Audio-Video Group, LLC v. Green
1:14-cv-00169
E.D. Va.Feb 27, 2014Background
- AVG, a Maryland audiovisual integrator owned by Eric J. Johnson, employed Christopher Green as a sales engineer from 2006 until his termination on January 6, 2014.
- Green signed a Confidentiality Agreement effective for ten years and had access to non-public pricing models, customer lists, in-process quotes, and other confidential business information.
- After termination AVG accessed Green’s company laptop and found invoices and proposals showing Green performed or solicited work for customers or prospects of AVG; 34 invoiced customers overlapped with AVG customers and about 29 projects were in process (only 6 returned).
- AVG sued Green alleging breach of duty of loyalty, tortious interference, breach of the confidentiality agreement, violations of the Virginia and Maryland Uniform Trade Secrets Acts, conversion, and accounting, and moved for a TRO and preliminary injunction seeking (inter alia) return of AVG property and prohibition on using or disclosing confidential information.
- The court evaluated the Winter preliminary-injunction factors: likelihood of success, irreparable harm, balance of equities, and public interest, and distinguished mandatory relief (return of property) from prohibitory relief (status quo) as subject to a stricter standard.
- The court granted injunctive relief to the extent necessary to (1) require return of AVG property and enjoin use/disclosure of confidential information, but denied relief that would bar Green from soliciting or providing audiovisual services to AVG customers absent misuse of confidential information and denied an order preventing use of his cellphone.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Green likely breached duty of loyalty by competing during employment | Green used AVG resources and solicited/served AVG customers while employed | Green contests scope; factual dispute over use of AVG information (implied) | Court: AVG likely to succeed; evidence (laptop invoices) supports breach of loyalty |
| Whether Green tortiously interfered with AVG business relationships | Green knew of AVG expectancies and used improper methods to divert customers | Green denies wrongful interference (implied) | Court: AVG likely to succeed; facts show Green invoiced overlapping customers and contacted in-process clients |
| Whether AVG’s information qualifies as trade secrets and was misappropriated | AVG’s pricing models, specifications, marketing plans, cost structures are trade secrets and Green used them | Green disputes characterization/use (implied) | Court: AVG likely to succeed on trade-secret claims; Confidentiality Agreement and evidence support misappropriation |
| Whether TRO/mandatory relief (return of files) and broader non-solicit/operational restraints are appropriate | AVG seeks immediate return of files, ban on use/disclosure, and prohibition on Green serving AVG customers or using cellphone | Green argued (via motion to continue and implicitly by not yet rebutting evidence) that broad employment restrictions are improper | Court: Grants mandatory relief to compel return of AVG property and enjoin use/disclosure of confidential info; denies injunction barring Green from providing services to AVG customers or using his cellphone absent misuse of confidential info |
Key Cases Cited
- Winter v. Natural Res. Def. Council, 555 U.S. 7 (U.S. 2008) (sets four-factor preliminary-injunction standard)
- Real Truth About Obama, Inc. v. Fed. Election Comm’n, 575 F.3d 342 (4th Cir. 2009) (applies Winter factors in Fourth Circuit)
- McNeil-PPC v. Granutec, Inc., 919 F. Supp. 198 (E.D.N.C. 1995) (only one viable claim needed to justify injunctive relief when multiple causes are alleged)
- Cornwell v. Sachs, 99 F. Supp. 2d 695 (E.D. Va. 2000) (mandatory injunctive relief requires a more exacting showing)
- MicroStrategy v. Business Objects, S.A., 331 F. Supp. 2d 396 (E.D. Va. 2004) (trade-secret elements and analysis)
- Combined Ins. Co. v. Wiest, 578 F. Supp. 2d 822 (W.D. Va. 2008) (employee duty of loyalty principles)
- Feddeman & Co. v. Langan Assocs., 260 Va. 35 (Va. 2000) (liability for misuse of confidential information and solicitation prior to termination)
- Colello v. Geographic Servs., Inc., 283 Va. 56 (Va. 2012) (misappropriation under VUTSA where use was subject to a duty to maintain secrecy)