A Place for Mom v. Perkins

475 F.Supp.3d 1217

A PLACE FOR MOM, Plaintiff,

v.Lisa PERKINS, Defendant.

CASE NO. C20-1028-JCC

United States District Court, W.D. Washington, at Seattle.

Signed July 31, 2020

Laura P. Hansen, Gavin William Skok, Fox Rothschild LLP, Seattle, WA, for Plaintiff.

Matthew R. Kelly, Darren Anthony Feider, Sebris Busto James, Bellevue, WA, for Defendant.

ORDER

John C. Coughenour, UNITED STATES DISTRICT JUDGE

This matter comes before the Court on Plaintiff's motion for a preliminary injunction (Dkt. No. 11) and motions to seal (Dkt. Nos. 14, 48). Having thoroughly considered the parties’ briefing and the relevant record, the Court finds oral argument unnecessary and hereby GRANTS the motion for the reasons explained herein.

I. BACKGROUND

Plaintiff is a Delaware corporation, headquartered in New York, that provides referrals to individuals for senior living and care facilities. (Dkt. No. 1-5 at 3.)

Plaintiff is the "largest senior living and care referral service company" in North America. (Id. ) Its network includes over 17,000 providers of senior living and care services. (Id. ) If a customer chooses to reside at a senior living and care facility in Plaintiff's network following a referral by Plaintiff, that facility pays Plaintiff. (Id. )

Defendant is a former employee of Plaintiff and a resident of Texas. (Id. ) Plaintiff hired Defendant in June 2015. (Id. at 4.) On June 19, 2015, Defendant signed an employment agreement that included a confidentiality clause, a non-solicitation clause, and a non-competition clause. (Id. at 4–5.) In relevant part, Defendant's employment agreement stated the following:

Confidentiality Obligation . "I understand and agree that all Proprietary Information ... is the Company's sole property, including all trade secrets, patents, copyrights and other rights in connection therewith .... I will not use any Proprietary Information disclosed to me for my own use or for any purpose other than to carry out my Duties .... Except as expressly provided in this Agreement, I will not (a) publish or disclose any Proprietary Information, (b) use any Proprietary Information for any purpose including, but not limited to, selling, licensing, marketing, or otherwise distributing any Proprietary Information and (c) use any Proprietary Information in any way detrimental to the Company and its business interests. Upon termination of the Employment Period, or upon the Company's earlier request, I will return or deliver to the Company all tangible forms of such Proprietary Information, and any other Company property in my possession or control, including but not limited to drawings, specifications, documents, records, devices, or any other original or copied material. I will not retain any copies, summaries, or notes of Proprietary Information unless expressly approved in writing by the President of the Company.

...

Solicitation of Employees and Company Customers . Except when I am acting for the Company's benefit, during the Employment Period, and for 12 months after my employment terminates for any reason, I will not solicit, contact, call upon, or attempt to solicit any employees or Company Customers, for the purposes of providing any products or services that may be used as a substitute for the products or services I provided while employed with the Company. This restriction applies only to any employees or Company Customers with whom I had contact or about whom I learned Proprietary Information during the last 24 months of my employment with Company. For purposes of this paragraph, "contact" means interaction between me and the employees of Company Customers which takes place to further the business relationship, or making sales to or performing services for the Company Customers.

...

Noncompetition . During my Employment Period with the Company and for 12 months after my employment terminates for any reason, I will not, without the Company's prior written consent, directly or indirectly work on any products or services that could be used as a substitute for any product or services being commercially developed or exploited by the Company during the last 24 months of my employment with the Company and either (a) about which I learned Proprietary Information or (b) on which I worked.

(Id. at 4–5.)

While working for Plaintiff, Defendant was responsible for "establishing, fostering, and maintaining relationships with [Plaintiff's] customers and referral sources in Texas, including hospitals, rehabilitation centers, and other healthcare providers." (Id. at 4.) On April 17, 2020, Defendant voluntarily resigned from her employment with Plaintiff. (Dkt. No. 24 at 9.) When she resigned, Defendant allegedly told Plaintiff that she was leaving to care for her aging mother. (Dkt. No. 1-5 at 6.) Plaintiff claims it was not aware that Defendant was in fact going to work for another company. (Id. ) Sometime between April and June 2020, Plaintiff learned that Defendant had accepted new employment with Senior Living Specialists, LLC, which is headquartered in Addison, Texas. (Id. ) Plaintiff claims that Defendant's new employer is Plaintiff's direct competitor in the senior living and care referral services in Texas. (Id. )

After learning that Defendant was working for a direct competitor, Plaintiff allegedly reviewed Defendant's company email and discovered that in the six weeks preceding her resignation, Defendant sent "highly-sensitive company records and trade secrets regarding [Plaintiff's] customers, referral sources, training materials, and sales and marketing strategies" to her personal email account. (Dkt. No. 11 at 2.) Defendant asserts that she emailed herself reports containing "non-proprietary and non-confidential information to verify whether [Plaintiff] had paid her all wages owed due to an ongoing dispute about [Plaintiff's] payment of commissions." (Dkt. No. 24 at 3.)

