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PC Connection, Inc. v. Mereos

United States District Court, D. Maryland, Southern Division

March 22, 2017

PC CONNECTION, INC. and GOVCONNECTION, INC., Plaintiffs,
v.
CHRISTOPHER MEREOS, Defendant.

          MEMORANDUM OPINION AND ORDER

          Paul W. Grimm United States District Judge.

         Pending before the Court is Plaintiffs' renewed Emergency Motion for Ex Parte Temporary Restraining Oder, which seeks injunctive relief to protect trade secrets and confidential information allegedly taken by the companies' former employee, Defendant Christopher Mereos. Pls.' Mot., ECF No. 2. Because Mereos has been served and failed to appear at a hearing held on March 21, 2017, I now construe the Motion as a Motion for a Preliminary Injunction. At the aforementioned hearing, I held that the Plaintiffs had demonstrated a likelihood that Mereos violated an enforceable non-disclosure agreement by taking proprietary information from the company, which if disclosed to the companies' competitors would likely result in irreparable harm to their business. Accordingly, I granted Plaintiffs preliminary-injunctive relief. This Memorandum Opinion and Order memorializes that ruling.

         Background

         Plaintiff GovConnection, Inc. (“GovConnection”) is the wholly-owned subsidiary of Plaintiff PC Connection, Inc. (“PC Connection”). Together, the companies sell software, hardware, and services to private businesses and government entities, with GovConnection handling the companies' public-sector work. Verified Compl. ¶ 15, ECF No. 1. On September 23, 2011, GovConnection hired Mereos as a Sales Support Associate and promoted him to Account Manager in 2013. Id. ¶¶ 20-21. As part of Mereos's in-processing, he signed an Employee Agreement (“Agreement”) which, among other things, contained the following nondisclosure agreement (as well as a non-competition agreement not presently at issue):

2.1 Nondisclosure and Nonuse of Confidential Information. I agree that all Confidential Information, as defined bellow, which I create or to which I have access as a result of my employment and other associations with the Company is and shall remain the sole and exclusive property of PC Connection. I agree that, except as required for the proper performance of my regular duties for the Company, as expressly authorized in writing in advance by the Company, or as required by applicable law, I will never, directly or indirectly, use or disclose any Confidential Information. I understand and agree that this restriction shall continue to apply after termination of my employment or this Agreement, howsoever caused. . . .
2.2. Use and Return of Documents. I agree that all documents, records and files, in any media of whatever kind and description, relating to the business, present or otherwise, of PC Connection and any copies (including without limitation electronic), in whole or in part, thereof (the “Documents” and each individual, a “Document”), whether or not prepared by me, shall be the sole and exclusive property of the Company. Except as required for the proper performance of my regular duties for PC Connection or as expressly authorized in writing in advance by the Company, I will not copy and Documents or remove any Documents or copies or derivatives thereof from the premises of the Company. I will safeguard, and return to the Company immediately upon termination of my employment, and/or at such times specified by the Company, all Documents and other property of the Company, and all documents, records and files of its customers, subcontractors, vendors, and suppliers (“Third-Party Document” and individually a “Third-Party Document”), as well as all other property of such customers, subcontractors, vendors and suppliers, then in my possession or control. . . .

Agr. ¶ 2, Verified Compl. Ex. A., ECF No. 1-2.

         According to GovConnect Vice President of Government Sales (and Mereos's supervisor), Jeffrey Trent, who testified at the hearing, at some point during Mereos's tenure, the employee's performance and attendance became a concern, and the company placed him on a performance improvement plan designed to help him address his deficiencies. On February 17, 2017, Mereos informed Trent that he wished to resign his employment because he did not believe that he would ever be taken off the improvement plan. At the time of his resignation, Mereos dishonestly told Trent that he planned to take a job at his uncle's property-management company. That same day, Mereos participated in an exit interview and signed a Termination Certification, as required by the Agreement. Verified Compl. ¶ 29; Termination Certification, Verified Compl. Ex. B., ECF No. 1-3; Agr. ¶ 5. By signing the Termination Certification, Mereos untruthfully represented:

I do not have in my possession, nor have I failed to return, any devices, records, data, notes, reports, proposals, lists, correspondence, . . . materials, equipment, other documents or property, or reproductions of any of the aforementioned items, including without limitation any such items in electronic form, belonging to PC Connection, Inc., its subsidiaries, affiliates, successors or assigns (together, the “Company”).
I further certify that I have complied with all of the terms of the Company's Employee Agreement signed by me (the “Agreement”) . . . .
I further agree that, in compliance with the Agreement, I will preserve as confidential all Confidential Information (as defined therein), including without limitation, trade secrets, confidential knowledge, data, or other proprietary information relating to products, processes, know-how, . . . databases, . . . customer lists, business plans, financial information or other subject matters pertaining to any business of the Company or any of its employees, customers, consultants or licenses.

         Termination Certification.

         Trent testified that a routine review of Mereos's work-email account revealed that emails had been deleted from the two weeks prior to Mereos's resignation. GovConnection recovered the deleted emails from its backup systems and determined that Mereos had sent at least four hundred emails to unsecured, external email addresses, many of them to the email address maryland44@outlook.com. See Verified Compl. ¶ 31. Mereos attached to these emails proprietary information such as his own and other salespersons' customer lists containing customer email addresses and nicknames; customer email communications; spreadsheets generated from a customer-relationship-management (CRM) site called CallBack that detailed expiration dates for customers' software licenses, price-margin data, and GovConnection's assessment of the likelihood that the company would secure deals with particular customers; and login information. See Verified Compl. ¶ 33. Trent testified that the information contained in the emails, if used in a way that violated the Agreement, could provide GovConnection's competitors a roadmap for stealing the company's business by allowing competitors to undercut license-renewal efforts; focus their sales efforts on customers with whom GovConnection has less established relationships; and take advantage of price-margin information.

         Based on information provided by Mereos's wife, Vicki Mereos, during GovConnection's efforts to effect service, the company learned that Mereos had taken a job with Lexmark, a manufacturer that sells its products through resellers, including GovConnection and its competitors. Further review of the information that Mereos forwarded to external email accounts identified a spreadsheet that detailed every GovConnection quote involving a Lexmark product since 2010, a spreadsheet that could only have been generated through a specific search of the CRM database using the keyword “Lexmark.” Plaintiffs' counsel Erik Winton spoke to Lexmark's General Counsel, who confirmed that the company had hired Mereos but without knowledge that Mereos was subject to a non-competition agreement. He iterated that Lexmark did not wish to jeopardize its business relationship with GovConnection. Shortly thereafter, Lexmark's General Counsel notified Winton that the company ...


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