JAMES M. MUNLEY, District Judge.
Before the court for disposition is plaintiff's request for a permanent injunction, asserting the defendant breached an agreement not to compete and misappropriated trade secrets when he resigned from his position as a sales manager and took a job with a competitor. For the reasons below, the court will grant plaintiff's request in part and deny it in part.
Defendant William Georgelis (hereinafter "Georgelis" or "defendant") began employment with TimberTech, a manufacturer of certain building materials, on August 6, 2003, as a Retail Sales Manager. (Tr. II 73:10-12; Tr. I 22:5-13; Pl. Ex. 4). As a condition of employment, TimberTech required Georgelis to sign an Agreement Regarding Competition and Confidential Information (hereinafter "Agreement"). (Tr. II 73:3-12; Pl. Ex. 9). Georgelis signed the Agreement. (Pl. Ex. 9). In 2013, TimberTech merged with Plaintiff CPG International LLC (hereinafter "CPG"). (Tr. II 67:2-4; Tr. I 20:25-21:3). By its terms, the Agreement was assigned to CPG as TimberTech's successor. (Pl. Ex. 9 ¶ 10).
As a sales manager for TimberTech, and later CPG, Georgelis oversaw sales of certain products in the lower mid-Atlantic region. (Tr. I 22:15-21; Pl. Ex. 4). This region included Virginia, Maryland, Delaware, the District of Columbia, and parts of Pennsylvania and West Virginia.
It is undisputed that, from the time he started with TimberTech, Georgelis's product line included railing and decking. Trim and pavers were added to Georgelis's product line after the merger with CPG in 2013. Georgelis's responsibilities included managing a team of seven sales representatives, setting the strategic direction for the region, interacting with distributors, dealers, and end users. (Tr. I 22:15-21; Pl. Ex. 11). Before leaving CPG, Georgelis earned $195,000 per year in 2012 and 2013, including bonuses, and in excess of $164,000 in 2014. (Tr. I 24:24-25:2).
Before working at CPG, Georgelis garnered extensive exposure to the building industry through his father, a forty-year veteran of the business. (Tr. II 72:4-25). Georgelis's own experience working in the field spans a broad range, having spent approximately nine years before joining CPG with Home Depot, a retailer, and McMillan Lodel Warehouser, a distributor. (Tr. II 73:14-19; Tr. I 12:9-14). He then worked for TimberTech and CPG for eleven years, from 2003 to 2014. (Tr. II 74:4-8). Georgelis testified that he has developed a skill set through his many years of experience in the building materials industry that would qualify him to sell a variety of products beyond those that he sold at CPG. (Tr. II 121:6-17).
At some point prior to December 12, 2014, Georgelis received a phone call from a "head hunter," or corporate recruiter, about an opportunity at Snavely Forest Products (hereinafter "Snavely"), a distributor of building materials. (Tr. II 70:9-17). Georgelis applied for the position, and, on December 12, 2014, he gave a presentation to executives from Snavely in Pittsburgh as part of the interview process. (Tr. II 63:2-8; 68:3-15; 4:10-12). The purpose of the presentation was for Snavely executives to see a demonstration of Georgelis's skills.
In preparing the presentation, Georgelis admittedly used a CPG lifecycle graph and CPG price data from an older CPG powerpoint presentation, after removing the CPG logos. (Tr. II 121:19-122:3; Pl. Ex. 10, 13). Georgelis took and used the CPG slides, he said, because it was easier and took less time than it would have to create his own slides. (
In the regular course of business, Georgelis routinely accessed a Salesforce database of confidential account information gathered from CPG's sales representatives. (Tr. I 62:17-66:2; Pl. Ex. 15, 29). In the days leading up to the presentation, however, Georgelis accessed a significantly larger number of accounts than over the preceding year. (
Defendant offered no explanation for why he accessed so many accounts outside his own territory, particularly while being courted by Snavely. Plaintiff offered no non-speculative evidence to explain defendant's reasons for doing so either.
On the day of the presentation, Georgelis plugged a flash drive containing the slide deck, along with 130 other CPG documents and files, into a Snavely computer, which was connected to a projector. (Tr. II 6:7-17). Georgelis had offered to distribute handouts or copies of the presentation, but ultimately did not, and no one took notes. (Tr. II 5:22-6:6; 124:11-14). Plaintiff presented no evidence to show that any CPG files were copied to the Snavely computer.
