Boston Scientific Corporation v. Takaahashi, et al. (Lawyers Weekly No. 09-012-17)
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COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, so SUPERIOR COURT
CIVIL ACTION
NO. 2017-02976 BLS 2
BOSTON SCIENTIFIC CORPORATION,
Plaintiff
vs.
LYNN TAKAAHASHI, GENE ZIGRA, JONATHAN OLSEN,
And NUVECTRA CORPRATION
Defendants
MEMORANDUM OF DECISION AND ORDER ON
PLAINTIFF’S MOTION FOR PRELIMINARY INJUNCTION
This is an action against three former employees of the plaintiff Boston Scientific Corporation (Boston Scientific) and their current employer, the defendant Nuvectra Corporation. The three individual defendants all reside in California and performed work for Boston Scientific in California until they resigned from the company on September 7, 2017. Boston Scientific alleges that upon their departure, the three took with them proprietary information relating to customer pricing and solicited least one Boston Scientific employee to join them at Nuvectra. Boston Scientific now seeks a court order prohibiting the employees from using or disclosing this information or from soliciting any other Boston Scientific employees. The request also seeks to prevent the individuals from doing any work for Nuvectra for some undefined period of time while an “accounting” is done of the information they allegedly took, even though their employment agreements with Boston Scientific do not include any provisions preventing them from working for a competitor or from soliciting Boston Scientific customers.
In connection with this request, the Court has considered various affidavits, including those of the three employees who specifically deny taking any confidential information. This
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Court has also considered the fact that Nuvectra itself took certain steps in advance of any litigation to ensure that the individuals returned all electronic devices they used while working at Boston Scientific, and has temporarily sidelined (or “benched”) them during this process. Based on these submissions as well as the memoranda and arguments of the parties, this Court concludes that the plaintiff has not demonstrated that it has a reasonable likelihood of success on the merits, or that it would suffer any irreparable harm if the injunction did not issue. Packaging Industries v. Cheney, 380 Mass. 609, 616, 617 (1980). Of particular importance to the Court’s conclusion is the following:
1. The information that Boston Scientific alleges was wrongfully taken were Product Billing Forms, which contain serial numbers of the products sold together with their price. In order for a nondisclosure agreement to be enforceable, the information it protects must be confidential, however. See Dynamic Research Corp. v. Analytic Scis. Corp., 9 Mass.App.Ct. 254, 278 (1980). Conceding that the forms contain no trade secrets, Boston Scientifics argues that they are nevertheless worthy of protection because they include “pricing packages” that are customized to meet the needs of its individual customers. Clearly, this pricing information has been shared with each customer, however, since the forms are generated in order to bill the customer; because the defendants are not prohibited from soliciting Boston Scientific customers, they could easily obtain the same information from the customer himself. Moreover, the defendants have produced evidence that product descriptions together with the identities of those who use such products are publicly available.
2. Even if these Product Billing Forms were confidential and proprietary, this Court is not convinced that the plaintiff will be able to prove that the individual defendants actually took the forms with them so that they could use them at Nuvectra. The individual defendants admit
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that they accessed these forms in the days leading up to their departure from Boston Scientific, but they state that they did so as part of their regular work duties — specifically in order to invoice customers who had already bought a product. They explain that it was important to finish that work before they left, because their commissions are based on the invoices they generate. In short, they did not “steal” anything from Boston Scientific.
3. Upon being contacted by Boston Scientific about the prospect of this lawsuit, Nuvectra immediately took steps to ensure that the individual defendants returned all Boston Scientific devices and information in their possession, thus diminishing any claim by the plaintiff that it is at risk of suffering irreparable harm. Each individual has also pledged not to solicit any Boston Scientific employee. Boston Scientific insists that it still needs a court order in place to ensure that they keep their word. Speculative harm cannot justify an injunction, however.
4. Finally, it does appear to this Court that what is truly motivating Boston Scientific is its hope that it can delay if not outright prevent its former employees from soliciting Boston Scientific customers – something that they are clearly permitted to do. Significantly, this lawsuit arises from events that occurred almost entirely in California, which prohibits noncompetition and nonsolicitation agreements. A court order would essentially make an end-run around that prohibition.
For these reasons together with other reasons set forth in the defendants’ Opposition, the plaintiff’s Motion for a Preliminary Injunction is DENIED.
________________________________
Janet L. Sanders
Justice of the Superior Court
Dated: September 26, 2017
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