SharkNinja, in opposing Keurig's TRO application, showed how smart defendants pick their battles when faced with bad optics in the context of a breach of a non-compete and fiduciary duty and trade secret misappropriation ("DTSA") claim.

Just a few weeks ago, Keurig Dr. Pepper, a leading producer of single serve brewing systems and specialty coffee in the U.S. and Canada, filed suit in Federal Court in Massachusetts, claiming that one of its former VPs, Jamal Wilson, who was charged with responsibility for leading the company’s strategy and development for existing Keurig brewer product lines and next generation single serve hot beverages, after tendering his resignation on June 6 with an effective end date for his employment on June 17, violated his non-compete and fiduciary duties to Keurig by downloading some of Keurig’s proprietary, trade secret and confidential information, including some Powerpoint Presentations pertaining to Keurig’s product development plans and strategies, and then began working for a significant competitor of Keurig’s – SharkNinja – on June 14 – before his employment with Keurig was even over.

Although Wilson did turn over his company-issued computers and cell phone upon leaving Keurig, it appears that those devices had been “wiped” before he did so, which, naturally, alarmed Keurig, leading them to seek a TRO from the Federal Court, including a Court order directing both SharkNinja and Wilson to preserve all Keurig data and have it forensically examined by an expert, and further, for an order compelling both SharkNinja and Wilson to abide by the terms of Wilson’s non-compete and restrictive covenant, which would prevent either of them from using confidential Keurig information, and theoretically, would also prevent Wilson from working for SharkNinja until his non-compete expires in 1 year from now.

Predictably, the defendants opposed Keurig’s application, with one of the primary thrusts of their argument being that while they admit Wilson is working for them, he isn’t working in a division that has anything to do with coffee, so in point of fact, Wilson isn’t really competing with Keurig at all, and the defendants have both taken active steps to make sure he doesn’t venture into the coffee space.

Here's the interesting part, which doesn’t get talked or written about nearly enough:

Rather than fighting to the death over the TRO application, the parties reached an agreement on the parameters of a TRO, including provisions whereby Wilson would certify that he has, and will continue to preserve any Keurig data in his possession, that within 5 days would make available to an independent computer forensics expert for imaging any devices capable of computing functions or storing electronic information that he had accessed since the time of his resignation from Keurig pursuant to a protocol to be agreed upon by all counsel that is designed to identify any Keurig confidential information or trade secrets located on these devices, and for 1 year agree not to allow Wilson to provide any services for SharkNinja related to coffee brewing products.

Here’s why this is so smart, from the defense perspective in particular:

How SharkNinja and Wilson's Approach to Picking Their Battles on the TRO Was Smart

Among other things, the former employers in circumstances like this often benefit from the bad optics of the former employee downloading information that, at least on the surface of things, appears to be confidential information, and they more often than not, have significantly greater resources than the ex-employee to fight over the TRO, and may even be entitled to recover their attorneys’ fees if the TRO is granted. So what the defense can do, if they’re smart, is to pick their battles wisely, particularly if the ex-employee isn’t really competing with the former employer directly anyway, and here, by saying “we’ll make the devices available for inspection, no problem,” they’re not fighting a battle they won’t win, and conserving economic resources, and showing “hey, we’ve got nothing to hide,” which helps blunt the negative optics they had out of the gate.
Jonathan Cooper
Connect with me
Non-Compete, Trade Secret and School Negligence Lawyer