What Is a Nuclear Verdict?
Nuclear verdicts refer to exceptionally high jury awards—generally, those exceeding $10 million. These verdicts have become increasingly common in the past decade. In fact, communications firm Marathon Strategies reported that 135 corporate lawsuits across 55 different sectors led to nuclear verdicts in 2024, totaling $31.3 billion. This marks the highest number of such verdicts since 2009, representing a 52% increase in frequency and a 116% rise in severity compared to the prior year.
A variety of factors have contributed to this trend, including rising litigation funding, eroding tort reform and, above all, deteriorating public sentiment toward businesses. Amid growing corporate distrust, businesses have not only been expected to meet higher standards within their operations but have also been held more accountable for their wrongdoings. Upon being sued and taken to court, businesses have frequently encountered juries that are sympathetic to plaintiffs. Compounding this issue, there’s a rising perception that businesses (especially large ones) can always afford the cost of damages. This means juries are likely to have fewer reservations when awarding substantial damages to plaintiffs, resulting in nuclear verdicts.
Nuclear verdicts can carry significant consequences for businesses of all sizes and sectors, causing lasting reputational harm, posing underinsurance concerns and wreaking large-scale financial havoc. That’s why it’s vital for businesses to better understand these verdicts and how to prevent them. This case study summarizes a recent nuclear verdict, outlines factors that led to the verdict, highlights associated compliance considerations and provides related risk mitigation measures.
$58.9 Million Trade Secrets Loss
Case Details:
In 2014, technology company Sonrai and garbage truck manufacturer Heil entered into a confidentiality agreement to examine the possibility of incorporating Sonrai’s proprietary “Vector” solution into Heil’s fleet. This solution is an advanced vehicle information tool that can help garbage truck fleet operators collect and assess truck data in real time. During the course of this agreement, Sonrai’s then-executive vice president worked closely with Heil to showcase Vector’s capabilities. Following a series of negotiations, however, Sonrai and Heil were unable to reach a deal to use such technology, thereby ending their business relationship.
In the coming months, Sonrai’s then-executive vice president resigned from his position and began working for Heil instead. By 2016, Heil had acquired another company to help develop and debut “Enhance,” a competing technology solution. Sonrai promptly sued Heil, alleging that Enhance was created using confidential information obtained during their prior agreement and business relationship. This litigation persisted for nearly a decade before heading into a multiweek trial at the U.S. District Court for the Northern District of Illinois.
During the trial, Sonrai’s legal team alleged that the technology company’s ex-employee was used as a “pawn” in Heil’s plan to launch a copycat version of Vector. The trial also revealed that, prior to his resignation from Sonrai, the then executive vice president downloaded a range of proprietary data from his corporate laptop over a 22-hour period, subsequently wiping it clean. This provided proof of destruction of evidence, with Sonrai’s legal team urging the judge and jury to assume the deleted information supported the eventual development of Enhance. In defense, Heil’s legal team claimed that the garbage truck manufacturer’s conduct was “isolated and limited” and that the sensitive data provided by Sonrai’s ex-employee was only briefly discussed and never explicitly requested.
In 2025, the jury awarded Sonrai $28.9 million in compensatory damages upon determining that Heil had unfairly leveraged the technology company’s trade secrets. The jury then added $30 million in punitive damages against Heil, asserting that the garbage truck manufacturer’s misappropriation of confidential information was willful and malicious. Altogether, this contributed to a nearly $60 million verdict; however, post-trial challenges ensued. In 2026, the court denied Heil’s legal team’s motions for a new trial and judgment as a matter of law, but granted their motion for remittitur in part, reducing the total award to nearly $10.4 million— split evenly between compensatory and punitive damages. This reduction emphasizes that nuclear verdicts, while headline-grabbing at the time of the jury’s decision, don’t always reflect the actual financial exposures companies face following post-trial proceedings.
Factors that Led to the $58.9 Million Trade Secrets Loss
Upon closer examination, the main factors contributing to this nuclear verdict were a handful of poor business and leadership practices.
First, the two companies involved failed to negotiate a licensing deal for Vector, paving the way for the development of a competing product. Following the breakdown of these negotiations, employee poaching occurred when Sonrai’s then-executive vice president left his position and was offered a new role at Heil.
Furthermore, Sonrai’s ex-employee engaged in a number of inappropriate activities by removing proprietary data from his corporate laptop before his resignation and promptly wiping it clean, constituting destruction of evidence. This data was then presumably used to launch Enhance, demonstrating the misappropriation of confidential information. Because departing executives have a responsibility to protect their former employer’s trade secrets and refrain from exploiting sensitive data for personal gain, this individual’s actions represent multiple leadership failures. Finally, the jury determined that Heil’s use of confidential information was both willful and malicious, indicating the garbage truck manufacturer intentionally leveraged this data to debut its new product and establish an unfair competitive advantage over Sonrai.
