Opinion
Case No: 6:21-cv-1590-PGB-LHP
2022-07-13
NATIONAL STAFFING SOLUTIONS, INC., Plaintiff, v. Heidi SANCHEZ, Defendant.
George R. Coe, Alexandria C. Dantes, Gabrielle Lauren Feulner, Ralph C. Losey, Adam Colby Losey, Losey PLLC, Orlando, FL, for Plaintiff. Heidi Sanchez, Orlando, FL, Pro Se. Eric Parke LaRue, II, The LaRue Firm, PLLC, Winter Park, FL, Henry Clay Parker, IV, Parker & Associates, PA, Orlando, FL, for Defendant.
George R. Coe, Alexandria C. Dantes, Gabrielle Lauren Feulner, Ralph C. Losey, Adam Colby Losey, Losey PLLC, Orlando, FL, for Plaintiff. Heidi Sanchez, Orlando, FL, Pro Se. Eric Parke LaRue, II, The LaRue Firm, PLLC, Winter Park, FL, Henry Clay Parker, IV, Parker & Associates, PA, Orlando, FL, for Defendant. ORDER PAUL G. BYRON, UNITED STATES DISTRICT JUDGE
This cause comes before the Court on Plaintiff's Motion for Preliminary Injunction (Doc. 2 (the "Motion")), Defendant's response (Doc. 23), and Plaintiff's reply thereto (Doc. 25). Upon consideration, the Motion is due to be granted.
I. BACKGROUND
Plaintiff is an employment agency that provides temporary and permanent placement of healthcare professionals throughout the United States. (Doc. 1, ¶ 8). Over the course of twelve years, Defendant worked for Plaintiff as a recruiter, account manager, vice president of therapy, and finally vice president. (Id. ¶ 9; Doc. 23, p. 3). As a condition of her employment, Defendant executed a Noncompetition, Nonsolicitation, and Confidentiality Agreement (the "Agreement") on April 17, 2014. (Id. ¶ 12; Doc. 1-1).
Restrictive Covenant, Black's Law Dictionary (10th ed. 2018) ("A promise, usually in a[n] . . . employment contract, not to engage in the same type of business for a stated time in the same market as the . . . employer.").
The Agreement provided, in relevant part, that Defendant "will return, allow access, and/or provide the password for all electronically stored information on smartphones, iPads, laptops, electronic devices or any other systems that store electronic information," including but not limited to "Dropbox and/or any other medium wherein data has been stored" in the event of employment termination. (Doc. 1-1, p. 6). Further, the Agreement states that "[Defendant] agrees that [Plaintiff] has the right to physically collect all of these devices and remove the electronically stored company information." (Id.).
In the course of her duties, Plaintiff alleges that it provided Defendant with an HP ProBook laptop (the "HP Laptop"), an iPhone, and access to Plaintiff's computer systems. (Doc. 1, ¶ 11; Doc. 2-1, ¶ 6). Defendant denies that Plaintiff provided her with an iPhone or even reimbursed her for her cellphone expenses during the course of her employment. (Doc. 23, p. 4). During her employment with Plaintiff, Defendant sent several emails between her work email address and several personal email addresses. (Doc. 2-2, ¶¶ 8-9). On August 25, 2021, Plaintiff terminated Defendant's employment. (Doc. 2-1, ¶ 8). Following her termination, Defendant executed a document stating that she returned all of Plaintiff's property, documents, and any confidential information in Defendant's possession or control ("Termination Agreement"). (Doc. 1, ¶ 19). However, Defendant had only returned the HP Laptop to Plaintiff and not the contested iPhone. (Doc. 2-1, ¶ 11).
A day after Defendant's termination, she attempted to access their Google Drive account ("Google Drive"), which contains confidential business records such as financial information and contact information for clients, that Defendant utilized during her employment. (Doc. 1, ¶ 22; Doc. 2-2, ¶¶ 4-5). However, Defendant claims that she was still working for Plaintiff wrapping up a few final client issues before leaving. (Doc. 23, p. 18).
