AIRPRO DIAGNOSTICS, LLC,
AIRPRO DIAGNOSTICS, LLC,
Case No. 3:16-cv-984-J-34JRK
January 20, 2017
Courtroom No. 10B
PRELIMINARY INJUNCTION HEARING
BEFORE THE HONORABLE MARCIA MORALES HOWARD
UNITED STATES DISTRICT JUDGE
JAMES ARTHUR BOLLING, ESQ.
MICHAEL EDWARD DEMONT, ESQ.
Smith, Hulsey & Busey
225 Water Street, Suite 1800 PO Box 53315
Jacksonville, Florida 32202-3315
GEOFFREY HEEKIN, ESQ.
AUSTIN T. HAMILTON, ESQ.
Heekin, Malin & Wenzel, PA
One Independent Drive, Suite 2200 PO Box 477
Jacksonville, Florida 32201
Shannon M. Bishop, RDR, CRR
221 North Hogan Street, #150
Jacksonville, Florida 32202
(Proceedings recorded by mechanical stenography;
transcript produced by computer.)
2 January 20, 2017 2:00 p.m.
4 COURT SECURITY OFFICER: All rise. The United States
5 District Court in and for the Middle District of Florida is now
6 in session. The Honorable Marcia Morales Howard presiding.
7 Please be seated.
8 THE COURT: Let me get my computer going.
9 All right. This is Case No. 3:16-cv-984-J-34JRK.
10 It’s Repairify, Inc., versus AirPro Diagnostics, LLC, Charles
11 Olsen, and Wilfredo Rodriquez.
12 And counsel beginning with the plaintiff, if you
13 could make your appearances for the record.
14 MR. BOLLING: Your Honor, I’m Jim Bolling, and Mike
15 Demont, on behalf of Repairify.
16 MR. HEEKIN: Your Honor, I’m John Heekin on behalf of
17 all the defendants.
18 MR. HAMILTON: Austin Hamilton, Your Honor.
19 THE COURT: All right.
20 MR. HAMILTON: And in the courtroom we also have
21 Rodney Margol and we have Wilfredo Rodriquez. Mr. Olsen hoped
22 to be here today, but his mother-in-law passed away and he’s up
23 in New Jersey, unfortunately, for that.
24 THE COURT: Oh, I’m sorry to hear that.
25 MR. HAMILTON: Yeah.
1 THE COURT: Okay. So we are here on Repairify’s
2 motion for a preliminary injunction, which is document number
3 41. And it was filed on December 27th, 2016.
4 Defendant has filed a response in opposition to that.
5 And I don’t have the docket number for it, but — but there’s a
7 And then we have a reply — Repairify’s reply
8 memorandum that was filed January 17th. That’s document number
9 48. And then there is an objection to and/or motion to strike
10 the exhibits attached to Repairify’s reply. And it’s document
11 number 50.
12 And I think that what we’re going to do is — I’m
13 just going to set the — the objection and motion to strike
14 aside for now, and I’m going to hear the arguments.
15 And at the conclusion of the arguments, if it is —
16 if there is material in that — in those specific exhibits that
17 is going to be determinative, I’ll — I’ll let you-all address
18 that at that time.
19 Mr. Bolling, I do have some questions for you with
20 regard to the motion. And I’m a little confused about
21 Mr. Rodriquez.
22 You are seeking a preliminary injunction as to the
23 claim that is in Count Seven of the amended complaint, and that
24 is your breach of contract claim against Mr. Rodriquez.
25 But what’s pled in Count Seven of the amended
1 complaint is that Mr. Rodriquez works for AirPro. And it
2 appears that everybody is in agreement that he doesn’t work for
3 AirPro; he works for Nationwide Parts Distributors.
4 And given that you have to — in order to get a
5 preliminary injunction, you have to show a substantial
6 likelihood of success on the claim, isn’t that fatal to your
8 MR. BOLLING: I don’t believe so, Your Honor.
9 THE COURT: How is it not? The claim that’s pled in
10 the complaint, based on the evidence, is going to fail, because
11 he’s not — he’s not employed by AirPro.
12 MR. BOLLING: Both Mr. Margol’s affidavit, which is
13 Exhibit 3 to the response, and Mr. Rodriquez’s affidavit, which
14 is Exhibit 2 to the response, say that Mr. Rodriquez works for
15 Nationwide, which is at the same address as AirPro, and that
16 Mr. Rodriquez performed scans, I believe, in — I’m quoting
17 this — from time to time, on behalf of AirPro. And so he’s
18 employed by Nationwide, but does work for AirPro from time to
20 THE COURT: There’s no allegation anywhere in any of
21 the — nothing that I see in any of the materials tells me what
22 Nationwide does, whether Nationwide competes with Repairify or
24 And if Nationwide doesn’t compete with Repairify and
25 he’s employed by Nationwide, what difference does it make that
1 they may be affiliated entities or that they are in the same
2 physical address? If they’re separate corporate entities —
3 MR. BOLLING: Well, both Mr. Margol and Mr. Rodriquez
4 admit that Mr. Rodriquez does work for AirPro.
5 THE COURT: They say from time to time he does scans
6 for AirPro.
7 MR. BOLLING: Which means that Mr. Rodriquez is —
8 when we’re talking about scans, there’s an AirPro device at a
9 body shop someplace in the country, and Mr. Rodriquez is
10 communicating with that body shop about remote diagnostics of
11 the vehicle, and is thereby competing with Repairify.
12 Now, he — he — technically, he’s an employee of
13 Nationwide, but he’s performing work for AirPro. And so we
14 argue that he is, therefore, competing with AirPro.
15 THE COURT: Well, competing with Repairify.
16 MR. BOLLING: Correct. And I can show you in the
17 record where they say —
18 THE COURT: No. I know they said that. I recall it
19 well. But I’m just — what I’m saying to you is, I’m
20 questioning whether — what you’re saying is that regardless of
21 who he’s working for, if he is using an AirPro product, that
22 means he’s competing with Repairify.