Less than a week after his presentation, Snavely hired Georgelis as a sales manager. (Tr. II 20:3-5; 53:18-55:6). Snavely hired Georgelis to manage a sales force, meet with customers, and work with manufacturers' sales representatives to gain market share among dealers and end users for the products Snavely distributes. (Tr. II 53:18-55:6; Pl. Ex. 12). Georgelis's Snavely territory covers much of the same area as his CPG territory did, including Maryland, Delaware, the District of Columbia, and parts of Virginia, West Virginia, Pennsylvania, and New Jersey. (Pl. Ex. 4 at 3).
On December 18, 2014, Georgelis notified Jim Gross, Georgelis's immediate supervisor at CPG, that he had accepted a new position and that he intended to end his employment with CPG in two weeks. (Tr. II 77:1-78:6). Gross asked whether, by taking the new position, Georgelis would be in breach of the Agreement, and Georgelis replied that the "non-compete would not be an issue." (Tr. II 77:21-23). According to Georgelis, after he explained that his new employer would be Snavely, Gross "quickly asked [Georgelis], Well, what branch are you going to? Where are you going to go?" (Tr. II 78:3-4). Georgelis informed Gross that he would be working in Snavely's Baltimore branch. (Tr. II 78:4-6). Gross's immediate reaction when Georgelis told him he'd be leaving to work for Snavely was to tell Georgelis that he was leaving to work for a competitor. (Tr. I 54:18-23).
Georgelis then continued working through the day, communicating with Gross multiple times. (Tr. II 78:7-79:10). Gross, in the meantime, notified Human Resources, his own direct supervisor, and the CPG CEO, and began working on a mitigation plan. (Tr. I 55:2-22). The plan was most highly concerned with the distribution partners and dealers with whom Georgelis had developed and maintained key personal relationships. (
At approximately 5:15 p.m. that evening, Georgelis participated in a phone call with Gross, CPG legal counsel Brian Cooper, and CPG Human Resources Director Sandy Jones. (Tr. II 80:1-9). Cooper reviewed the solicitation and confidentiality provisions of the Agreement with Georgelis, and Jones informed Georgelis that his employment was being terminated immediately. (Tr. II 81:15-16). Georgelis was instructed to return all CPG property in his possession, and arrangements were made for picking up his laptop, telephone, and automobile. (Tr. I 56:2-9; Tr. II 81:8-18).
Georgelis began working for Snavely on December 19, 2014.
Georgelis signed the Agreement on August 6, 2003, his first day with TimberTech.
By its terms, signing the Agreement was a condition of Georgelis's employment, and his employment, wages, and benefits were the consideration for the Agreement. (Pl. Ex. 9). The Agreement is silent as to Georgelis's job title or description, salary, benefits, or the products he would be selling. (
In the Agreement, Georgelis acknowledged that he would have access to confidential information, which included marketing methods and data, sales techniques and customers, prices, products purchased by customers, and business strategies or plans. (
Georgelis further agreed not to engage in any business as an employee or otherwise that competes with TimberTech in any territory where TimberTech products or services are promoted or sold, nor to solicit TimberTech customers, for two years following termination of employment. (
Georgelis agreed to deliver a copy of the Agreement to any prospective new employer during the two-year period following separation from TimberTech. (
The Agreement contains a savings clause, providing that any provision found to be invalid or unenforceable should be enforced to the extent permissible by law or judicially modified if necessary to render enforcement practicable. (
Finally, the Agreement represents that Georgelis will not be impaired in his ability to work in his chosen field by the obligations undertaken by signing the Agreement. (
(Pl. Ex. 9). Georgelis testified that he understood the last sentence to mean he could work at any company he chose, regardless of whether it competed with TimberTech or CPG, or not. (Tr. II 75:4-15).
Georgelis had access to CPG's confidential information while working at CPG. (
Georgelis also had access to, and, in some instances, helped create, confidential information about sales strategies. (
Other than the slides Georgelis included in his power point presentation, plaintiff has failed to establish that defendant has copied or transmitted or in any other way disclosed any of CPG's confidential information to Snavely. With respect to the slides, plaintiff has failed to establish that the information contained therein was not readily ascertainable by the general public.
CPG filed its complaint on January 26, 2015, seeking temporary and permanent injunctive relief and compensatory and statutory damages. (Doc. 1). Count I of the complaint alleges a claim for breach of contract under Ohio law. Count II contends Georgelis violated the Ohio Uniform Trade Secrets Act. Count III asserts a claim for unfair competition.
