Indiana Intellectual Property Law News
South Bend, Indiana – The United States District Court for the Northern District of Indiana entered a Temporary Restraining Order against Darkhorse Cargo, Inc. (“Darkhorse”) and its employees (collectively “Defendants”) regarding trade secrets and confidential information of Plaintiff, RC Trailers, Inc. (“RC”).
RC manufactur
es and distributes cargo and specialty trailers throughout the United States. According to RC, it expends a lot of time, effort, and expense to maintain dealer and vendor relationship using trade secrets and confidential business information. RC claims it uses confidentiality provisions in its employee handbooks, passwords, disclaimers on confidential communications, and o
RC’s former president, Defendant Bryan Johnson (“Johnson”), ended his employment with RC in September 2018 and signed an agreement that contained non-solicitation and non-recruitment covenants that expired one year later. After Johnson’s departure, he claims many RC employees were unhappy to see him leave and wanted to work for him elsewhere. In the spring of 2019, RC promoted Defendant Joseph Kiefer (“Kiefer”) from CFO to acting General Manager. Kiefer claims that RC employees were talking about wanting Johnson to open his own trailer company prior to Kiefer terminating his employment with RC in June 2019. Prior to his leaving RC, Kiefer allegedly tried to recruit RC’s sales professional to join Darkhorse, indicating the business would be started by Kiefer and Johnson in the near future. RC claims that unbeknownst to it, Kiefer deleted the post-employment restrictions in his non-compete agreement before signing and returning it to RC upon his departure.
On September 23, 2019, less than five days after Johnson’s restrictive covenants expired, RC employees began resigning in large numbers to be employed by Darkhorse. The RC employee that began overseeing the finances of RC after Kiefer’s departure discovered confidential and trade secret information that was taken by Defendants. At least one of the Defendants even emailed herself “an excel spreadsheet containing RC’s comprehensive private financial data from the past three years.” Following multiple cease and desist letters and communications, including communication that Defendants had cooperated and returned RC’s property, Defendants produced new property belonging to RC. The USB that was belatedly turned over contained templates and contact information that was modified for Darkhorse’s use as “DH” appeared before the various parts listed. Thereafter, RC renewed its request for a TRO.
The Court found that RC is likely to succeed on the merits of its claims of misappropriation of trade secrets, unfair competition, breach of fiduciary duties, and conversion. Additionally, the Court found that “RC is likely to suffer irreparable harm for which there is no adequate remedy at law if the Court were not to enter a TRO” because “Defendants’ activities likely caused the massive loss of RC’s workforce and at least some harm to RC’s reputation and goodwill.”
Finally, the Court held that granting the TRO would uphold the public’s interest in ensuring the enforcement of state and federal laws to protect trade secrets and legitimate business interests.
The case was assigned to Judge Jon E DeGuilio and Magistrate Judge Michael G. Gotsch, Sr. in the Northern District of Indiana and assigned Case 3:19-cv-00973-JD-MGG.