Sample Complaint 2 
________________________________________________________
UNITED STATES DISTRICT COURT FOR THE [district]
[names of Plaintiffs],
Plaintiffs,
v.
[names of Defendants]
Defendants.
________________________________________________________
COMPLAINT FOR VIOLATION OF DTSA, CUTSA, BREACH OF FIDUCIARY DUTY, BREACH OF WRITTEN CONTRACT, BREACH OF IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING; UNFAIR COMPETITION; COMMON LAW MISAPPROPRIATION AND UNFAIR COMPETITION
DEMAND FOR JURY TRIAL COMPLAINT
Plaintiffs [name of Plaintiff 1] (“Plaintiff 1”) and [name of Plaintiff 2] (“Plaintiff 2”) (collectively “Plaintiff”) hereby complain and allege the following against [name of Defendant 1] (“Defendant 1”) and [name of Defendant 2] (“Defendant 2”) (collectively, “Defendants”):
NATURE OF THE CASE
1. This is an action based upon: (1) the Defend Trade Secrets Act, 18 U.S.C. § 1836, et seq.; (2) California’s Uniform Trade Secrets Act (Cal. Civ. Code § 3246, et seq.); (3) breach of fiduciary duty and duty of loyalty; (4) breach of contract as to Defendant 2; (5) breach of the implied covenant of good faith and fair dealing as to Defendant 2; (6) unfair-competition (under Cal. Bus. & Prof. Code § 17200, et seq.); and (7) common law misappropriation and unfair competition. Plaintiff seeks injunctive relief, damages, and other appropriate relief to stop Defendants’ use, disclosure, and misappropriation of Plaintiff’s confidential and trade secret documents and information by, among other things, providing it to creditors of Plaintiff.
THE PARTIES
2. Plaintiff 1 is a [State] Limited Liability Company, headquartered in [City, State] and a subsidiary of Plaintiff 2. Plaintiff 2 is a [State] company, having its headquarters in [City, State].
3. Plaintiff is informed and believes, and thereupon alleges that Defendant 1 is a citizen of the United States, residing at [address of Defendant 1] and owns and uses the email address [email address of Defendant 1].
4. Plaintiff is informed and believes, and thereupon alleges that Defendant 2 is a dual citizen of the [Country] and [Country], residing at [addresses of Defendant 2]. Defendant 2 owns and uses the email address [email address of Defendant 2].
5. Third party [name of Third Party] (“Third Party”) is a managed cloud computing company that offers Internet hosting services, email accounts, Internet domains, and cloud storage. Third Party has offices at [address of Third Party]. As described herein, Defendant 1 received and sent Plaintiff’s confidential and trade secret documents and information using his personal email account at paul.ostling@pauljostling.com that is hosted by and through Third Party.
6. Third party Google, Inc. (“Google”) is a technology company that offers Internet- related services, including email services through Gmail and cloud storage. Google has offices at 1600 Amphitheatre Parkway, Mountain View, California 94043. As described herein, Defendant 2 forwarded Plaintiff’s confidential and trade secret documents and information to his personal email account [Defendant 2’s email address] that is hosted by and through Google.
7. Defendants, without authorization, have misappropriated Plaintiff’s confidential and trade secret documents and information. Defendants are responsible for the occurrences alleged herein and are the proximate cause of the injuries Plaintiff has suffered.
8. Upon information and belief, the actions and omissions alleged herein to have been undertaken by the Defendants were undertaken by each Defendant individually, were actions and omissions that each Defendant authorized, controlled, directed, or had the ability to authorize, control or direct, and/or were actions and omissions each Defendant assisted, participated in, or otherwise encouraged, and are actions for which each Defendant is liable. Each Defendant aided and abetted the actions of the Defendants set forth below, in that Doe Defendant had partial or full knowledge of those actions and omissions, provided assistance and benefited from those actions and omissions, in whole or in part. Each of the Defendants was the agent of each of the remaining Defendant, and in doing the things hereinafter alleged, was acting within the course and scope of such agency and with the permission and consent of other Defendant.
JURISDICTION
9. This Court has original jurisdiction over this action pursuant to the Defend Trade Secrets Act, 18 U.S.C. § 1836(c) and 28 U.S.C. § 1331. This Court has supplemental jurisdiction over the other claims asserted herein, pursuant to 28 U.S.C. § 1367. There is complete diversity and the amount in controversy exceeds the jurisdictional amount, and thus, this action is also subject to the Court’s diversity jurisdiction under 28 U.S.C. § 1332.
VENUE
10. Venue is proper in this Court pursuant to 28 U.S.C. § 139l(b), as a substantial part of the events or omissions giving rise to the claims made herein occurred in the [district] and a substantial part of the property that is the subject of the claims is situated in the [district]. Specifically, the misappropriated confidential and trade secret information and documents were sent to an email accounts provided by Google and Third Party, with a presence in the [district], and, on information and belief, still reside on Google’s and Third Party’s servers. Venue is also proper because the Court has personal jurisdiction over at least one defendant that resides in the district.
INTRADISTRICT ASSIGNMENT
11. This is an action for trade secret misappropriation, breach of contract, breach of implied covenant of good faith and fair dealing, unfair competition, breach of fiduciary duty and loyalty and misappropriation, where a substantial part of the events or omissions which give rise to the claims have taken place in [district] and where a substantial part of the property that is the subject of the action is situated in [district]. Thus, pursuant to Civil L.R. 3- 2(c) and (e), this action should be assigned to the [district].