23 MR. BOLLING: He’s not only using an AirPro product,
24 he’s performing scans on behalf of AirPro. I probably ought to
25 get out the precise quote of what —
1 THE COURT: I — I read it. And I think I even
2 quoted it myself in my notes. I don’t have — I’m not
3 questioning whether both Mr. Margol and Mr. Rodriquez say that
4 he’s employed by Nationwide and that he does scans on behalf of
5 or for AirPro from time to time.
6 I — I agree that that’s what the evidence is. What
7 I’m questioning is whether that evidence is — would be
9 And stepping back from that, the — probably the more
10 basic problem, I think, is that’s not what’s pled in your —
11 what you’re arguing now is not what’s pled in your complaint.
12 And you can’t amend your complaint by arguments in a motion.
13 What the complaint alleges is that he’s employed by
14 AirPro and that he’s competing with — and that — that by
15 virtue of that employment, he’s competing with Repairify.
16 MR. BOLLING: Well, he’s performing work for AirPro.
17 And that should make him an employee. He’s doing work for
18 AirPro. We served — we thought he worked for AirPro.
19 THE COURT: That’s evident by paragraph 84 of the
20 amended complaint.
21 MR. BOLLING: And then — and we had him served at
22 AirPro’s address.
23 THE COURT: Which is also Nationwide.
24 MR. BOLLING: Which is also Nationwide’s address. So
25 he’s working for AirPro from time to time, although his
1 full-time job, apparently, is with Nationwide.
2 THE COURT: So if he — all right. If I look — view
3 it that way, if he’s working for AirPro from time to time, how
4 are you irreparably harmed?
5 MR. BOLLING: He is using the specialized and
6 extraordinary training that he received in Remote Diagnostics
7 at AEST and at Repairify.
8 THE COURT: What special extraordinary training did
9 he receive at Repairify?
10 MR. BOLLING: He helped develop the AsTech device.
11 They both —
12 THE COURT: No. I asked about what did he get at
13 Repairify, not at AEST.
14 MR. BOLLING: Oh, we argue that Repairify has a
15 legitimate business interest in the training and knowledge and
16 confidential information that Mr. Olsen and Mr. Rodriquez
17 received at AEST. And I can go over the facts that support
18 that proposition.
19 THE COURT: Well, before we get there, answer this
20 question: Did either Mr. Rodriquez or Mr. Olsen obtain any —
21 I’m trying to word my question carefully. So Mr. Olsen was
22 with Repairify for four months — Mr. Olsen was there for four
23 months. Mr. Rodriquez was there for about a year.
24 During Mr. Olsen’s four months and Mr. Rodriquez’s
25 one year, at Repairify only — let’s — not talking about
1 AEST — did either of them get any trade secrets of Repairify?
2 MR. BOLLING: Yes.
3 THE COURT: What?
4 MR. BOLLING: They were — let’s start with
5 Mr. Olsen. Mr. Olsen says in his affidavit, which is Exhibit 1
6 to the response, that he, when he was at Repairify, was
7 performing testing and trials of the AsTech to identify its
9 And we believe those weaknesses, the information that
10 he learned from performing tests and trials of AsTech, is
11 Repairify’s confidential trade secret information.
12 THE COURT: What my — that testing and training that
13 was done on the AsTech device is the testing and training from
14 Mr. Kelly’s affidavit that resulted in the — resulted in — in
15 the AsTech 2 device being made, right?
16 MR. BOLLING: Correct. Correct. What — what he
17 says specifically — what Mr. Olsen says specifically in his
18 affidavit is, During my less-than-four-month employment with
19 Repairify, my primary job responsibilities included research
20 and development activities to solve functional problems with
21 AsTech Version 1 and initial design of AsTech Version 2. And
22 that’s at page 19, paragraph 16, of his affidavit, which is
23 Exhibit 1 to the response.
24 THE COURT: AsTech Version 2 was developed — or was
25 rolled out — was introduced on July 5th of 2015.
1 MR. BOLLING: ’16, I believe, wasn’t it? Or, no —
2 yes, it was the middle of last year.
3 THE COURT: Okay. It’s stated differently in two
4 different places, so…
5 MR. BOLLING: I’m sorry, Your Honor? I didn’t hear
7 THE COURT: Oh, it’s — there must be a typo in one
8 place. It says it two different ways in two different places.
9 But — so you’re saying it was in July of 2016, not July of
11 MR. BOLLING: Correct.
12 THE COURT: Mr. Heekin, is that consistent with your
13 understanding, sir? I just don’t know which of these to rely
15 MR. HEEKIN: The dates, Your Honor?
16 THE COURT: Was AsTech 2 released in 2015 or 2016?
17 MR. HEEKIN: In 2016, Your Honor.
18 THE COURT: Okay. All right. Other than the
19 information — the — whatever information that — gained about
20 the AsTech 2 device — or in testing the AsTech 2 device, what
21 other confidential information or training did he receive at
23 MR. BOLLING: We’re relying principally on the
24 confidential trade secret information of Repairify that
25 Mr. Olsen learned as part of the testing and trial — trials of
1 AsTech in identifying the weakness of the AsTech device.
2 THE COURT: All right. And what — what customer
3 information did he — did either Rodriquez or Olsen obtain
4 while at Repairify?
5 MR. BOLLING: In our motion, Exhibit 1, which is the
6 Kelly affidavit, he says that both Mr. Olsen and Mr. Rodriquez
7 had extensive contacts with Repairify’s customers, including
8 Mr. Olsen responding to customer concerns and helping resolve
10 And then Mr. Rodriquez did much of the same thing as
11 part of his scanning on behalf of Repairify. But we’re
12 principally relying on the confidential trade secret
14 THE COURT: The — with regard to customer
15 information, is there any — any piece of that customer
16 information that you could identify as them having obtained
17 during your employment with Repairify, as opposed to prior to?
18 MR. BOLLING: No.
19 THE COURT: In the response to the motion for
20 preliminary injunction, Mr. — or defendants have argued that,
21 in addition to Mr. Olsen, three other individuals — well,
22 Mr. Margol and three other individuals are working — who
23 previously worked for AEST are now working for Repairify.