Then, when Plaintiff could not access their Google Drive after Defendant had left the company, Defendant claimed that she could not remember the password to the Google Drive, and the recovery email address and phone number had been changed to Defendant's own personal email and phone number. (Doc. 2-1, ¶¶ 13-14). Plaintiff reached out to Defendant multiple times to request her cooperation to reset the password, but Defendant never responded. (Id. ¶ 13). Despite attempting to work with Defendant to change the password to regain access to the Google Drive, the security measures prevented Plaintiff from accessing their own information until September 16, 2021. (Id. ¶ 15).
Following this difficulty, Plaintiff retained a digital forensics company to analyze the returned HP Laptop and Plaintiff's Google Drive Account that Defendant had access to while employed. (Doc. 2-1, ¶ 18). During this investigation, Plaintiff discovered that Defendant had connected an iPad to the HP Laptop and Defendant refused access to the iPad for Plaintiff to verify that its confidential data had not been stored on it. (Id. ¶ 20; Doc. 2-2, ¶ 11). Additionally, Plaintiff discovered that Defendant had saved information from the Google Drive to a personal Dropbox account, created under her former work email address, without Plaintiff's knowledge or consent. (Doc. 2-1, ¶ 21). Further, the day before she was terminated, Defendant connected her iPhone to the HP Laptop and appeared to have accessed the Google Drive account from her iPhone, but did not turn the iPhone over as she had previously attested when she signed the Termination Agreement. (Doc. 2-1 ¶ 17; Doc. 2-2, ¶¶ 4-6). Even after Defendant had been terminated from Plaintiff, Defendant continued to access the Google Drive, but the extent of her access remains unclear at this time. (Doc. 2-1, ¶ 18; Doc. 2-2, ¶ 12).
From the attached declarations, it is unclear when this Dropbox account was created, but Defendant states that she has not used the Dropbox account since 2016. (See Docs. 2-1, 23).
Plaintiff initiated this action on September 28, 2021. (Doc. 1). In the Complaint, Plaintiff alleges three different causes of action against Defendant: (1) violation of the Computer Fraud and Abuse Act ("CFAA") ("Count I"); (2) violation of the Computer Abuse and Data Recovery Act ("CADRA") ("Count II"); and (3) breach of contract ("Count III"). (Id.). On the same day, Plaintiff filed the instant Motion. (Doc. 2). The Court then entered a briefing schedule. (Doc. 5). Defendant then requested two separate extensions of time to respond to the Motion, which the Court granted. (Docs. 16, 17, 20, 21). Defendant then filed her response to the Motion, and subsequently, Plaintiff filed its reply; therefore, the matter is now ripe for review. (Docs. 23, 25).
II. STANDARD OF REVIEW
To obtain a preliminary injunction, as the movant, Plaintiff must establish: (1) a substantial likelihood of success on the merits of the underlying case; (2) irreparable harm in the absence of an injunction; (3) that the harm suffered by Plaintiff in the absence of an injunction would exceed the harm suffered by Defendants if the injunction is issued; and (4) that an injunction would not disserve the public interest. Swain v. Junior, 961 F.3d 1276, 1284-85 (11th Cir. 2020). Ultimately, "a preliminary injunction is an extraordinary and drastic remedy not to be granted unless the movant clearly establishe[s] the 'burden of persuasion' as to each of the four prerequisites." Siegel v. LePore, 234 F.3d 1163, 1176 (11th Cir. 2000) (quoting McDonald's Corp. v. Robertson, 147 F.3d 1301, 1306 (11th Cir. 1998)).
