Poller v. BioScrip, Inc.
974 F. Supp. 2d 204
S.D.N.Y.2013Background
- Plaintiff Judy Poller was a longtime BioScrip IVIG/chronic-care salesperson who signed a 2009 Restrictive Covenant Agreement (RCA) with non‑compete (1 year, NY metro), non‑solicit (2 years) and confidentiality provisions; she resigned in March 2011 and began work at American Outcomes Management (AOM).
- Poller copied and/or forwarded several BioScrip work documents (commission reports, patient/referral compilations, emails) to her personal email and returned her company laptop after allegedly deleting many files; some patient transfers to AOM followed.
- BioScrip sued asserting counterclaims against Poller and AOM: breach of the RCA (non‑compete, non‑disclosure), breach of fiduciary duty/duty of loyalty, CFAA violation, unfair competition, trade‑secret misappropriation, unjust enrichment, tortious interference, GBL § 349, and sought injunctive and punitive relief; AOM counterclaimed for unfair competition.
- Key factual disputes: whether BioScrip’s referral/patient compilations are trade secrets (effort to compile, confidentiality measures), which referral relationships predated Poller’s BioScrip employment, whether Poller intended/use of the copied materials at AOM, and whether any computer access was “unauthorized” under the CFAA.
- Procedural posture: cross‑motions for summary judgment; court denied or granted parts of motions after finding multiple genuine issues of material fact but resolving several legal questions as matters of law.
Issues
| Issue | Plaintiff's Argument (Poller/AOM) | Defendant's Argument (BioScrip) | Held |
|---|---|---|---|
| Enforceability of RCA (trade secrets & legitimate interest) | RCA overbroad; referral/physician info is publicly ascertainable and not a trade secret | BioScrip: compilations, patient details, databases and guarded access are protectable trade secrets and justify restrictions | Court: triable issue exists whether compilations are trade secrets; legitimate interests (possible trade secrets, goodwill) survive summary judgment but factual issues remain |
| Non‑compete (1 year, NY metro) | Unduly burdens Poller’s livelihood; not justified by unique services | BioScrip: reasonable duration/area; protects legitimate interests | Court: non‑compete reasonable in time and area given interests; enforceability depends on whether trade secrets exist (fact issue) |
| Non‑solicit (2 years, unmodified) | Overbroad because it would bar solicitation of pre‑existing personal clients | BioScrip: protects goodwill | Court: non‑solicit is overbroad as written; may be limited to clients developed during BioScrip employment (blue‑penciling) |
| Breach of fiduciary duty / duty of loyalty | Poller: actions occurred after resignation; no continuing fiduciary breach | BioScrip: Poller sent confidential materials while still employed and solicited/transitioned patients | Held: material factual disputes about emails and intent; summary judgment denied on Counts III & IV |
| CFAA claim | Poller: access while still authorized; forwarding/deletions occurred before resignation was effective | BioScrip: Poller exceeded authorization and wiped files, causing investigatory costs | Court: grant summary judgment for Poller — access was authorized while she remained an employee; CFAA claim fails |
| Unfair competition / trade‑secret misappropriation / unjust enrichment | Poller/AOM: no misappropriation by AOM; Poller acted in good faith and used public information | BioScrip: misappropriation of compiled materials gave AOM unfair advantage; AOM benefited unjustly | Court: genuine issues re Poller’s misappropriation and unfair competition — summary judgment denied as to Poller; AOM cleared on misappropriation/unfair competition; unjust enrichment may stand as alternative (fact issues) |
| Tortious interference | Poller/AOM: contact with patients was lawful competition | BioScrip: wrongful means (breach of fiduciary duty, misuse of confidential data) caused loss | Court: material issues of fact whether wrongful means occurred; denied summary judgment |
| GBL § 349 claim | BioScrip: AOM’s conduct misled patients and was consumer‑directed | Poller/AOM: statute does not cover private, individualized business dispute | Court: granted summary judgment for Poller/AOM — conduct was not consumer‑oriented/publicly directed |
| Remedies: injunctive & punitive damages | Poller/AOM: no entitlement to punitive; injunctive relief not sought now | BioScrip: seeks damages and punitive relief | Court: permanent injunctive relief claim moot; punitive damages unavailable on record — summary judgment for Poller/AOM on punitive relief |
Key Cases Cited
- BDO Seidman v. Hirshberg, 93 N.Y.2d 382 (N.Y. 1999) (restrictive covenants enforceable only if reasonable and protect legitimate employer interests)
- Ticor Title Ins. Co. v. Cohen, 173 F.3d 63 (2d Cir. 1999) (services are ‘unique’ only in narrow, case‑specific circumstances)
- Leo Silfen, Inc. v. Cream, 29 N.Y.2d 387 (N.Y. 1971) (customer lists protectable where customers not readily ascertainable and cultivated with substantial effort)
- Softel, Inc. v. Dragon Med. & Scientific Commc'ns, Inc., 118 F.3d 955 (2d Cir. 1997) (definition and factors for trade secret protection under New York law)
- Unisource Worldwide, Inc. v. Valenti, 196 F. Supp. 2d 269 (E.D.N.Y. 2002) (trade secret factors and partial enforcement/blue‑penciling of overbroad covenants)