PLAINTIFF’S BUSINESS
12. Plaintiff is a [description of Plaintiff’s business].
13. In [date], Plaintiff announced a voluntary restructuring of its debt (hereinafter, the “Plaintiff Restructuring”). As part of this restructuring, Plaintiff is in ongoing discussions and negotiations with its creditors. A successful restructuring is key to maintaining Plaintiff’s solvency and its competitive advantage in the industry.
14. In [date], Plaintiff commenced a confidential arbitration proceeding (hereinafter, the “Plaintiff Arbitration”) against its former CEO [name of former CEO] (“Plaintiff’s Former CEO”), who served in the role prior to Defendant 1 and another earlier CEO. Due to the timing of the arbitration proceeding, its relationship to the restructuring, and the highly sensitive nature of its subject matter, it is critical to Plaintiff and to its restructuring efforts that the arbitration remain confidential.
PLAINTIFF’S TRADE SECRETS AND CONFIDENTIAL INFORMATION
15. Plaintiff takes extraordinary steps in protecting its confidential and trade secret documents and information. Plaintiff limits access to sensitive confidential information and trade secrets. Plaintiff employees are able to gain access to Plaintiff confidential information only through password-protected programs and entry points. Plaintiff secures access to its facilities and other employs other security measures that limit and control access to its confidential information and trade secrets. Plaintiff takes security measures, including locking its doors and activating an alarm system after business hours and having security guards. During business hours, members of the public are not allowed in the facility unless they have an appointment or otherwise escorted by a Plaintiff employee. Employees are expected to treat sensitive documents-including material related to the Plaintiff restructuring, its arbitration against former CEO Plaintiff’s Former CEO, documents and information regarding internal employment matters, and confidential information regarding customers-as per internal policies and agreements. Employees can only access Plaintiff computers and peripheral devices with the proper user ID and passwords.
The Company introduced Access Monitoring and Control System to office premises. Special equipment that includes Proximity card readers, cards and SW that provides for the maintenance of the employee database and their access to offices is used to control doors to offices.
A CCTV system is organized in the office that provides for storage of recorded video information on a hard drive. The main purpose of the system is to facilitate the investigation in the event of an emergency situation in the office. The owner of the video information is the General Director.
16. Plaintiff enforces the protection of its confidential and trade secret documents and information, through confidentiality provisions in employment agreements, and detailed and strict internal policies on confidentiality, information security and IT use.
17. For example, Plaintiff’s information security policy creates a framework for preventing information security vulnerabilities, managing user accounts and passwords, and protecting confidential corporate information within the company’s information systems. At section 4, the policy makes clear that: “Information-is a critically important asset to the Company, which must be protected from unauthorized access, intentional or deliberate deletion or amendment.” At section 4.5.1, the policy prohibits establishing any unauthorized “external connections” to Plaintiff systems or information, and provides that “[i]the event of non-compliance with this rule, the user will be fully responsible for the consequences of his actions.” Section 4.5.3 provides, among other things, that “[t]he use of email boxes not belonging to the Company for the transfer of corporate information is prohibited,” that “access to the Internet network and collaborative tools provided for CIS users may be used only in accordance with the Company’s business objectives,” and that “[i]f confidential or proprietary information of the company must be sent using collaborative tools (e-mail, electronic conference, etc.), it must be encrypted so that it can be read only by the person it was targeted for. Such information is encrypted using the software and algorithms approved by the company.”
18. Plaintiff continuously updates and maintains the digital and physical security and confidentiality of its information. For example, at section 4.8 of the information security policy, Plaintiff provides that “[t]he following technical measures are used to control risks: monitoring, system logs analysis, regular inspections, analysis on the side of the management and independent internal audits of information security.” and “[a]ctivities for the optimization of risk include a regular reassessment of risks and, accordingly, reassessment of policies, risk management, adjustment and updates of information security mechanisms.”
19. Plaintiff derives value from the secret nature of its confidential and trade secret documents and information. It does not freely share its confidential material or trade secrets with any entity or person outside of Plaintiff. Plaintiff requires all of its employees and consultants to sign employment agreements that include confidentiality, non-disclosure, and non-use provisions that acknowledge its employees and consultants will receive confidential and proprietary documents and information during their employment that belongs to Plaintiff. As discussed (infra), Defendants entered into such agreements.
20. Plaintiff’s confidentiality provisions define its proprietary and confidential material broadly and prohibit, among other things, its employees and consultants from disclosing Plaintiff confidential and proprietary material from anyone outside of Plaintiff without its consent or otherwise misappropriating Plaintiff’s confidential and proprietary material. These agreements signed by Plaintiff’s employees establish a contractual duty to Plaintiff not to disclose, use, or retain Plaintiff’s confidential or proprietary information without Plaintiff’s authorization. Plaintiff’s trade secrets and confidential documents and information, subject to its confidentiality restrictions and protections, include: board materials, minutes of board meetings, legal counsels’ opinions, confidential letters from counsel for certain of the creditors and Plaintiffs responses, internal decision-making and strategy concerning the restructuring and negotiations, internal decision-making and strategy concerning the arbitration with Plaintiff’s Former CEO, Credit Committee materials, Compensation Committee materials, valuation reports by consultants, internal emails regarding ongoing negotiations with clients and internal employment matters.
