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Pacific Woodtech Corporation v. Semsak

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

December 6, 2019

PACIFIC WOODTECH CORPORATION, A Washington Corporation, Plaintiff
v.
DANIEL SEMSAK, Defendant.

          ORDER GRANTING IN PART AND DENYING IN PART MOTION FOR TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE

          BARBARA J. ROTHSTEIN UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION

         Before the Court is Plaintiff Pacific Woodtech Corporation's motion for temporary restraining order and order to show cause. Dkt. No. 6. Having reviewed the motion, the declarations included thereto, and the record of the case as it exists, the Court with grant in part and deny in part Plaintiff's motion. The reasoning for the Court's decision follows.

         II. BACKGROUND

         Plaintiff is a Washington state corporation and represents itself as a “leading manufacturer of engineered wood products, specifically LVL and I-Joists.” Dkt. No. 1 at ¶ 1; see also Id. at ¶ 6. Defendant is a former executive who, until October of this year, worked for Plaintiff. See Id. at ¶ 7. His last position at the company was as Northeast and Northwest Business Development Manager. Id.

         In this position, Plaintiff represents that Defendant had access to a “wide variety of [Plaintiff's] most confidential, proprietary, and trade secret information.” Id. at ¶ 9. According to Plaintiff, Defendant agreed to be bound by Plaintiff's confidentiality policies, including that he would not “divulge or transmit any of [Plaintiff's] confidential or trade secrets.” Id. at ¶ 8 see also Dkt. No. 6 at 5-6 (providing an excerpt from Plaintiff's employment handbook addressing Confidential and Proprietary Information).

         According to Plaintiff, on October 9, 2019, Defendant informed Plaintiff that he was leaving their employ. Dkt. No. 1 at ¶ 10. Defendant informed Plaintiff that he would be taking a position with Plaintiff's industry competitor, Murphy Company (“Murphy”). Dkt. No. 6 at 2, 6. Before leaving, Plaintiff's CEO, James Enright, reminded Defendant of his obligations to return all property belonging to Plaintiff and not to misappropriate company trade secrets. Dkt. No. 1 at ¶ 11.

         Shortly thereafter, members of Plaintiff's company attended an industry trade show and while there were informed that Defendant was present at the show and was divulging Plaintiff's “confidential [] pricing strategies involving current [] customers.” Id. at 12.

         Plaintiff responded with a cease and desist letter instructing Defendant to cease divulgence of company trade secrets and requesting that he return any company property. Id. at ¶ 13; see also Dkt. No. 1-1 (cease and desist letter). In reply, Defendant sent a letter reaffirming his commitment not to disclose or misuse Plaintiff's confidential and proprietary information and enclosing a thumb drive which he represented contained “all the written information related to” his employment with Plaintiff, “confidential or otherwise, ” that he retained after leaving the company. Dkt. No. 1 at ¶ 14; see also Dkt. No. 1-2 (Defendant's response letter).

         Plaintiff then hired a third-party expert who conducted a forensic analysis of Plaintiff's computer-related activities in his final weeks with the company. According to Plaintiff, the analysis revealed that Defendant “downloaded sensitive [] Trade Secrets onto multiple flash drives that [Defendant] took with him when he left” Plaintiff's employ. Dkt. No. 1 at ¶ 15; see also Dkt. No. 6 at 9 (providing tabular logs of downloaded materials). Plaintiff represents that there is “no reason for any [of Plaintiff's] employee[s] to download such data.” Dkt. No. 6 at 9.

         Based on the foregoing, Plaintiff filed the current suit. Plaintiff's complaint, filed on December 4, 2015, asserts causes of action for (1) theft of trade secrets under the Defend Trade Secrets Act, 18 U.S.C. § 1832 et seq.; (2) misappropriation of trade secrets under Washington Revised Code (“RCW”) 19.108; (3) breach of duties of loyalty and confidentiality; and (4) replevin. Dkt. No. 1 at ¶¶ 20-43. On December 5, 2015, Plaintiff moved for a temporary restraining order which: (1) enjoins Defendant from disclosing or using Plaintiff's confidential information and trade secrets; (2) requires Defendant to turn over “all of [Plaintiff's] confidential information and trade secrets . . . as well as all of [Defendant]'s personal computers and [Defendant]'s work computers” so that Plaintiff may image them to preserve evidence, identify to whom else Defendant may have passed trade secrets, and to prevent further disclosure; (3) requires Defendant to preserve all evidence; (4) requires Murphy to preserve all evidence; and (5) requires Defendant to show cause as to why a preliminary injunction preventing him from possessing, disclosing, or using Plaintiff's confidential and trade secrets is not warranted. Dkt. No. 6 at 3-4.

         III. LEGAL STANDARD

         Federal Rule of Civil Procedure (“FRCP”) 65(b) empowers federal district courts to issue temporary restraining orders (“TRO”). Fed.R.Civ.P. 65(b); see also Local Rules W.D. Wash. LCR 65(b).

         To obtain a TRO, the movant must “meet the standards for issuing a preliminary injunction.” Navigant Consulting, Inc. v. Milliman, Inc., No. 18-1154, 2018 WL 3751983, at *3 (W.D. Wash. Aug. 8, 2018). This includes the requirement that the movant show that (1) it is likely to succeed on the merits of its claims, (2) it is likely to suffer irreparable harm in the absence of preliminary relief, (3) the balance of equities tips in its favor, and ...


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