United States District Court, D. Columbia
October 19, 2015.
Economic Research Services, Inc., Plaintiff: Leslie Paul
Machado, W. Michael Holm, LEAD ATTORNEYS, LECLAIR RYAN,
Alexandria, VA USA; John Paul Leonard, Walter Richard
Krzastek, Jr., PRO HAC VICE, MCELROY, DEUTSCH, MULVANEY &
CARPENTER, LLP, Morristown, N.J. USA.
Resolution Economics, LLC, Ali Saad, Paul White, Defendants:
Alta Marlynn Ray, David Barmak, LEAD ATTORNEYS, MINTZ, LEVIN,
COHN, FERRIS, GLOVSKY & POPEO, P.C., Washington, DC USA;
Peter Van Buren Unger, Stewart S. Manela, LEAD ATTORNEYS,
ARENT FOX LLP, Washington, DC USA; Michael Scott Arnold, PRO
HAC VICE, MINTZ, LEVIN, COHN. FERRIS, GLOVSKY & POPEO, P.C.,
Chrysler Center, New York, N.Y. USA.
OPINION [Dkts. #3, #22]
J. LEON, United States District Judge.
Economic Research Services (" plaintiff" or "
ERS" ) commenced the instant action against defendants
Resolution Economics LLC (" Resolution" ), Paul
White (" White" ), and Ali Saad (collectively,
" defendants" ) in August 2015. ERS alleges, in a
thirteen-count Verified Complaint, that White, a former
employee, violated the terms of his employment agreement by
disseminating ERS's confidential information and by
luring ERS's clients and employees to its regional
competitor, Resolution Economics. See Verified
Compl. [Dkt. #1]. Eager to stop the exodus of clients and
personnel, ERS sought a preliminary injunction to enjoin
defendants from purloining additional information and from
further soliciting its client base. See Mot. for TRO
& Prelim. Inj. & Br. in Supp. of Economic Research Servs.,
Inc.'s Appl. for a TRO & a Prelim. Inj. (Pl.'s
Mem." ) [Dkt. #3]; Defs.' Mem. of Law in Opp'n
to Pl.'s Mot. for a Prelim. Inj. (" Defs.'
Mem." ) [Dkt. #19]. Upon consideration of the
pleadings, the relevant case law, and the entire record
herein, the Court DENIES plaintiff's motion in its
ERS provides economic research and statistical analysis for
corporations and law firms in a variety of disciplines,
including employment discrimination, fair lending, insurance
coverage, and intellectual property. See Compl.
¶ 19. Although the events at issue here
transpired in ERS's Washington, D.C. office, that is not
ERS's only, or even principle, place of business. Indeed,
ERS, which is a subsidiary of parent corporation SourceHOV,
is headquartered in Florida and contains two outposts in
California, both of which have sizeable Labor and Employment
practices. White Decl. ¶ 3 [Dkt. #19-1]. Defendant
Resolution operates in the same Labor and Employment
consulting milieu. Since its founding nearly twenty years
ago, Resolution has established offices in Los Angeles,
Chicago, and Washington, D.C., and has built, moreover, a
respected practice furnishing expert witness services in
labor and employment disputes, as well as financial
consulting in matters concerning " human resource
management, wage and hour issues, and accounting." Saad
Decl. ¶ 2 [Dkt. #19-2].
his move to Resolution, defendant White was a demonstrably
important part of ERS's Washington, D.C. Labor and
Employment practice. White began his twenty-two year stint at
ERS in 1993, when he was hired as an Economist. Compl. ¶
¶ 21, 25. He thereafter moved up the ranks, receiving a
promotion to Vice President in 1998 before ultimately
becoming a Managing Director in the Washington, D.C. office
of ERS's Labor and Employment group in 2010. Compl.
¶ ¶ 21, 25. As a condition of his employment, White
signed numerous contracts with ERS, the most recent of which
was consummated on June 29, 2015 (the " 2015 Employment
Agreement" or the " Agreement" ). Compl. Ex. 3
[Dkt. #1-3]; see Compl. ¶ ¶ 28-32; see
also Compl. Ex. 1 [Dkt. #1-1]; Compl. Ex. 2 [Dkt. #1-2].
The 2015 Employment Agreement contains several restrictive
covenants, only a few of which are relevant here. First, the
Agreement bars Directors from disclosing ERS's
confidential information to third parties at any time
following their departure from ERS. Compl. Ex. 3 § 3(i).
Second, it prohibits Directors from soliciting ERS employees
or clients for the twelve months following their
separation. Compl. Ex. 3 § §
3(k)(i)-(ii). Third, and finally, the Agreement precludes
Directors, once again for a period of twelve months after
leaving ERS, from performing " any act that [the]
Director[s] knew, know, or reasonably should have known . .
. might directly injure ERS or its parents and affiliates in
any material respect." Compl. Ex. 3 § 3(k)(iv).
