Vendr, Inc. v. Tropic Techs.
| Docket Number | 2:23-CV-165-DAK-DAO |
| Decision Date | 06 June 2023 |
| Parties | VENDR, INC., Plaintiff, v. TROPIC TECHNOLOGIES, INC., and GRAHAM SANDERS, Defendants. |
| Court | U.S. District Court — District of Utah |
This matter is before the court on Plaintiff Vendr, Inc.'s Motion for Temporary Restraining Order [ECF No. 16]. On April 27, 2023, the court held a hearing on the motion via zoom videoconferencing. At the hearing, Monica S. Call and Eileen R. Ridley represented Vendr, L. Reid Skibell and Elizabeth M Butler represented Defendant Tropic Technologies, Inc., and Robert O. Rice represented Defendant Graham Sanders. The court took the motion under advisement. After carefully considering the parties' memoranda and arguments as well as the facts and law relevant to the pending motion, the court issues the following Memorandum Decision and Order on the pending motion.
BACKGROUND [1]
Plaintiff Vendr is suing Tropic Technologies and Graham Sanders in connection with Sanders's employment with Tropic and the alleged breach of his noncompete and nondisclosure agreement with Vendr. Vendr and Tropic compete as providers of multiple software as service (“SaaS”) products and services. These products and services include: 1) a negotiation-as-a-service that helps customers negotiate contracts with third-party suppliers; 2) the management of software contracts for customers from contract inception to contract execution; 3) solutions to monitor customer's SaaS application usage and 4) solutions to assist finance, procurement, and information technology departments in the procuring of such SaaS solutions.
Vendr was founded in 2018 and has its principal place of business in Massachusetts.
Tropic was founded in 2019 and has its principal place of business in New York. Vendr alleges that it is the pioneer in the SaaS product and service provider field and that it is more prominent than Tropic in the market.
Vendr considers the identity of its customers, technologies processes, customer and supplier data, and growth and product strategy to be confidential and proprietary. Vendr limits distribution and access to these materials within Vendr. Vendr also takes measures to protect the secrecy of the information it considers confidential and proprietary, such as maintaining sophisticated IT security and infrastructure, using unique user IDs and strong passwords, and requiring all employees to sign confidentiality and noncompete agreements.
Graham Sanders began working at Vendr on June 27, 2022, as a Senior Executive Buyer.
Sanders graduated from college in 2014 with a degree in Political Science and Government but later found himself working for a variety of companies in the technology industry. In 2021, Sanders moved to Salt Lake City, Utah, to work for Lucid Technologies, where he worked until he began working at Vendr in June of 2022. As a Senior Executive Buyer, Sanders contacted software service suppliers to negotiate contract terms for the service for Vendr's customers. For example, if a Vendr customer was party to a soon-to-expire contract for video-conference services, Sanders contacted the supplier to negotiate terms for a renewed service contract.
While Sanders worked at Vendr, there were forty buyers-five pods of buyers with eight in each pod. Each pod handled 60-100 customers. As a Senior Executive Buyer, Sanders did not have a dedicated group of customers with whom he worked, or an exclusive relationship with any particular customer. Sanders negotiated contract terms with software suppliers on behalf of customers but was not primarily responsible for managing Vendr's relationships with its customers. Vendr's Sales Team, Implementation Team, and Customer Satisfaction Team worked directly with customers.
When Sanders began his employment at Vendr, he entered into a written Employment Agreement and an accompanying Confidential Information and Inventions Assignment Agreement (“PIIA”). Pursuant to his written Employment Agreement, Sanders agreed to abide by Vendr's rules and policies, including the provisions of the PIIA confidentiality agreement. The PIIA stated that Sanders's employment created a “relationship of confidence and trust' with respect to the confidential information Sanders would have access to and that Vendr had a “protectable interest” in the Confidential Information, which was laid out in detail. The PIIA also included a one-year noncompete provision precluding Sanders from employment with a competitor in the defined territory. Sanders also agreed to return all company property when his employment with Vendr terminated.