III. DISCUSSION
Plaintiff argues that it has sufficiently shown that it is entitled to a preliminary injunction requiring Defendant to: "(1) immediately cease accessing or attempting to access [Plaintiff's] systems; (2) immediately cease any and all use, distribution, disclosure, or sharing of documentation and electronically stored information obtained from [Plaintiff]; (3) provide [Plaintiff] a forensic copy, including all accompanying file and system metadata, of all documentation and electronically stored information [Defendant] obtained from [Plaintiff]; (4) allow [Plaintiff] access to devices, email accounts, and other systems within [Defendant's] possession, custody, or control that store information and, upon information and belief, contain information and other data related to [Plaintiff] and its business; and (5) immediately cease and desist any and all contact with [Plaintiff's] past, current, and prospective clients, other than to inform them as necessary of the prohibition on further contact pursuant to this Court's Order." (Doc. 2, pp. 5-17).
While Defendant agrees to the entry of preliminary injunctive relief to preserve the status quo, Defendant argues that Plaintiff has not shown a substantial likelihood of success on the merits and Plaintiff's blanket request to access Defendant's personal computer devices for any information relating to Plaintiff is too broad to appropriately be granted as injunctive relief. (Doc. 23, pp. 8-12). Given that Defendant contests both one of the factors necessary to grant a preliminary injunction and the extent of the relief under said injunction, the Court will address each factor in turn.
A. Substantial Likelihood of Success
Plaintiff asserts three causes of action in the Complaint. (Doc. 1). But to prevail on its motion for injunctive relief, Plaintiff must only demonstrate a substantial likelihood of success as to one cause of action. Planetary Motion, Inc. v. Techsplosion, Inc., 261 F.3d 1188, 1192, 1203 (11th Cir. 2001) (upholding a district court's grant of injunctive relief where it only examined one of the plaintiff's claims); see also Convergent Nonprofit Sols., LLC v. Wick, No. 6:19-cv-1157, 2019 WL 7423549 at *—, 2019 LEXIS 223953 at *5 (M.D. Fla. Sept. 5, 2019). Here, Plaintiff argues that it has shown that it will be successful on the merits for all three claims in its Complaint to warrant a preliminary injunction: (1) violation of CFAA, (2) violation of CADRA, and (3) breach of contract. (Doc. 2, pp. 6-14). Plaintiff is correct that it is substantially likely to succeed on the merits of Count III—specifically, its claim for breach of the Agreement.
Because Plaintiff's Motion may be granted with a likelihood of success on only one Count, the Court will not address the other Counts.
Under Florida law, a plaintiff must establish that there was (1) a valid contract, (2) a material breach, and (3) damages to prevail on a claim for breach of contract. Beck v. Lazard Freres & Co., 175 F.3d 913, 914 (11th Cir. 1999). For a restrictive covenant to be valid, such as the instant Agreement, it must be "reasonable in time [and] area" and "set forth in writing signed by the person against whom enforcement is sought." FLA. STAT. § 542.335(1)(a). Further, "the person seeking enforcement of the restrictive covenant shall plead and prove the existence of one or more legitimate business interests justifying the restrictive covenant," including "[v]aluable confidential business or professional information that does not qualify as trade secrets." Id. at § 542.335(1)(b). Finally, when determining whether the breach is material, the court may examine "the extent the injured party will be deprived of the benefit they reasonably expected, the availability of adequate compensation for the injured party, and the likelihood the breaching party will cure." Id. at *8.
The Agreement specifically states that it "shall be governed by the laws of the State of Florida" (Doc. 1-1, p. 6), and both parties agree regarding this choice of law (Doc. 2, pp. 12-14; Doc. 23, p. 2).
In the Motion, Plaintiff argues for a traditional breach of contract claim. (Doc. 2, pp. 12-14). However, the Agreement that is the basis for Plaintiff's claim is a restrictive covenant, and thus, the Court must analyze it under the case law as such.
