United States District Court, E.D. North Carolina, Western Division
LOUISE W. FLANAGAN, District Judge.
This matter is before the court following Rule 16 conference and hearing held with the court on April 30, 2014, at which time the court directed the parties to meet and confer and submit to the court by May 6, 2014, a proposed consent order regarding preliminary injunctive relief as well as a proposed consent order relevant to the case schedule. On May 8, 2014, defendants filed a joint report and plan regarding scheduling, and defendants filed a response including separate proposed consent preliminary injunction orders. Separate order entered this date sets forth the case schedule and discovery limitations. Regarding preliminary injunctive relief, based upon the response, the exhibits thereto, and the parties' positions stated at hearing on April 30, 2014, the court orders as follows.
Plaintiff filed a verified complaint against defendants on April 17, 2014, in Cumberland County District Court. In its complaint, plaintiff alleges breach of contract, unfair and deceptive trade practices, tortious interference with contractual relations, misappropriation of trade secrets, unjust enrichment, and civil conspiracy, seeking injunctive and monetary relief. Plaintiff alleges that defendant Amy E. Tuschen's employment with defendant eScience and Technology Solutions, Inc. ("eScience"), a competitor of plaintiff, is in violation of certain restrictive covenants to which defendant Tuschen is bound under two employment contracts executed between defendant Tuschen and plaintiff. Contemporaneously with the filing of its verified complaint in state court, plaintiff secured an ex parte temporary restraining order by the presiding district court judge which enjoined each defendant in multiple respects, with hearing on the return of the temporary restraining order set at that time for 9:00 a.m on April 28, 2014
Defendants removed the action to this court on April 25, 2014, and filed a partial motion to dismiss for failure to state a claim. On April 28, 2014, plaintiff filed an emergency motion seeking, among other relief, that the court adopt the state court temporary restraining order and extend the terms of such for a like period or until a hearing on preliminary injunction could be held. On April 29, 2014, by text order, the court granted plaintiff's emergency motion and entered a temporary restraining order on the terms and conditions set forth in the state court order, to extend up to and through May 12, 2014. The court set the matter for an administrative conference by telephone on April 30, 2014. In the meantime, on April 29, 2014, defendants filed a response in opposition to plaintiff's emergency motion.
During the administrative conference and hearing, held April 30, 2014, the parties with the assistance of the court, reach an agreement as to the need for a consent preliminary injunction order to replace the temporary restraining order. The parties generally agreed to proceed under a consent preliminary injunction order outlined by the court at hearing that preserves the status quo pending a period of expedited discovery leading to briefing and court's ruling regarding plaintiff's request for permanent injunctive relief and defendants' legal challenges to the plaintiff's claims. The parties generally agreed to a consent preliminary injunction order containing the following terms outlined by the court:
1. Defendants shall be enjoined during the pendency of the litigation from disclosing or relying on any information gained from exposure to the technical proposal submitted; pricing and employee salary information; personnel evaluations; and fee, profit, overhead, and general and administrative information in relation to the Contract (defined in ¶20 of the complaint) and/or any other contract or solicitation.
2. Defendants shall be enjoined during the pendency of the litigation from soliciting plaintiff's employees.
3. Defendant Tuschen shall be able to return to work under the terms of the consent preliminary injunction order.
The court directed the parties to confer and draft a consent preliminary injunction order, to be submitted to the court by Tuesday, May 6, 2014, with defendants agreeing to transmit an initial draft to plaintiff by May 2, 2014, and with plaintiff agreeing to a May 6, 2014, deadline for completion of the consent preliminary injunction order.
The court also directed the parties to confer and submit a proposed scheduling order for the case in the form of a consent order. The parties agreed on a discovery cutoff date of May 28, 2014, and agreed to conduct a limited amount of expedited discovery preceding that date, the terms of which would be set forth in the proposed scheduling order. The parties, with assistance of the court, agreed to a period of briefing, with hearing if necessary, to address plaintiff's request for permanent injunctive relief and defendants' legal challenges to plaintiff's claims. The court stated that defendant's motion to dismiss was not to be ruled upon as such by the court, but that rather it should be converted to one for summary judgment, and defendants should present arguments in brief pursuant to Federal Rule of Civil Procedure 56.
On May 1, 2014, the court entertained an informal request for clarification of the court's directives, which request was memorialized in an email chain received by the case manager through defense counsel. Said communication evidenced disagreement between the parties as to when defendant Tuschen may return to work, subject to restrictions discussed and ordered at conference and hearing. The court confirmed by text order that it had imposed injunctive terms and conditions on defendants at conference and hearing, to which defendants must comply. The court reiterated that the consent order process underway affords the parties opportunity to more fully inform the contours of the order for the court's further consideration. The court ordered that, subject to the court's oral order of record, and the stipulations of the parties, defendant Tuschen could return to work.
On May 8, 2014, defendants filed a response to the court's directive to submit a consent preliminary injunction order. Defendants' response notes that the parties were unable to reach an agreement on a consent order to be tendered to the court. Defendants propose a preliminary injunction order attached as Exhibit A to defendants' response. Defendants also attach as Exhibit B the latest version of plaintiff's proposed consent preliminary injunction. The two proposed draft preliminary injunction orders are similar in many respects, with plaintiff's proposed draft showing several changes suggested in redline formatting.
In light of the general agreement between the parties at conference and hearing, on April 30, 2014, and in light of the many similarities between the two proposed draft preliminary injunction orders, the court determines without further discussion that, at a minimum, a preliminary injunction order containing those terms common to both proposed draft preliminary injunction orders is warranted and consented to by the parties. The parties have a mutual goal to preserve the status quo pending ruling by the court on the parties' claims and defenses. Those terms common to both proposed draft preliminary injunction orders will preserve the status quo. Therefore, the present preliminary injunction order contains these common terms consented to by the parties, in addition to disputed terms discussed as follows.
With respect to the remaining terms in dispute, the court makes the following findings of fact and conclusions of law, in addition to those noted already herein above.
A. Findings of Fact
1. Plaintiff disputes the phrase "then expired" in reference to the state court temporary restraining order in the second WHEREAS clause in defendants' proposed preliminary injunction order.
2. The expiration status of the state court temporary restraining order is not a finding material or necessary to the present preliminary injunction order.
3. Plaintiff seeks to add reference to defendant eSTS in Section A of defendants' proposed preliminary injunction order.
4. While defendants oppose addition of defendant eSTS to this section because eSTS cannot act alone, addition of eSTS to this clause helps to reiterate that the ...