The opinion of the court was delivered by: Jose E. Martinez United States District Judge
ORDER GRANTING IN PART AND DENYING IN PART MOTION FOR PRELIMINARY INJUNCTION
THIS CAUSE came before the Court upon Plaintiffs' Verified Emergency Motion for Preliminary Injunction (D.E. No. 4). The Court held a hearing on this motion on April 5, 2011. See (D.E. No. 40). After careful consideration and for the reasons set forth below, the Court grants in part and denies in part Plaintiffs' motion for a preliminary injunction.
I. Relevant Factual and Procedural Background
Plaintiff Marine Turbo Engineering, Ltd. ("Marine Turbo, Ltd.") is located in Birkenhead, England and is "a repair and maintenance company that specializes in turbochargers for power plants and large ships." (D.E. No. 1-1, Compl. at ¶ 17);*fn1 see also (D.E. No. 39, Aff. of Stanley Dean at ¶ 3). Marine Turbo, Ltd. and its Associated Companies*fn2 "maintain workshops around the world that service turbochargers on-ship, at dock, at anchor, off-shore and on-land." (D.E. No. 1-1, Compl. at ¶ 17). Plaintiff Marine Turbo Engineering, LLC ("Marine Turbo, LLC") is one of Marine Turbo, Ltd.'s Associated Companies. (D.E. No. 39, Aff. of Stanley Dean at ¶ 11). Plaintiff Marine Turbo, LLC owns Plaintiff Marine Turbo Engineering (USA), LLC ("Marine Turbo (USA), LLC"). Id. at ¶ 6. Marine Turbo (USA), LLC never became operational and "did not hold active accounts, nor did it generate or receive income or pay any expenses." (D.E. No. 1-1, Compl. at ¶ 19). Marine Turbo, Ltd. "pays expenses for and provides common business services" to Marine Turbo, LLC. (D.E. No. 39, Aff. of Stanley Dean at ¶ 5). Marine Turbo, LLC maintained a worshop at 3708 SW 30th Ave., Ft. Lauderdale, Florida 33312. Id. at ¶ 4.
Defendants Glyn Clemson, Karen Clemson, Kathleen Kent ("Kent"), Gerrit Walters ("Walters"), and Ivar Koek ("Koek") were all employees of Plaintiffs. (D.E. No. 39, Aff. of Stanley Dean at ¶¶ 7- 21). Defendant Glyn Clemson became an employee of Marine Turbo, Ltd. in 2003. Id. at ¶ 7. In 2005, Marine Turbo, Ltd. relocated Glyn Clemson to a position in the Bahamas. Id. at ¶ 8. On June 27, 2005, Glyn Clemson executed an employment agreement with Marine Turbo, Ltd. and its Associated Companies. (D.E. No. 1-1, Exh. A at 28, 41, 45). This agreement contains certain restrictions on competition and disclosure of confidential information. Id. at 28-45. In 2008, Glyn Clemson was once again relocated to Ft. Lauderdale to manage Marine Turbo, LLC's North and South American operations as well as their Bahamian operations. Id. at 10.
Karen Clemson was also an employee of Marine Turbo, LLC. (D.E. No. 153-2, Sworn Statement of Kent at 11-12); (D.E. No. 4-1, Exh. B at 25). Karen Clemson was hired by her husband, Glyn Clemson, to do the Bahamas bookkeeping. Id. at 11.
Kent was also an employee of Marine Turbo, LLC who was hired to perform bookeeping and account coordination in the Ft. Lauderdale workshop. Id. at 10-11. Kent has since been dismissed from this action, and Plaintiffs have filed her detailed sworn statement regarding the actions of her former co-defendants. (D.E. Nos. 153-2,168).
Walters was also an employee of Plaintiffs. (D.E. No. 4-1, Exh. C); (D.E. No. 39, Aff. of Stanley Dean at ¶ 21). He was hired on a trial basis to see if he could generate work for Marine Turbo, LLC. Id. Walters has since been dismissed from this action, and Plaintiffs have filed a sworn statement regarding the actions of his former co-defendants. (D.E. Nos. 131-1,168).