DEFENDANTS’ DUTIES TO PLAINTIFF
21. Plaintiff hired Defendant 2 in [date] as Director of Strategic Marketing, Development and Communications. He also became assistant to the General Director to the CEO in [date].
22. As Director of Strategic Marketing, Development and Communications, Defendant 2 had access to Plaintiff’s confidential and trade secret documents and information, including management materials prepared for Plaintiff’s Board of Directors (“Board”), attorney-client communications and attorney work product from Plaintiff’s outside counsel, material regarding negotiations of customer contracts, and information relating to the Plaintiff Restructuring and the Plaintiff Arbitration.
23. Accordingly, as a condition of Defendant 2’s employment with Plaintiff, he agreed not to disclose Plaintiff’s confidential or trade secret documents and information without Plaintiff’s prior consent. Under Article 7, “Confidentiality” of his Employment Agreement, Defendant 2 agreed not disclose Plaintiff’s confidential or trade secret documents and information without Plaintiff’s consent. Pursuant to Article 7.1 of his Employment Agreement, Defendant 2 agreed that:
[d]uring the term of this Contract and after its termination, [he] agrees not to disclose to third parties or use without the consent of the Employer, a confidential information or information containing commercial secrets, the access of which was obtained by [Defendant 2] during the period of work for the Employer.
24. Defendant 2 also acknowledged in his Employment Agreement the broad definition of Plaintiff’s confidential and trade secret information. Under Article 7.2 of Defendant 2’s Employment Agreement, he acknowledged that Plaintiff’s confidential and trade secret information included:
all specifications, drawings, formulas, archive files, all correspondence, all handbooks or manuals, all reports, documents and protocols, all data classified as business secret, work performance instructions provided orally or in writing, relating to the activities of the Employer or used methods, procedures, know how or equipment.…
25. Moreover, under Article 7.3 of his Employment Agreement, Defendant 2 agreed not to take any notes, copies, photographs, or summaries of Plaintiff’s confidential or trade secret documents and information. Defendant 2 further agreed that all confidential and trade secret documents and information “must remain the exclusive property of [Plaintiff] and must be returned … upon first request.”
26. Also critical to Defendant 2’s employment was his compliance with Plaintiff’s code of conduct. Under Article 4 of his Employment Agreement, Defendant 2 agreed to comply “with the requirements of the internal code of conduct” to act with a “[r]esponsible attitude for the property of the Employer,” and to “cherish credibility and the reputation of the Employer.”
27. Pursuant to the terms of his employment, Defendant 2 was also bound by the terms of Plaintiff’s internal confidentiality policy, internal IT use policy, and internal information security policy. These policies prohibited sending confidential, internal information to parties’ email addresses outside of Plaintiff. In particular, section 4.5.3 of the information security policy provides that “the use of email boxes not belonging to the Company for the transfer of corporate information is prohibited.”
28. Plaintiff suspended Defendant 2 on [date] following its investigation that revealed Defendant 2’s misappropriation of Plaintiff’s trade secrets and confidential information and his breach of his employment agreement.
29. Plaintiff hired Defendant 1 on [date] as interim chief executive officer (“CEO”). Prior to that, since [date], Defendant 1 was Chairman of the Board. Under the confidentiality provisions of his employment agreement, Defendant 1 agreed to:
not, except as authorized or required by your duties hereunder, use for your own benefit and gain or reveal to any person, firm, company or other organization whatsoever, any trade secrets or Confidential Information belonging to the Employer or to any other member of the Group or relating to the affairs or dealings of the Group which may come to your knowledge during your employment. You shall treat the same with complete secrecy.
30. As CEO, Defendant 1 owed Plaintiff a fiduciary duty of care and loyalty, obligating him to “use [his] best endeavours [sic] to promote the interest” of Plaintiff. Pursuant to the terms of his employment, Defendant 1 also was bound by the terms of Plaintiff’s IT policy that prohibited sending confidential, internal information to parties’ email addresses outside of Plaintiff. Defendant 1 remained as CEO of Plaintiff 1/Plaintiff 2 until [date] when Plaintiff 1/Plaintiff 2’s Board of Director accepted his resignation. Defendant 1 is currently involved in a different company as an investor, and Defendant 2 is working at that same company and assisting Defendant 1 in managing his investment in the new company.
DEFENDANTS’ MISCONDUCT
31. Unbeknownst to Plaintiff, from at least [date] through [date], Defendant 1 and Defendant 2 misappropriated Plaintiff’s confidential and trade secret documents.
32. Defendant 1 resigned on [date]. Shortly before resigning, Defendant 1 asked Plaintiff to give Defendant 2 a special $[amount] bonus. Plaintiff later discovered that Defendant 1 had been approving Defendant 2 for an inordinate amount of overtime that accumulated to nearly [percentage] percent additional pay during [year]. Given Plaintiff’s financial condition and the timing of Defendant 1’s bonus request in relation to his departure, this was all unusual.
33. In [date], Defendant 2 began exhibiting behavior that was unusually secretive. Defendant 2 often would leave the floor where he works, move one floor up, and take and make numerous calls. This behavior was out of the ordinary. At that time, Defendant 2 also came to work on the weekends repeatedly, at a time when he had no reason to be there. At this time, Defendant 2 began asking numerous and detailed questions regarding the restructuring and negotiations with bondholders, even though he was not working on such matters and they were entirely outside of the job scope.