Compliance Considerations for the $58.9 Million Trade Secrets Loss
This case also raises compliance considerations regarding several federal and state regulations, including the following:
- The Defend Trade Secrets Act (DTSA)— This federal law allows U.S. companies to sue competitors, former employees and business partners who steal, disclose or misappropriate their trade secrets, as long as the lawsuit is filed less than three years after the incident was discovered (or reasonably should have been discovered). As such, this law enabled Sonrai to sue Heil after the technology company’s ex-employee shared proprietary data. Under the DTSA, courts can issue injunctions to prevent the widespread distribution of trade secrets and award compensatory damages to affected companies. In cases of willful and malicious misappropriation, courts can also award punitive damages up to double the compensatory damages, as was the case here before the award was reduced through post-trial proceedings. Nevertheless, the DTSA requires companies to include specific whistleblower immunity notice language in written agreements governing trade secrets, thereby ensuring that individuals will not be held liable for disclosing confidential information to government officials or attorneys when reporting suspected violations or during legal proceedings. Failure to include this language could prevent companies from recovering punitive damages and attorney fees in a DTSA lawsuit.
- The Illinois Trade Secrets Act (ITSA)—This state law is designed to protect against the unauthorized use or disclosure of confidential information among Illinois-based companies. To file a lawsuit under the ITSA, a company must meet two main requirements. First, it must prove that the misappropriated information was so valuable and sufficiently secret that it would have provided an actual or possible economic advantage over competitors. Second, it must demonstrate that reasonable steps were taken to maintain the secrecy of this information (e.g., confidentiality agreements, physical safeguards and access controls). Because the proprietary data shared by Sonrai’s ex-employee likely helped Heil develop its new product and gain a competitive advantage, and this information was supposed to be protected by the initial confidentiality agreement between the two companies, this case meets ITSA requirements. Similar to the DTSA, this law also permits courts to issue injunctions to preserve trade secrets and award damages to affected companies.
- Fiduciary duty obligations—A fiduciary is an individual or entity acting on behalf of others. Because they hold positions of trust and are required to put the interests of the company and its shareholders ahead of their own, corporate executives are generally considered fiduciaries under both state and federal law. As a result, these individuals are ethically and legally bound to uphold several core responsibilities, also known as fiduciary duties. Namely, corporate executives are required to fulfill their duties of care and loyalty, meaning they must make reasonable, well-informed business decisions and avoid potential conflicts of interest that could put their personal gain above the company’s wellbeing. These duties also extend to departing executives, prohibiting them from abusing corporate resources and exploiting confidential information for their own benefit. With this in mind, Sonrai’s former executive vice president breached his fiduciary duties by downloading proprietary data from his corporate laptop and wiping it clean before his resignation.
- Evidence preservation standards—In both state and federal courts, all parties involved in a lawsuit have a responsibility to preserve any evidence that may be relevant to the case. This means that, as soon as a lawsuit is reasonably foreseeable, these parties must suspend their existing document destruction policies and implement a formal litigation hold to preserve potentially valuable evidence (both physical and electronic). Failure to do so could result in severe spoliation sanctions, including monetary penalties and possible dismissal of the case. Because Sonrai’s ex-employee was poached by Heil, and he disclosed proprietary data to the garbage truck manufacturer to help develop a competing product, litigation was reasonably foreseeable. Therefore, his decision to wipe his corporate laptop clean after downloading the confidential information could constitute a violation of evidence preservation standards.
Risk Mitigation Measures
To avoid similar losses, businesses should follow these risk mitigation tactics:
- Draft solid agreements. Businesses should create clear, detailed confidentiality and nondisclosure agreements when entering into relationships with other businesses, particularly when those relationships involve the sharing of trade secrets and other proprietary data. These agreements should outline each party’s specific obligations and the consequences for violating such responsibilities. If applicable, these agreements should also include noncompete and non-solicitation provisions. In addition, these agreements should include whistleblower immunity notice language, as required by the DTSA. It’s wise to work with legal counsel when drafting these agreements.
- Establish effective offboarding protocols. Businesses should have documented offboarding processes that explain how to smoothly transition departing employees, especially executives and senior leaders, from the workforce and prevent the exploitation of confidential information. HR teams should be routinely trained on these processes to ensure proper enforcement. Employees should also be aware of these processes, including the steps for returning workplace devices and revoking access to corporate resources.
- Monitor sensitive data. By conducting regular data audits, businesses can better flag any suspicious activity and defend against the possible disclosure of confidential information. During these audits, businesses should carefully review system access logs for potential abnormalities or unexplained actions, such as bulk downloads, missing or duplicate records, and format or naming inconsistencies. Any issues should be promptly investigated to prevent widespread losses.
- Leverage litigation holds as needed. Whenever businesses suspect an impending lawsuit, whether due to a significant workplace incident, threats of legal action or a regulatory investigation, all document destruction policies should immediately cease. From there, businesses should invoke litigation holds to protect their records and preserve any valuable information that could be deemed evidence. In doing so, businesses can reduce the risk of spoliation sanctions and related penalties.
- Ensure compliance. Workplace policies and procedures, including the actions of executives and senior leaders, should be regularly assessed to maintain compliance with trade secret laws and fiduciary duty obligations, as well as any other applicable federal, state and local regulations.
- Secure proper coverage. In this increasingly litigious environment, businesses need to have a robust liability insurance portfolio. Depending on their operations, this may include technology errors and omissions coverage, media liability coverage or other specialized policies that address intellectual property related exposures. It’s best to consult trusted insurance professionals to discuss specific liability coverage needs.
We Can Help
If you have questions, reach out to one of our insurance advisors to discuss specific coverage needs, so you can avoid a nuclear verdict loss.