24 Why wouldn’t those individuals have all of the same
25 information? Why is Mr. Olsen — is it — is Mr. Olsen’s
1 additional employment there, or Mr. Rodriquez’s, causing you
2 irreparable harm?
3 MR. BOLLING: Well, with regard to the — and
4 we’re — we’re principally focused on the software and code
5 involved in the AsTech device. And the other folks that you
6 just mentioned did not work for Repairify, as I understand it.
7 Mr. Margol didn’t work for AEST, even, for the last
8 several months of AST’s — AEST’s existence. And so those
9 folks never worked for Repairify and did not have — were not
10 privy to the testing and trials that are described in
11 Mr. Olsen’s affidavit and in Mr. Kelly’s declaration, which is
12 Exhibit 3 to the reply.
13 THE COURT: So the entirety, then, of what you’re
14 relying on in seeking to enforce the noncompete is the
15 additional information that Mr. Olsen learned in the testing
16 and trial of the AsTech device that resulted in the rolling out
17 of the AsTech 2?
18 MR. BOLLING: Not the entirety, Your Honor, but
19 that’s our principal basis for arguing that they’re —
20 Repairify has a legitimate — legitimate business interest in
21 enforcing the noncompetition agreement that Mr. Olsen signed.
22 THE COURT: What would be the basis of enforcing it
23 against Mr. Rodriquez, who wasn’t involved in those trials?
24 MR. BOLLING: Which —
25 THE COURT: What would be the basis of enforcing it
1 against Mr. Rodriquez that was not involved in those — in that
2 testing or trials?
3 MR. BOLLING: Mr. Olsen — or Mr. Rodriquez, rather,
4 in his affidavit, said that he was involved in the development
5 of AsTech. And that is Exhibit 2 to the response.
6 THE COURT: Tell me what — what paragraph you’re
7 referring to there.
8 MR. BOLLING: On page two, in paragraph eight,
9 Mr. Rodriquez says, I performed automotive remote scanning and
10 diagnostics and development for AEST and for CDS, which is —
11 that’s the doing-business-as name for AEST and, now, Repairify.
12 THE COURT: Right. But that would be — that would
13 be information he gained while at Repairify.
14 MR. BOLLING: At AEST and Repairify.
15 THE COURT: With regard to Mr. Olsen, I understood
16 you to be specifically relying on the additional testing to
17 identify AsTech’s weaknesses, which was done, it looks like, in
18 part, beginning in — under AsTech, but maybe it was completed
19 and under Repairify.
20 MR. BOLLING: Correct.
21 THE COURT: There’s no similar allegation that
22 Mr. Rodriquez was involved in any of that. So what is — what
23 is the basis of — of enforcing the noncompete agreement
24 against Mr. Rodriquez?
25 MR. BOLLING: In the Kelly affidavit, which is
1 Exhibit 3 to the reply, on page four, paragraph 10, it says
2 that Olsen and Wilfredo Rodriquez had access to Repairify’s
3 corporate archive with most of Repairify’s electronically
4 stored information, including customer contact information and
5 research and development of software.
6 And as discussed in my previous affidavit, that
7 software is a Repairify trade secret. Olsen and, to a lesser
8 extent, Rodriquez were involved in the development of that
10 THE COURT: I’m sorry? What is that last point that
11 you read?
12 MR. BOLLING: That was Exhibit 3.
13 THE COURT: No. I see it. But you said Olsen and,
14 to a lesser degree, Rodriquez — you weren’t reading from —
15 MR. BOLLING: I’m reading from Doug Kelly’s
16 declaration, which is Exhibit 3 to the reply.
17 THE COURT: Right. Where is the statement —
18 MR. BOLLING: That’s paragraph 10 on page four.
19 THE COURT: When — when were they involved in the
20 development of that software?
21 MR. BOLLING: Well, according to Rodriquez’s
22 affidavit, it was while he was at CDS, which is the doing
23 business name of AEST and then Repairify.
24 And here it says that Rodriquez had access to this
25 software information during his time at Repairify and that he
1 helped develop it. And it’s — it doesn’t say.
2 But he was involved, to my understanding. But as to
3 the timing as between AEST and Repairify, what we have is
4 Mr. Rodriquez’s affidavit, which says that it was while he was
5 at CDS, which is ambiguous, because it applies to both AEST and
7 THE COURT: And exactly what is — so the AEST
8 product is patented. And so the defendants say it’s public
9 information and it’s not a trade secret.
10 What precisely is it that is a trade secret of
11 Repairify’s that you’re saying they have access to that they
12 didn’t — that they didn’t already know or have access to when
13 they were at AEST?
14 MR. BOLLING: See, the patent, which is — let’s see.
15 The patent which is attached to the Kelly affidavit, which is
16 attached to our initial motion as Exhibit 1 — the patent is
17 attached as Exhibit Foxtrot.
18 And you can review the patent, which is at 1F of the
19 motion, and see that it does not disclose anything with regard
20 to the software and the coding, to — whereas, if you go to the
21 motion itself, Exhibit 1 Charlie, which is the purchase
22 agreement pursuant to which Repairify bought the business of
23 AEST, it treats — or discusses source code and software on
24 page 21.
25 This is Exhibit 1 Charlie to — Exhibit Charlie to
1 the Kelly affidavit, which is attached to our motion. And the
2 purchase and sale agreement talks about the source code in the
3 software, on page 21, at paragraph 3.9 alpha. And then it
4 says, lower on that page, in 3.9 echo, that AEST kept that
5 information secret.
6 THE COURT: Right. But that’s all information that
7 they got from AEST, not from Repairify. That is all
8 information that they got from AEST, not from Repairify.
9 MR. BOLLING: Well, I’m trying to show the chain of
10 custody of this top secret software.
11 THE COURT: Well, I guess — well, let me ask you
12 this: Would you agree with me that if Mr. Olsen and
13 Mr. Rodriquez never went to work with Repairify that you would
14 not have any ability to prevent them from using information
15 that they learned while they were at AEST?
16 MR. BOLLING: No, Your Honor. I would not agree with
18 THE COURT: All right. Explain to me how you would.
19 MR. BOLLING: Because pursuant to the purchase
20 agreement, the — AEST’s causes of action and claims were also
21 assigned to Repairify.