34. During this same period of time-and particularly during the last few weeks in [date], Plaintiff began receiving multiple letters from its creditors with which it was negotiating. These letters appeared to be coordinated. In view of the foregoing developments, on [date], Plaintiff exercised its rights consistent with internal IT policy, to which Defendant 2 had agreed, and accessed his Plaintiff email account to investigate.
35. Upon reviewing Defendant 2’s work email account, Plaintiff discovered that since [date], Defendant 2 had sent a substantial number of trade secret and confidential documents to his personal Gmail account. There was a dramatic increase in the amount of material Defendant 2 was sending from Plaintiff email account [email address] to his personal Gmail email account [email address]. These emails contain trade secret and confidential documents relating to the Plaintiff Restructuring and Plaintiff Arbitration, as well as commercial information. A number of the documents are specifically marked “strictly confidential.” This information includes:
(a)	Internal decision-making and strategy concerning the restructuring and negotiations, forwarded to Defendant 2’s private email account on [date], emails relating interactions with creditors “[names of creditors],” and internal information and communications relating to the restructuring.
(b)	Board materials, board minutes and presentations of advisors for the board, forwarded to Defendant 2’s private email account on [date], including particularly very recent materials from the end of [month] and beginning of [month]. Internal drafts of communications with creditors were also sent.
(c)	Legal counsels’ opinions and confidential letters from counsel for certain of the creditors and Plaintiffs responses, forwarded to Defendant 2’s private email account on [date].
(d)	Internal information concerning the arbitration with Plaintiff’s former CEO Plaintiff’s Former CEO, forwarded to Defendant 2’s private email account on [date].
(e)	Credit Committee materials, forwarded to Defendant 2’s private email account on [date] and [date] in emails containing information about decision making, strategy and the contents of December meetings and minutes.
(f)	Compensation Committee materials, forwarded to Defendant 2’s private email account on [date].
(g)	Valuation reports forwarded to Defendant 2’s private email account on [date].
(hereinafter, the “Plaintiff Confidential Information”).
36. Plaintiff did not authorize Defendant 2 to send these materials to his personal Gmail account. His actions were unauthorized and inconsistent with his obligations under his employment agreement and his duties to the company. By sending these materials to his personal Gmail account, Defendant 2 violated the Plaintiff internal IT policy. The materials that Defendant 2 forwarded to his personal account were beyond the scope of his duties. There was no legitimate purpose for Defendant 2 to send the materials to his personal Gmail account.
37. Plaintiff’s investigation also revealed Defendant 2’s deliberate attempts to conceal his unauthorized transmission of Plaintiff’s confidential and trade secret information to his personal Gmail account. On [date], Defendant 2 deleted many of the emails he had forwarded to his personal Gmail account. He also emptied his “trash” folder of his Plaintiff email account. Plaintiff, however, was able to recover these deleted emails. The investigation revealed that Defendant 2 deleted numerous emails he forwarded to his personal Gmail account. Those deleted emails include emails that forwarded Plaintiff Confidential Information.
38. Plaintiff also reviewed Defendant 2’s phone records. Given the ongoing, sensitive negotiations with its creditors, Plaintiff had instructed Defendant 2 not to communicate to creditors or to anyone outside of the company who may relate to the ongoing negotiations without prior approval from his supervisors. Defendant 2 disobeyed these instructions. Phone records from Defendant 2’s work telephone reveal that from [date] through [date], Defendant 2 had phone multiple conversations with (a) Defendant 1, after his resignation from Plaintiff and with (b) a representative of one of the creditors in a position adverse to Plaintiff. Separately, during this same period, on [date], Plaintiff received a letter from a different creditor, and on [date], received a letter from counsel for a group of creditors. The receipt of these letters all appeared coordinated.
39. On [date], Plaintiff interviewed Defendant 2, during which he admitted that he had sent, to his personal Gmail account, confidential information that did not pertain to his duties. Defendant 2 could not provide a clear explanation for his actions. Defendant 2 denied that conversations with the creditor’s representative, despite the phone records showing that they spoke twice on [date]. When asked to explain the purpose of the calls and to provide the specifics of the information that he had sent to his private account, Defendant 2 refused to continue the discussion and left the interview. Plaintiff asked Defendant 2 to return for a follow up interview and further discussion; he refused to do so and did not return to the office. Plaintiff also asked Defendant 2 to return his Plaintiff mobile phone and laptop; he refused to do so.
40. Given the results of Plaintiff’s internal investigation and Defendant 2’s violations of his employment agreement and the Plaintiff IT policy, Plaintiff suspended Defendant 2’s employment effective [date]. Plaintiff has denied Defendant 2 access to the office, services through his Plaintiff-issued mobile phone and laptop in his possession, and his Plaintiff email account. Plaintiff has also instructed Defendant 2 not to communicate with other Plaintiff employees without management’s approval. Moreover, Plaintiff has repeatedly requested that Defendant 2 return his Plaintiff-issued mobile phone and laptop, as he is required to do under his employment agreement, but he refuses to do so.
41. Defendant 2’s suspension did not dissuade him from continuing activities contrary to Plaintiff’s interests and designed to impede Plaintiff’s investigation. On [date], Defendant 2 made a communication to Plaintiff’s outside counsel through Defendant 1, in which he threated to complain to regulatory authorities unless Plaintiff dropped its investigation of Defendant 2’s conduct.