Finally, Koek was employed by Marine Turbo, LLC since 2008 when it was headquartered in Mobile, Alabama. Id. at 15. Koek was employed to take work orders and to provide service and repair work. (D.E. No. 4-1, Exh. B at 26, 28).
Defendant Leonardo Da Motta ("Da Motta") sought employment with Marine Turbo, LLC and Marine Turbo, Ltd. to act as a salesman. (D.E. No. 39, Aff. of Stanley Dean at ¶¶ 22, 23). Da Motta interviewed with Glyn Clemson, and Glyn Clemson reported back to the owners of Marine Turbo, Ltd. and Marine Turb, LLC that Da Motta demanded too high a salary, and thus, Da Motta was not hired by Plaintiffs. Id. at ¶ 24. Da Motta, however, was hired by Glyn Clemson as the Director of Sales for Defendant Turbocharger Services Worldwide, LLC ("TSW"), a competing turbocharger servicing business. (D.E. No. 4-1, Exh. G at 60). Da Motta worked out of Plaintiffs' Ft. Lauderdale office. Id.; (D.E. No. 153-2, Sworn Statement of Kent at 62).
TSW was formed by Glyn Clemson and Kent on April 15, 2010. (D.E. No. 4-1, Exh. D at 39). The principal address of TSW was listed as the same as Plaintiffs' Ft. Lauderdale workshop. Id. TSW engaged in the same business as Plaintiffs; namely, repairing and servicing marine turbochargers. Id., Exh. F at 54-55, 58-78. TSW operated out of the Plaintiffs' Ft. Lauderdale workshop using Plaintiffs' equipment, including their computers, and Plaintiffs' facilities. Id., Exh. G at 58; (D.E. No. 39-7 at 1-6); (D.E. No. 153-2, Sworn Statement of Kent at 34-35, 42, 62-63, 116, 127-128). Defendants' employees, Glyn Clemson, Kent, Walters, and Koek and Da Motta, an employee of TSW, actively worked for TSW and actively engaged in direct competition with Plaintiffs in North and South America and the Caribbean Basin, at times providing identical services to identical customers formerly serviced by Plaintiffs. (D.E. No. 4-1, Exh. F at 54; Exh. G at 58-59, 61, Exh. J, Exh. K at 90-96); (D.E. No. 153-2, Sworn Statement of Kent at 71-72).
Around the same time that TSW was established, Koek, Clemson, and Walters established Defendant Turbo Di Corp., S.A. ("TDC"), another competing turbocharger servicing business in Ecuador. (D.E. No. 201-2 at 1-4); (D.E. No. 4-1, Exh. F at 56). Work for TDC was also performed out of Plaintiffs' Ft. Lauderdale workshop, and the address of the workshop was also used in association with TDC. (D.E. No. 39, Aff. of Stanley Dean at ¶¶ 30-34); (D.E. No. 43-1 at 1-3). Defendants' employees, Glyn Clemson, Kent, Walters, and Koek actively worked for TDC, and TDC actively engaged in direct competition with Plaintiffs in Ecuador, at times providing identical services to identical customers formerly serviced by Plaintiffs. (D.E. No. 43-2, 7-8); (D.E. No. 39-6 at 1-2); (D.E. No. 39-7 at 3-6); (D.E. No. 39-8 at 1-20).
On December 7, 2010, Stanley Dean, the owner of Marine Turbo, Ltd. made a surprise visit to the Ft. Lauderdale workshop and immediately terminated Glyn Clemson and Kent. (D.E. No. 39, Aff. of Stanley Dean at ¶¶ 3, 26, & 27).
Plaintiffs have filed a ten-count complaint against Defendants alleging, breach of employment agreement,*fn3 violation of Florida's Uniform Trade Secrets Act, violation of the Computer Fraud and Abuse Act, civil conspiracy, tortious interference with advantageous business relationships, conversion and misappropriation of corporate assets and opportunities, breach of fiduciary duty,*fn4 and breach of common law duty of loyalty.*fn5 In Count IX, Plaintiffs seek an injunction, and in Count X, Plaintiffs seek a declaratory judgment against Glyn Clemson declaring his interest in Marine Turbo (USA), LLC.
