Jak Prods., Inc. v. Bayer
| Decision Date | 27 March 2015 |
| Docket Number | Civil Action No. 2:15–cv–00361. |
| Citation | 94 F.Supp.3d 777 |
| Parties | JAK PRODUCTIONS, INC., et al., Plaintiffs, v. Robert BAYER, Defendant. |
| Court | U.S. District Court — Southern District of West Virginia |
David J. Carr, Justin P. Spack, Paul C. Sweeney, Ice Miller, Indianapolis, IN, Kate Sturdivant Gibson, Richard M. Wallace, Spilman Thomas & Battle, Charleston, WV, for Plaintiffs.
Isaac Ralston Forman, Michael B. Hissam, Bailey & Glasser, Charleston, WV, for Defendant.
FINDINGS OF FACT, CONCLUSIONS OF LAW, AND MEMORANDUM OPINION AND ORDER
Pending before the court is the plaintiffs' motion for a preliminary injunction with respect to the parties' covenant to not compete. . For the reasons explained below, the plaintiffs' request for a preliminary injunction on this issue is DENIED. The court DIRECTS the Clerk to refer any remaining discovery matters contained in plaintiffs' motion [Docket 5] to the Magistrate Judge.
The plaintiffs JAK Productions, Inc. (“JAK”) and Group Consultants, Inc. (“GCI”) request that the defendant Robert Bayer be preliminarily enjoined from violating the noncompete provision in section 8.a. of his Employment Contract. See infra Part III (). I need only make findings of fact that are pertinent to this determination. I FIND as follows:
1. JAK performs telemarketing work to fundraise for nonprofit organizations. ).
2. GCI performs “consultant services for nonprofit organizations.” (Tr. [Docket 22], at 91:23–24; see Pls.' Proposed Findings of Fact & Conclusions of Law [Docket 30], at 2).1
3. JAK and GCI employed Mr. Bayer beginning in February 2010. .
4. Mr. Bayer entered into an Employment Contract with JAK and GCI dated February 24, 2010. (See Ex. 1 Employment Contract [Docket 1–1], at 1).
5. The Employment Contract included restrictive covenants, including a noncompetition provision located in section 8.a. (See id. at 3). That provision provides as follows:
(Id. ).
6. While employed, Mr. Bayer did work for JAK's call centers in Parkersburg, West Virginia; Fairmont, West Virginia; Portsmouth, Ohio; and Washington, Pennsylvania. (See Tr. [Docket 22], at 18:16–19:10, 19:20–20:7, 92:4–7). The Washington, Pennsylvania, call center is now closed. (See id. at 18:20–22, 92:6–7).
7. In 2014, Mr. Bayer resigned from his employment with JAK and GCI. (See Def.'s Proposed Findings of Fact & Conclusions of Law [Docket 31], at 9). His last day of employment was March 27, 2014. (See Tr. [Docket 22], at 22:14–16; Pls.' Proposed Findings of Fact & Conclusions of Law [Docket 30], at 3).
8. Mr. Bayer commenced employment with Residential Programs, Inc. (“RPI”) in April 2014. (See Tr. [Docket 22], at 9:18–21, 10:2–4).
9. RPI and JAK are direct competitors. (See id. at 16:18–19; Pls.' Proposed Findings of Fact & Conclusions of Law [Docket 30], at 9).
10. Mr. Bayer performed work from his home for RPI from April 2014 until he began working in RPI's new call center in Athens, Ohio, on October 20, 2014. (See Tr. [Docket 22], at 14:7–18; Pls.' Proposed Findings of Fact & Conclusions of Law [Docket 30], at 10).
11. Mr. Bayer's home is within a 30–mile radius of JAK's Parkersburg, West Virginia, call centers. (See Tr. [Docket 22], at 44:21–25; Pls.' Proposed Findings of Fact & Conclusions of Law [Docket 30], at 10).
12. RPI's call center in Athens, Ohio, is within a 30–mile radius of at least one of JAK's Parkersburg, West Virginia, call centers. (See Tr. [Docket 22], at 45:1–18; Pls.' Proposed Findings of Fact & Conclusions of Law [Docket 30], at 10; Def.'s Proposed Findings of Fact & Conclusions of Law [Docket 31], at 10).