As Senior Executive Buyer, Vendr alleges that Sanders was privy to confidential and proprietary information, including data insights, customer lists and contacts, supplier lists and contacts, overall business processes and strategies, product plans, and plans for growth. Vendr alleges that Sanders participated in at least 100 individual customer deals across multiple third-party suppliers and industries. Sanders, however, states that he could not directly access customer information on Vendr's platform but could be provided such information by other Vendr teams. Vendr used a platform called Salesforce to manage customer information. Sanders did not have access to Salesforce and could not access the customer information Vendr maintained in Salesforce. When Vendr assigned Sanders a customer contract, he would often receive a copy of the service contract with a supplier so that he could negotiate a renewal contract. But the details of the contract were not secret to Vendr because the customer and the supplier had the terms of the contract as well.
Sanders claims that he worked on too many contract renewals to be able to remember customers' names, especially since his negotiations were with the suppliers. Once he had new terms for the customer's contract with a given supplier, he would post them in Vendr's system. If a customer had issues with the terms, they would work with the Customer Satisfaction Team. He had little contact with customers and limited, short-term contact with service providers.
After working for Vendr for seven months, Sanders was unsatisfied with his job, largely because he felt that the workload was excessive. He requested help regulating his workload, but his manager continued assigning him assignments that he felt were overwhelming. In late 2022, Sanders began looking for employment with other technology companies. Around that time, Sanders responded to an inquiry from Tropic. Sanders states that he told Tropic about the PIIA, and Tropic claims that it instructed him not to bring any information or materials from Vendr over with him.
On January 4, 2023, Sanders gave Vendr two weeks' notice of his intent to leave his employment with Vendr. Sanders' employment with Vendr terminated January 18, 2023. During his exit interview over a video call with Mike Dockendorf, Vendr's Human Resources Business Partner, Vendr claims that Sanders did not disclose that he was going to work for a competitor, despite being asked, and that he was reminded of his continued contractual legal obligations. Sanders, however, claims that Dockendorf did not discuss or reference any contractual obligations.
Vendr also alleges that Sanders downloaded a significant amount of confidential, proprietary, or trade secret information from Vendr's server to his company computer in the last weeks of his employment. Vendr's IT systems show that, in the last two weeks of Sanders' employment, there was a spike in Sanders' computer downloads. Vendr alleges that it appears that Sanders downloaded a list of all the deals he had worked on, as well as information about other deals with which he was not involved. The list of deals showed the buyer, supplier, stakeholders, type of deal, dates, and pricing. Vendr alleges that he copied that information to a personal computer or device and then allegedly wiped all data from his computer before returning it to Vendr contrary to the PIIA's requirement not to delete any information contained on his company computer.
Sanders, however, denies taking any confidential or proprietary information from Vendr. He claims that the only documents he transferred from his Vendr laptop to a personal device was his company photograph and a spreadsheet containing personal information. The latter was basically an electronic version of a spiral notebook where he saved dates, events, and other information. None of the information in the spreadsheet was confidential or proprietary to Vendr. Sanders also explains the spike in his downloads to a request from his supervisor to compile a list of all his deals to give to colleagues to assist in the transition of work when he left.
Furthermore, Sanders takes issue with Vendr's claim that he improperly deleted information on his company laptop prior to returning it. This claim, Sanders contends, does not take into consideration the types of instructions Vendr gives its employees in practice about returning their laptops. On January 9, 2023, Sanders received an email from Dockendorf entitled “Final Day Info” providing him with information about wrapping up his time with Vendr.
Dockendorf advised Sanders that his He also instructed Sanders to return his laptop via federal express. To remove any personal data that might exist on the laptop, Sanders performed a factory reset on the laptop. Sanders believed that resetting the laptop to its factory settings was the most efficient way to get all his personal...
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