Transperfect Translations, Inc. v. Leslie

• Decision Date: 12 January 2009
• Docket Number: No. 4:08-cv-3499.,4:08-cv-3499.
• Citation: 594 F.Supp.2d 742
• Parties: TRANSPERFECT TRANSLATIONS, INC., Plaintiff, v. Brett J. LESLIE, Defendant.
• Court: U.S. District Court — Southern District of Texas

594 F.Supp.2d 742

TRANSPERFECT TRANSLATIONS, INC., Plaintiff, v. Brett J. LESLIE, Defendant.

Civ. No. 4:08-cv-3499.

United States District Court, S.D. Texas, Houston Division.

January 12, 2009.

COPYRIGHT MATERIAL OMITTED

Jerry L. Mitchell, Jr., Kasowitz Benson et al., Houston, TX, for Plaintiff.

Alain M. Baudry, Maslon Edelman Borman & Brand LLP, Minneapolis, MN, William Henry Stout, Sutliff & Stout, PLLC, Houston, TX, for Defendant.

ORDER

KEITH P. ELLISON, District Judge.

Pending before the Court is Plaintiff TransPerfect Translations, Inc.'s ("TransPerfect") Motion for a Preliminary Injunction. (Doc. No. 1.) After considering the parties' arguments and the relevant law, the Court finds that TransPerfect's Motion should be granted in part and denied in part.

I. BACKGROUND

A. History

This suit involves an alleged breach of a covenant not to compete. On November 17, 2008, Defendant Brett J. Leslie gave notice that he was leaving his job at TransPerfect to go work for a direct competitor, Merrill Brink International ("Merrill") in its Chicago office. TransPerfect is a translation firm, offering services to individuals and businesses, with offices located in Houston, Chicago, and other national and international locations. (Doc. No. 1, Ex. A, ¶ 10.)

Prior to working for TransPerfect, Leslie worked as a territory manager and salesman for a liquor distributorship in Florida, where he managed 25 retailer accounts. (Dec. 4, 2008, Mtn. Hr'g; Pl. Ex. 5.) TransPerfect hired Leslie in July 2006 as a Strategic Business Manager in TransPerfect's Atlanta, Georgia office. (Doc. No. 1, Ex. A, ¶ 11.) Leslie executed a confidentiality agreement with TransPerfect upon his hiring in Georgia. (Doc. No. 1, Ex. A, ¶ 14.) Obarski testified that this Agreement is signed by all salespeople at TransPerfect. (Dec. 4, 2008, Mtn. Hr'g.) Under the Agreement, TransPerfect explained that it would provide confidential information:

Upon execution of this Agreement TransPerfect will have to disclose, and may have already disclosed to [Leslie] certain Confidential Information .... The Confidential Information is not generally known to others and could have economic value if disclosed to others and/or used by [Leslie], directly or indirectly in competition with TransPerfect. [Leslie] has a duty, both contractual and otherwise, to keep secret and confidential the Confidential Information.

(Doc. No. 1, Ex. A, Ex. A ¶ 3.)

In addition, it included a covenant not to compete:

[Leslie] will not: ... [w]hile employed by Transperfect and for a period of one year immediately following termination of [Leslie's] employment: ... compete with the TransPerfect business in any activities involved in the provision of goods or services in competition with the business.... The restrictions of this paragraph ... and all of its subparagraphs apply only to products and services that are competitive with the products and services of the TransPerfect Business and only in the states in which TransPerfect maintains U.S. Offices or the countries in which TransPerfect maintains foreign offices at the time [Leslie's] employment is terminated.

(Doc. No. 1, Ex. A, Ex. A ¶ 8.)

TransPerfect's Employee Handbook includes a section on protecting confidential information including trade secrets, customer lists, and financial information. In the Handbook, employees are instructed not to discuss confidential work matters in public places, to monitor and supervise visitors to TransPerfect, to destroy hard copies of documents that are not filed or archived, and to secure confidential information in desk drawers and cabinets. (Pl. Ex. 10, at 14.) Leslie acknowledged that he received the Handbook in July and October 2006. (Pl. Ex. 3, 4.) TransPerfect also maintains a Code of Ethical Conduct that explains that the company has security procedures for laptop computers and explains that its employees sign non-disclosure agreements. (Pl. Ex. 10, at 10.)