22 And so if AEST had a claim against Mr. Olsen or
23 Mr. Rodriquez for — for example, in Florida, there’s a common
24 law duty that a former employee cannot disclose the top secret
25 information of his former employer. He has a common law duty
1 to do that.
2 And then we also include in the record that the AEST
3 employees, as shown in the purchase and sale agreement and in
4 the AEST employee handbook, signed confidentiality agreements.
5 And so if Mr. Olsen and Mr. Rodriquez were to violate
6 that confidentiality, then that claim was assigned to
8 THE COURT: Where is that confidentiality agreement?
9 MR. BOLLING: We do not have a copy of it, but we
10 have evidence that there is such a thing.
11 THE COURT: The evidence being the affidavit of Lisa
13 MR. BOLLING: Lisa Brown, which is Exhibit 2 to
14 the —
15 THE COURT: Yeah. I’ve got — it’s doc 48,
16 Exhibit 2.
17 MR. BOLLING: Yes, where it says that all employees
18 agree to maintain the confidentiality of AEST’s confidential
20 And then, also, in Mr. Kelly’s affidavit, in Exhibit
21 1 — Mr. Kelly’s declaration, which is Exhibit 3 to the reply,
22 he attaches the Repairify employment agreement, which also
23 shows that —
24 THE COURT: You mean the employee handbook for
1 MR. BOLLING: Correct.
2 THE COURT: Okay.
3 MR. BOLLING: And then going back to Mr. Kelly’s
4 affidavit, which is attached as Exhibit 1 to the motion, he
5 attaches the purchase and sale agreement, which says that all
6 AEST employees had signed confidentiality agreements.
7 And so we have violations of breaches of those
8 agreements. Plus, we have the common law privilege of the duty
9 of the former employee not to disclose the confidential
10 information of his former employer. And that’s — I don’t know
11 that we need much in the way of authority for that, but —
12 THE COURT: We probably do, because contracts in
13 restraint of trade have to be in writing. I mean, 542.335
14 requires it to be in writing in order to be enforced.
15 And I guess when you’re talking about —
16 MR. BOLLING: Oh, for a noncompetition agreement,
18 THE COURT: — the —
19 MR. BOLLING: And we have one.
20 THE COURT: Well, you have one with Repairify, but
21 you’re seeking to extend it to information — well, we’ll start
23 You have one with Repairify. But you will agree with
24 me that a covenant not to compete — its sole purpose can’t be
25 to protect competition. It has to project — protect some
1 legitimate business interest, right?
2 MR. BOLLING: Yes, ma’am.
3 THE COURT: The Repairify employment agreement, with
4 regard to confidential information, is limited to information
5 which the employee acquired in the course of or as an incident
6 to his employment with the company, so that the Repairify
7 employment agreement, by its terms, protects the information
8 that they got while they were employed at Repairify. But
9 you’re seeking to extend it to the information that they
10 already had from AEST?
11 MR. BOLLING: Yes, ma’am. And we say that because
12 Repairify bought the business and the assets of AEST, including
13 the employment agreements that AEST had with its employees.
14 THE COURT: And you’re — and you’re considering
15 these nondisclosure agreements that Ms. Brown talked about as
16 employment agreements that you bought, right?
17 MR. BOLLING: There’s that. And by common law, if
18 there’s not a written employment agreement, every employee
19 necessarily has at least an oral contract with his employer.
20 And we cited that case in our reply on page six, that
21 under Florida law — and this comes from Laney v Hospital Board
22 of Directors. That’s the — that’s the “at will”.
23 There’s the law that we cited that all employees in
24 Florida have a contract with their employers.
25 THE COURT: So — I’m sorry, sir. Say that again.
1 MR. BOLLING: That all — here it is. On page five
2 of the reply, 2d — the Fla.Jur.2d.
3 THE COURT: Oh, well, that might be why I didn’t pay
4 attention to it, because I generally don’t hold any stock on
5 Fla.Jur. I mean, cite me to a case that says that, but
6 Fla.Jur. is not something that —
7 MR. BOLLING: And then we drop a footnote and cite
8 the Southern District case, Knight v Palm City, that all
9 employees have an employment agreement, because there’s — in
10 Florida, the essential elements of the contract are offer,
11 acceptance, and consideration.
12 THE COURT: So these unwritten employment agreements,
13 you’re saying you purchased?
14 MR. BOLLING: Correct.
15 THE COURT: All right.
16 MR. BOLLING: And that’s pursuant to the — I’m not
17 just saying that. It’s — the purchase agreement says that.
18 THE COURT: The purchase agreement on page 30,
19 section 5.5, which deals with employee matters, says that the
20 buyer is required to offer employment on an “at will” basis to
21 each of the business’s employees. Each business employee who
22 accepts the offer of employment will be referred to as a
23 transferred employee. And on the closing date, the seller
24 shall terminate the employment of that employee.
25 So — but yet you’re — you’re claiming that this “at
1 will” employment agreement that is terminated by virtue of the
2 contract inures to the benefit of your client?
3 MR. BOLLING: Correct, Your Honor, because —
4 THE COURT: Yeah. I —
5 MR. BOLLING: — certainly in the agreement it says
6 that AEST’s agreements for the employment of any executive
7 employee are transferred assets relating to the business, to
8 which AEST is a party.
9 THE COURT: Well, let’s look at that section. Look
10 at section 3.11 on page 22, which talks about contracts and
11 agreements. And it says that any of those — and it lists the
12 different kinds — it calls them the material contracts.
13 MR. BOLLING: And then on page 23, under little Roman
14 number (ix), it talks about the agreements for the employment
15 of any executive employee or other individual on a full- or
16 part-time or a consulting basis.
17 THE COURT: And all of those agreements — and
18 complete copies of them are required to be described in the
19 seller disclosure schedule. It’s 3.11(b), right?
20 MR. BOLLING: 3.11 echo or (b)?
21 THE COURT: (b).
22 MR. BOLLING: There can be a copy of the contract or
23 a description of it.
