92 F. Supp. 3d 389
D. Maryland2015Background
- Savelich was Ameritox’s Northwest District Manager (2010–Jan 2015) and signed confidentiality, noncompetition/nonsolicitation, trade-secrets, and HIPAA/privacy agreements while living in Oregon.
- In Dec 2014 Savelich resigned to join competitor PCLS; Ameritox later discovered December 2014 emails from his Ameritox account to his personal/PCLS accounts with attachments containing IMS-purchased provider data, Ameritox customer lists from its Territory Management Tool (TMT), pricing/compensation data, recruiting/interview guides, and a financial practice profile.
- Ameritox sued for breach of contract, misappropriation of trade secrets, and breach of duty of loyalty, and obtained a TRO; it moved for a preliminary injunction to bar solicitation and use/disclosure of Ameritox information.
- The court reviewed choice-of-law (Agreement selected Maryland; agreements signed in Oregon), the scope/enforceability of the covenants (customer nonsolicit, employee nonsolicit, confidentiality), and trade-secret misappropriation (focused on IMS and TMT customer data).
- The court found Ameritox likely to show that certain customer data (IMS/TMT) are trade secrets and that Savelich misappropriated them, but concluded the nonsolicitation and confidentiality covenants are overbroad and that Ameritox failed to show irreparable harm sufficient to justify a preliminary injunction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Choice of law for Agreement | Maryland law applies per contractual choice-of-law clause | Oregon law should apply because Agreement was signed in Oregon and Oregon policy/statute could void restrictions | Maryland law applied; court rejected claim that application would violate Oregon fundamental policy because covenants at issue fell outside Oregon notice rule |
| Enforceability of customer nonsolicitation covenant | Covenant bars solicitation of Ameritox clients in specified states and is enforceable to protect goodwill and customer lists | Covenant overbroad (covers clients Savelich never served, includes states where he never worked, temporal vagueness) | Covenant held overly broad and not likely enforceable; Ameritox failed to show likelihood of success on this covenant |
| Enforceability of employee nonsolicitation covenant | Needed to prevent poaching and protect business | Overbroad because it prohibits soliciting any Ameritox employee at any level/location, not just those with whom Savelich had relationships | Covenant held overly broad and not likely enforceable |
| Enforceability of confidentiality covenant | Protects trade secrets, pricing, methods, client lists, employee lists; enforceable to prevent misuse | Overly broad and vague; covers information in public domain or general industry knowledge | Covenant held overly broad in scope beyond MUTSA-protected secrets; Ameritox unlikely to prevail on whole covenant |
| Trade-secret misappropriation (IMS/TMT/customer data) | IMS and TMT customer data are trade secrets; emails show Savelich copied/transferred them and aided PCLS in replicating database | Defendant concedes IMS/TMT data are proprietary; argues plaintiff hasn’t shown broader categories are trade secrets and challenges remedial urgency | Court found Ameritox likely to succeed on claim that IMS/TMT customer data are trade secrets and were misappropriated |
| Irreparable harm / preliminary injunction | Misappropriation threatens loss of customers, goodwill, and replication of Ameritox processes — injunctive relief needed | Money damages are adequate; misappropriated electronic materials were returned and deleted; inevitable-disclosure doctrine not adopted | Court held Ameritox failed to show likely irreparable harm distinct from monetary damages; injunction denied |
Key Cases Cited
- MicroStrategy Inc. v. Motorola, 245 F.3d 335 (4th Cir. 2001) (preliminary injunction is extraordinary relief to be granted sparingly)
- Winter v. Natural Resources Defense Council, 555 U.S. 7 (U.S. 2008) (preliminary injunction standard requires likelihood of success and irreparable harm)
- Real Truth About Obama, Inc. v. Federal Election Commission, 575 F.3d 342 (4th Cir. 2009) (four-factor preliminary injunction framework reaffirmed)
- Ciena Corp. v. Jarrard, 203 F.3d 312 (4th Cir. 2000) (choice-of-law and substantial relationship analysis)
- Barnes Group, Inc. v. C & C Products, Inc., 716 F.2d 1023 (4th Cir. 1983) (party choice of law may be disregarded if contrary to fundamental policy of interested state)
- LeJeune v. Coin Acceptors, Inc., 381 Md. 288 (Md. 2004) (discussion of trade-secret protection, pricing information, and rejection of inevitable-disclosure doctrine)