United States District Court, W.D. Washington, Seattle
ORDER DENYING MOTION FOR TEMPORARY RESTRAINING
S. LASNIK, UNITED STATES DISTRICT JUDGE
matter comes before the Court on plaintiff's
“Motion for Temporary Restraining Order, Order to Show
Cause, and Order for Limited, Expedited Discovery.”
Dkt. # 2. The Court has considered the parties' memoranda
and accompanying declarations. For the reasons explained
below, the motion is DENIED.
Code Systems Corporation, doing business as Turbo.net
(hereinafter “Turbo”), provides services that
allow its clients to run old software on new operating
systems. Defendant Leander Murphy was a Technical Account
Manager at Turbo until he resigned in September 2017 and left
the company the following month.
Murphy worked at Turbo under an employment contract. It
included a confidentiality provision that prohibited him from
disclosing, either during or after employment, any
proprietary information that Turbo kept confidential. Dkt. #
4 at 8-9. It also included a noncompetition provision, which
stated that while Mr. Murphy worked at Turbo and for one year
after he left, he would not perform or solicit any
competitive services to any of Turbo's clients or to any
prospective clients Mr. Murphy played a role in soliciting.
Dkt. # 4 at 9. Mr. Murphy also entered into a stock option
agreement with Turbo in October 2013, which included similar
confidentiality and noncompetition provisions. Dkt. # 4 at
Turbo, Mr. Murphy had a prominent role in a partnership with
Rimini Street, Inc. (“RSI”), a company that had
hired Turbo to provide consulting and support services to
RSI's clients. As noted, Mr. Murphy resigned his position
with Turbo in September 2017. According to him, he resigned
with no plans of working at RSI, but he applied for and
accepted a position there after he left Turbo. He asserts
that he joined RSI under the impression that Turbo's CEO,
Kenji Obata, approved of and even encouraged the move based
on Turbo's then-existing partnership with RSI. Dkt. # 10
December 2017, a billing dispute arose between the two
companies. Several days later, Mr. Obata also learned Mr.
Murphy had accepted a position with RSI. In an email to RSI
CEO Seth Ravin about the billing issue, Mr. Obata also raised
the issue of RSI recruiting Mr. Murphy. Dkt. # 4 at 29-30.
Mr. Ravin responded with several emails promising to
investigate the matter, to which Mr. Obata responded,
“Hope we can work it out.” Dkt. # 4 at 28.
days later, Turbo sent letters through counsel to RSI and Mr.
Murphy objecting to Mr. Murphy working there. Dkt. # 3 at
13-18. Mr. Ravin responded that the matter would have to be
resolved by the parties' attorneys given the threat of a
lawsuit. Dkt. # 4 at 26. He also expressed regret that a
potential legal dispute meant the companies would have to end
January 12, 2018, Turbo filed a complaint against Mr. Murphy
alleging breach of contract and violations of state and
federal trade-secret laws. Dkt. # 1. In addition, Turbo filed
the instant motion for a temporary restraining order, Dkt. #
2, seeking to restrain Mr. Murphy from working at RSI. Turbo
also requested leave to propound expedited discovery related
to Mr. Murphy's hiring and employment.
January 18, 2018, Mr. Murphy responded. Dkt. # 9. In a sworn
declaration, Dkt. # 10, Mr. Murphy asserts that RSI and Turbo
are not competitors. Indeed, he asserts that RSI initially
hired Turbo because Turbo provides services RSI does not. He
also states that he is not working in a competitive capacity
at RSI, nor is he working with or soliciting any current or
prospective Turbo clients. In addition, Mr. Murphy asserts
that he acquired little or no confidential and proprietary
information while working at Turbo, and that he has not and
will not disclose any of it if he did. A declaration by
Desmond Whitt, Dkt. # 11, the RSI Vice President who hired
Mr. Murphy, further affirms that Mr. Murphy's work is and
will remain outside the scope of the services Turbo offers.
Mr. Whitt also states that Mr. Murphy has not shared any
confidential or proprietary information.
considering a motion for a temporary restraining order, the
Court weighs plaintiff's likelihood of success on the
merits, the likelihood of irreparable injury, the balance of
hardships, and the public interest. See Winter v. Nat.
Res. Def. Council, Inc., 555 U.S. 7, 20 (2008).
Likelihood of success on the merits is the most important
factor, and a party seeking a stay or temporary restraining
order will not succeed without passing that threshold
inquiry. Garcia v. Google, Inc., 786 F.3d 733, 740
(9th Cir. 2015).
record before the Court, Turbo has not met its burden of
showing a likelihood of success on the merits. Regarding Mr.
Murphy's employment agreement, the record does not
support a finding that Turbo will likely show he is
performing or soliciting competitive services to current or
prospective Turbo clients. For the stock option agreement, it
indicates that its noncompetition provision does not cover a
noncompetitive job at another company, even if the other
company may compete with Turbo in unrelated ways. Dkt. # 4 at
17. Mr. Murphy and Mr. Whitt both affirm that Mr.
Murphy's job responsibilities do not include competitive
services and that he does not work with current or
prospective Turbo clients. Nothing in the record contradicts
those sworn statements, and the Court has no reason to doubt
Court also finds Turbo has not met its burden of showing a
likelihood of success on its trade-secret claims. There is
insufficient evidence to support a finding that Mr. Murphy
acquired any Turbo trade secrets and that the information has
been or ...