In Georgia, Leslie worked directly under Kevin Obarski, a TransPerfect Vice President. (Dec. 4, 2008, Mtn. Hr'g.) Obarski created this position specifically for Leslie, and Obarski described Leslie as his protege. (Id.) Leslie was trained to "cold call," to serve as the lead liaison at trade shows for TransPerfect, and to become the "go-to guy" for TransPerfect's e-Learning subdivision. (Id.) Companies have begun using computer-based training for their employees, and TransPerfect's e-Leaning subdivision translates this training into international languages. (Id.) Obarski testified that TransPerfect intended to cultivate Leslie's skills so that he would eventually replace Obarski in some capacity, or become a regional director or vice presidentlevel manager. (Id.) According to Leslie, Obarski was known as the best cold-caller in the business, and Leslie was allegedly assigned to work under him to improve his cold-calling skills, among other goals. (Id.) In his position with Obarski, Leslie allegedly listened in on speakerphone conversations with upper level management and heard discussions regarding company strategy, requests for proposals, and new clients. (Id.) Leslie was asked to collect the business plans from several of TransPerfect's U.S. offices, in addition to client names and the value of sales, and compile this information for Obarski. (Dec. 4, 2008, Mtn. Hr'g.) Leslie allegedly had access to a tool that logs current clients. (Id.)

Leslie's authority was cabined, however, as he was required to receive approval to sign deals worth more than $10,000. (Id.) In his resignation e-mail, Leslie explained that part of the reason he is leaving TransPerfect was that he was looking for a job where there is "no direct management that I speak and report to on a weekly basis," and where he has his own corporate credit card. (Pl. Ex. 21.) Leslie claims that the one upper management meeting he attended in person, he did so by mistake and that, when Obarski made calls, he would ask Leslie to step out of the office. (Id.) Leslie characterized his role while working for Obarski as that of a "go-fer" who also sold strategic accounts, specifically TransPerfect's e-Learning and Life Sciences accounts. (Id.) Leslie claims that, while at TransPerfect, he spent 80-90 percent of his time selling. In Georgia, he made under $40,000, depending on how much he sold, just above the earnings of a typical account manager/executive, but much less than upper management. (Dec. 4, 2008, Mtn. Hr'g.) According to TransPerfect's website, an account manager sells products to clients and provides customer support. (Def. Ex. 4, 6.) The position requires a bachelor's degree, but no experience, although one or two years of prior sales experience is considered beneficial. (Id.) Leslie claims that the account executive position description was comparable to his job at TransPerfect with the exception of his duties involving e-Learning. (Id.) In Houston, Leslie allegedly made around $95,000 during the time he worked for TransPerfect, although Obarski testified that, annualizing his last two commission checks, he would have made over $170,000. (Id.)

TransPerfect alleges that Leslie received confidential information from several different sources while at the company including general training on selling TransPerfect products and specific training on the e-Learning account. TransPerfect claims that Leslie received training about using "features and benefits," or techniques that are used to try to win a specific account. (Id.) As an example of a feature and benefit, Obarski explained that TransPerfect has received certifications that appeal to certain clients in highly regulated industries, such as the ISO standards (international management standards). This ISO certification is noted in the form signature included at the bottom of e-mails sent by Leslie and another TransPerfect employee. (Pl. Ex. 16, 22.) Leslie acknowledges that he has received training that has increased his earning potential. (Id.) He claims, however, that he has retained no paper or electronic information from TransPerfect, and he promptly returned his TransPerfect laptop upon his departure. (Dec. 4, 2008, Mtn. Hr'g.)

Eventually, Leslie spent nearly 80 percent of his time selling e-Learning. (Id.) e-Learning is the fastest growing area of TransPerfect's business and its value increased by 300 or 400 percent in 2007. (Id.) TransPerfect claims that Leslie was one of two employees trained to market and sell TransPerfect's e-Learning business nationally. At the Motion hearing, Leslie responded that there were six people trained in e-Learning: three in California and three elsewhere, although he conceded that only three worked at the TransPerfect company rather than at other members of TransPerfect's umbrella organization, and one of those at TransPerfect left the company prior to his departure. (Id.) In both his capacity as the trade show liaison and in his general e-Learning duties, Leslie allegedly contacted prospective clients and current TransPerfect clients domestically and abroad who had already purchased other TransPerfect products, to try to sell e-Learning products. (Id.) Leslie sold e-Learning to offices in Baltimore, Maryland, as well as New Jersey, Michigan, and Germany, and had some involvement with clients in California, Tennessee, England, and an existing client in Illinois. (Id.) Including sales of e-Learning products, Leslie had approximately three to four contacts with customers or potential customers in Illinois during his time at TransPerfect and had "a couple" of sales calls in Ohio. (Id.)¹ In his e-Learning capacity, Leslie was also supervised by Brooke Christian, the Vice President of global sales and marketing for TransPerfect and TransPerfects's sister companies, rather than Obarski. Leslie continued to report to Christian when he moved to Houston and worked under Devon Williams. Although Leslie appeared to have significant authority in the e-Learning business, it was not...