24 THE COURT: And is — were these “at will” employment
25 agreements —
1 MR. BOLLING: I don’t have —
2 THE COURT: You know, I’ll —
3 MR. BOLLING: — with — I don’t have that schedule
4 with me, Your Honor.
5 THE COURT: Here’s — here’s the thing, Mr. Bolling.
6 I — I don’t think that you’re going to be able to present me
7 with any case law that says an “at will” employment
8 agreement — an oral “at will” employment agreement is — can
9 be transferred by virtue of an asset purchase, particularly in
10 the context of — of this particular agreement, which clearly
11 calls for an end to the “at will” employment with — as with
12 AEST and a new employment with Repairify.
13 But the bigger problem I think I have is that you’re
14 relying on either an oral agreement or a written nondisclosure
15 agreement that the court doesn’t have before it, so I don’t
16 know the terms of it.
17 And don’t I have to know the terms of it to know
18 whether it is even permitted to be assigned under Florida law?
19 MR. BOLLING: We have evidence, Your Honor, of the
20 confidentiality agreements between the individual defendants
21 and AEST and —
22 THE COURT: I’m sorry, sir. Where do we have
23 evidence of what the confidentiality agreements between AEST
24 and the individuals said?
25 MR. BOLLING: What they say? That is described on
1 page 21 of the purchase agreement and page 22.
2 THE COURT: Show me what you’re referring to, please.
3 MR. BOLLING: Start with 3.9 alpha, which discusses
4 software. And it’s defined as registered intellectual property
5 rights in 3.9 alpha.
6 And then in 3.9 echo, it says that the seller has
7 taken efforts to maintain the secrecy of this information.
8 And then in 3.9 foxtrot, it says that the employees
9 agree to protect the confidentiality of the information —
10 confidential information of the business.
11 And it’s largely the same on the next page, in 3.9
12 hotel, at the bottom. The seller has not disclosed the source
13 code for any owned software with anybody other than employees
14 that have signed agreements under which they are required to
15 protect the confidentiality of the source code. And so that
16 describes the confidentiality agreements between the individual
17 defendants and AEST.
18 THE COURT: It doesn’t answer the question that I
19 asked you, though, which is: Without seeing the agreements,
20 how can the court determine whether they could be assigned?
21 MR. BOLLING: As I understand the law in Florida, the
22 presumption is in favor of assignability. And so
23 confidentiality agreements should fall under the general rule
24 of being assignable, unless there’s some exception. And I
25 don’t know that there is any exception here.
1 THE COURT: Well, the Florida Supreme Court says that
2 where there’s an asset purchased, in order for the agreement to
3 be assigned, the employee has to consent to the assignment.
4 And that was in — in a case — I think I left it sitting on my
5 desk — that predated 543.225. That was under 542.33.
6 Under 542.335, at least one — one court, in a
7 divided decision, has said, If the agreement itself says it can
8 be assigned, then that’s good enough. There’s no dispute about
10 But without — if I don’t have actual consent by the
11 defendants and I don’t have a written confidentiality agreement
12 that says it can be assigned, then how can — how can Repairify
13 rely on the contract with AEST?
14 MR. BOLLING: The quick answer to your question is I
15 don’t know, because I haven’t done — we have not done the
16 research on the assignability of confidentiality agreements.
17 THE COURT: All right.
18 MR. BOLLING: And we would like to have the
19 opportunity to do so, if we can.
20 THE COURT: Well, let me ask you another question.
21 Here, let me give you…
22 You filed — you found out that Mr. Olsen was
23 competing in July of 2016, right?
24 MR. BOLLING: We found out?
25 THE COURT: That Mr. Olsen was working for AirPro in
1 July of — as early as July of 2016.
2 MR. BOLLING: We — we found out that he, Mr. Olsen,
3 was working at AirPro in — beginning in — we thought July.
4 When we learned that he was — began working at AirPro in July,
5 I — I don’t recall whether the record indicates when we
6 learned that Mr. Olsen began working in July at AirPro.
7 THE COURT: You knew at least as of July 11th, right?
8 MR. BOLLING: That’s when we filed the complaint?
9 THE COURT: No, sir. You filed the complaint, I
10 believe, August 2nd, but you — you attach an e-mail to, I
11 think, Mr. Kelly’s affidavit, in which Mr. Olsen is listed as
12 one of the — as one of the Repairify employees.
13 MR. BOLLING: A Repairify employee?
14 THE COURT: I’m sorry. AirPro.
15 MR. BOLLING: I would make more of an issue out of
16 that, but I’ve made the same mistake a couple of times.
17 THE COURT: Fair enough.
18 But I guess my question is, you — it seems like you
19 knew for almost six months that Mr. Olsen was working for
20 AirPro. Why the — why the delay in filing the motion for
21 preliminary injunction?
22 MR. BOLLING: The answer to that is that it was
23 Mr. Olsen’s involvement with National Seminars that caused some
24 of the most irreparable harm to Repairify.
25 And you could look at — here at Exhibit J to
1 Mr. Margol’s affidavit, which is Mr. Olsen’s rendition with his
2 opinions of the strengths and weaknesses of the Repairify
3 AsTech product.
4 And in Mr. Kelly’s declaration, which is Exhibit 3 to
5 the reply, he says that that activity is causing irreparable
6 harm to Repairify, because Mr. Kelly is having to field
7 questions and concerns from customers and potential customers
8 about what Mr. Olsen is saying about Repairify in that — that
10 THE COURT: But that — that’s — he could be on that
11 task force or trade committee — I can’t remember exactly what
12 it was called — regardless of whether he’s working —
13 MR. BOLLING: CDIC. And then —
14 THE COURT: Sir, can I — he could be in that
15 position — he could be doing that regardless of whether he was
16 working for AirPro, couldn’t he? I mean, that — you’re
17 seeking to prohibit him from engaging in professional
18 activities broadly, but you have a noncompete that prevents him
19 from competing against you.
20 MR. BOLLING: But this particular document, the
21 Exhibit J to the Margol affidavit, which is Mr. Olsen’s work
22 product, is an advocacy piece on behalf of AirPro and against
24 And when we get further into the timing of this, if
25 you — we show — it’s either in the reply itself or in
1 Mr. Kelly’s declaration, that that document is posted on the
2 CDIC’s Web page. And it’s dated December 21, 2016.
3 And so that was a very recent problem, which is
4 causing that type of activity by Mr. Olsen, as evidenced by
5 this very recent exhibit.