Defendant does not contest that the Agreement is a valid contract signed by Defendant, that it was reasonable in time and area, or that it was made for the purpose of a legitimate business interest. (Doc. 23, pp. 10-11). Further, Plaintiff specifically pleads Defendant's actions have damaged the "security, integrity, and availability of [Plaintiff's] computer systems and other confidential and proprietary information," which is a listed as a legitimate business interest for a restrictive covenant under Florida law. (Doc. 1, ¶ 48). Thus, the only remaining element that must be established is whether Defendant materially breached the Agreement.
The Agreement specifically states that "in any event upon termination of employment, the Employee will return, allow access, and/or provide the password for all electronically stored information on smartphones, iPads, [or] laptops" and the "Employee agrees that Employer has the right to physically collect all of these devices and remove the electronically stored company information." (Doc. 1-1, p. 6). Here, Plaintiff asserts that Defendant breached the Agreement by preventing Plaintiff from accessing the Google Drive after her termination by failing to provide the password, failing to return all of Plaintiff's property, and refusing Plaintiff access to devices and email accounts within her possession that may contain Plaintiff's sensitive information. (Doc. 2, p. 13).
Defendant argues that the claim for breach of contract is not ripe for review as it is based on her refusal to allow Plaintiff "to collect and search [her] personal devices," and she should have the benefit of "[d]iscovery, trial and legal argument" to ensure due process will be afforded. (Doc. 23, pp. 10-11). However, this is irrelevant for the purposes of Plaintiff's breach of contract claim and only attempts to explain why Defendant breached the Agreement.
It is uncontested that Plaintiff was prevented from accessing its own Google Drive for several weeks after Defendant's termination. In an attached declaration, Plaintiff asserts that it could not access the Google Drive because "the password [had] been changed and the recovery email address . . . [was] set to [Defendant's] personal email address." (Doc. 2-1, ¶ 13). On September 2, 2021, Plaintiff attempted to reach out to Defendant to reset the password, but Defendant did not respond. (Id.). In response to the Motion, Defendant now attaches the text she received from one of Plaintiff's employees asking for her help to reset the password, but again it does not show Defendant responding to the request. (Doc. 23, pp. 17, 31). Even if Defendant had responded, Defendant's failure to "provide the password" to the Google Drive prevented Plaintiff from accessing important financial information and client contact information for several weeks.
Further, while it is contested whether Plaintiff provided Defendant with the iPhone, it is clear that Defendant has prevented Plaintiff from removing any electronically stored company information from her devices, including the iPhone. In the Agreement signed by Defendant, it specifically states that the employee will allow access to electronic devices to "remove the electronically stored company information." (Doc. 1-1, p. 6). Here, Plaintiff attests that Defendant accessed Plaintiff's Google Drive from the iPhone, which had been connected to the HP Laptop along with an iPad, and Plaintiff sent emails between her personal email accounts and work email account, "some of which contained [Plaintiff's] business information." (Doc. 2-2, ¶¶ 6-9). The declaration specifically identifies these personal email addresses: sanchez.heidi@gmail.com, boticelli712@aol.com, and Heidi.sanchez@icloud.com (collectively, the "personal email addresses"). (Id. ¶ 8).
In response, Defendant argues that she did not intend to download confidential information when she connected the iPhone or the iPad to the HP Laptop. (Doc. 23, pp. 18-19). However, this is irrelevant to the issue at hand. According to the terms of the Agreement, Plaintiff has the ability to "remove electronically stored company information" from Defendant's electronic devices. (Doc. 1-1, p. 6). As such, Plaintiff has sufficiently shown that Defendant accessed the Google Drive from the iPhone, sent confidential business information to her personal email addresses, and connected the iPhone and the iPad to the HP Laptop to warrant the concern that Plaintiff must remove confidential company information.