42. Notwithstanding his resignation as CEO in mid-[month], Defendant 1 continued to ask his former personal assistant at Plaintiff to continue to carry out tasks for him, and received from her confidential internal information regarding Defendant 2’s investigation and suspension. In particular, on [date], Defendant 1 received from his former personal assistant at the company, to his personal email account ([email address]), three emails containing the internal notice regarding Defendant 2’s suspension and internal details regarding that suspension. On [date], Defendant 1 forwarded each of these confidential emails to [name of Creditor’s Representative] (“Creditor’s Representative”), the representative of one of the creditors with which Plaintiffs are negotiating, and to Defendant 2. Defendant 1 copied both of these individuals on the same forwarded emails. Since Defendant 2’s suspension, Defendant 1 also called [name of representative], another representative of the same creditor represented by Creditor’s Representative, and [name of consultant], one of Plaintiffs’ former restructuring consultants.
43. Since his suspension, Defendant 2 is working at Defendant 1’s new company and assisting Defendant 1 with his investment in that company. Defendant 2 has been assisting Defendant 1 with work at that same company while employed by Plaintiffs. In particular, Defendant 2’s company email account continues to receive meeting request with respect to that particular company.
44. The information that Defendant 2 sent to his personal email account contains a wide variety of confidential information that would be of interest to numerous parties, including the creditors involved in the Plaintiff Restructuring, Plaintiff’s former CEO Plaintiff’s Former CEO adverse to the company in the Plaintiff Arbitration, and commercial information that would be of interest to competitors. Given the nature of the information that Defendant 2 sent to his personal account, there is a serious risk that such information is planned to be shared with creditors, former CEO Plaintiff’s Former CEO in the arbitration, competitors or others. Depending on the creditors reactions to receiving certain of the trade secrets and confidential information and precisely what information has been shared with which creditors, including internal strategy and information about the restructuring and the arbitration, such information may inject disruption into the negotiations and potentially risk the success of that effort. Thus, Defendant 2’ s actions create a severe potential risk of disadvantaging Plaintiff by frustrating its ability to negotiate a fair and reasonable restructuring with its creditors, by disclosing its internal strategies. There is a risk that creditors who were to obtain this information from Defendant 2 might use it to gain an unfair advantage during the Plaintiff Restructuring. Such disclosure might also create a risk of advantaging some creditors over others, and unfairly advantaging parties associated or affiliated with such creditors. There is also a potential risk that these actions by Defendant 2 might be inconsistent with the requirements of securities regulations and laws in the jurisdictions in which the company’s securities are trading, depending on the timing of the disclosure of the information at issue, as it may be considered to include price-sensitive information. Further, given that confidential customer and strategy information was included in the conduct, there is a risk of unfair competition as well, if competitors were to receive this data. There is also a serious potential risk of interference with the Plaintiff Arbitration. For example, there is no reason that Defendant 2 should have forwarded such information to himself. If he were to share that information with Plaintiff’s former CEO Plaintiff’s Former CEO or his counsel, who are adverse in the arbitration, this could be extremely damaging to Plaintiff.
45. This harm and risk of harm to Plaintiff results directly from Defendant 2’s misconduct. The restructuring is critical and essential to the existence of the business and the confidential arbitration is very important to the business as well. Defendant 2’s interference or potentially providing trade secret and confidential information to certain creditors risks to impair the ability to complete the restructuring and thus creates risk to Plaintiff’s existence, which could not be repaired. The sharing of this information also creates potential unfairness in the restructuring, both for Plaintiff and other creditors. And, as discussed, Defendant 2’s potential disclosure of information to an adversary in the arbitration is also the type of injury that could not be repaired. Finally, if sensitive commercial information regarding customers and internal affairs were passed to competitors, it could enable them to unfairly compete against Plaintiff. This too creates a serious risk of harm.
46. Similarly, the information that Defendant 1 received at his personal email account from his former personal assistant is sensitive internal employment information and was, in fact, forwarded by Defendant 1 to a creditor who is a contractual counterparty in the restructuring. Given the sensitivity of the existing restructuring negotiations, the fact that Defendant 1 has received and forwarded confidential internal employment information to creditors indicates risks regarding the restructuring process and relations similar to those described above.
47. Given Defendant 2’s and Defendant 1’s attitude and complete disregard for their obligations to Plaintiff, given Defendant 2’s efforts to destroy the evidence of his misappropriation, given Defendant 1’s willingness to obtain information improperly from his prior personal assistant, and given both of their continued possession and access to trade secreted information, there is a substantial likelihood that Defendant 1 and Defendant 2 will continue to misappropriate Plaintiff’s trade secrets, to the detriment of Plaintiff’s interests and in furtherance of their own interests. For the same reasons, there is also a substantial risk that Defendant 2 will continue his efforts to destroy evidence of illicit activity or evade the true facts from coming to light, if he finds out about the relief Plaintiff requests. Similarly, given Defendant 1’s exhibition of evasive behavior, by interacting with his former personal assistant and obtaining confidential information from her, there is a risk that he too would not take necessary steps to preserve evidence.
48. Upon information and belief, Defendants have or will provide a benefit to third parties or have profited from their misappropriation of Plaintiff’s confidential and trade secret documents and information by disclosing those documents and information to other parties.
CLAIMS FOR RELIEF
FIRST CLAIM FOR RELIEF
Trade Secret Misappropriation Under the Defend Trade Secrets Act (18 U.S.C. § 1836 et seq.)
49. Plaintiff realleges and incorporates by reference each and every allegation set forth in paragraphs 1 through 48 above.
