Medeiros v. Alex and Ani, LLC, 022820 RISUP, PC-2015-5680

Docket Nº:C. A. PC-2015-5680
Opinion Judge:STERN, J.
Party Name:DAVID MEDEIROS, Plaintiff, v. ALEX AND ANI, LLC; A AND A SHAREHOLDING COMPANY, LLC; ALEX AND ANI EMPLOYEE INCENTIVES HOLDINGS, LLC; and CAROLYN RAFAELIAN, Defendants.
Attorney:For Plaintiff: Michael A. Kelly, Esq.; Nicole Martucci, Esq.; Michael L. Mineau, Esq.; Joelle C. Rocha, Esq. For Defendant: John Tarantino, Esq.; Chelsea Kelly, Esq.; Nicole J. Benjamin, Esq. For Interested Party: David A. Wollin, Esq.
Case Date:February 28, 2020
Court:Superior Court of Rhode Island
 
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DAVID MEDEIROS, Plaintiff,

v.

ALEX AND ANI, LLC; A AND A SHAREHOLDING COMPANY, LLC; ALEX AND ANI EMPLOYEE INCENTIVES HOLDINGS, LLC; and CAROLYN RAFAELIAN, Defendants.

C. A. No. PC-2015-5680

Superior Court of Rhode Island, Providence

February 28, 2020

For Plaintiff: Michael A. Kelly, Esq.; Nicole Martucci, Esq.; Michael L. Mineau, Esq.; Joelle C. Rocha, Esq.

For Defendant: John Tarantino, Esq.; Chelsea Kelly, Esq.; Nicole J. Benjamin, Esq.

For Interested Party: David A. Wollin, Esq.

DECISION

STERN, J.

Plaintiff David Medeiros (Plaintiff) moves for summary judgment on Defendants' Alex and Ani, LLC (Alex and Ani), A and A Shareholding Company, LLC (A and A Shareholding), Alex and Ani Employee Incentives Holdings, LLC, and Carolyn Rafaelian (Rafaelian) (collectively, Defendants) claims (1) that Plaintiff breached the terms of an Employee Confidentiality Agreement; (2) that Plaintiff breached the terms of a Non-Compete, Non-Solicit and Non-Disclosure Agreement (the NDA); (3) that Plaintiff breached his fiduciary duty to Alex and Ani; and (4) that Plaintiff committed computer theft in violation of G.L. 1956 § 11-52-4. Defendants have timely objected to Plaintiff's motion and have filed a cross-motion for summary judgment which requests judgment in their favor on Plaintiff's claims (1) that Plaintiff is vested with a certain number of Incentive Units which A and A Shareholding must purchase at fair market value; (2) that Plaintiff was discriminated against based on his gender in violation of G.L. 1956 § 28-5-7; and (3) that Plaintiff was discriminated against based on his military status in violation of G.L. 1956 § 30-11-1. Plaintiff timely objected to Defendants' motion. Jurisdiction is pursuant to Super. R. Civ. P. 56(c) and G.L. 1956 §§ 8-2-13, 8-2-14, and 9-30-1 et seq.

I

Facts and Travel

A

Plaintiff's Employment

Alex and Ani is a Rhode Island limited liability company whose founder and CEO is Rafaelian. Compl. ¶¶ 2, 8; see also Defs.' Answer Compl. (Answer) ¶¶ 2, 8. In or about May of 2013, the Plaintiff was hired to serve as the Senior Vice President of Operations and Acting Chief Operational Officer of Alex and Ani. Defs.' Answer ¶ 12. Plaintiff was hired by Alex and Ani's then-Chief Executive Officer (CEO) Giovanni Feroce (Feroce). Pl.'s Mot. Summ. J. (Mot.), Ex. 7 (Feroce Dep.) at 8:18-23; 35:12-16.

At the time Plaintiff was hired, Alex and Ani had actual knowledge of the fact that he was an active member of the Rhode Island National Guard and was a combat veteran. Defs.' Answer ¶ 13. Plaintiff understood that he was hired by Feroce for his "military leadership, discipline, management, [and] logistic skills." Defs.' Mot. Summ. J., Ex. 7 at 7:17-19 (Medeiros Dep., July 9, 2018). Plaintiff's job responsibilities included working with a team to research quality control issues and locating additional manufacturing sources for Alex and Ani's products. Compl. ¶ 55; Defs.' Answer ¶ 55; Feroce Dep. 39:22-40:2; Pl.'s Mot., Ex. 3, ¶ 7 (Medeiros Aff.).

