Vas Aero Servs., LLC v. Arroyo

• Court: U.S. District Court — Southern District of Florida
• Writing for the Court: DONALD M. MIDDLEBROOKS
• Citation: Vas Aero Servs., LLC v. Arroyo, 860 F.Supp.2d 1349 (S.D. Fla. 2012)
• Decision Date: 18 May 2012
• Docket Number: Case No. 12–CV–80484.
• Parties: VAS AERO SERVICES, LLC, Plaintiff, v. Phillip ARROYO, Defendant.

860 F.Supp.2d 1349

VAS AERO SERVICES, LLC, Plaintiff,

v.Phillip ARROYO, Defendant.

Case No. 12–CV–80484.

United States District Court,

S.D. Florida,

West Palm Beach Division.

May 18, 2012.

Andrew Michael Loewenstein, Akerman Senterfitt, West Palm Beach, FL, Christopher Stephen Carver, Akerman Senterfitt, Miami, FL, Jason Samuel Oletsky, Akerman Senterfitt, Ft. Lauderdale, FL, for Plaintiff.

Jonathan Vine, Cole, Scott & Kissane, P.A., West Palm Beach, FL, for Defendant.

ORDER ON PLAINTIFF'S MOTION FOR TEMPORARY RESTRAINING ORDER AND FOR PRELIMINARY INJUNCTION

DONALD M. MIDDLEBROOKS, District Judge.

THIS CAUSE is before the Court upon Plaintiffs Motion for Temporary Restraining Order and for Preliminary Injunction (“Motion”) (DE 4), filed May 2, 2012. On May 17, 2012, I held a hearing on the instant Motion. In addition to considering the evidence presented at the hearing, I have carefully reviewed Plaintiffs Motion, Defendant's Response, and am otherwise fully advised in the premises.

I. FINDINGS OF FACT

On May 2, 2012, Plaintiff, VAS Aero Services, LLC, (“VAS”) filed a Complaint seeking Injunctive Relief and Damages against its former employee, Defendant Phillip Arroyo (“Arroyo”). ( See DE 1). VAS contends that before Arroyo left VAS to work for GA Telesis, LLC, one of VAS's biggest competitors, Arroyo improperly removed VAS documents containing confidential and proprietary information.

A. VAS

VAS is a Delaware limited liability company with its principal place of business and headquarters located in Boca Raton, Florida. ( Id. at ¶¶ 2–3). VAS is a “leading provider of aftermarket services in the aviation industry.” ( Id. at ¶ 6). Specifically, VAS sources, warehouses, and markets aircraft components to a diverse clientele. ( Id. at ¶ 6).

VAS has been in business for over thirty years, and, during that time, VAS credits its success to its ability to “develop[ ] unparalleled sourcing and customer relationships with industry leaders, including, [t]he Boeing Company, General Electric, and Embraer.” ( Id. at ¶ 7). Additionally, VAS “is a preferred supplier to leading airlines worldwide.” ( Id. at ¶ 7).

One key aspect of VAS's business model is its redistribution program ( id. at ¶ 8), which VAS created to benefit its existing clientele. Essentially, the redistribution program operates in the following manner: VAS's clients consign to VAS their excess aircrafts and parts, then, VAS strips the aircrafts and sells the parts. ( Id. at ¶¶ 8–9). VAS arranges and executes the entire redistribution process from start to finish. ( Id. at ¶ 9). In order to find suitable buyers, VAS utilizes its “proprietary based models to analyze [existing companies'] supply and demand” of the specific materials. ( Id. at ¶ 8). Once the models determine which companies may need the specific materials, VAS's redistribution team forecasts what price would be appropriate for the product and then they market the products to target companies. ( Id. at ¶ 8).

Since its inception, VAS has invested and continues to invest significant resources on the following: (1) collecting information and developing methods and techniques to help develop, maintain, and foster business relationships with business entities and (2) identifying a client's potential needs and developing innovative solutions to satisfy those needs. ( Id. at ¶ 17).

B. VAS and Boeing

While VAS invests substantial resources developing its relationships with all of its clients, VAS directs a significant portion of those resources towards fostering its relationship with one of its key clients, the Boeing Company (“Boeing”). ( Id. at ¶ 10). On or around October 1, 2003, Boeing and VAS's predecessor, Volvo Aero Services Corp. (“Volvo”), entered into a Parts Distribution Agreement (“Master Agreement”). ( Id. at ¶ 10). The Master Agreement sets forth the terms and conditions of the Parties' strategic business arrangement, for example, the Master Agreement provides that VAS would serve as Boeing's exclusive aftermarket service provider for “Boeing IDS aircraft parts.” ( Id. at ¶ 10).

