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Deane v. Pacific Financial Group Inc.

United States District Court, W.D. Washington, Seattle

October 31, 2019

KENNETH I. DEANE, Plaintiff,
v.
PACIFIC FINANCIAL GROUP INC, et al., Defendants.

          ORDER ON MOTION FOR TEMPORARY RESTRAINING ORDER

          Marsha J. Pechman United States Senior District Judge.

         The above-entitled Court, having received and reviewed:

         1. Defendants' Motion for Temporary Restraining Order (Dkt. No. 25), 2. Plaintiff Kenneth I. Dean's Memorandum Opposing Defendants' Motion for Temporary Restraining Order (Dkt. No. 30), all attached declarations and exhibits, and relevant portions of the record, rules as follows:

         IT IS ORDERED that the motion is DENIED.

         Background

         Defendant The Pacific Financial Group, Inc. (“TPFG”) is an investment advisory group; Plaintiff was employed with the company from October 2007 until January 2019 (Plaintiff actually disputes when his employment ended, but for purposes of this motion is willing to use January 2019 as his end date). Plaintiff executed an Employment Agreement (“the Agreement”) with TPFG. Two of the primary provisions of the Agreement consisted of (1) Plaintiff's acknowledgment that TPFG's confidential information “constitutes a valuable, special and unique asset of [TPFG];” and (2) Plaintiff's agreement, for a period of one year post-separation, to neither solicit any TPFG client to terminate its relationship with TPFG nor induce any referral sources to cease doing business or otherwise interfere with their relationship with TPFG. Dkt. No. 27, Decl. of Meade, Ex. A at 5-6.

         Following Plaintiff's separation from TPFG, he began receiving quarterly termination payments per the Agreement (Plaintiff disputes that TPFG is calculating the payments correctly - it is one of the issues in this lawsuit - but that is not relevant for purposes of the TRO). He became employed by Advisors Capital Management (“Advisors Capital, ” “Advisors”), another investment advisory company which TPFG describes as a “direct competitor.” Shortly after taking his new position, Plaintiff contacted the Executive Vice President (Mills) of Kovacks Securities, Inc. (“Kovacks”), an investment advisory company which utilizes TPFG's portfolio management services and programs, seeking to schedule a meeting to discuss his new position at Advisors Capital. Mills referred Plaintiff to Kovacks' business development consultant (Monks). On July 18, 2019, Plaintiff met with Monks and discussed the establishment of a business relationship between Advisors and Kovacks which would include the use of Advisors' models on Kovacks' platform. Dkt. No. 29, Decl. of Monks at ¶ 5. Plaintiff followed up with emails after the meeting. Id., Ex. B.

         Kovacks informed TPFG of the contact from Plaintiff (Decl. of Meade at ¶ 7), resulting in TPFG filing a cease and desist letter with Plaintiff's attorney, who responded by assuring the company that Plaintiff was aware of the constraints of the Agreement and had no intention of violating them. A similar letter was sent by TPFG to Advisors Capital.

         Three months later, Defendant filed the instant motion, seeking:

         1. A prohibition against Plaintiff “using, disclosing, copying, storing, transmitting, interfering, or otherwise damaging” TPFG's confidential and proprietary information;

         2. A prohibition against Plaintiff “inducing any custodians, consultants, or referral sources to cease doing business with or interfering with their relationship with TPFG;”

         3. Permission to deposit all future payments owing to Plaintiff under his employment contract with the Court Registry.

         Discussion

         The parties are in agreement regarding the standard against which this request for emergency equitable relief must be measured. Defendant is required to establish (1) a likelihood of success on the merits, (2) that it is likely to suffer irreparable harm in the absence of the requested relief, (3) that the balance of hardships tips in its favor, and (4) that the public ...


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