6 It’s causing irreparable harm to Repairify because of
7 customers — potential customers following Mr. Kelly and
8 saying, What’s up with this, we don’t understand this, could
9 you — and it’s harming Repairify’s brand, as discussed in
10 Mr. Kelly’s declaration, which is Exhibit 3 to the reply.
11 THE COURT: It’s harming Repairify’s brand, which
12 means — what you’re talking about is wanting to prevent
13 competition. What you — what you are permitted to protect
14 through a noncompete agreement is legitimate business
16 You are permitted to protect disclosure of trade
17 secrets, confidential business information, customer contacts,
18 et cetera.
19 What you just described is simply wanting to prevent
21 MR. BOLLING: Except that what Mr. Olsen is
22 disclosing as a weakness of the Repairify AsTech product is
23 based upon his knowledge of Repairify’s confidential trade
24 secret information, namely, the results of the testing and
25 trials of the AsTech product and the — the development of
1 potential resolutions of those problems.
2 And Mr. Olsen says in his — in his affidavit that
3 that was what he was doing at Repairify before — and we can
4 look at his declaration to where he said, on page 19, paragraph
5 66, During my less-than-four-month employment with Repairify,
6 my primary job responsibilities included research and
7 development activities to solve functional problems with
8 AsTech 1 and initial design of AsTech 2.
9 And so the information he learned during that four
10 months was Repairify’s confidential trade secret information.
11 And then he goes on to use that same information in disclosing
12 it in competition with Repairify.
13 Because if you look at the Kelly declaration, which
14 is Exhibit 3 to the reply, Mr. Kelly says — where Mr. Olsen,
15 in Exhibit J to the Margol affidavit, is discussing the
16 Repairify AsTech product, where he’s discussing the — AirPro’s
18 And in the strengths and weaknesses, Mr. Olsen
19 identifies translation issues, which the — as there’s an
20 AsTech device in a body shop. And it’s plugged into a computer
21 module in a vehicle.
22 The information comes to the AsTech device, it’s
23 converted into Internet language, and then unconverted on the
24 other side here in Jacksonville, and back and forth.
25 And so those translations were the problems that
1 AsTech 1 was suffering from and that which Mr. Olsen identified
2 and tried to solve during his time at Repairify.
3 And now he’s using that same confidential trade
4 secret information that we’ve described in both the motion and
5 in the reply. The software is confidential and trade secret.
6 And in this Exhibit J to the Margol affidavit, it’s
7 not just Mr. Olsen neutrally going out and opining about
8 scanning and remote diagnostics.
9 He’s — according to this Kelly declaration, he’s
10 doing a lot more than that. He’s describing a lot of
11 weaknesses to AsTech — Repairify’s AsTech device that are
12 equally attributable to the AirPro device, yet he doesn’t
13 include them there.
14 And that’s an example of Exhibit J being an advocacy
15 piece, a marketing piece, on behalf of AirPro, to our
16 detriment — Repairify’s detriment, because it discloses
17 Repairify’s confidential trade secret information.
18 THE COURT: All right. We’re going to have to —
19 before the end of the hearing, we’re going to have to go back
20 to that issue, but the — he may — Mr. Olsen came out with a
21 written piece about this in September of 2016, right, which
22 is — has essentially the same information?
23 MR. BOLLING: That’s — that is an AirPro press
24 release that you’re speaking of, which is an exhibit to the
25 Kelly declaration.
1 THE COURT: That was September of 2016. So my
2 question, again, was: Why was the motion not filed until
3 December 27th of 2016?
4 MR. BOLLING: There are a host of reasons for that.
5 For one, Repairify changed lead law firms during that period.
6 They hired Kirkland & Ellis, which was the lead counsel
7 initially, and then they retained — and we were the local
8 counsel for Kirkland & Ellis.
9 And then — and we were strictly local counsel. And
10 then Repairify decided that it wanted to retain us to be the
11 lead counsel in the case. And so that caused some of the —
12 some of the time that you’re talking about.
13 And then, due to the vagaries of our various
14 schedules, I had — in October, I had a tremendous amount of
15 surgery done, and so I was out of the office for nearly a
16 month. And that is probably the better part of what you’re
17 talking about.
18 THE COURT: All right. Let me talk to Mr. Heekin for
19 a few minutes. Let me talk to Mr. Heekin.
20 Mr. Heekin, why isn’t whatever information that
21 Mr. Olsen got about the weaknesses of — the testing that he
22 was doing during the period of time that he did work for
23 Repairify, why wouldn’t that be confidential business
24 information, that limited amount that — that Repairify is
25 entitled to protect via the noncompete agreement?
1 MR. HEEKIN: Your Honor, first of all, that’s nothing
2 different than anybody that had knowledge of the way these
3 things worked.
4 And in our affidavits we put in there’s probably a
5 dozen manufacturers of these kinds of products. But that’s
6 nothing different than anybody who’s familiar with this
7 product — any product, can look at and determine.
8 What’s missing from their presentation is what they
9 did to enable Chuck Olsen to identify the weaknesses of the
10 AsTech. And the answer is they haven’t raised that because
11 they did nothing.
12 Mr. Olsen, through his affidavit — you can see that
13 he had 35 years’ experience in the automotive industry here in
14 North Florida.
15 He’s had several years of experience in this kind of
16 device prior to his employment by — his four-month employment
17 by AsTech. And so there’s nothing that they have imparted on
19 And there’s no secret that — that the — AsTech has
20 problems, because they even — in the scan reports that they
21 give their customers after they scan, they give a disclaimer
22 that has all these problems in it.
23 THE COURT: Show me what you’re referring to. Or
24 if — it would be in the record?
25 MR. HEEKIN: This is a result of what was served on
1 us two days ago.