When entering into the Agreement, Plaintiff had the expectation that Defendant would not be able to retain important company information, such as financial information or client contact information, upon termination. However, Plaintiff has shown that Defendant likely may have done precisely what Plaintiff had tried to prevent in executing this Agreement—allow a past employee to compromise the security of Plaintiff's confidential information. Doe v. Rollins Coll., No. 6:18-cv-1069, 2021 WL 2481924, at *2 (M.D. Fla. Apr. 27, 2021) ("A material breach is one that goes to the essence of the contract."). Because Defendant failed to turn over the Google Drive password upon termination and failed to allow Plaintiff to remove the electronically stored confidential information from the iPhone, the iPad, and Defendant's personal email addresses, Plaintiff has breached the restrictive covenant in the Agreement.
Therefore, Plaintiff has shown it is likely to succeed on the merits of its breach of contract claim and has satisfied the first factor for a preliminary injunction.
B. Irreparable Harm
Plaintiff next argues that Defendant's unlawful access and retention of its confidential information has compromised the security of Plaintiff's protected computer system and its confidential information. (Doc. 2, pp. 14-15). Defendant argues that Plaintiff has failed to show what data was downloaded and why its disclosure would create irreparable harm. (Doc. 23, p. 9).
Before the Court may issue a preliminary injunction, Plaintiff must show that irreparable harm is not merely possible, but likely. Alabama v. U.S. Army Corp. of Eng'rs, 424 F.3d 1117, 1131 (11th Cir. 2005). "An injury is irreparable only if it cannot be undone through monetary remedies." Ne. Fla. Chapter of the Ass'n of Gen. Contractors v. City of Jacksonville, 896 F.2d 1283, 1285 (11th Cir. 1990). However, "[t]he violation of an enforceable restrictive covenant creates a presumption of irreparable injury to the person seeking enforcement of a restrictive covenant." FLA. STAT. § 542.335(1)(j).
Defendant's argument in rebuttal of the presumed irreparable injury falls flat. The purpose of the presumption is to place the burden on Defendant to affirmatively show that there is not any irreparable harm—not merely state that Plaintiff has not done enough. Blue-Grace Logistics LLC v. Fahey, 340 F.R.D. 460, 466 (M.D. Fla. 2022) ("In effect, Florida's presumption replaces the equitable discretion that must be exercised consistent with traditional principles of equity with a near categorical rule that irreparable harm is established." (internal quotations omitted)). Here, Plaintiff has shown that Defendant has allegedly unlawfully accessed and retained Plaintiff's confidential financial and client contact information and has repeatedly refused to allow Plaintiff to remove said information from her devices. (Doc. 2, pp. 14-15; Doc. 23, pp. 3-5). Further, Plaintiff identifies confidential client information that Defendant included on a public record in the response to the instant Motion, showing how Defendant continues to threaten the security of Plaintiff's confidential financial and client information. (Doc. 23, pp. 4-5). Therefore, even though Plaintiff failed to include the relevant case law, Plaintiff has sufficiently established that the data stored on the Google Drive contained confidential financial and client information.
Given a violation of the Agreement creates a presumption of irreparable harm, and Plaintiff's confidential information has still not been removed from Defendant's possession, despite their efforts to do so, Plaintiff is likely to continue to suffer irreparable harm without an injunction.
C. Balance of Harms
The Court must next consider whether the harm to Plaintiff in the absence of an injunction outweighs the harm an injunction may cause to Defendant. Am. Red Cross v. Palm Beach Blood Bank, Inc., 143 F.3d 1407, 1410 (11th Cir. 1998). In balancing the potential harm an injunction may cause either party, "the harm considered by the district court is necessarily confined to what might occur in the interval between ruling on the preliminary injunction and trial on the merits." United States v. Lambert, 695 F.2d 536, 540 (11th Cir. 1983).
Plaintiff argues that Defendant has no right to misappropriate Plaintiff's confidential information and no right to breach her contractual obligations without consequence. (Doc. 2, pp. 15-16). While the Defendant does not directly respond to this argument or address this prong at all, the Court will construe Defendant's concern that the requested search of her iPhone, iPad, and personal email addresses is intrusive and too broad to be properly granted as injunctive relief. (Doc. 23, pp. 7-8, 10-11).
