Highland Consulting Grp. v. Minjares Soule

• Decision Date: 26 August 2021
• Docket Number: 9:19-cv-81636-ROSENBERG/REINHART
• Parties: THE HIGHLAND CONSULTING GROUP, INC., Plaintiff, v. JESUS FELIX MINJARES SOULE, Defendant.
• Court: U.S. District Court — Southern District of Florida

THE HIGHLAND CONSULTING GROUP, INC., Plaintiff, v. JESUS FELIX MINJARES SOULE, Defendant.

No. 9:19-cv-81636-ROSENBERG/REINHART

United States District Court, S.D. Florida

August 26, 2021

ORDER DENYING SUMMARY JUDGMENT

ROBIN L. ROSENBERG, UNITED STATES DISTRICT JUDGE.

This matter comes before the Court on Plaintiff's Motion for Summary Judgment [DE 125] and upon Defendant's Amended Motion for Final Summary Judgment [DE 167]. The Motions have been fully briefed and are ripe for the Court's review. The Court has considered the parties' briefing and the record and is otherwise fully advised in the premises. For the reasons set forth below, the Motions are DENIED.

This case is about an employee who signed a restrictive covenant as part of his employment and resigned several years later. His former employer maintains that he subsequently breached several provisions of the restrictive covenant. He maintains that his former employer breached his employment agreement by failing to pay his salary and bonuses, thereby discharging his obligation to comply with the restrictive covenant. Both parties seek summary judgment, however the Court concludes that genuine issues of material fact preclude granting summary judgment for either party.

I. FACTUAL BACKGROUND^[1]

Plaintiff Highland Consulting Group, Inc. is a global business consulting firm that James Kerridge founded in the early 1990's. One industry in which Plaintiff provides consulting services is the mining industry. Gregory Peacock led Plaintiff's mining division for a period of time until he resigned on September 20, 2019. On or around September 25, 2019, Peacock founded Surge Performance Group (“SPG”), a consulting firm that also provided services in the mining industry.

Defendant Jesus Felix Minjares Soule began working for Plaintiff in 2011. He worked under Peacock in Plaintiff's mining division for a period of time. Defendant's compensation consisted of a salary and reimbursement of out-of-pocket expenses, both of which were to be paid on a bi-weekly basis. In 2014, he became eligible to participate in Plaintiff's “Discretionary Project Bonus” Program. Defendant's “employment package” contained a Non-Disclosure, Non-Solicitation, and Compliance Agreement (“the Agreement”), which he signed. The Agreement included the following provisions:

1. Non-Disclosure of Confidential information. The Employee agrees that the work for which Employee is employed is and will be of a confidential nature, and in connection with the performance of Employee's services on behalf of The Highland Group or any of ifs affiliates (Hereafter collectively referred to as Highland), Highland may make available to Employee information of a confidential nature as to Highland and its client's methods, trade secrets programs, operations, clients and employees. The Employee warrants and agrees that' Employee will receive in strict confidence all such confidential information belonging to The Highland Group or to the clients of highland. The Employee further agrees to maintain and to assist Highland in maintaining the secrecy of such information to prevent it from coming into unauthorized hands.

The Employee further agrees that:

A) Employee will neither copy nor distribute any material, or other information which comes into Employee s possession as a result of employment by Highland, other than for approved Highland use;

B) Employee will not during the time of employment by Highland nor at any time thereafter directly or indirectly disclose to others and/or use for Employee's own benefit or for the benefit of others, confidential information including, but not limited to, trade secrets customer lists employee and prospective employee information, proprietary software products, financial statements, or other financial information pertaining to the business o† Highland or to any of its clients, acquired by Employee during the period of employment, except to the extent as may be necessary in the period of employment or except to the extent as may be necessary in the ordinary course of performing duties as an Employee of Highland;

C) Upon termination of employment with Highland, Employee will return to Highland or to High and s clients all materials and information, and any copies thereof and certify to Highland that Employee no longer has any rights to such materials or information and agrees that the original and all copies of such materials and information have been returned to Highland or to Highland's client and that Employee will not develop competing professional consulting services based upon the materials and information obtained while employed by Highland; and