13. While working from home, Mr. Bayer assisted RPI in opening its Athens, Ohio, call center. (See Tr. [Docket 22], at 14:22–15:5; Pls.' Proposed Findings of Fact & Conclusions of Law [Docket 30], at 9).
14. While working at RPI's Athens, Ohio, call center, Mr. Bayer performs similar operations work as he did at JAK's call centers. (See Tr. [Docket 22], at 23:5–8; Pls.' Proposed Findings of Fact & Conclusions of Law [Docket 30], at 10).
The plaintiffs filed their complaint on January 8, 2015 [Docket 1]. They bring actions against Mr. Bayer for breach of contract, conversion, misappropriation of trade secrets, and breach of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030(g). The plaintiffs also filed a motion for a temporary restraining order and preliminary injunction, writ of replevin, leave to conduct expedited discovery, and production of documents and things [Docket 5] and filed a memorandum in support [Docket 6].
I set a TRO hearing on this motion for January 9, 2015. (See Pls.' Notice of Hr'g [Docket 12], at 1). However, the hearing was cancelled upon the request of the parties. Instead, the parties stipulated to the following: (1) Mr. Bayer “is temporarily restrained ... from violating the non-compete (i.e., paragraph 8.a.'s 30–mile radius restriction) obligations as set forth in his Employment Contract until further order of this Court;” (2) Mr. Bayer “is preliminary enjoined from violating his anti-piracy, non-solicit, and confidentiality obligations as set forth in his Employment Contract ... throughout the pendency of this litigation or until further order of the Court;” (3) Mr. Bayer is preliminary enjoined from using or destroying any of the plaintiffs' data; (4) Mr. Bayer is preliminarily enjoined from using or disclosing the plaintiffs' confidential information or trade secrets; (5) Mr. Bayer must return all of plaintiffs' property; and (6) Mr. Bayer must make available to the plaintiffs any electronic storage devices he has used since March 1, 2014. . The stipulated order also set a preliminary injunction hearing for January 26, 2015.
The day of the hearing, the plaintiffs filed a supplemental memorandum of law in support of their motion [Docket 18], and, at the conclusion of the preliminary injunction hearing, I gave the parties 14 days to submit recommended findings of fact. (See Tr. [Docket 22], at 142:12–143:6). On February 9, 2015, both parties filed their proposed findings of fact and conclusions of law [Docket Nos. 30 & 31]. On February 9th, the plaintiffs additionally filed a post preliminary injunction hearing brief [Docket 28].
At the time of the preliminary injunction hearing on January 26, 2015, no motion response had been filed by Mr. Bayer. However, just before the hearing, Mr. Patrick McFarland, as counsel for Mr. Bayer, hand-delivered the defendant's response to chambers on the understanding that it would be filed soon thereafter. Nevertheless, no such response was filed until February 12, 2015 [Docket 36], when the court granted Mr. McFarland's motion to withdraw as counsel and mentioned this lack of filing in the order [Docket 35]. Because the plaintiffs had not received a copy of this response until February 12th, they moved to supplement the hearing record with additional exhibits [Docket 37]. I granted the plaintiffs' request to do so on February 27, 2015 [Docket 39].
Therefore, with respect to this particular motion, I have before me the plaintiffs' motion [Docket 5], memorandum in support [Docket 6], supplemental memorandum in support [Docket 18], post preliminary injunction hearing brief [Docket 28], recommended findings of fact and conclusions of law [Docket 30], and supplemental hearing exhibits [Docket 37]. As for the defendant, I have before me his response [Docket 36] and his recommended findings of fact and conclusions of law [Docket 31]. In addition, I will consider the evidence presented by the parties at the preliminary injunction hearing. (See Tr. [Docket 22] ).
Throughout litigation, the parties have inconsistently presented the scope of the instant matter to the court. As a result, I must first clarify the issue that is pertinent to this request for a preliminary injunction.
On the one hand, the parties explicitly state that the court need only concern itself with the noncompete provision of the Employment Contract located in section 8.a. (E.g., Tr. [Docket 22], at 55:15–56:3 (...
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