Plaintiffs filed a motion for a preliminary injunction asking the Court to enter an order enjoining all Defendants from:
(1) competing either directly or indirectly with Plaintiffs in their geographic territory of operations; (2) possessing or seeking to possess any of Marine Turbo's assets or corporate materials; (3) misrepresenting themselves as being employed by, working for or on behalf of, or being associated in any manner with, Marine Turbo, Ltd. or any of its Associated Companies . . .; (4) contacting any of Plaintiffs' customers or prospective customers; (5) using any confidential information or trade secrets obtained through Defendants' former employment to their advantage vis-a-vis Marine Turbo; and (6) assisting, being employed by, engaging in, or taking a greater than 1% interest in any company . . . that competes with Marine Turbo. (D.E. No. 4 at 20). The Court grants in part and denies in part Plaintiffs' motion.
"A preliminary injunction is an 'extraordinary and drastic remedy.'" Citizens for Police Accountability Political Committee v. Browning, 572 F. 3d 1213, 1217 (11th Cir. 2009) (quoting McDonald's Corp. v. Robertson, 147 F. 3d 1301, 1306 (11th Cir. 1998)). "To secure an injunction, a party must prove four elements: (1) a substantial likelihood of success on the merits; (2) irreparable injury absent an injunction; (3) the injury outweighs whatever damage an injunction may cause the opposing party; and (4) an injunction is not adverse to the public interest." Browning, 572 F. 3d at 1217.
Plaintiffs seek an injunction on the basis of their claims in Count I, breach of the employment agreement, Count II, violation of Florida's Uniform Trade Secrets Act, Count III, violation of the Computer Fraud and Abuse Act, and Count V, tortious interference with business relationship.*fn6 See (D.E. No. 4 at 9, 15-16).
A. Substantial Likelihood of Success on the Merits
1. Breach of the Employment Agreement
First, Plaintiffs seek a preliminary injunction on the basis of their claim against Defendant Glyn Clemson for breach of the employment agreement. Plaintiffs allege that Glyn Clemson has breached an employment agreement he signed with Plaintiff Marine Turbo, Ltd. in 2005. (D.E. No. 1-1 at 11). Plaintiffs alleged that Clemson violated "paragraphs 3.1, 3.2, 3.4, 3.6, 17.1, 17.2, 17.4, 17.5, 17.7, 19.1, and 19.2 of his agreement by defalcating and otherwise misappropriating MARINE TURBO's property, customers, trade secrets, business methods, benefits, corporate opportunities and other assets and establishing TSW, LLC. And TDC, S.A. (D.E. No. 1-1 at 12). Plaintiffs' request for an injunction relate to Glyn Clemson's breach of restrictive covenants in sections 17, 19, and 20 of the employment agreement. The Court finds that Plaintiffs have demonstrated a substantial likelihood of success as to this claim.
The relevant provisions of the employment agreement that Plaintiffs allege Clemson violated in Count I are as follows*fn7
17.1 The Employee may not directly or indirectly carry on or assist in carrying on or be employed or engaged in any other business or work of any kind except by investments up to £[10,000] each of a passive nature which, other than for monitoring by the receipt and perusal of accounts and reports, require no time or effort on the part of the Employee.
17.2 The Employee shall not directly or indirectly carry on or assist in carrying on or be employed or engaged in or be interested in any way in any business which competes with that of the Company except as the owner of shares or securities in any company dealt with on any recognised stock exchange entitling the holder to exercise not over % of the total votes exercisable at general meetings of its member.
17.4 If the Employee is in breach of any of the terms of his or her employment he or she shall immediately disclose the breach to the Company and if he or she becomes aware of any breach of the terms of employment of any other employee he or she shall disclose the breach to the Company as soon as he or she becomes aware of it.
17.5 The Employee shall not use or otherwise turn to his or her advantage his or her knowledge of or any connection with any of the customers of or suppliers to the Company so as to take any direct or indirect advantage of the business ...