T.H. Glennon Co. v. Monday

T.H. GLENNON COMPANY, INC. Plaintiff, v. SHONN MONDAY, Individually, and as Manager of TMG Green, LLC;DEBRA MONDAY, Individually, and as Manager of TMG Green, LLC;TMG GREEN, LLC; ULDERIC BOISVERT, Individually, as Manager of Greenwood Farms, LLC,and as President of H.U.R.B. Landscaping, Inc.; GREENWOOD FARMS, LLC;H.U.R.B. LANDSCAPING, INC.; PAT Does 1-5; Defendants.

CIVIL ACTION NO. 18-30120-WGY

UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS

March 17, 2020

YOUNG, D.J.

FINDINGS OF FACTS, RULINGS OF LAW, AND ORDER FOR JUDGMENT

I. INTRODUCTION

On July 17, 2018 the chemical company T.H. Glennon ("Glennon"), which manufactures mulch coloring, commenced this action in the Massachusetts Superior Court sitting in and for the county of Essex, suing their former employee Shonn Monday for breach of contract, misappropriation of trade secrets under Massachusetts Law, interstate misappropriation of trade secrets under the Federal Trade Secret Protection Act, and conversion. Pl.'s Compl. ("Original Complaint"), ECF No. 24. On July 25, 2018, Monday removed the action to this Court. See generally Notice Removal, ECF No. 1.

Nearly a year later, on June 5, 2019 with trial fast approaching, Glennon amended its complaint, adding six new defendants: Shonn Monday's wife Debra Monday; their company TMG Green, LLC; Ulderic Boisvert; Greenwood Farms, LLC; H.U.R.B. Landscaping, Inc.; and Pat Does 1-5, a collection of unknown individuals and corporations. Am. Compl. ("Compl.") ¶¶ 2-8, ECF No. 59. Count I, against Monday only, is for breach of contract. The remaining causes of action were raised against all defendants: violation of the Computer Fraud and Abuse Act (Count II); interstate misappropriation of trade secrets under the Federal Trade Secret Protection Act (Count III); Racketeer Influenced and Corrupt Organizations Act ("RICO") conspiracy (Count IV); misappropriation of trade secrets under Massachusetts Law (Count V); unfair competition (Count VII);¹ copyright violation (Count VIII); unfair and deceptive trade practices under Massachusetts Law (Count IX); tortious interference with a contractual relationship (Count X); and diversion/usurpation of corporate opportunity (Count XI).

At a motion session on September 24, 2019, this Court considered two Motions to Dismiss, one filed by Shonn Monday, Defs.' Sup. Mot. Dismiss, ECF No. 97, and one filed by Debra Monday and TMG Green. Mem. Supp. TMG's Mot. Dismiss Pl.'s Am. Compl., ECF No. 106. This Court granted the Motion to Dismiss as to the RICO claim (Count IV), the Copyright Violation claim (Count VIII) and the Unfair and Deceptive Trade Practices claim (Count IX). Electronic Clerk's Notes, ECF No. 122. It then ordered a trial for Shonn Monday only, holding the cases against the other defendants in abeyance pending the outcome of that trial. Id.

This Court held a three-day bench trial on the remaining counts against Monday on October 21-24 2019. See Electronic Clerk's Notes, ECF Nos. 134, 135, 136, 129. The Court heard testimony from six witnesses. Glennon called Steven Presser, a forensic computer expert; Kathleen Shea, the marketing director of Glennon; Helen Bacon, the treasurer of Glennon; Patty Jean "Rocky" Berry, vice president of Glennon; Shonn Monday as an adverse witness; and Brian Shea, president of Glennon. See Exhibit Witness List, ECF No. 137. Monday took the stand in his own defense. Electronic Clerk's Notes, ECF No. 136.

Following the trial, this Court issued an Order enjoining Shonn Monday, Debra Monday, and TMG Green from engaging in the mulch coloring business for two years, and from using the TMGGreen name or logo. Order 2, ECF No. 133. The Order also required them to return any iteration of Glennon's proprietary Filemaker Database, which Monday had illicitly copied, and to refrain from entering into any contractual relationship with any person or entity listed in the database. Id. at 2-3.

As to the case against Monday, this Court now makes the following findings of fact and rulings of law.

II. FINDINGS OF FACT

A. Monday's Employment with T.H. Glennon

Glennon is a private chemical company that specializes in manufacturing water-based adhesives, and is involved in the businesses of green waste recycling and mulch-based colorants. Glennon manufactures both dry and wet mulch colorants, and sells a machine called the "Mulch ColorJet," a wet mulch coloring system.

