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Integrated Global Services, Inc. v. Mayo

United States District Court, E.D. Virginia, Richmond Division

September 13, 2017

MICHAEL MAYO, Defendant.



         This matter is before the Court on Plaintiff Integrated Global Services, Inc.'s ("IGS") Motion for Preliminary Injunction. (ECF No. 4.) On August 22, 2017, Mayo filed a "Brief in Support for Expedited Hearings" with nine exhibits. (ECF No. 22.) On August 25, 2017, the Court held a hearing at which it took evidence and heard oral argument, and the matter is ripe for disposition. The Court exercises jurisdiction pursuant to 28 U.S.C. § 1331.[1]Mayo appeared pro se.[2] The day of the hearing, the Court entered an Order granting the Preliminary Injunction. (ECF No. 19.) This Memorandum Opinion sets forth the reasoning for the Court's ruling.

         I. Factual and Procedural Background

         A. Procedural History

         On August 10, 2017, IGS filed its Verified Complaint against Defendant Michael Mayo, (ECF No. 1), the Motion for Preliminary Injunction, (ECF No. 4), and a Motion to Expedite Discovery, (ECF No. 6).[3] Mayo was personally served with summons and a copy of the Verified Complaint on August 11, 2017, and on August 15, 2017, IGS filed a Motion for Expedited Hearing on its Motion for Preliminary Injunction.[4] On August 16, 2017, the Court held a conference call at which counsel for IGS and Mayo, proceeding pro se, appeared. The Court set an expedited briefing schedule on the Motion for Preliminary Injunction and the Motion for Expedited Discovery, and scheduled a hearing on the Motion for Preliminary Injunction. On August 22, 2017, Mayo filed a "Brief in Support for Expedited Hearings" with nine exhibits. (ECF No. 22.) On August 23, 2017, IGS filed a copy of its Witness and Exhibit Lists for the Preliminary Injunction Hearing, (ECF No. 15), and a Motion to Seal Exhibits, [5] (ECF No. 13). On August 24, 2017, IGS filed a Motion to Seal the Courtroom and Transcript.[6] (ECF No. 16.)

         Mayo filed the above-referenced collection of "exhibits, " cross-examined witnesses, and presented some argument during the hearing. Eventually, however, he decided not to testify or otherwise present evidence to the Court during the hearing, even though the Court made clear that Mayo's earlier-filed "exhibits" would not be considered in its ruling on the Motion for Preliminary Injunction unless Mayo presented them in a manner that complied with the Federal Rules of Evidence.

         B. Factual Findings [7]

         Mayo was employed with IGS as a "Mechanical Product Manager-Paper" from 2010 until June 21, 2017. (Compl. ¶ 15.) In that capacity, Mayo "oversaw projects, " "evaluated the scope of the work IGS was asked to perform for customers and prospective customers, attended pre-bid meetings, and worked with IGS's sales department to develop project estimates, bids and proposals." (Id. ¶ 16.) He also managed projects "worth as much as $5, 000, 000.00" and supervised crews of up to one hundred workers. (Id.) In the course of his work, Mayo had extensive interactions with IGS customers, and "had access to IGS's key contacts for and relationships with" these customers, (Id. ¶ 20). Importantly, he also "had access to IGS's highly sensitive, confidential, proprietary[J and trade secret information, " including the "technical, engineering, sales, customer, budget, manpower, and cost and pricing information" for IGS projects for a variety of customers. (Id. ¶ 18.) IGS provided Mayo with a password-protected laptop computer and a smartphone "to use in connection with his employment for IGS." (Id. ¶ 28.)

         On August 26, 2010, approximately three months after he began working for IGS, Mayo executed an "Employee Proprietary Information, Inventions, Non-Solicitation[J and Non-Competition Agreement" (the "Confidentiality Agreement"). (Id. ¶¶ 23-24.) The Confidentiality Agreement governs, inter alia, nondisclosure of company information and return of company documents. (Confidentiality Agreement 1, 3, ECF No. 1-1.) The section governing nondisclosure provides, in part:

At all times during my employment and thereafter, I will hold in strictest confidence and will not disclose or use any of the Company's Proprietary Information . . ., except as such disclosure or use may be required in connection with my work for the Company, or unless an officer of the Company expressly authorizes such in writing. ... I have been informed and acknowledge that the unauthorized taking of the Company's trade secrets may subject me to civil and/or criminal penalties.