The Master Agreement includes detailed provisions, including, but not limited to, delivery terms, pricing structures, warehousing and storage conditions, and profit allocation. ( Id. at ¶ 11). Boeing and VAS have amended the Master Agreement by executing addendums that are incorporated by reference into the Master Agreement. ( Id. at ¶ 11). VAS alleges the Master Agreement and addenda contain confidential, proprietary, and trade secret information, which is unavailable to the general public. ( Id. at ¶ 14). Due to the type of information contained in the Master Agreement and addenda, VAS and Boeing incorporated a confidentiality provision into the Master Agreement ( id. at ¶ 11), which provides:

Release of any information regarding this contract or performance hereunder shall not be made by one Party without prior written approval of the other Party. All proposed releases shall be submitted for written approval in accordance with Article 26, NOTICES. BOEING IDS Programs may not release information about other Programs internally within The Boeing Company or externally without the prior written consent of the Program.

( Id. at ¶ 15). Each addendum includes a similar confidentiality provision. ( Id. at ¶ 16).

Before Boeing and VAS could finalize the Master Agreement and each subsequent addendum, they had to engage in “painstaking[ ] negotiations.” ( Id. at ¶ 12). During the hearing, VAS's General Counsel Kevin P. Hartney (“Hartney”) testified that the Master Agreement and addenda include pricing terms, details about the stripping down process, and other confidential and proprietary information. Hartney stated that VAS invested and continues to invest significant resources developing its relationship with Boeing. One way VAS fosters its relationship with Boeing is by sharing “a common facility in Kent, Washington (“Kent Facility”).” ( Id. at ¶ 13).

C. Security Measures

Due to the confidential and proprietary nature of the work performed at the Kent Facility, only an individual who has passed “multiple levels of security clearance” can enter the Kent Facility. ( Id. at ¶ 13).

i. Master Agreement

In addition to the level of security clearance required to enter the Kent Facility, VAS imposed additional security measures to protect the Master Agreement and addenda. ( Id. at ¶ 14). As previously addressed, the Master Agreement and each addendum include a confidentiality provision, which requires VAS and Boeing to obtain the other party's written approval before releasing any information regarding the Master Agreement, an addendum, or performance of any of the acts set forth in the Master Agreement and addenda. ( Id. at ¶¶ 15–16).

The Master Agreement and each addendum are stored in VAS's Program Management SharePoint database (“Management Database”) and VAS's Legal SharePoint Database (“Legal Database”). ( Id. at ¶¶ 23–24). In order to protect the confidentiality of this information, VAS installed a multi-tiered password system on its Management Database, which only permits a few “key VAS” employees to access these documents. ( Id. at ¶ 23).

In a further effort to protect the information contained on both databases, VAS employees could only access these databases via VAS's intranet or through VAS's secured Virtual Private Network (“VPN”) tunneling. ( Id. at ¶ 25). Other security measures imposed by VAS to protect the information in its databases include, but are not limited to, the following: (1) permitting only key employees access to the databases; (2) requiring authorized users to change their “login credentials” every ninety days; and (3) mandating authorized users to select a password that is at least seven characters long and contains both letters and numbers. ( Id. at ¶ 25).

ii. Confidentiality Policy

In an effort to further protect any confidential and proprietary information, VAS requires its employees to agree to abide by VAS's confidentiality policy. Hartney testified that Arroyo acknowledged VAS's Company Information and Property Policy, when he electronically signed this document. The confidentiality policy provides in pertinent part:

The protection of Company business information, property and all other Company assets are vital to the interests and success of the Company. No Company related information or property, including without limitation, documents, files, records, computer files, equipment, office supplies, or similar materials (except in the ordinary course of performing duties on behalf of the Company) may, therefore, be removed from the Company's premises. Violation of this policy is a serious offense and will result in appropriate disciplinary action, up to and including discharge.

In addition, when an employee leaves the Company, the employee must return all Company related information and property that the employee has in his/her possession, including, without limitation, documents, files, records, manuals, information stored on a personal computer or on a computer disk, supplies, and equipment or office supplies.

( Id. at ¶ 33). In his Response, Arroyo concedes he currently possesses documents relating to VAS, in fact, he stated he “has offered to return and/or allow [VAS] to inspect any information or documents relating to VAS ... in his possession.” (DE 21 at 15).

iii. Confidential Nature of Work Policy

Additionally, VAS requires its employees to follow VAS's Confidential Nature of Work Policy, which provides in pertinent part:

All records of the Company and information relating to the Company or its customers are confidential and employees must, therefore, treat all matters accordingly. No Company or Company-related information, including without limitation, documents, notes, files, records, oral information, computer files or similar materials (except in the ordinary course of performing duties on behalf of the Company) may be removed from the Company's premises without permission...