50. Plaintiff owns and possesses certain confidential and trade secret documents and information as alleged above that relates to the Plaintiff Restructuring and Plaintiff Arbitration.
51. Plaintiff’s confidential and trade secret documents and information relates to products and services used, sold, shipped and ordered in, or intended to be used, sold, shipped and/or ordered in, interstate or foreign commerce.
52. Plaintiff has taken reasonable steps to protect the secrecy of its confidential and trade secret documents and information, including the secrecy of the Plaintiff Confidential Information Defendants have misappropriated.
53. Defendants have misappropriated the Plaintiff Confidential Information in the improper and unlawful manner as alleged herein.
54. Defendants have failed to return to Plaintiff the Plaintiff Confidential Information and have attempted to conceal their theft of such information. On information and belief, if Defendants are not enjoined, they will continue to misappropriate, disclose, and use for their benefit and to Plaintiff’s detriment the Plaintiff Confidential Information.
55. Because Plaintiff’s remedy at law is inadequate, Plaintiff seeks-in addition to damages-a temporary, preliminary, and permanent injunctive relief to and to protect its confidential and trade secret documents and information as well as Plaintiff’s legitimate business interest. Critical to the Plaintiff competitive advantage is the confidentiality of its negotiations with its creditors. Plaintiff will continue to suffer irreparable harm absent injunctive relief.
56. Plaintiff has a substantial likelihood of success on the merits because of Defendants’ blatant, willful, and malicious misappropriation of trade secrets through the unlawful methods alleged herein.
57. Defendants’ misappropriation of Plaintiff’s confidential information and trade secrets has caused and will continue to cause Plaintiff substantial injury, including, but not limited to actual damages, lost profits, harm to its reputation, and the diminution in value of its trade secrets. Defendants have been unjustly enriched by their misappropriation of Defendants’ confidential information and trade secrets.
58. Defendants’ misappropriation of the Plaintiff Confidential Information was intentional, knowing, willful, malicious, fraudulent, and oppressive. Plaintiff is entitled to an award of exemplary damages and reasonable attorneys’ fees.
SECOND CLAIM FOR RELIEF
Trade Secret Misappropriation Under California’s Uniform Trade Secret Act (Cal. Civ. Code § 3426 et seq.)
59. Plaintiff realleges and incorporates by reference each and every allegation set forth in paragraphs 1 through 58 above.
60. Plaintiff owns and possesses certain confidential and trade secret documents and information as alleged above that relates to the Plaintiff Restructuring and Plaintiff Arbitration. These are trade secrets within the meaning of California Civil Code Sections 3426 through 3426.11.
61. Plaintiff has taken reasonable steps to protect the secrecy of its confidential and trade secret documents and information, including the secrecy of the Plaintiff Confidential Information Defendants have misappropriated by, among other things, limiting access to confidential and trade secret documents and information, requiring employees-including the Defendants-to sign confidentiality agreements, implementing policies that require confidentiality, and limiting access to its computers and requiring passwords.
62. Defendants have misappropriated the Plaintiff Confidential Information in the improper and unlawful manner as alleged herein.
63. Defendants have failed to return to Plaintiff the Plaintiff Confidential Information and have attempted to conceal their theft of such information. On information and belief, if Defendants are not enjoined, they will continue to misappropriate, disclose, and use for their benefit and to Plaintiff’s detriment the Plaintiff Confidential Information.
64. Because Plaintiff’s remedy at law is inadequate, Plaintiff seeks-in addition to damages-a temporary, preliminary, and permanent injunctive relief to and to protect its confidential and trade secret documents and information as well as Plaintiff’s legitimate business interest. Critical to the Plaintiff competitive advantage is the confidentiality of its negotiations with its creditors. Plaintiff will continue to suffer irreparable harm absent injunctive relief.
65. Plaintiff has a substantial likelihood of success on the merits because of Defendants’ blatant, willful, and malicious misappropriation of trade secrets through the unlawful methods alleged herein.
66. Defendants’ misappropriation of Plaintiff’s confidential information and trade secrets has caused and will continue to cause Plaintiff substantial injury, including, but not limited to actual damages, lost profits, harm to its reputation, and the diminution in value of its trade secrets. Defendants have been unjustly enriched by their misappropriation of Defendants’ confidential information and trade secrets.
67. Defendants’ misappropriation of the Plaintiff Confidential Information was intentional, knowing, willful, malicious, fraudulent, and oppressive, all within the meaning of California Civil Code, Section 3294. Defendants misappropriated Plaintiff’s confidential and trade secret information intentionally and knowingly and with a deliberate intent to benefit themselves and to injure Plaintiff. Plaintiff is entitled to its damages, in an amount to be determined at trial, as well as injunctive relief, and an award of punitive damages and/or treble damages and attorney’s fees pursuant to California Civil Code, Sections 3426.3(c) and 3426.4.
THIRD CLAIM FOR RELIEF
Breach of Fiduciary Duty and Duty of Loyalty
68. Plaintiff realleges and incorporates by reference each and every allegation set forth in paragraphs 1 through 67 above.
69. As employees of Plaintiff, Defendants owed Plaintiff a duty of loyalty and was obligated to act with the utmost good faith, and in the best interest of Plaintiff.
70. Plaintiff was entitled to place its trust and confidence in Defendants and entitled to expect Defendants to act with the utmost good faith toward it in carrying out the employment and the business of Plaintiff.