CPG moved the court for a temporary restraining order (hereinafter "TRO") on January 27, 2015, along with motions for an expedited hearing and expedited discovery. (Docs. 3, 5). The court granted expedited discovery, and, on a telephone conference, scheduled a consolidated hearing for February 3, 2015. (Docs. 10, 11). We ruled that the hearing would consolidate the preliminary injunction and the trial on the merits for the permanent injunction, pursuant to Federal Rule of Civil Procedure 65(a)(2), and we verbally denied the TRO at the end of the hearing. (Doc. 10; Tr. II 131:2-9; see also Tr. I 4:9-10).
The court heard testimony on February 3 and 4, 2015, from four witnesses. Plaintiff called James Anthony Gross, Vice President of Eastern Division Sales for CPG and Georgelis's supervisor, and Christopher Scott Tragasz, testifying as an expert in computer forensic examinations. (Tr. I 17:1-4, 100:18-22). Defendants called Clark Spitzer, Senior Vice President of Snavely, in charge of Marketing and Eastern Distribution, and Defendant Georgelis.
The court has jurisdiction pursuant to the diversity statute, 28 U.S.C. § 1332. CPG is incorporated under the laws of the State of Delaware with its headquarters in Scranton, Pennsylvania. (Doc. 1, Compl. ¶¶ 26-27). The defendant is a citizen of Maryland. (Tr. II 64:11-14). Additionally, the amount in controversy exceeds $75,000. (Doc. 1, Compl. ¶ 34). Because complete diversity of citizenship exists among the parties and the amount in controversy exceeds $75,000, the court has jurisdiction over this case.
Plaintiff has the burden of proving its case by a preponderance of the evidence. Plaintiff meets this burden when, in light of all the evidence, it establishes that what it claims is more likely so than not so.
In determining whether any fact has been proven by a preponderance of evidence in this case, we have considered the testimony of all witnesses, both plaintiff witnesses and defense witnesses. We have also examined all exhibits received in evidence, whether presented by the plaintiff or defendant.
CPG filed a three-count complaint of January 26, 2015, seeking injunctive relief and compensatory and statutory damages. Count I of the complaint alleges a claim for breach of contract under Ohio law. Count II contends Georgelis violated the Ohio Uniform Trade Secrets Act. Count III asserts a claim for unfair competition. The court will address each count in turn.
Plaintiff alleges defendant breached the Agreement, and seeks a permanent injunction to redress the harm caused by that breach. "According to well-established principles of equity, a plaintiff seeking a permanent injunction must satisfy a four-factor test before a court may grant such relief."
Plaintiff alleges it has suffered and will continue to suffer irreparable injury as a result of defendant's breach of the Agreement. Plaintiff seeks an order enjoining defendant from working for Snavely or any other company that sells products that compete with CPG's for a period of two years.
Defendant counters that plaintiff has suffered no irreparable injury, because the Agreement is not a valid contract, and, if the Agreement is a valid contract, Georgelis did not breach the Agreement.
We first examine the Agreement to determine whether it is valid as a matter of contract law. As noted above, we apply Ohio law to this contract. "A contract is generally defined as a promise, or a set of promises, actionable upon breach. Essential elements of a contract include an offer, acceptance, contractual capacity, consideration (the bargained for legal benefit and/or detriment), a manifestation of mutual assent and legality of object and of consideration."
Defendant argues that the Agreement is void because he was provided with no additional consideration when the lineup of products Georgelis was tasked with selling changed after CPG took over TimberTech. After the merger, Georgelis began selling trim and pavers in addition to decking and railing. (Tr. II 104:2-5). Defendant relies solely on
Further,
Under Ohio law, even if the merger between TimberTech and CPG somehow created a new Agreement, Georgelis's continued employment is sufficient consideration. Where an at-will employee enters into a noncompetition agreement with his or her employer in exchange for the employer continuing the at-will employment relationship, consideration exists.
Here, however, there was no new Agreement, and there was no change in employment status relevant to the Agreement that Georgelis signed. The Agreement, by its terms, is not limited to any particular products to be sold or, indeed, any job description whatsoever. The Agreement applied to Georgelis's entire tenure as an employee with TimberTech and its successors, and, therefore, the original consideration was sufficient to bind him to that Agreement for the intended duration. Accordingly, the Agreement is a valid contract.