At the heart of this case is Plaintiff's allegation that Defendant is "using [Plaintiff's] confidential, proprietary, and trade secret information for her own benefit and for the benefit of her new employer." (Dkt. No. 1-5 at 6.) Plaintiff further alleges that Defendant is "soliciting [Plaintiff's] referral sources for her own benefit and for the benefit of her new employer." (Id. ) As an apparent result of Defendant's solicitation, "at least one referral source has informed [Plaintiff] that it will be working with [Defendant] now instead of [Plaintiff]." (Id. ) Plaintiff thus claims that Defendant's actions "interfere with [Plaintiff's] customer and referral relationships, irreparably harm and damage [Plaintiff's] business, jeopardize [Plaintiff's] confidential information and trade secrets, and put [Plaintiff] at a competitive disadvantage." (Dkt. No. 11 at 2.)

On June 16, 2020, Plaintiff filed a complaint for injunctive relief and damages in King County Superior Court. (Dkt. Nos. 1 at 2, 1-5 at 1.) On June 24, 2020, Plaintiff moved for a temporary restraining order, an order to show cause, and an order for expedited discovery. (Id. ) On June 29, 2020, the parties participated in a temporary restraining order hearing before Court Commissioner Hendry H. Judson. (Id. ) After considering the parties’ pleadings and hearing oral argument, the Superior Court found that Plaintiff had submitted sufficient evidence to demonstrate a likelihood that it will prevail on the merits of its claims. (Dkt. No. 1-2 at 4.) The Superior Court further found that Plaintiff would suffer actual and substantial injury if Defendant was not immediately enjoined pending further proceedings. (Id. ) The Superior Court accordingly entered a temporary restraining order and scheduled a hearing to show cause for a preliminary injunction for July 17, 2020.¹ (Dkt. No. 1 at 2.)

Defendant removed the case on July 1, 2020, (Dkt. No. 1 at 1), and filed her answer on July 8, 2020, (Dkt. No. 10). On July 9, 2020, Plaintiff filed the instant motion for a preliminary injunction. (Dkt. No. 11.) On July 24, 2020, Defendant filed a response, (Dkt. No. 31), and sent Plaintiff her discovery responses, (see Dkt. Nos. 45 at 2–4; 49-1; 49-3; 49-4; 49-5; 50; 51). Defendant's responses revealed several pertinent facts, including that Defendant (1) accessed Plaintiff's Salesforce database "eleven times after she left" her position with Plaintiff, (Dkt. No. 46 at 2); (2) forwarded one of Plaintiff's lead sourcing reports "containing extensive information about [Plaintiff's] referral sources, customers, and marketing efforts" to her new employer on June 19, 2020, after being served with a copy of the summons and complaint in this action, (Dkt. Nos. 45 at 2; 50 at 2); (3) "contacted twenty or more" of Plaintiff's referral sources since ending her employment, (Dkt. No. 49-1 at 5); (4) communicated with "at least one" of Plaintiff's employees about leaving Plaintiff's organization and joining Senior Living Services, (Dkt. No. 49-3); and (5) "stole hard copy documents and copied documents to a jump drive," (id. at 6).

II. DISCUSSION

A. Plaintiff's Motion for Preliminary Injunction

Federal law provides the rules for modifying a preliminary injunction entered by a state court prior to removal. See Granny Goose Foods, Inc. v. Brotherhood of Teamsters & Auto Truck Drivers Loc. No. 70 , 415 U.S. 423, 437, 94 S.Ct. 1113, 39 L.Ed.2d 435 (1974) ; Pantoja v. Countrywide Home Loans, Inc. , 640 F. Supp. 2d 1177, 1183 n.5 (N.D. Cal. 2009). Those rules give a district court "wide discretion" to modify an injunction in the face of changed circumstances or new facts. See A & M Records, Inc. v. Napster, Inc. , 284 F.3d 1091, 1098 (9th Cir. 2002) (quoting Sys. Fed'n No. 91 v. Wright , 364 U.S. 642, 647–48, 81 S.Ct. 368, 5 L.Ed.2d 349 (1961) ).

A preliminary injunction is "an extraordinary remedy never awarded as of right." Garcia v. Google, Inc. , 786 F.3d 733, 740 (9th Cir. 2015) (citing Winter v. Nat'l Res. Def. Council, Inc. , 555 U.S. 7, 20, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008) ). To obtain such relief, a party must ...