Shonn Monday joined T.H. Glennon on September 16, 2009 as a salesman. As part of the employment process, Monday signed a Confidentiality Agreement (also called a "Non-Disclosure Agreement" or "NDA"). This agreement included language indicating that, "In consideration of and as a condition of the Employer employing the Employee and the Employer providing Confidential Information to the Employee" the Employee would undertake certain actions. Trial Ex. 7, Confidentiality Agreement ¶ 1. These actions include keeping informationconfidential, id. at ¶¶ 1-5, refraining from taking advantage of any business opportunity "relating to or similar to the Employer's current or anticipated business opportunities," id. at ¶ 6, and refraining from competing during employment or within two years of termination "with a business which is in direction competition" in the Employee's subject area. Id. at ¶¶ 9-10. The NDA also required the return of any confidential information upon the Employee's termination, including any computers, documents, or storage devices potentially containing confidential information. Id. at ¶ 16.

Glennon provided Monday a computer, phone, and iPad pursuant to his duties as a salesman. His compensation from the company consisted of a yearly salary as well as commissions on equipment sold, and he was responsible for maintaining contact with existing customers as well as reaching out to new clients. He was primarily responsible for sales in the Northeast portion of the country.

On April 21, 2016, while employed with Glennon, Monday registered the corporation TMG Green, LLC, listing himself as the Resident Agent and his wife Debra Monday as the manager. See Mass. Sec. of the Commonwealth, Corporations Division, Business Entity Summary, TMG Green LLC, available at http://corp.sec.state.ma.us/CorpWeb/CorpSearch/CorpSummary.aspx?FEIN=001220017&SEARCH_TYPE=1. Monday states he created thiscompany to allow people to advertise and sell their used equipment, and provided consulting on equipment safety. Trial Ex. 13, Monday Deposition 15:15-19-:12. Therefore, TMG Green maintained a website with images and sales options for multiple types of recycling equipment, including the "ColorCritter." Tr. Ex. 6, Screenshots 19-31.

Though Monday was successful as a salesman during his first years at Glennon, his performance eventually declined. Kathleen Shea testified that his percentage of overall sales revenue within the company dropped from 48% in 2010 to only 36% in 2018, and that his revenue was declining in 2018 even as other members of the sales team saw continued growth. Monday stated he was the top salesman "except for the last three years." Monday Deposition 71:18. By 2018 the company was concerned about Monday's sales performance, customer service, following of directions, and general performance. Trial Ex. 12, Shea Deposition 39:23-44:12. As a result, the company reduced his sales commission and cut his territorial responsibilities, before ultimately firing him on June 25, 2018. Shea Deposition 39:23-40:8; 45:15-45:24.

B. Monday's Firing and Subsequent Investigation

Monday returned his computer, phone, and iPad to Glennon on July 9, 2018, approximately two weeks after his firing. All three were completely wiped of data, with the iPad and iPhonereset to their factory settings. When "Rocky" Berry, the Glennon vice president, asked him to return the remaining data, Monday refused. Concerned, Kathleen Shea logged onto Filemaker, Glennon's database of customer contacts, and saw that Monday had sent multiple emails to himself and to his wife, including one with Glennon's yearly financial revenue and customer order information. Shea then discovered the TMG Green site by searching for Monday's name on the Commonwealth's business registry.

Investigating further, Shea the other executives of Glennon discovered that Monday had deleted many of his work emails, though their IT team was able to recover some of them. Among the deleted emails were two between Monday and customers directing them to the TMG Green website to find recycling equipment, with Monday specifically recommending the ColorCritter machine to one of these customers. Tr. Ex. 3, Two Emails with Attachments, Nov. 2, 2017 email from Shonn Monday to Jeff Moulton; Id., March 26, 2018 email from Shonn Monday to clinkln@hotmail.com.

The executives at Glennon were particularly concerned about ensuring their Filemaker system of customer contacts was secure. This system contained the contact information and records for over 4,000 customers. Glennon had developed this database from a list of several hundred names that the national sales manager, Kriem Michel brought to the company from Bayer when she joinedin 2001. Employees were required to use a username and password to access Filemaker, and their use was restricted; for example, Monday could only access contacts for the twelve states he covered as a salesman. See Tr. Ex. 14, Filemaker Directive. Only five people in the company, three of them executives, had access to the entire database.

Approximately September 2018 Glennon hired the firm Black Swan Digital Forensics to conduct a forensic analysis of the three wiped computers. Black Swan was able to recover many of the deleted files, primarily from Monday's laptop, and produced mirrors of this data. Black Swan was also able to recover a significant amount of data from a partially-deleted external hard drive belonging to Monday. This hard drive, which Glennon obtained during the course of this litigation, reflected a back-up of Monday's company-issued laptop,...