2 THE COURT: Okay. Then — then in the event that I’m
3 going — in the event that I consider the information in —
4 that was attached to the reply, I’ll look at — make it
5 Defendant’s, I don’t know, Exhibit 1 from the hearing.
6 MR. BOLLING: May we — may we have a copy of it,
7 Your Honor?
8 THE COURT: I assume that Mr. Heekin has a copy for
10 (Defendant’s Exhibit 1 was received into evidence.)
11 THE COURT: Go ahead.
12 MR. HEEKIN: Your Honor, so I don’t — they have —
13 other than using vague and conclusory allegations of the trade
14 secret and extraordinary efforts and training, they have shown
15 nothing that Mr. — that they imparted on Mr. Olsen during his
16 brief, less-than-four-month period of time with them.
17 And they can’t get away with just using conclusory
18 statements like trade secrets and confidential information and
19 that kind of stuff. They’ve got to actually show what it is.
20 And I’ve got the case law. And we cite it in our memo. But
21 there’s hard copies. I’ll be happy to give them to you.
22 THE COURT: Well, let me see the exhibit. And you
23 took the position in your memo that they have to plead — that
24 Mr. Olsen is using trade secrets or is using confidential
25 customer information, but I think that that’s — I think you’re
1 relying on case law under Florida Statute 542.33, which was
2 repealed, that the replacement statute doesn’t include that —
3 that language.
4 MR. HEEKIN: The use?
5 THE COURT: So the Florida noncompete statute has
6 been amended three times. The current statute 542.335, which
7 is the one that governs noncompetes entered into on or after
8 July of 1996, took away the requirement that in order to get an
9 injunction you have to plead and prove the actual use of the
10 trade secret or use of confidential business information, and
11 replace that with a — a rebuttable presumption of irreparable
12 harm if the party establishes an enforceable contract
13 necessary — reasonably necessary to predict a recognized
14 legitimate business interest.
15 So I don’t think they have to plead use, but they do
16 have to plead the — the existence of a legitimate business
17 interest, which is what you’re — you’re saying they’ve done
19 Give me a moment to read what — so what is it that
20 I’m —
21 MR. HEEKIN: Page two, Your Honor. And we’ve — my
22 eyes are sort of bad, so I asked our client to actually load
23 that up. This is actually a verbatim replication of the small
24 print that they give their customers.
25 THE COURT: And so you’re saying that this is the
1 same thing as what’s disclosed in Exhibit J to the — to
2 Mr. Olsen’s affidavit?
3 MR. HEEKIN: Yes, Your Honor.
4 So anybody in the industry that has access to, I
5 believe, a computer and the Internet can get a copy of these
6 disclaimers that plaintiff gives as to the AsTech machine.
7 So it doesn’t take a whole lot of — it doesn’t take
8 any trade secrets to — to read what’s written in the — if you
9 are in the industry, to understand what they’re talking about.
10 THE COURT: Your fourth affirmative defense says —
11 if I can find it. Your fourth affirmative defense doesn’t make
12 any sense to me, so I want you to tell me what it is. But
13 I’m —
14 MR. HEEKIN: That’s probably because I didn’t write
15 it, my associate did.
16 THE COURT: Way to throw your associate under the
18 MR. HAMILTON: Thank you.
19 THE COURT: You signed it.
20 MR. HEEKIN: I didn’t say this one.
21 THE COURT: You signed it. That means you have to be
22 able to explain it to me.
23 So it says, The employment agreement attached as
24 Exhibit 8 to plaintiff’s complaint — and this happens to be in
25 Mr. Rodriquez’s answer — is unenforceable against
1 Mr. Rodriquez because it was not an agreement between plaintiff
2 and defendant, and thus is unenforceable by plaintiff.
3 MR. HEEKIN: Yes, Your Honor. That line of cases you
4 were talking about, about the — on a transfer, you have to
5 have the consent of the employee.
6 THE COURT: Right. But the — I thought that the one
7 he’s referring to as Exhibit 8 was the actual agreement between
8 Repairify and Mr. Rodriquez?
9 MR. HEEKIN: Rodriquez, yes. We’re saying that when
10 they terminated the contract with Mr. Rodriquez, then that —
11 he’s relieved of any obligations under the — what he otherwise
12 would have had, number one.
13 And, number two, this whole issue in the brief that
14 we submitted, that the language of the — the language of the
15 employment contract for Mr. — it’s the same for Mr. Rodriquez
16 and for Mr. Olsen.
17 And paragraph three is what they’re relying on. And,
18 Your Honor, they’ve sought to amend their complaint to — to
19 allege an action for — for reformation.
20 THE COURT: For reformation.
21 MR. HEEKIN: Well, paragraph three of the contract
22 says, in pertinent point, he, meaning the employee, shall not
23 compete with the company. And now they define the company up
24 in the very first line of the agreement to be Repairify.
25 He shall not compete with the company in the — in
1 the restricted territory. And that’s a defined term. And then
2 the last sentence of that paragraph three talks about the
3 restricted territory.
4 Restricted territory means anywhere in North Florida
5 or where Discover Technologies — and it should have is —
6 conducting business.
7 THE COURT: Doesn’t — don’t both — doesn’t
8 AirPro — I know I — I think in Mr. Margol’s affidavit it says
9 AirPro doesn’t do business in North Florida. Its principle
10 place of business is in North Florida. Isn’t that doing
11 business here?
12 MR. HEEKIN: They do business north-wide — what they
13 do is they have contracts with the body shop. And what the
14 affidavit says, they don’t have any contracts with any body
15 shops in North Florida. They have contracts with body shops in
16 Canada. They have contracts throughout the United States. But
17 they don’t have any contracts in North Florida.
18 And then he also says that Discover Technologies is
19 out of business and so is not conducting any business anywhere
20 in North Florida.
21 Now they have asked for reformation, saying it’s a
22 mutual mistake. But if you look at the affidavits of both
23 Mr. Olsen and Mr. Rodriquez, both of them declined to agree
24 with that. Both of them say that they understood. Because at
25 the time that they were presented with this — I think they
1 were presented this by a —
2 THE COURT: A Discover Technologies employee while
3 they were working in the building that belonged to Discover
5 MR. HEEKIN: And it was co-located with Discover
6 Technologies. And I believe they were presented this with —
7 by an employee of Discover Technologies.