The parties do not dispute that Georgelis left his employment with CPG to work for Snavely. CPG alleges that in doing so, Georgelis breached the Agreement because Snavely competes with CPG. Georgelis first argues that he did not breach the agreement because Snavely is a distributor and CPG is a manufacturer, and therefore the two companies cannot, by definition, be competitors. Defendant further argues he is not in breach because the Agreement's final paragraph allows him to work for whatever employer he chooses. The court finds defendant's arguments unconvincing.
First, plaintiff presented evidence that established that CPG and Snavely sell competing products in the same territory to the same customers, and argues that they are therefore competitors. Without reference to a single legal authority, defendant counters with the proposition that a manufacturer and a distributor cannot compete with one another. Thus, defendant argues, because CPG is a manufacturer, and Snavely is a distributer, they cannot be considered competitors, and he did not breach the Agreement by leaving CPG to work for Snavely.
Defendant's argument overruns case law, oversimplifies the circumstances of this case, and overlooks the simple reality that Georgelis cannot do the job he was hired by Snavely to do without competing with CPG. Whether the former and new employers can be categorized as the same type of business is entirely irrelevant to the analysis of whether they "compete" in the marketplace.
Ohio law provides that competition is a "rivalry between two or more businesses striving for the same customers or market."
There is no question, based on the evidence adduced at trial, that CPG and Snavely seek to sell competing products to the same customers in the mid-Atlantic region. CPG manufactures and sells building material products, including decking, railing, trim, and pavers. (
Snavely is a distributor of building material products. (Tr. II 8:18-21). Snavely partners with manufacturers to sell their products to dealers. (Tr. II 7:25-8:11). Just like CPG, Snavely works with their partners to increase market share for their partners' products, primarily by securing shelf space with the same dealers. (
In the business model described above, the interests of the manufacturer and their partner distributors are aligned, because both are working toward the goal of maximizing sales down the channel. (Tr. II 29:13-16). In a single territory, located in Texas, CPG partners with Snavely to sell CPG products. (Tr. I 18:3-25). In all other areas in which they both operate, Snavely partners with manufacturers other than CPG to sell products that compete with CPG's. (
Moreover, in the mid-Atlantic territory where Georgelis worked for CPG and has been working for Snavely since December 19, 2014, CPG partners with the distributors Rocco, Parksite, and Huttig, to sell the CPG products TimberTech deck, TimberTech and Azek rail, Azek trim, and Azek porch (hereinafter, collectively "the CPG products"). (Pl. Ex. 21). In that same territory, Snavely partners with the manufacturers Trex, Palram, and Aeratis, to sell Trex deck, Trex rail, Palram PVC trim, and Aeratis porch (hereinafter, collectively "the Snavely products"). (
Accordingly, the court finds that Snavely and CPG are competitors in the Mid-Atlantic market for sales of deck, rail, trim, and porch products. By the terms of the Agreement, Georgelis is prohibited from engaging in any business for a competitor of CPG. Therefore, Georgelis has breached the Agreement by working for Snavely, and the breach is particularly material because Snavely hired Georgelis to facilitate that competition by selling the same kinds of products as he did for CPG, in the same territory, to the same customers.
Defendant next argues that, even if Snavely is a CPG competitor, he has not breached the Agreement because its final paragraph allows him to work for whatever employer he chooses, without limitation.
The final paragraph of the Agreement states:
(Pl. Ex. 9). Georgelis testified that he believed this paragraph meant that he could not be limited in his choice of employer, even if such an employer competed with CPG or TimberTech. (Tr. II 75:4-15).
The provision makes no mention of companies or employers of Georgelis's choosing, but rather states that he would not be impaired from working in the "field" he chose. The Oxford English Dictionary defines "field," in relevant part, as "An area or sphere of action, enquiry, or interest; a (wider or narrower) range of opportunities, or of objects, for activity or consideration; a theme, a subject." OXFORD ENGLISH DICTIONARY ONLINE (2015). When the Agreement referred to the "field" of Georgelis's choice, it referred to the area or sphere of action or interest in which he chooses to seek employment; a "range of opportunities," not a specific job or employer.
When read in context, consistent with the whole of the Agreement, we find that the only reasonable interpretation of this provision is that CPG has no right to prevent Georgelis from working in the field of building material sales. It cannot mean that he is free to work for a competitor, because that would negate the substance of a major component of the Agreement, an absurd result.