(Id. at 1.) "Proprietary Information" is defined in the Confidentiality Agreement as

any and all confidential and/or proprietary knowledge, data[, ] or information of the Company. . . . [and] includes (a) trade secrets, inventions, mask works, ideas, processes, formulas, source and object codes, data, programs, other works of authorship, know-how, improvement, discoveries, developments, designs and techniques . . .; and (b) information regarding plans for research, development, new products, marketing and selling, business plans, budgets and unpublished financial statements, licenses, prices and costs, suppliers and customers.

(Id.) The Confidentiality Agreement expressly provided that Mayo was free to "use information which is generally known in the trade or industry, or which is not gained as result of a breach of the Confidentiality Agreement." (Id.) The Confidentiality Agreement further required that, upon leaving IGS's employment, Mayo would "deliver to the Company any and all drawings, notes, memoranda, specifications, devices, formulas, and documents, together with all copies thereof, and any other material containing or disclosing any Company Inventions, Third Party Information, or Proprietary Information of the Company." (Id. at 3.)

         IGS terminated Mayo's employment on June 21, 2017, but not until the afternoon of July 19, 2017-nearly one month later-did Mayo return the company laptop and computer to Rich Crawford, IGS's Chief Executive Officer, and he did so "only after IGS demanded their return." (Compl. ¶ 32.) After Mayo returned the computer and phone, IGS learned that the phone "had been reset to its original factory settings, thereby erasing all of the data created during Mayo's use." (Id. ¶ 33.) Crawford testified at the August 25, 2017 hearing that, even before the July 19, 2017 meeting, he was becoming "very concerned." Crawford testified that IGS had repeatedly asked Mayo to return the computer and phone, and, given Mayo's delay in doing so, Crawford began to believe that Mayo might use IGS's proprietary information while working for someone else. Crawford also testified that he had heard reports that Mayo was communicating and meeting with IGS competitors just after being laid off by IGS. Given Mayo's delay in returning his computer and phone, Crawford's misgivings, and the "apparent deletion of information from the smartphone, IGS had Mayo's computer forensically examined" by J. Christopher Racich, an expert in computer forensic analysis.

         Racich began a forensic examination of the computer on July 21, 2017, two days after Mayo had returned the computer to IGS. The purpose of Racich's examination was to "determine to the extent possible whether Mayo attached any external storage devices to the ... [l]aptop, copied data to external sources, accessed IGS information, or deleted or otherwise overwr[ote] files or otherwise acted inappropriately after the end of his employment with IGS." (Racich Decl. ¶ 8.) Racich's examination revealed the following activity on the laptop that occurred after Mayo's employment was terminated: [8]

(1) "[O]n June 23, 2017, at approximately 2:00 p.m. EST, a PNY USB 2.0 Flash Drive with the ID number of 1101310565D0AD74&0 was for the first time attached to the" computer, (id. ¶ 10);
(2) Also on June 23, 2017, the computer was used to access files existing on the removable device entitled "E:\Unbrella Scaffolding\Digester Scaffold arm 14 foot D.pdf and "E:\Unbrella Scaffolding\Umbrella Scaffold 12ft 3in.pdf, " (id);
(3) After June 21, 2017, the computer was used to access folders on the local computer entitled "Paragon Dakota Gas July 2016.xlsx, " "Paragon Dakota Gas Quote July 2016.pdf, " "Black Hills Power - Wygen LPA Screen Proposal Rev la - Jeff.pdf, " "SRIESTIMATINGTEMPLATE.xls, " and "AirHeater.xlsx, " (id. ¶ 13);
(4) At some point, the computer was used to access "cached versions of file[s] existing on the IGS Network Server" in folders entitled "\\ings-fp\userfolders\Mike Mayo\Air Heater Projects 2016, " ""\\ings-fp\userfolders\Mike MayoWr Heater Projects 2016, " and ""\\ings-fp\userfolders\Mike Mayo\LPA Screens Black Hills Power Wygen 1 2016, " (id. ¶14);
(5) On or after June 21, 2017, "there was a Google search for 'hoe [sic[ to save my contacts without iCloud'" performed on the computer, (id. ¶ 15);
(6) Finally, between 10:19 a.m. and 10:39 a.m. on July 19, 2017 (the day that Mayo met with Rich Crawford and returned the computer and phone), "more than 2, 500 files were accessed and deleted" from the laptop, (id. ¶16).