71. Plaintiff relied on Defendants’ loyalty and integrity and their faithful performance of their responsibilities.
72. Defendants took advantage of Plaintiff’s faith in them—thereby breaching their fiduciary duties—by failing to perform their duties to Plaintiff, by acting in conflict of interest, by engaging in activities for their own benefit and to the detriment of the company, and by providing secret information and interacting with for Plaintiff’s creditors with which Plaintiff was and is negotiating as part of the Plaintiff Restructuring.
73. Defendants knowingly and willing breached their duty of loyalty to Plaintiff by misappropriating Plaintiff’s confidential and trade secret documents and information, and engaging in acts that undermine Plaintiff’s negotiation position with its creditors or otherwise jeopardize that process, and which expose Plaintiff’s trade secrets to risk from multiple sources.
74. Defendants acted in a manner inconsistent with their agency and trust by misappropriating Plaintiff’s confidential and trade secret documents and information to the injury of Plaintiff and for their own benefit and the benefit of certain third parties, and by acting against Plaintiff’s interests while and after employed by Plaintiff.
75. As a direct and proximate cause of Defendants’ disloyalty to Plaintiff and breach of their duties, Plaintiff has been and is being harmed, and faces severe risk of irreparable harm.
76. Plaintiff is entitled to its damages, in an amount to be determined at trial, as well as disgorgement from Defendants, and the forfeiture and return of all monies and compensation paid to them during their period of disloyalty, the exact amount to be determined at trial. Plaintiff is further entitled to injunctive relief against Defendants and all those acting in concert or participation with them, remedying their past improper conduct, and preventing such conduct in the future.
77. Defendants are still in possession of Plaintiff’s confidential and trade secret information, are able to access it, and are able to use this information to benefit certain Plaintiff creditors in the Plaintiff Restructuring, and to benefit other parties. Defendants have shared this confidential information with others who may use, or are using this information to Plaintiff’s detriment.
78. As a direct and proximate results of Defendants’ disloyalty, Plaintiff has been irreparably injured and has suffered damages in an amount to be determined at trial. Because its remedy at law is inadequate, Plaintiff seeks, in addition to damages, preliminary and permanent injunctive relief, enjoining Defendants, and all those acting in concert or participate with them, from further improper conduct, from further misappropriation and use of Plaintiff’s confidential and trade secret documents and information, seizure and return of the trade secrets and confidential information, and physical media, and all copies thereof.
FOURTH CLAIM FOR RELIEF
Breach of Written Contract (Defendant 2)
79. Plaintiff realleges and incorporates by reference each and every allegation set forth in paragraphs 1 through 78 above.
80. Pursuant to Defendant 2’s Employment Agreement, Defendant 2 was obligated to, inter alia: (a) to hold in strict confident and not to disclose Plaintiff’s confidential and trade secret documents and information outside of Plaintiff without Plaintiff’s approval; (b) comply with the Plaintiff’s internal code of conduct; (c) act responsibly for Plaintiff’s property; (d) return all Plaintiff property and all confidential and trade secret documents and information to Plaintiff upon first request; and (e) not to transfer Plaintiff’s confidential and trade secret documents and information to email that did not belong to Plaintiff.
81. Defendant 2 also breached his contractual obligations by transferring Plaintiff’s confidential and trade secret documents and information, including the Plaintiff Confidential Information, from his Plaintiff email account to his personal Gmail account without Plaintiff’s approval. Defendant 2 breached his contractual obligations by communicating with creditors of Plaintiff without authorization.
82. Moreover, Defendant 2 breached his contractual obligations by failing to return his Plaintiff mobile phone and laptop and the Plaintiff confidential and trade secret documents and information, after Plaintiff requested that he do so. Further, Defendant 2 breached his contractual obligations by failing to follow Plaintiff’s internal code of conduct. Critically, his misappropriation of Plaintiff’s confidential and trade secret documents and information, his failure to comply with explicit instructions, and his interference with an internal investigation are inconsistent with Plaintiff’s internal code of conduct.
83. As a direct and proximate result of Defendant 2’s breaches, Plaintiff has suffered extensive damage, the exact amount to be determined at trial.
84. Plaintiff will continue to be directly and proximately damaged and irreparably harmed, if Defendant 2 is not enjoined from further violation of his contractual obligations and if he is not directed to comply therewith, and prohibited from using and disclosing Plaintiff’s confidential and trade secret documents and information. Plaintiff has not adequate remedy at law as money damages along will not fully compensate Plaintiff, and injunctive relief is warranted to prevent further irreparable harm to Plaintiff.
85. Plaintiff accordingly seeks damages and preliminary and permanent injunctive relief.
FIFTH CLAIM FOR RELIEF
Breach of Implied Covenant of Good Faith And Fair Dealing (Defendant 2)
86. Plaintiff realleges and incorporates by reference each and every allegation set forth in paragraphs 1 through 85 above.
87. Defendant 2’s Employment Agreement contained an implied covenant of good faith and fair dealing. This implied covenant obligated Defendant 2 to refrain from doing any act that would deprive Plaintiff from the benefits of the agreement or that would impede Plaintiff from performing any or all of the conditions of the agreement that it agreed to perform.
88. Defendant 2’s misconduct as described herein breached the implied covenant of good faith and fair dealing. Defendant 2 failed to protect the secrecy of Plaintiff’s confidential and trade secret documents and information or to otherwise adequately perform his duties for Plaintiff. Instead, Defendant 2 misappropriated Plaintiff’s confidential and trade secret documents and information as described herein.