"In interpreting a contract, we are required, if possible, to give effect to every provision of the contract. If one construction of a doubtful condition written in a contract would render a clause meaningless and it is possible that another construction would give that same clause meaning and purpose, then the latter construction must prevail."
A breach of the Agreement is not enough on its own to compel the court to issue injunctive relief. Plaintiff must establish that it would suffer irreparable harm if the Agreement is not enforced. We find that CPG has carried its burden here.
"Irreparable harm is `a potential harm which cannot be redressed by a legal or equitable remedy following a trial.'"
CPG demonstrated that Georgelis had access to, and at times, developed, confidential strategies and plans for the sales of their products. Further, Georgelis developed and cultivated relationships with customers at the dealer level to facilitate sales of CPG products. Snavely hired Georgelis to fulfill the same role in selling and supervising the selling of products distributed by Snavely, products that compete with CPG's in the mid-Atlantic region.
If Georgelis is permitted to work for Snavely in that capacity, CPG would suffer irreparable harm through the loss of customers whose relationships with Georgelis-relationships developed in the employ and for the benefit of CPG-would render them susceptible to his solicitations on Snavely's behalf. Such harm would not be remediable by money damages, because CPG would have no way of proving that any particular lost sale was attributable to Georgelis's unfair competition. CPG would be put at a competetive disadvantage that legal remedies would not be able to redress.
Further, the "inevitable disclosure doctrine" establishes the element of irreparable harm. Third Circuit courts have found that an employer suffers irreparable harm where an employee who has had access to the employer's confidential information goes to work for a competitor under circumstances in which the employee is likely, if not certain, to use that information to compete with his original employer. "Because he was exposed to confidential information about [his employer's] sales, marketing, and pricing strategies," Georgelis "would be likely to use that information, either consciously or not, when competing against" CPG in selling building products.
Finally, Georgelis stipulated to the nature of the type of harm his employer would face if he breached the Agreement. The Agreement states that TimberTech's remedy at law would be inadequate for any breach of the Agreement, and that injunctive relief may be granted to enforce any of the provisions therein. (Pl. Ex. 9 ¶ 8). Such a contractual provision is not sufficient on its own to obtain relief, but it does constitute "one factor that weighs in favor of finding irreparable harm."
For the reasons discussed above, we find that CPG has carried its burden to establish that remedies at law are unable to compensate plaintiff for the harm that has been and will be caused by defendant's breach.
Plaintiff must next establish that the balance of harms weighs in favor of granting that relief. Specifically, plaintiff must demonstrate that enforcement of the Agreement will go no further than necessary to protect plaintiff's interests, and that it does not unduly burden defendant's ability to make a living.
Defendant argues that plaintiff has failed to carry this burden because the Agreement is unreasonable in scope regarding time, geographic area, and products covered. Defendant argues that the scope of the Agreement is unreasonable because it goes beyond what is necessary to protect CPG's business interests and is overly burdensome on his own ability to make a living.
It is undisputed that the Agreement should be "interpreted, construed, and enforced in accordance with the laws of the State of Ohio." (Pl. Ex. 9 ¶ 9). "In Ohio, non-compete agreements that are reasonable are enforced, and those that are unreasonable are enforced to the extent necessary to protect an employer's legitimate interest."
The Supreme Court of Ohio set forth the current standard for review and enforcement of agreements not to compete in
The Court in
The
In the instant case, defendant takes issue with the two-year bar on competition and solicitation to which he agreed.
Defendant first argues that other CPG employees have agreed to one-year terms, and thus these other agreements evidence that CPG does not actually believe its interests can only be protected by a two-year period of non-competition and non-solicitation. We disagree.
First, defendant has provided no evidence that the other employees who received one-year agreements have the same qualifications and responsibilities as defendant. Nor has he established that CPG did not agree to longer agreements in exchange for some bargained-for benefit, such as lower salary or fewer benefits.
We have heard nothing upon which to base a finding that Georgelis's two-year Agreement is in any way comparable to the one-year agreements of other employees. To do so in absence of evidence would be arbitrary and speculative.
Second, under Ohio law, agreements not to compete for periods of two years or greater are regularly held to be reasonable when the circumstances merit.
Defendant next argues that a two-year non-competition and non-solicitation period is unreasonable because it is greater than what CPG requires to protect its interests and is overly burdensome on his ability to make a living. Defendant argues that two years is more than CPG needs because of the constantly changing nature of the confidential information to which Georgelis was exposed. After careful review of the evidence, we agree that two years is an unreasonable period under the circumstances, and will reduce the time span of the bar on competition to one year.
