United States District Court, W.D. Virginia, Roanoke Division
Michael F. Urbanski Chief United States District Judge
pending before the court are plaintiff Hawk Advisers,
Inc.'s ("Hawk") motion to expedite (ECF No. 5)
and motion for a preliminary injunction (ECF No. 7). At a
hearing held on the motions on May 4, 2018, the court
questioned whether an arbitration clause in an employment
agreement precluded the court from deciding Hawk's
motions. Following the hearing, defendant Ryan E. Gillenwater
("Gillenwater") moved to compel arbitration and
stay the proceedings pending arbitration, pursuant to the
Federal Arbitration Act ("FAA"), 9 U.S.C.
§§ 3-4. ECF No. 25. Hawk opposed the motion and
filed a supplemental memorandum in support of its preliminary
injunction motion. For the reasons set forth below, the court
will GRANT the motion to compel arbitration.
2009, defendant Gillenwater became an insurance agent for
Carlton Wright Insurance Company ("Carlton
Wright"), and the two parties entered into an employment
agreement (the "Producer Agreement"). Compl. ¶
7, ECF No. 1; Producer Agreement, ECF No. 23-1. The Producer
Agreement prohibited Gillenwater from disclosing Carlton
Wright's confidential or trade secret information to
third parties and required Gillenwater to return all Carlton
Wright business records when his employment ended. Producer
Agreement § IX. The Producer Agreement further barred
Gillenwater from soliciting Carlton Wright's customers or
employees for a period of three years following the
termination of his employment. Id. at §§
VIII, XI. In the section on dispute resolution, titled
"XIII. Arbitration/Litigation" (the
"Arbitration Clause"), the Producer Agreement
provides as follows:
Any controversy, claim, or breech [sic] giving rise
to a claim for liquidation [sic] or monetary damages arising
out of or relating to this Agreement shall be submitted for
settlement to an arbitrator agreed upon by both parties
hereto. If the parties cannot agree upon an arbitrator, the
controversy, claim, or breach shall be referred to the
American Arbitration Association with a request that the
Association appoint an Arbitrator. Arbitration shall be held
in the city of business of the Agency in accordance with the
rules and standards of the American Arbitration Association.
In the event any party hereto resorts to either legal action
or arbitration as the result of any dispute pertaining to any
of the terms of this Agreement, the prevailing party shall be
entitled to collect all costs incurred, including but not
limited to attorney's fees and other costs.
Id. at § XIII. The parties agreed that Virginia
law would govern the interpretation and enforcement of the
Producer Agreement. IcL at § XVII.
his employment with Carlton Wright, Gillenwater built a book
of business in the family entertainment and amusement
industry (the "Amusement Book"). Compl.
¶¶ 9-11. The business expanded in 2012, and Carlton
Wright began operating the Amusement Book as Keystone
Amusement Enterprises ("KAE"). Id. ¶
2015, Rand Wright ("Wright"), owner of Carlton
Wright, and Stephen Hamilton ("Hamilton"), owner of
Commercial Insurance Services, Inc., formed Hawk to serve as
a holding company. Id. ¶ 13. Wright became the
president of the new company, which took control of Carlton
Wright's Amusement Book and retained Gillenwater and
other Carlton Wright employees. Li ¶¶ 14-16. As
part of the transition, in March 2016, Gillenwater signed a
nondisclosure and confidentiality provision (the
"Confidentiality Agreement") in the Hawk employee
handbook. Confidentiality Agreement, ECF No. 23-2.
2016, Hawk made Gillenwater an officer and vice president of
the company. Compl. ¶ 18. By the fall of 2017, however,
Wright and Hamilton became concerned about Gillenwater's
work performance and confronted Gillenwater about his conduct
in late November 2017. Li ¶¶ 21, 26, 36.
January 16 and 17, 2018, Gillenwater secretly met with
Hawk's competitor, McGowan Insurance
("McGowan"), in Ohio. Id. ¶ 42.
Analysis of Gillenwater's work computer revealed that he
had compiled information about Hawk's finances and
customers on the evening before he travelled to Ohio. ECF No.
23-11 at¶ 11-12. Gillenwater spoke to two other Hawk
employees, as well as Wright, about selling the Amusement
Book to McGowan and leaving Hawk to work for McGowan. Compl.
¶¶ 42-43. On January 26, 2018, Hawk fired
Gillenwater. Id. ¶ 68.
leaving Hawk, Gillenwater became a vice president at McGowan.
ECF No. 1-6. Hawk believes that Gillenwater is soliciting its
customers and continues to have administrator
authority and credentials to the KAE Facebook page, as well
as access to the "KAE Notebook, " a Cloud system
containing information about Hawk's clients. Compl.
¶¶ 88, 96.
managing director of McGowan, Lee Stacey, avers that McGowan
has not permitted Gillen\vater to violate his employment
agreement. ECF No. 23-14 at ¶ 5. Stacey further avers
that Gillenwater has not shared any Hawk information with
McGowan. Id. ¶ 4. At the preliminary injunction
hearing, Hawk admitted that it has not lost any business or
employees to McGowan.
April 4, 2018, Hawk sued Gillenwater for misappropriation of
trade secrets, breach of contract, conversion, violation of
the Computer Fraud and Abuse Act, breach of fiduciary duty
and the duty of loyalty, violation of the Virginia Business
Conspiracy Act, tortious interference, and punitive damages.
Hawk now seeks a preliminary injunction prohibiting
Gillenwater from writing business for family entertainment
centers in the United States, soliciting Hawk clients and
employees, or using Hawk's confidential and proprietary
information for any purpose during the pendency of this
matter. Hawk requests an order requiring Gillenwater to
return any confidential Hawk information and to relinquish
his passwords and credentials for the KAE Notebook and the
KAE Facebook page. Hawk further asks that Gillenwater be
required to preserve all Hawk information and provide ...