89. As a proximate result of these breaches and of the other improper conduct alleged above, Plaintiff has been irreparable injured and has suffered damages in an amount to be determined at trial. Because its remedy at law is inadequate, Plaintiff also seeks, in addition to its damages, preliminary and permanent injunctive relief.
SIXTH CLAIM FOR RELIEF
Unfair Competition Cal. Bus. & Prof. Code §§ 17200, et seq.
90. Plaintiff realleges and incorporates by reference each and every allegation set forth in paragraphs 1 through 89 above.
91. By obtaining Plaintiff’s confidential and proprietary material without its authorization or consent and disclosing the material and information outside of Plaintiff, including to Plaintiff creditors, and creating a risk of disclosure to Plaintiff’s competitors, Defendants have competed unfairly. Through their actions, Defendants have compromised the confidentiality of Plaintiff’s trade secrets, undermined Plaintiff’s competitive advantage in the market place, and has caused Plaintiff to incur costs and damage. Among other things, Defendants have given Plaintiff’s creditors an unfair advantage in negotiations during the Plaintiff Restructuring and created a risk of providing further benefits to creditors, adverse parties in an arbitration and competitors, and to the detriment of Plaintiff. Defendants, moreover, have simultaneously compromised Plaintiff’s opportunity to benefit from its ingenuity and efforts as embodied in its confidential and trade secret documents and information.
92. These acts and practices, as described herein, constitute unfair competition in violation of California Business and Professions Code, Sections 17200 et seq., as follows:
93. As a direct and proximate result of Defendants’ unfair competition in violation of Business and Professions Code, Sections 17200 et seq., Plaintiff is informed and believes, and thereon alleges, that Defendants have been unjustly enriched in an amount not yet ascertained.
(a)	Defendants’ violations of Civil Code Sections 3426 et seq., as alleged herein, constitute unlawful business acts or practices, within the meaning of Business and Professions Code Sections 17200 et seq.; and
(b)	Defendants’ acts in violation of their employment agreements and the implied covenant of good faith and fair dealing inherent therein, as alleged herein, are part of a concerted effort by Defendants to significantly threaten Plaintiff’s competitive advantage, specifically as to the Plaintiff Restructuring. Defendants’ conduct constitutes unfair business acts or practices within the meaning of Business and Professions Code, Sections 17200 et seq.
94. As a direct and proximate result of Defendants’ unfair competition in violation of Business and Professions Code, Sections 17200 et seq., Plaintiff has suffered and will continue to suffer great and irreparable harm. Defendants threaten to commit further violations of Business and Professions Code, Sections 17200 et seq. and, unless restrained and enjoined, will do so, all to Plaintiff’s irreparable damage. Plaintiff’s remedy at law is not by itself adequate to compensate Plaintiff for the harm Defendants have inflicted and threatened. Accordingly, Plaintiff seeks preliminary and permanent injunctive relief pursuant to, inter alia, Business and Professions Code, Section 17203.
SEVENTH CLAIM FOR RELIEF
Common Law Misappropriation and Unfair Competition
95. Plaintiff realleges and incorporates by reference each and every allegation set forth in paragraphs 1 through 94 above.
96. Plaintiff has expended considerable time and money developing the confidential and proprietary material that Defendant obtained-including but not limited to, information regarding Plaintiff products and systems, presentations outlining Plaintiff’s current systems and plans for future products, and other intellectual property, as well as internal valuable strategies regarding the operations of the business and credit facilities, all of which is the company’s valuable intellectual property.
97. Defendant has taken Plaintiff’s confidential and proprietary material without authorization and has disclosed and/or used the Plaintiff confidential and proprietary material and information without authorization or permission from Plaintiff.
98. As a consequence of Defendant’s unauthorized disclosure and use of Plaintiff’s confidential and proprietary material, Plaintiff has been harmed. Plaintiff is informed and believes, and on that basis alleges, that Defendant’s conduct constitutes common law misappropriation and unfair competition and were carried out willfully, fraudulently, maliciously and with the wanton disregard of Plaintiff’s rights, thereby entitling Plaintiff to compensatory and punitive damages to be proven at trial.
PRAYER FOR RELIEF
WHEREFORE, Plaintiff prays for judgment in its favor and against Defendants, inclusive as follows:
A. Awarding damages as described in each of the above claims, in favor of Plaintiff and against Defendants in amounts to be determined at trial, and further directing forfeiture and disgorgement of all amounts paid by Plaintiff to Defendants during the period of disloyalty;
B. Granting a temporary and permanent injunction against Defendants, enjoining them from violating their legal and contractual duties to Plaintiff, from misappropriating or from using Plaintiff’ s confidential and trade secret documents and information, including the Plaintiff’s Confidential Information, and directing Defendants to return all of Plaintiff’s property;
C. Awarding punitive damages in favor of Plaintiff and against Defendants in an amount to be determined at trial;
D. Awarding Plaintiff pre-judgment and post-judgment interest, its attorneys’ fees, and costs and other expenses incurred in this action;
E. Granting Plaintiff such other and further relief as this Court deems just and proper.
JURY DEMAND
Plaintiff demands jury trial for all issues so triable.
Dated: [date]
[names and signatures of Attorneys for Plaintiff]
Attorneys for Plaintiffs [names of Plaintiffs]