiscal responsibility.

“I understand how to build a successful organization, create jobs locally and look at the good, bad and ugly of a profit-and-loss statement to make important decisions for my business,” Mr. Mitchell said at a recent campaign appearance. “We need that type of business mentality in the state Senate as we look at more budget deficits in our immediate future.”

Last week, he picked up high-profile endorsements from retiring state Sen. Mary Margaret Whipple, Arlington Democrat, and state Sen. Louise L. Lucas, Southampton Democrat, at an event at his Ashburn, Va.-based company.

“I have no doubt that his strong business background, decorated military service and fresh perspective will be an asset to this new district,” Mrs. Whipple said.

But Mr. Mitchell’s 17-month-old company, Modern Mechanical LLC, spent much of its first year in litigation. According to Virginia court records, Mr. Mitchell was sued by his former company, Parrish Services, almost immediately after forming Modern Mechanical.

The sides agreed to a settlement. Although the settlement is sealed, hundreds of pages of documents detailing the complaints remain unsealed.

Erik Frias, an attorney for Mr. Mitchell, said he could not discuss the case beyond what was outlined in the court documents. He said the parties agreed to a settlement before the scheduled March 7 trial.

Asked about the terms of the agreement, Parrish Chief Operating Officer Linda Couch said, “The terms are it’s a sealed settlement. We’re not at liberty to discuss the terms.”

An attorney for Parrish said it would be inappropriate to comment on the case in general.

Mr. Mitchell also said he could not discuss the case.

“There was a suit, there was a countersuit, both parties involved reached a mutually agreeable settlement, and that was the end of it,” he said.

The complaints

According to court records, the lawsuit was filed on April 30, 2010. It says Mr. Mitchell violated the terms of employment agreements he signed Oct. 21, 2008, saying he would protect Manassas, Va.-based Parrish Services‘ confidential information and trade secrets during and after his employment, and that he would not own a company “in substantial competition” within 50 miles of Manassas for at least two years.

But in court papers, Mr. Mitchell admitted to organizing Modern Mechanical while he was still employed at Parrish and before giving his intent to end his employment.

Mr. Mitchell filed paperwork for his company on March 10, 2010, according to the Virginia State Corporation Commission.

In court papers, he said he resigned from his position with Parrish on April 10, 2010. Modern’s first day of operations was April 19, and the company first received revenue from the operation two days later. Parrish filed suit in Prince William County Circuit Court on April 30, 2010.

Mr. Mitchell conceded that he signed an agreement but disputed that it was the one referenced in court papers. He said he did know about marketing strategies and denied breaching trade secrets. His attorneys also said in court papers that the agreement was unenforceable because of the vague definition of “in substantial competition.”

He acknowledged in court papers that he offered jobs to three of Parrish’s employees but maintained that they were offered more senior positions at Modern than they held at Parrish — a stipulation that made the offers legally permissible, his attorneys argued.

Although the company serves the community of Ashburn — well within 50 miles of Manassas — Modern Mechanical is registered to an address in Richmond, according to state records.

Mr. Mitchell, in response to the lawsuit, filed a counterclaim in May 2010 accusing Parrish of defamation, denying that he ever served as an officer of Parrish or that he formed Modern Mechanical for the purpose of competing with Parrish.

Mr. Frias said Mr. Mitchell had given him paperwork to establish the Ashburn address as the primary one for the business, and that it should have been filed some time ago but must have gotten lost in the paper shuffle.

The Richmond address “was a decision that was made some time ago when it was first established,” Mr. Frias said.

Why?

“For reasons I can’t go into,” he said.

Asked whether he thinks the lawsuit will emerge as a campaign issue, Mr. Mitchell said he does not.

“The campaign’s been going great,” he added. “We’ve been out there working hard, talking to voters.”