Plaintiff asserts that it has lost control of its protected computer systems by Defendant's continued refusal to comply with the terms of the Agreement. (Doc. 2, p. 16). If an injunction is granted preventing Defendant from disclosing and retaining Plaintiff's confidential information, there will be very little harm to Defendant as it will merely be preventing Defendant from continuing to violate the Agreement. To the extent Defendant is harmed by allowing Plaintiff to "physically collect" and "remove the electronically stored company information," Defendant specifically agreed to these terms upon signing the Agreement. (Doc. 1-1, p. 6). Further, Plaintiffs have specifically identified which electronic items and the personal email addresses that contain confidential information and have consulted with an expert in digital forensics that has asserted the search will be limited to only information related to Plaintiff's confidential information. (Doc. 2, p. 17; Doc. 2-2, ¶ 12). Therefore, the harm to Defendant will be limited to only what is reasonably necessary to enforce the terms of the Agreement.
Accordingly, Plaintiff has shown that the balance of harms favors Plaintiff over Defendant.
D. Public Interest
Finally, the Court must ask whether the public interest will be served by granting the preliminary injunction. Again, Defendant does not address this prong. (See Doc. 23). Plaintiff argues that a preliminary injunction in this case will serve the public interest by preventing anti-competitive business practices, protecting a business's confidential information, protecting the fair and legitimate operations of the industry, and protecting consumers against deception and confusion. (Doc. 2, p. 17).
Again, Plaintiff does not cite to any case law in support of this proposition and should remember to do so in the future. (Doc. 2, p. 17).
Florida law makes clear that "[n]o court may refuse enforcement of an otherwise enforceable restrictive covenant on the ground that the contract violates public policy unless such . . . public policy requirements substantially outweigh the need to protect the legitimate business interest or interests established by the person seeking enforcement of the restraint." FLA. STAT. § 542.335(1)(i). Further, "[a] preliminary injunction enforcing the restrictive covenants will serve the public interest because enforcement of a valid restrictive covenant encourages parties to adhere to contractual obligations." 7-Eleven, Inc. v. Kapoor Bros, Inc., 977 F. Supp. 2d 1211, 1230 (M.D. Fla. 2013).
As established, the Agreement is enforceable, so there is strong presumption in favor of enforcement. Defendant willingly agreed to the conditions, and the public benefits from having such agreement enforced. Finally, Plaintiff is correct that the public interest is also served by protecting confidential information and enforcing confidentiality agreements. See Freedom Med., Inc. v. Sewpersaud, 469 F. Supp. 3d 1269, 1279 (M.D. Fla. 2020). Therefore, there is no compelling reason why the Agreement should not be enforced, and the Court will enter a preliminary injunction to do so.
IV. CONCLUSION
Accordingly, it is so ORDERED AND ADJUDGED as follows:
1. Plaintiff National Staffing Solutions' Motion for Preliminary Injunction (Doc. 2) is GRANTED.
2. Defendant Heidi Sanchez is ENJOINED from:
a. Accessing or attempting to access National Staffing Solution's computer systems;
b. Any and all use, distribution, disclosure, or sharing of documentation and electronically stored information Heidi Sanchez obtained from National Staffing Solutions;
c. Any and all contact with National Staffing Solutions' past, current, and prospective clients, other than to inform them as necessary of the prohibition on further contact pursuant to this Order.
3. Defendant Heidi Sanchez is FURTHER DIRECTED to:
a. Provide National Staffing Solutions a forensic copy, including all accompanying file and system metadata, of all documentation and electronically stored information Heidi Sanchez obtained from National
b. Allow National Staffing Solutions access to devices, email accounts, and other systems within her possession, custody, or control that store information and contain confidential information and other data related to National Staffing Solutions and its business.
4. The Court finds that a bond is not necessary.
DONE AND ORDERED in Orlando, Florida on July 13, 2022.