CPG demonstrated that if Georgelis is permitted to work for Snavely without delay, selling the same products in the same region to the same customers, CPG is at risk to lose those customers to Snavely. CPG presented evidence that Georgelis has spent over a decade establishing customer relationships on behalf of CPG, and his new position would require him to usurp those relationships on behalf of Snavely. He would do so knowing what CPG's sales strategies were when he left, and, to a certain extent, where CPG's plans would take them in the near future.
Because CPG has established that they have a legitimate business interest that would be irreparably harmed if Georgelis is allowed to immediately work for Snavely, we hold that the covenant not to compete with CPG nor to solicit CPG's customers will be enforced. CPG has not, however, demonstrated by a preponderance of the evidence that two years is not greater than necessary for the protection of CPG, and therefore reasonable as a matter of law.
Ohio law requires a "reasonable relationship between the period of prohibition and [the employer's] business interests."
Defendant next contends that the Agreement is unreasonable in its geographic scope and in barring Georgelis from selling all products that CPG sells or might sell in the future. Plaintiff seems to concede in its post-trial brief that the true crux of the risk CPG faces from Georgelis working for a competitor would be that "CPG will suffer irreparable harm if Georgelis is not required to abide by his Agreement and enjoined from selling or supervising others selling competing products to CPG's same customers in the same region in his new role for Snavely." (Doc. 31, Pl's Br. at 4) (emphasis added). In any event, Mr. Gross testified that selling building products other than those manufactured by CPG, such as doors, windows, or roofing products, would be permissible under the Agreement. (Tr. I 46:18-47:3).
Ultimately, CPG's evidence failed to establish any threat from Georgelis selling 1) any product that does not compete with CPG's products, whether in the mid-Atlantic region or elsewhere, or 2) any product outside of the mid-Atlantic region and to customers other than those to whom he would have been selling CPG's products. Thus, we find that the geographic scope and products covered in the Agreement are unreasonable, and must be altered under Ohio law to be enforceable.
In order to protect CPG's legitimate interests, we need only enjoin Georgelis from selling or supervising others who would sell any products CPG sold as of the day Georgelis's employment ended, within the territory Georgelis covered as a CPG employee, and to any CPG customer for whose account Georgelis was or would have been responsible.
The second prong of the
Refashioned in the manner described above, the Agreement does not impose undue hardship on Georgelis. He is still able to work in the building material industry, in sales, and in the geographic territory in which he has previously worked. Or, if he chooses, he can work outside of the mid-Atlantic area, and sell the same types of products he once sold for CPG to new customers. Further, he need not end his employment with Snavely, so long as he does not sell products that compete with CPG products (as of the date of his termination from CPG) to CPG customers in the mid-Atlantic territory. Georgelis himself concedes that his skill set qualifies him to sell a variety of building materials products beyond those that he sold at CPG. (Tr. II 121:6-17);
Finally, defendant has raised no potential harm to the public if we enforce the Agreement. "As a rule, Ohio law finds the enforcement of contractual obligations to be of itself an important social policy interest."
Because plaintiff has carried its burden to prove 1) that the Agreement is valid; 2) defendant has breached the Agreement; 3) as a result of defendant's breach, plaintiff will suffer irreparable harm if the Agreement is not enforced; 4) remedies at law, such as money damages, are inadequate to compensate the plaintiff for such harm; 5) the defendant will not be unduly burdened by an order enforcing the Agreement within the limitations the court will set; and 6) enforcement is in the public interest, we find in favor of the plaintiff on Count I of the complaint (Doc. 1).
The court will grant a permanent injunction enjoining defendant from competing with CPG by selling or supervising the selling of products that compete with CPG's (as of his last day of employment with CPG), within the same mid-Atlantic territory and to any of the same customers he had contact with on behalf of CPG, for a period of one years. Under the tolling provision in the Agreement (Pl. Ex. 9 ¶ 12), the one-year period will begin to run on the date of the court's injunctive order.
In Count II of its complaint, plaintiff alleges that defendant wilfully and maliciously "misappropriated, misused, and likely disclosed" CPG's trade secrets in violation of the Ohio Uniform Trade Secrets Act (hereinafter "OUTSA"), Oh. Rev. Code Section 1333.61, et seq. (Doc. 1 ¶¶ 121-129)
OUTSA protects businesses' trade secrets, defined as:
OH. REV. CODE § 1333.61(D).
