Fromhold v. Insight Glob., LLC

657 F.Supp.3d 880

Michael FROMHOLD, Plaintiff/Counterclaim-Defendant, v. INSIGHT GLOBAL, LLC, Defendant/Counterclaim-Plaintiff.

Civil Action No. 3:23-CV-0048-X

United States District Court, N.D. Texas, Dallas Division

Signed February 23, 2023

Shannon D. Norris, Meggan C. Burchfield, Norris Law Firm, Coppell, TX, Elizabeth Bulat Turner, Pro Hac Vice, Matthew D. Treco, Pro Hac Vice, Martenson Hasbrouck & Simon LLP, Atlanta, GA, for Plaintiff/Counterclaim-Defendant.

Jared Michael Slade, Christopher Andrew Thomson, Emily A. Fitzgerald, Alston & Bird LLP, Dallas, TX, Christopher C. Marquardt, I, Pro Hac Vice, Alston & Bird LLP, Atlanta, GA, for Defendant/Counterclaim-Plaintiff.

ORDER DENYING MOTION FOR TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION

BRANTLEY STARR, UNITED STATES DISTRICT JUDGE

At a legal conference three years ago, a professor pulled me aside. He confided that he was an atheist, he knew I believed in God, but he wanted to apologize for the treatment people of faith in America are receiving. I didn't fully know what he meant. I do now. Religious discrimination in modern America is becoming socially acceptable. But it is legally intolerable. Justices and Judges on the higher courts have sounded the alarm on such cases.¹ This Court must too. In the past few months, this Court has had to enjoin Southwest Airlines from further discriminating against its flight attendants for their religious beliefs.² This case is the second verse of the same song.

Here, Insight Global, LLC ("IG") is a staffing company. IG ordered its employees to get vaccinated against COVID-19. Michael Fromhold, an executive in charge of over 80% of the company's revenue, applied for a religious exemption and fully explained his beliefs. IG said it needed more information, denied Fromhold's request, and confirmed that its denial was final. (That's weird. It gets weirder.) Before the IG policy took effect, Fromhold's boss suggested Fromhold work from home to avoid awkwardness. IG then warehoused Fromhold in a sister company not known for its significant achievements, tried to cut his salary, and then moved Fromhold to a new division at IG where he supervised 4 people instead of 1,000. To cap it off, IG sidelined him from key meetings. An ostracized Fromhold left and became the CEO of another staffing company.

Now, apparently IG thinks Fromhold has talent and seeks to fire Fromhold from his new job because Fromhold and IG agreed to a noncompete and a restriction on using confidential information. The Court cannot enter an injunction either to fire Fromhold or to prohibit his use of confidential information. Regarding the noncompete, the Court must follow Texas Supreme Court precedent by narrowing the overbroad noncompete to cover the clients Fromhold personally served at IG and to his scope of work there—getting nationwide clients to sign exclusive staffing contracts. There is no evidence Fromhold is running afoul of those prohibitions. But there is evidence that IG violated Title VII by denying Fromhold's request for a religious exemption. So all factors cut against an injunction on the noncompete. On confidential information, there is no evidence Fromhold took any written confidential information or is using any confidential information that he remembers in his work at the new company. There is evidence from IG's witnesses that Fromhold is honest. Honesty and faith are not adequate bases for the Court to enjoin Fromhold or fire him from his new job. Accordingly, the Court DENIES the request for a temporary restraining order and preliminary injunction. [Doc. No. 5].

I. Factual Background

IG is a staffing services company where Fromhold worked for over 15 years, including as a senior executive. Fromhold joined IG shortly after graduating college, and as he worked there, he received various promotions.

Later, in May of 2021, IG promoted Fromhold to president of the company's Technology Division. This division has thousands of employees and produces several billion dollars in revenue—which accounts for over 80% of the company's annual revenues. As president of that division, Fromhold became a member of the Executive Leadership Team in which he would attend weekly meetings with IG's CEO, Bert Bean, and fellow senior executives. Attending those meetings required Fromhold to sign a confidentiality acknowledgement to confirm that those meetings involved sensitive information.

The Employment Agreement

Fromhold initially signed his Employment Agreement (the "Agreement") in 2019. It contains various restrictive covenants, including non-disclosure of confidential information and trade secrets and non-solicitation of clients.

