Miner, Ltd. v. Anguiano

• Decision Date: 29 May 2019
• Docket Number: EP-19-CV-00082-FM
• Citation: 383 F.Supp.3d 682
• Parties: MINER, LTD., Plaintiff, v. Paul ANGUIANO, Paseo Del Norte Dock Products, Inc., Defendants.
• Court: U.S. District Court — Western District of Texas

383 F.Supp.3d 682

MINER, LTD., Plaintiff,

v.Paul ANGUIANO, Paseo Del Norte Dock Products, Inc., Defendants.

EP-19-CV-00082-FM

United States District Court, W.D. Texas, El Paso Division.

Signed May 29, 2019

David W. Long-Daniels, Joshua Y. Joel, Mitchell A. Robinson, Pro Hac Vice, Greenberg Traurig, Atlanta, GA, Shira R. Yoshor, Greenberg Traurig, L.L.P., Houston, TX, for Plaintiff.

Gerald Green Howard, Ainsa Hutson Hester & Crews, LLP, El Paso, TX, for Defendant.

ORDER GRANTING MOTION FOR PRELIMINARY INJUNCTION

FRANK MONTALVO, UNITED STATES DISTRICT JUDGE

Before the court is "Plaintiff Miner, Ltd.'s Renewed Motion for Preliminary Injunction" ("Motion") [ECF No. 20], filed March 8, 2019 by Miner, Ltd. ("Plaintiff"); "Plaintiff Miner Ltd.'s Supplemental Brief in Support of Renewed Motion for Preliminary Injunction" ("Supplemental Brief") [ECF No. 33], filed April 29, 2019; and "Defendants' Response to Plaintiff's Renewed Motion for Preliminary Injunction" [ECF No. 37], filed May 6, 2019 by Defendants Paul Anguiano ("Anguiano") and Paseo Del Norte Dock Products, Inc. ("PDN") (collectively, "Defendants"). After due consideration, the Motion is GRANTED.

I. BACKGROUND

A. Factual Background

On January 29, 2019, Plaintiff filed suit in the San Antonio Division of the Western District of Texas, seeking injunctive relief and damages arising out of alleged misconduct by Anguiano, a former employee of Plaintiff, and PDN, his new employer.¹ Plaintiff makes the following allegations: (1) Anguiano solicited Plaintiff's clients in violation of the Amended Limited Liability Company Agreement of Miner ("Amended LLC Agreement")² ; (2) Anguiano solicited Plaintiff's employees in violation of the Amended LLC Agreement³ ; (3) Anguiano "improperly disclosed and/or used Miner's propriety information—including its trade secrets—on behalf of Paseo Del Norte" in violation of the Amended LLC Agreement⁴ ; (4) Anguiano solicited Plaintiff's clients in violation of the non-competition, non-solicitation, and confidentiality covenants in the employment agreement ("Employment Agreement") signed at the time of his promotion to Account Executive⁵ ; (5) Anguiano solicited Plaintiff's employees in violation of the Employment Agreement⁶ ; (6) Anguiano "improperly disclosed and/or used Miner's propriety information—including its trade secrets—on behalf of Paseo Del Norte" in violation of the Employment Agreement⁷ ; (7) tortious interference⁸ ; (8) Anguiano and PDN misappropriated trade secrets in violation of the Defend Trade Secrets Act ("DTSA"), 18 U.S.C. § 1836 et seq.⁹ ; (9) Anguiano and PDN misappropriated trade secrets in violation of the Texas Uniform Trade Secrets Act ("TUTSA"), Tex. Civ. Prac. & Rem. Code § 134A.002 et seq.¹⁰ ; (10) Anguiano accessed Plaintiff's computer system in violation of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030¹¹ ; and (11) Anguiano breached a fiduciary duty to Plaintiff.¹²

Plaintiff is a national company that sells, installs, and services material handling equipment and loading dock products across the nation.¹³ Anguiano was an employee of Plaintiff for seventeen years.¹⁴ During his time with Plaintiff, he was employed as a salesman, account executive, president, and managing member of Miner El Paso.¹⁵

1. Subscription and Transaction Agreement and Second Amended and Restated Limited Liability Agreement

Anguiano became a managing member of Plaintiff in exchange for purchasing shares in Plaintiff in June 2012.¹⁶ On December 12, 2012, Anguiano and CI (MHE) Holdings, LLC—the private entity that acquired Plaintiff—entered into the "Subscription and Transaction Agreement" ("Subscription Agreement"),¹⁷ which contains a non-compete covenant and a non-solicitation covenant.¹⁸ It provides:

Section 1.2 Closing. The sale and purchase of the Purchased Units shall take place on the Closing Date (as defined in the Purchase Agreement) (the "Closing"). At the Closing, (a) the Company shall issue and sell to each Purchaser such Purchaser's Purchased Units and (b) each Purchaser shall deliver to the Company cash by wire transfer of immediately available funds to an account designated by the Company prior to the Closing, or by such other mechanism as the Company and such Purchaser may agree, in the amount of such Purchaser's Purchase Price.