Georgelis clearly had access to confidential information as defined in the Agreement.
Plaintiff did establish that the defendant accessed data related to customers outside his sales territory prior to his departure from CPG, and after he began discussions with Snavely about obtaining a job. These files would likely constitute trade secrets belonging to CPG, because the data therein were valuable to CPG by being not generally known or available, and were subject of efforts to keep them secret. The court has seen no evidence, however, that Georgelis downloaded or printed any of these files. Plaintiff has submitted no evidence that Georgelis provided copies of any of CPG's files to Snavely, or that he has retained or communicated any of the detailed information from Sales Force.
Plaintiff requested that the court grant an adverse inference against defendant because Snavely refused to produce his current work computer for forensic analysis. We deny that request. We decline to punish Georgelis for a decision that was, at the very least, not entirely within his power to make. Snavely is not a party to this matter, and we will not hold their refusal to produce the laptop against Georgelis; it would be unjust. Moreover, there are many possible reasons why a company might be reticent to turn over a computer that likely contains proprietary or confidential information to a competitor to comb through. We cannot conclude that the most likely reason they withheld the computer was to conceal evidence of CPG information on Georgelis's Snavely computer.
While the court strongly suspects that Georgelis's activity in accessing accounts beyond his mandate was not driven by a desire to further CPG's business interests, we cannot find that plaintiff proved by a preponderance of the evidence that Georgelis misused or misappropriated this information. While it is true that defendant offered no explanation for his actions, neither did plaintiff ask him for his reasons. We are left with only suspicion and speculation, but no evidence. In any event, the risk that Georgelis might disclose or misuse this information during the course of his employment with Snavely is sufficiently mitigated by enforcement of the Agreement.
The only other instance of alleged misappropriation plaintiff points to is the presentation Georgelis made to Snavely using CPG slides. While Georgelis admits he used CPG confidential information to create those slides, which in itself constitutes a breach of the Agreement, the parties' evidence conflicted as to whether the data in the slides was a trade secret under OUTSA. It is unclear whether the pricing data Georgelis used was derived from publicly available information. The court heard conflicting testimony, of equal weight, as to whether this data was a CPG trade secret or publicly available. (compare Tr. I 60:18-61:18, with Tr. II 123:9-17). We remain unconvinced that the data is not readily ascertainable from public sources.
Likewise, defendant presented evidence that slide presentations such as the one Georgelis plagiarized are routinely displayed at conferences where individuals, such as vendors and hotel staff, can view them or hear their contents, without signing confidentiality agreements. (Tr. I 74:24-75:22). This would tend to demonstrate at best a lack of effort to keep them secret, or at worst for CPG, a deliberate release of the presentations to the public. Either way, the plaintiff has not established that the slides nor the data contained therein were trade secrets under OUTSA.
Finally, we find that plaintiff has failed to prove beyond a preponderance of the evidence that any of Georgelis's actions were undertaken with malice. We doubt whether he intended to do anything more than obtain a new position to better benefit himself and his family. Georgelis testified that he believed what he was doing was not a violation of the Agreement. While we have ruled that he was wrong as a matter of law, we find defendant's testimony credible, and, having seen no evidence to the contrary, we take him at his word that his actions were not willful.
In light of these findings, we hold that plaintiff has no viable claim under OUTSA, and we find in favor of the defendant on Count II of the complaint.
The plaintiff's allegations of unfair competition in Count III of the complaint are identical in substance to those raised under Counts I and II, except that plaintiff claims unspecified "compensatory damages" in addition to irreparable harm. To the extent that plaintiff has established that defendant has engaged or likely will engage in unfair competition with CPG, the injunctive relief granted under Count I is a sufficient remedy to make plaintiff whole. Because plaintiff has established that any harm to CPG's customer relationships, current or prospective, goodwill, or other business interests are impossible to calculate in economic terms and irreparable by any means other than injunctive relief, plaintiff's request for money damages is denied.
For the reasons set forth above, we find in favor of the plaintiff on Count I, and in favor of the defendant on Count II. We find that Count III is subsumed in the first two counts, and is therefore moot. An appropriate order follows.
(Pl. Ex. 9 ¶ 3).
(Pl. Ex. 9 ¶ 5).
(Pl. Ex. 9 ¶ 3).