Section 5 is the "Confidential Information" provision, which states that Fromhold "agrees not to use, disclose or otherwise make available, directly or indirectly, any Confidential Information" and that this obligation "shall survive the termination of this Agreement and/or the termination of [Fromhold's] employment with [IG] and shall continue for so long as such information meets the definition of Confidential Information as stated below."³

Section 7 is the noncompete, which states that Fromhold cannot for one year after leaving IG

own, acquire or control any interest, financial or otherwise, in, and/or otherwise manage, operate, control, or participate in the ownership, management, operation or control of, be employed by or otherwise provide services to, or otherwise engage in, any Restricted Business in any geographic area in which [IG] or any of its affiliates does business or is actively planning to do business during his employment[.]⁴

Section 7(a) defines "Restricted Business" as:

temporary, permanent and enhanced staffing services, (a) principally in the information technology, accounting, government, finance and engineering sectors, or (b) in the healthcare sector, to the extent such services described in this subsection (b) are provided or in active planning to be provided by any of the Acquired Companies during the Employment Period, or with respect to the portion of the Noncompete Period that follows the termination of Executive's employment, as of the date of termination, and any other business that [IG] or any of its Subsidiaries engages in during the Employment Period or, with respect to the portion of the Noncompete Period that follows the termination of [Fromhold's] employment, as of the date of termination.⁵

In the Agreement, Fromhold agreed that any breach or threatened breach of the confidential information and non-competition provisions of the Agreement would cause IG irreparable harm, that IG has the right to enjoin him as a result of such breach or threatened breach, and that no bond should be required for the injunction.

Enter COVID

On September 9, 2021, President Biden issued an executive order requiring federal contractors to require their employees to get vaccinated for COVID-19.⁶ The executive branch guidance from November set a deadline of January 18, 2022 for employees to get vaccinated.⁷ Also in November, IG instituted its COVID-19 vaccination policy (the "Covid Policy"). The Covid Policy required certain employees, including Fromhold, to provide proof of receiving the vaccine. Fromhold informed IG that his sincerely held religious beliefs prohibited him from receiving the vaccine, and he requested an accommodation. Specifically, Fromhold explained that his Christian belief is that God made his immune system the way God intended, the vaccine would alter it, and his religious beliefs have kept him from receiving past vaccines. As Fromhold explained at the second hearing:

I'm a Bible-believing Christian. I grew up Catholic. Throughout my life I've always believed that Jesus is our savior, he died for our sins, he was risen from the dead and he was—we were created in his image. And I'm not going to put something in my body that will change my immune system based on how God created me. That's been my belief for a long time. I also believe that my body is a temple of the Holy Spirit. When I was in 6th grade, in Catholic school, I received, you know, the sacrament of confirmation, where you receive the Holy Spirit. And that's been a longstanding belief of mine. So I haven't gotten a vaccine in my adult life. And when this came about, this is something that I knew exactly what my beliefs were.⁸

IG asked Fromhold four additional questions, which Fromhold answered.⁹ IG then denied the exemption request for lack of sufficient information.¹⁰ But IG never asked Fromhold for more information¹¹ and instead said that its decision was final.¹² On November 5, 2021, IG informed Fromhold it would be removing him from leadership and any role involving federal contracting and would move him to a sister company called Monument Consulting, a company Fromhold testified that the CEO and others at IG "have not spoken very highly of."¹³ And when Fromhold still dutifully reported to work before the policy took effect, his boss told him to "go home and work from home" because "[i]t is going to be awkward if you are in the office" or even "in the building."¹⁴

Fast forwarding to December, the federal contractor vaccine mandate (with a January compliance deadline) was a bit under the weather. A federal court in Georgia enjoined the mandate nationwide.¹⁵ Days later, the Biden administration enjoined itself, announcing it would not take action against contractors pending the outcome of the litigation over the contractor vaccine mandate.¹⁶

Later, IG moved Fromhold from Monument Consulting to be president of a new division called IG Prime & Payroll ("IG Prime"). He was given the title of president of this division some ten months after IG removed him from his leadership role. IG Prime boasted four employees. As president of IG Prime, IG sidelined Fromhold from vice-president meetings, meetings with the Vice President of Revenue, and financials meetings. IG initially excluded Fromhold from P-Zone meetings and monthly Compass...