         Racich affirms that, although his analysis revealed "data that ha[d] been definitely opened by the user on external devices, " but might not be "a complete list of all data that was copied, " and the best way to determine the data copied "would be to gain physical access to the actual external device for forensic examination." (Id. ¶ 12.) Racich testified that he was presented with a document that, to a reasonable degree of certainty, was a printout containing a list of the files present on the USB Drive on August 10, 2017. That printout-twenty-five pages long- indicated that the USB Drive contained approximately 250 documents containing IGS's confidential, proprietary and trade secret information, including documents related to IGS's projects for Paragon Gas, Boise Jackson and Black Hills Power.

         Crawford testified that these documents contained information relating to ongoing IGS projects including pictures, diagrams, production rates, contact information for customers and employees, service agreements, and customer proposals. At least two of the documents were spreadsheets from which IGS would calculate its project costs and its profit margins, both of which were created based on years of IGS experience in the industry. Crawford attested that these documents were confidential, provided a competitive advantage to IGS, and would be harmful to IGS in the hands of a competitor. Crawford testified that the documents on the USB Drive constituted "the most important information for [Mayo's] largest accounts." Crawford further identified specific steps IGS took to prevent this information from being disclosed to the public, including having all of its employees and many of the companies for whom it performed work execute non-disclosure agreements; limiting the dissemination of this information with IGS to only those individuals who needed to know the information to perform their job functions; and, marking information as "confidential." Crawford also confirmed that the information in the project folders that had been deleted contained IGS's confidential, proprietary and trade secret information regarding proposals, rates, estimates and sensitive postproject technical reports, and that for at least some of the documents, IGS does not have other copies. Some documents existed only on Mayo's computer because they related to work completed on job sites in the last couple months that had not yet been copied to another IGS drive. Crawford testified that losing those documents would cause IGS significant damage and that some, but not all, of the information could only be recreated at significant expense to IGS. Moreover, according to IGS, Mayo's deletion of those documents "has deprived IGS of valuable information" and prevented it from determining "earlier activity, including whether Mayo copied the documents before he deleted them." (Compl. ¶ 48.)

         IGS also alleges that, after Mayo was laid off by IGS, he "secured employment with a direct competitor of IGS." (Id. ¶ 53.) IGS asserts, "[u]pon information and belief, [that] during the week of July 12, 2017, Mayo met with one of IGS's direct competitors, to discuss possible employment, " and on July 19, 2017, Mayo "indicated to Mr. Crawford that he intended to work for a direct competitor." (Id. ¶ 50.) IGS alleges that "Mayo already has disclosed and/or used IGS's confidential, proprietary[, ] and trade secret information, " (Id. ¶ 56), and that, "[u]pon information and belief, Mayo and the competitor(s) with which Mayo communicated about his employment acted in concert and with the intent for Mayo to disclose IGS's confidential, proprietary and trade secret information and to use such information to compete with IGS, " (Id. ¶ 54.) Crawford testified that Mayo had told him that Mayo intended to work for an IGS competitor, and that Crawford had heard "rumblings" that Mayo was meeting with competitors. Mayo presented no evidence to rebut this information.

         On July 26, 2017, IGS sent Mayo a letter requesting that Mayo produce the USB drive and return to IGS all other property related to IGS's business. After several communications back and forth, IGS received, through counsel for Mayo, a forensic analysis of the USB Drive. The forensic analysis "revealed that, on July 7, 2017, Mayo copied to the USB Drive approximately 250 documents containing IGS's confidential, proprietary and trade secret information, including documents related to IGS's projects for Dakota Gas, Boise Jackson and Black Hills Power, " (Id. ¶ 65), and that, before returning the computer to IGS, "Mayo deleted from the computer some, if not all, of the documents he copied to the USB Drive, " (Id.66). "The forensic analysis further confirmed that Mayo copied IGS's confidential, proprietary and/or trade secret information while taking steps to secure employment with and while working for a direct competitor of IGS." (Id. at 68.)

         According to IGS, Mayo still has not complied with its requests that he return IGS's "confidential, proprietary[, ] and trade secret information, " nor provided an explanation for why he accessed, copied, or deleted that information. (Id. ¶ 70.) IGS avers that

[i]f the Court does not enjoin Mayo's continued misappropriation and use of its information, IGS will lose business, goodwill, customers and its competitive advantage in the market in which it does business. Because of the critical nature of the information Mayo stole, Mayo's actions have the potential to damage IGS's overall business operations permanently and irreparably.

(Id. ¶ 73.) IGS seeks "a temporary restraining order, a preliminary injunction[, ] and permanent relief." (Id. ...

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