For TechAmerica, one of the largest technology trade associations in the country, this has already been a difficult year. In the past few weeks, the trade group’s situation has apparently gotten even more challenging.
This column has obtained a copy of a lawsuit against TechAmerica that was quietly filed on September 18 in the Circuit Court of Lake County, Illinois by three of the association’s current member companies. The three firms – Zebra Technologies, PCTEL, and SigmaTron – allege that the association “breached its contractual obligations” when it closed the TechAmerica Midwest operation last June, thus “denying members access to a local office and the corresponding local benefits and opportunities.” In other words, they claim they didn’t get what they paid for.
The suit accuses TechAmerica of breach of contract, unjust enrichment, fraudulent or negligent misrepresentation, and violation of the Deceptive Trade Practices Act. The Chicago-area companies are seeking unspecified monetary damages, presumably, at the very least, in the amount they paid as membership dues. The combined dues for the three association members are listed in the filing as a total of $50,000.
On November 7, attorneys for the association filed a formal response to the complaint denying most of the allegations. According to the filing, TechAmerica admitted that the three companies requested cancellation of their membership, but denied that they requested a full refund. TechAmerica did reject a prorated refund of their membership dues. The three firms are still listed as members on the association's website.
Stephanie Craig, Senior VP of Communications for TechAmerica, would not comment directly on the lawsuit, but responded to an inquiry from this column by stating that “we are, and have been for a long time, focused on our dynamic new organization that is resonating greatly with our members, new and old.”
Representatives from the three companies involved declined to comment on the lawsuit. Their attorney, Andrew Cripe of the Chicago law firm of Polsinelli Shughart, also declined to say much about the legal action other than the total amount of damages sought by his clients “was still to be determined."
As previously described in this column, TechAmerica closed most of their regional offices and trimmed staff last June. As a further sign that the group continues to struggle financially, this column has also learned that another round of layoffs occurred two weeks ago. According to a former employee, four staff members in TechAmerica’s Santa Clara, California office were laid off and the space has been subleased. A few remaining TechAmerica staff members are now working from their Silicon Valley homes according to this source.
TechAmerica’s Craig would not confirm the layoffs, but insisted the association is “maintaining our beachheads in Washington, D.C., Brussels, Beijing, and Santa Clara, as well as offices in Sacramento, Austin and Chicago.”
The latest round of difficulty for TechAmerica comes at the end of a year in which the group originally appeared to be actively seeking a merger. Although the association announced their interest in a merger earlier this year, Craig was quoted here last July as claiming that TechAmerica “did not need to merge.”
While a merger with another association may not be on the horizon for TechAmerica, talks between two other major high tech trade groups have bogged down as well. Politico reported last month that merger discussions between the Information Technology Industry Council (ITI) and TechNet have stalled because of a disagreement over who would be in charge of the combined group.
Meanwhile, a new Congress and returning President will be sworn into office next month. At a time when the tech industry is coming under increasing scrutiny on a number of fronts, ranging from online privacy issues to stock market violations, the cutbacks, lawsuits and backroom fighting among TechAmerica, ITI and TechNet would give anyone pause as to whether these groups are truly prepared to strengthen technology’s clout in the nation’s capital in the coming year.