D) The Employee acknowledges that confidential information obtained from Highland and/or Highland's clients including but not limited to, the identity of the services being performed for such by Highland, the identity of employees or consultants employed by Highland in the performance of such services, the price being charged by Highland to such clients or potential clients and the needs of such are all trade secrets of Highland and constitute confidential information disclosed to the Employee in connection with Employee's employment. Therefore, the Employee agrees that the solicitation of or business dealings with such clients or potential clients by the use of such information or trade secrets during employment or subsequent to the Employee's termination of employment with Highland for Employee's own account or on behalf of any person or corporation other than Highland would thus constitute a violation of this agreement.

2. Non-Solicitation. The Employee agrees that the Employee may not;

A) During the period of employment and for twelve (12) months following the termination for any reason of the Employee's employment, solicit or sell, for Employee's own account or tor others, professional consulting services that are competitive with the services of Highland, to any company for which the Employee has solicited or has performed any professional consulting services on behalf of Highland during any part of the twelve months immediately preceding the termination of Employee's employment;

B) During the period of employment and for twelve (12) months following the termination for any reason, work or render professional consulting services, for Employee's own account or for others, for any client of Highland for which Employee has performed any services during any part of the year immediately preceding the termination;

C) During the period of employment and for twelve (12) months following the termination of the Employee s employment, either directly or indirectly, hire any employee or subcontractor of Highland in any capacity whatsoever, for Employee's own account or on behalf of any person or corporation other than Highland, or attempt to induce any employee of Highland to leave the employ of Highland to work for Employee or any other person, firm or corporation.

D) Regardless of circumstances, should such a relationship as discussed in paragraphs A B, or C above come into existence, either directly or through a third party, the Employee agrees in recognition of extensive marketing expense incurred by Highland to a reimbursement of fifty percent (50%) of any fees derived from Highland clients In addition, if the Employee accepts employment with a Highland client, a placement fee of thirty-five percent (35%) of total first year income will be due Highland.

Defendant resigned his employment with Plaintiff effective September 25, 2019.

II. PROCEDURAL BACKGROUND

In December 2019, Plaintiff filed the Complaint in this matter together with an application for a temporary restraining order and a preliminary injunction. DE 1. Plaintiff brings three counts in the Complaint. Count 1 is for violation of the Defend Trade Secrets Act (“DTSA”), 18 U.S.C § 1836(b)(1), and seeks a permanent injunction of Defendant's use of Plaintiffs trade secrets or, alternatively, an award of damages. Count 2 is for breach of the Agreement and seeks a permanent injunction of Defendant's use of Plaintiffs confidential information and for Defendant's return of the confidential information. Count 2 is premised on breaches of Paragraphs 1.A, 1.B, and 1.C of the Agreement. Count 3 is for breach of the Agreement and seeks an award of damages. Count 3 is premised on breaches of Paragraphs 2.A and 2.B of the Agreement.^[2]

Defendant brings a counterclaim for breach of contract and seeks an award of damages. DE 135. The counterclaim is premised on a breach of Defendant's employment agreement by failing to pay him earned bonuses.

The Court denied Plaintiff's request for a temporary restraining order and held an evidentiary hearing on the request for a preliminary injunction on February 19, 2020. DE 15; DE 56. Following that hearing, the Court issued an order granting in part and denying in part the request for a preliminary injunction. DE 60. The Court determined that Plaintiff had established a substantial likelihood of success on the claims that Defendant breached Paragraphs 1.C and 2.B of the Agreement. The Court therefore issued a preliminary injunction (1) requiring Defendant to immediately return to Plaintiff or Plaintiff's clients all of their materials and information and any copies thereof, and (2) prohibiting Defendant, for a period of 12 months following the termination of his employment, from rending professional consulting services for any client of Plaintiff for which he performed any services during any part of the year immediately preceding the termination of his employment. The Court determined that Plaintiff did not establish a substantial likelihood of success on the claims that Defendant violated the DTSA and breached Paragraphs 1.A, 1.B and 2.A of the...