6, 2015, shortly after signing the 2015 Employment Agreement,
White resigned his position at ERS and, effective July 17,
2015, left to manage Resolution's nascent Washington,
D.C. office. Compl. ¶ ¶ 38-39; Compl. Ex. 4 [Dkt.
#1-4]. After apprising ERS of his resignation, but shortly
before leaving ERS, White generated a list of the clients he
had serviced during his tenure at ERS. White Decl. ¶ 43.
While ERS contends that White's actions were tantamount
to misappropriation, defendants maintain that there is
nothing untoward about reverse-engineering, as White
purportedly did here, a client list from memory. Indeed,
White avers that he compiled the offending list " one
evening at home" by jotting down the " contacts
that [he] had at [client] law firms, public agencies and
in-house legal and human resources departments." White
Decl. ¶ 43. Where his memory failed, White supplemented
the list by combing through his LinkedIn contacts and
performing targeted Internet searches. White Decl. ¶ 43.
For a number of the clients on his list, White included email
addresses that he either recalled from memory or located
through publicly-available sources. White Decl. ¶ 43.
White then tendered the list to Resolution, which conducted
its own searches to find, and catalogue, the email addresses
of the remaining clients whose contact information White was
unable to independently verify. Hurtado Decl. ¶ 5 [Dkt.
#19-3]. Thereafter, on July 17, 2015, Resolution emailed the
individuals on White's reconstructed list, announcing
that White would be joining Resolution as a Partner and
furnishing his updated contact information. Compl. ¶
¶ 42, 46; Compl. Ex. 5 [Dkt. #1-5]. According to ERS,
the announcement had its desired effect. Shortly after
Resolution sent the email, ERS began to receive formal
notices from its clients requesting that their files be
transitioned to Resolution. See Compl. ¶ 46.
exodus was not limited to ERS's clients. In the wake of
White's resignation, several other members of ERS's
Washington, D.C. Labor and Employment group, all of whom had
worked for White, quit their jobs at ERS and joined
Resolution. See Compl. ¶ 52. By
August 10, 2015, nine of the ten employees in the practice
group had resigned their posts. Compl. ¶ ¶ 53-62.
ERS places the blame for this defection squarely at
White's feet, asserting that " White either actively
solicited the Washington, D.C. [Labor and Employment] Group
to join Resolution or, at the least, influenced Resolution to
hire them in breach of his non-solicitation
obligations." Compl. ¶ 63. ERS contends, in short,
that defendants " decimated" its Washington, D.C.
office. Compl. ¶ ¶ 64-65.
commenced this suit on August 10, 2015, alleging breach of
contract in addition to numerous commercial torts. See
generally Compl. That same day, eager to stymie the
torrent of client and personnel defections, ERS moved to
enjoin defendants from " the use [of] ERS's
confidential information" and from " recruiting ERS
employees or soliciting business from ERS's
clients." Mot. for TRO & Prelim. Inj.; Pl.'s Mem.
Defendants timely opposed this request. See
Defs.' Mem. I heard oral argument on ERS's Motion on
August 31, 2015, see August 31, 2015 Minute Entry,
and received supplemental briefing from both sides on
September 14, 2015, see Plaintiffs Supplemental
Memorandum of Law in Further Support of Plaintiffs Motion for
a Preliminary Injunction [Dkt. #27]; Defendants'
Supplemental Brief in Further Opposition to Plaintiffs Motion
for a Preliminary Injunction (" Defs.' Suppl.
Mem." ) [Dkt. #28]
preliminary injunction is an " extraordinary
remedy" that " should be granted only when the
party seeking the relief, by a clear showing, carries the
burden of persuasion." Cobell v. Norton, 391
F.3d 251, 258, 364 U.S.App.D.C. 2 (D.C. Cir. 2004) (citation
omitted). Ordinarily, a plaintiff seeking such a remedy must
demonstrate " that he is likely to succeed on the
merits, that he is likely to suffer irreparable harm in the
absence of preliminary relief, that the balance of equities
tips in his favor, and that an injunction is in the public
interest." Winter v. NRDC, Inc., 555 U.S. 7,
20, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008) (citations
omitted). Courts considering these factors typically do so on
a " sliding scale" that balances the relative
strengths of each prong. Davis v. Pension Benefit Guar.
Corp., 571 F.3d 1288, 1291-92, 387 U.S.App.D.C. 205
(D.C. Cir. 2009). Despite this flexibility, it remains
incumbent on the movant to demonstrate a quantum of
irremediable injury. SeeCityFed Fin. Corp. v.
Office of Thrift Supervision, 58 F.3d 738, 747, 313
U.S.App.D.C. 178 (D.C. Cir. 1995). Indeed, because
irreparable harm has " always" been the touchstone
of injunctive relief, Sampson v. Murray, 415 U.S.
61, 88, 94 S.Ct. 937, 39 L.Ed.2d 166 (1974), a movant's
failure to demonstrate the requisite injury is grounds for
denying a motion for a ...