1

Employee Confidentiality Agreement

Concurrent with the start of his employment at Alex and Ani, Plaintiff executed an Employee Confidentiality Agreement. Pl.'s Mot., Ex. 5. Pursuant to the Employee Confidentiality Agreement, Plaintiff "acknowledge[d] that A[lex & Ani] possesses certain 'Confidential Information, '" further defined as "all information relating to A[lex & Ani] or its business including but not limited to contemplated new products and services, marketing and advertising campaigns product designs and design techniques, creatives, creative campaigns and themes, sales projections, financial information, budgets and projections, system designs, employees, management procedures and systems, employee training materials, production plans and techniques, product and materials specifications, research, client information (including purchase history and client identifying information) and vendor information (including the identity of vendors and information concerning the capacity of or products or pricing provided by specific vendors)." Id. at 1.

Excluded from the definition of "Confidential Information" under the Employee Confidentiality Agreement was "information that becomes generally publicly available." Id. By signing the Employee Confidentiality Agreement, Plaintiff agreed not to "disclose or use . . . any Confidential Information." Id. at 2.

2

Non-Compete, Non-Solicit and Non-Disclosure Agreement

On or about October 11, 2013, Plaintiff executed a non-disclosure agreement (NDA), pursuant to which the Plaintiff "recognize[d] that [his] position with Alex and Ani . . . has entrusted [him] with highly sensitive, confidential, restricted and proprietary information." Pl.'s Mot., Ex. 6, § 4.1. By signing the NDA, Plaintiff agreed to hold Alex and Ani's Confidential Information in strictest confidence and not to disclose Alex and Ani's Confidential Information to any third party. Under the NDA, "Confidential Information" was defined as "information that Alex and Ani has obtained through a significant investment of resources in connection with its actual or anticipated business, including but not limited to copyrighted or patentable subject matter, research, development, innovations, inventions, designs, technology, techniques, 'know how,' improvements, trade secrets, business affairs and finances, customers, employees, manufacturers, operations, facilities, consumer markets, products, capacities, systems, procedures, security practices, data formats, and business methodologies." Id. § 4.3.

The NDA also "recognize[d] that Alex and Ani has received and will receive from third parties their confidential or proprietary information," and Plaintiff "agree[d] to hold all such confidential or proprietary information in the strictest confidence and not to disclose it . . . except as necessary in carrying out [his] work for Alex and Ani consistent with Alex and Ani's agreement with such third party." Id. § 5.6. Exceptions to the Plaintiff's confidentiality obligations under the NDA included information "which (i) is or becomes publicly available through no wrongful act or omission of mine or others . . . ." Id. § 5.7

3

Incentive Unit Agreement

Finally, on or about December 20, 2013, Plaintiff and A and A Shareholding executed the Incentive Unit Agreement [C-Level] (IU Agreement), pursuant to which the Plaintiff was issued Series 2 Incentive Units. Mem. Opp. Defs.' Mot. Summ. J., Ex. 30. The IU Agreement provided that if Plaintiff "is terminated for Cause, [he] shall . . . immediately forfeit . . . all of his . . . Series 2 Incentive Units (both that portion that is still subject to vesting and any vested portion)." Id. ¶ 3. Under the IU Agreement, "Cause" was defined as, inter alia,

"unauthorized use or disclosure of [A and A Shareholding's] or any of its Subsidiaries'1 confidential information or trade secrets which use or disclosure causes material harm to [A and A Shareholding] or any of its Subsidiaries, or breach of any provision of any non-competition or similar agreement between [Plaintiff] and [A and A Shareholding] or any of its Subsidiaries." Id.

B

Cinerama

At all times relevant, Cinerama was a manufacturer of some of Alex and Ani's products. Defs.' Countercl. ¶ 3. On or about September 1, 2011, Cinerama and Alex and Ani entered into a Mutual Nondisclosure Agreement (Cinerama NDA), pursuant to which the parties agreed that they would not disclose one another's confidential information. Pl.'s Mot., Ex. 1; Defs.' Countercl. ¶¶ 3-4. Under the Cinerama NDA, "Confidential Information" was defined as, inter

alia,

"all information relating in any manner to discloser's contemplated new products and services, . . . financial information, budgets and projections, . . . production plans and techniques, product and materials specifications, product designs and design techniques, . . . vendor information (including the identity of vendors and information concerning the capacity of or products or pricing provided by specific vendors). . . ." Pl.'s Mot., Ex. 1, ¶ 1.

Excluded from the definition of "Confidential Information" under the Cinerama NDA was "information that (a) becomes generally available to the public . . . ." Id.

On or about January 29, 2016, Alex and Ani Assembly, LLC (A&A Assembly) and Cinerama executed an Asset Purchase Agreement (Cinerama Purchase Agreement) whereby A&A Assembly bought Cinerama's property and assets, including "any claims or causes of action of [Cinerama] against any third party relating to the Business or the Assets, whether known or unknown, contingent or non-contingent . . . ." Pl.'s Mot., Ex. 13, § 2.1(1); Defs.' Countercl. ¶ 32.

C

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