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Reconstruction Experts, Inc. v. Franks

United States District Court, D. Colorado

April 23, 2018




         Plaintiff Reconstruction Experts, Inc. (“RE”) sues a former employee, Jeremiah Franks (“Franks”), for causes of action related to alleged breach of noncompete and nondisclosure covenants in Franks's employment contract with RE. (See ECF No. 1-1.) Currently before the Court is a single filing titled “Plaintiff's Renewed Motions for Expedited Discovery and Preliminary Injunction” (“Renewed Motion”). (ECF No. 23.) This motion seeks a ruling on two motions RE filed in Colorado state court before Franks removed this action to this Court, namely, RE's Motion for Expedited Discovery (“Discovery Motion”) (ECF No. 1-2) and RE's Motion for Temporary Restraining Order and Preliminary Injunction (“TRO/PI Motion”) (ECF No. 1-3).

         RE presents a colorable case under the likelihood-of-success prong of the preliminary injunction standard. In particular, Franks's purported denials of RE's accusations are so oddly worded that they strongly suggest Franks has in fact breached his noncompete or nondisclosure covenant, or both. However, RE fails to present even a prima facie case of ongoing or impending irreparable harm. Thus, a preliminary injunction is not appropriate and RE's interconnected request for expedited discovery is, accordingly, moot. The Renewed Motion will be denied.

         I. BACKGROUND

         A. Undisputed Facts

         Based on the currently operative complaint (the First Amended Complaint, ECF No. 14) and Franks's answer (ECF No. 19), the following is undisputed:

         RE is a Colorado corporation with its principal place of business in Arvada, Colorado. (ECF No. 14 ¶ 1.) Franks is a Texas resident. (Id. ¶ 2.)

         RE is in the business of reconstruction, restoration, remodeling, and litigation support. (Id. ¶ 8.) It is a licensed contractor at least in California, Colorado, and Texas. (Id.)

         Franks joined RE in 2002. (Id. ¶ 9.) He was regularly promoted to positions of higher authority within the company. (Id. ¶ 10.) In 2011, he was promoted to Vice President of Southwestern Operations. (Id. ¶ 13.) On February 16, 2012, Franks executed the “Employment Agreement” with RE. (Id. ¶ 4.)

         The Employment Agreement contains, among other things, provisions regarding confidential information and trade secrets, nondisclosure, and noncompetition. As to confidential information, it sets up a defined term-“Confidential Information in Materials”-meaning

all information, processes, technical information, all financial and related documentation, Client lists, Client contracts, contact information, price lists, job costs, pricing and bid methods, supplier lists, marketing plans, financial information, software or improvements, job orders, records, forms, computer printouts, market information, know-how, unique methods of operation for a repair contracting business and other information that is not generally known to the public and which gives RE or its Affiliates an advantage over competitors who do not know or use the information, and all other non-public compilations of information which relate to the business of RE or its Affiliates.

(ECF No. 19-1 § 2(a).) The “Confidential Information in Materials” phrase is then employed in the nondisclosure and noncompete provisions:

(e) Upon and after termination of his employment with RE, Employee shall not use for any purpose whatsoever, disclose or retain any of the Confidential Information and Materials and shall not take with him any products or things embodying any Confidential Information and Materials or any originals or copies thereof. Additionally, Employee shall not convey, transmit, communicate, transfer or sell to any person any of the Confidential Information and Materials by copies or otherwise.
(f) Employee will not, for a period of two (2) years from the date of termination of employment for whatever reason or cause, either directly or indirectly, as an employee, consultant, investor or owner: (1) solicit, market, contact, call or interfere with or accept business or do business with any client or customer of RE with whom Employee worked at any time within one (1) year preceding termination of Employee's employment at RE; (2) provide direct or indirect services to a Competitor, whether as an employee, consultant, independent contractor, agent, or owner; (3) attempt to solicit for employment any person who is, at the time of such solicitation, employed by RE or being considered for employment with RE; (4) try to induce any employee of RE or an RE Affiliate to leave his/her employment with RE or the RE Affiliate. For purposes of this Agreement, a “Competitor” shall mean any person or entity that competes or is actively preparing to compete in a state in which RE or any of its Affiliates does business, with any service or business of RE or any of its Affiliates, and specifically including, but not limited to, repair contracting, reconstruction, restoration, insurance repair and destructive testing or real estate and its improvements. Employee acknowledges and agrees that the restrictions contained in this Section 10(f) are reasonable in scope and duration and are necessary for the protection of RE's Confidential Information identified above.

(Id. §§ 10(e)-(f).)

         As for remedies, the Employment ...

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