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Section 1.4 Non-Competition: Non-Solicitation.

1.41 For a period set forth next to the name of such Purchaser or Non-Purchaser Stockholder on Appendix A hereto commencing on the date of the Closing, each Purchaser and Non-Purchaser Stockholder shall not, directly or indirectly (whether by himself or itself, through an affiliate or in partnership or conjunction with, or as an employee, officer, director, manager, member, owner, consultant or agent of, any other Person):

(a) undertake, participate or carry on or be engaged or have any financial or other interest in, or in any other manner advise or assist any other Person in connection with the operation of, the business of providing repair service, planned maintenance support, sales and installation, equipment modernization, diagnostics and analytics services for truck loading dock equipment, commercial doors, recycling/waste handling equipment, material handling equipment, security and access control solutions, storefront glass systems to customers, and similar equipment and fixtures located at retail, distribution, manufacturing, healthcare and hospitality companies ("Competing Business") anywhere in North America or any other geographic location in which the Company or its affiliates engages in business;

(b) solicit, entice, encourage or intentionally influence, or attempt to solicit, entice, encourage or influence, any employee of the Company, MHE, the Companies (as defined in the Purchase Agreement) or their respective affiliates to resign or leave the employ of the Company, MHE, the Companies or their respective affiliates or otherwise hire, employ, engage or contract any such employee to perform services other than for the benefit of the Company, MHE, the Companies or their respective affiliates; or

(c) solicit, entice, encourage or influence, or attempt to solicit, entice, encourage or influence, any customer of the Company, MHE, the Companies or their respective affiliates (including any Person who has been a customer of the Companies at any time during the period of 12 months before the Closing) to alter, reduce or terminate its business relationship with the Company, MHE, the Companies or their respective affiliates for the direct or indirect benefit of any Competing Business.

For the avoidance of doubt, with respect to each Purchaser and Non-Purchaser Stockholder, the covenants contained in this Section 1.4.1 are in addition to any other non-compete, non-solicit or similar restrictions between such Purchaser or Non-Purchaser Stockholder, on the one hand, and the Company or any of its affiliates, on the other hand, including those contained in the Limited Liability Company Agreement or any employment agreement with such Purchaser or Non-Purchaser Stockholder.¹⁹

An attached appendix to the Subscription Agreement specifies that Anguiano was subject to a non-compete and non-solicitation period for a duration of two years from the closing of the sale.²⁰

CI (MHE) Holdings, LLC and Anguiano entered into another agreement five days later on December 17, 2012: the "Second Amended and Restated Limited Liability Company Agreement" ("Amended LLC Agreement").²¹ It sets forth:

Section 12.3 Post Employment

(a) Each Management Member further agrees that, for a period of three (3) years (or such other period as may be specified in the Subscription Agreement or Profits Interest Award Agreement relating to such Management Member) after the cessation or termination of his or her employment or consultancy with the Company or its applicable Subsidiary, whether voluntary or involuntary, with or without cause (the "Non-Compete Period"), he or she shall not, either directly or indirectly: (i) engage in the Business for such Management Member's own account; (ii) render any services or give advice related to the Business to or for any Person that is engaged or is about to become engaged in the Business; (iii) assist any other Person to engage in any activities competitive with the Business of the Company or any Subsidiary of the Company; or (iv) become, directly or indirectly (and whether or not for compensation), a stockholder, partner, member, manager, employee, contractor, agent or consultant of (or establish any other similar affiliation, relationship or capacity with) any Person that is engaged or is about to become engaged in the Business, other than passive ownership as a portfolio investment (with no director designation rights or other special governance rights) of no more than five percent (5%) of the outstanding equity securities of any corporation listed on a national securities exchange.

(b) Without limiting the foregoing, each Management Member further agrees that, for a period of three (3) years (or such other period as may be specified in the Subscription Agreement or Profits Interest Award Agreement relating to such Management Member) after the cessation or termination of his or her employment or consultancy with the Company or its applicable Subsidiary, whether voluntary or involuntary, with or without cause (the "Non-Solicit Period"), he or she shall not, either directly or indirectly, hire, solicit (or encourage any other Person to hire or solicit) or encourage to leave the employment of the Company or any Subsidiary of the Company, any Person, whether full or part-time, who is an officer, employee, contractor or consultant (other than a contractor or consultant who is a third party service provider whose services are generally available) of, or to, the Company or any Subsidiary of the Company on the date hereof or who has been employed or engaged by the Company or any Subsidiary of the Company within one (1) year prior to the date of such

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