8 So since Discover Technologies — is not a business,
9 number one. And, number two, since AirPro does no business in
10 North Florida, then that covenant not to compete is invalid, or
12 And, Your Honor, the Supreme Court case that I
13 referenced a little bit ago, for the proposition that — even
14 if the court finds that — that that is still valid because —
15 even though Discover Technologies is out of business, the
16 Supreme Court case of Corporate Express Office Products, Inc.,
17 versus Phillips, reported at 847 So.2d 406, Florida Supreme
18 Court, 2003, holds that — Your Honor, can I tender this to
20 THE COURT: I actually have a copy, but go ahead.
21 MR. HEEKIN: Okay. Oh, you’ve already…
22 THE COURT: That was the one I was searching the desk
23 for earlier that I wanted to cite to Mr. —
24 MR. HEEKIN: Oh, okay. Well —
25 MR. BOLLING: May we have a copy of it?
1 THE COURT: Oh.
2 MR. HEEKIN: Sure.
3 At 409, the court crystallizes the question. And
4 that is at the bottom right-hand column. The question in this
5 case is whether the nature of the business transaction affects
6 whether a consent to an assignment of a noncompete agreement is
7 necessary either in the original assignment or in connection
8 with the subsequent transaction.
9 The types of transactions relevant to this case —
10 and they consider four different types, an asset sale, a 100
11 percent stock sale, a merger, and a name change.
12 Clearly, we did not have a 100 percent stock sale in
13 the instant case. We don’t have a merger. And we don’t have a
14 name change.
15 So we’re relying on the asset sale. And in that
16 particular document by which they bought the asset from the
17 bankruptcy court, it’s styled asset purchase agreement.
18 And if you go to — flip to page 411 —
19 THE COURT: And if I’m — I’m going to interrupt you,
20 Mr. Heekin. Because I think where you’re going to is that the
21 Corporate Express Office Products case says that for an
22 assignment to be effective the employee has to consent, right?
23 MR. HEEKIN: Exactly, Your Honor. And this is under
24 the new statute.
25 THE COURT: The Corporate Express case?
1 MR. HEEKIN: Yes.
2 THE COURT: No, it’s not. Well, it was a 2003 case.
3 But it was applying — it was interpreting a contract that was
4 entered into in — under 542.33.
5 MR. HEEKIN: I thought it was cited in 542. —
6 THE COURT: It talks about 542.335 also, but it
7 specifically notes that — that 542.335 is inapplicable.
8 MR. HEEKIN: Well, they say in footnote two — excuse
9 me. I’m sorry — three, at the bottom — the very bottom
10 right — you’re right. You’re correct, Your Honor.
11 We express no opinion whether, as to noncompete
12 agreements entered after July 1, 1996, section 542.335 changes
13 the law regarding assignments, because that issue is not before
14 us and neither the First DCA or the Fifth DCA relied on the
16 So I guess it’s still an open question. But I would
17 say that this is persuasive law.
18 THE COURT: Well, I think that the problem — and
19 this is — and, Mr. Bolling, this is what — the two cases that
20 I was going to refer you to were the Coachman case that — or
21 the Corporate Express Products case that Mr. Heekin has given
22 to you, but there’s a subsequent case, which is Depuy
23 Orthopaedics v. Waxman, which is 95 So.3d 928. It’s a First
24 DCA case from 2012.
25 It’s a divided opinion in which ultimately the
1 assignment is upheld, but it’s upheld specifically because the
2 contract itself or the non- — the restrictive covenant — the
3 restrictive covenant says that it can be assigned.
4 And that was what I was saying earlier, was
5 without — because the — the Florida statute says — 542.335
6 specially says that it — I wanted to make sure you-all could
7 finish so that you could hear what I’m saying —
8 MR. BOLLING: Yes, ma’am.
9 THE COURT: — because I was talking to you about —
10 talking about assignments.
11 The statute says that a non- — a restricted covenant
12 can be enforced by an assignee if the restrictive covenant
13 expressly authorizes enforcement by the assignee.
14 And I don’t know — did you get the case cite that I
15 was referring to, the Depuy Orthopaedics?
16 MR. BOLLING: I did, Your Honor.
17 THE COURT: And that’s why I was saying how — how
18 can I determine whether the restrictive covenant that you’re
19 relying on is enforceable by you if I don’t have a copy of it
20 to determine whether or not it expressly says it’s assignable?
21 That was — that was the question.
22 MR. BOLLING: And we will endeavor to find — we have
23 not yet found it, but we — if we could have the opportunity to
24 find one of these confidentiality agreements, we’ll make it
25 part of the record, if we can have an opportunity to do that.
1 THE COURT: I’m a little puzzled how you wouldn’t
2 have had an opportunity to — to find that in the six months in
3 which it’s your position that you’ve been irreparably harmed,
4 but we’ll set that aside. I’m deciding the motion based on
5 what’s before me at this point in time.
6 Mr. Heekin, you take the position that your clients
7 are relieved of their obligations because Repairify first
8 breached its agreements.
9 Starting with Mr. Rodriquez, who voluntarily resigned
10 his employment with Repairify, how did Repairify breach any
11 obligation to him?
12 MR. HEEKIN: Can we take Mr. Olsen first?
13 THE COURT: No. I gave you the hard one first on
14 purpose, because — because I don’t think there’s any basis to
15 claim that.
16 (Counsel confer.)
17 MR. HEEKIN: I misspoke, Your Honor. We’re talking
18 about Olsen, Mr. Olsen.
19 THE COURT: Okay. Then with Mr. Olsen, how is it
20 that they breached any obligation to him? He was an employee
21 “at will”. So he could be terminated at any time? How — how
22 does that — how is there a breach?
23 MR. HEEKIN: He can be terminated at any time, Your
24 Honor, but if they — there was an implied covenant of
25 employment. And if they terminate anytime — they cited this
1 in their papers.
2 If they terminated him without cause, which is what
3 happened here, then — then that’s — proves the slew of cases
4 where the first party breaches — and I’ve got three cited that
5 are noncompetes.
6 THE COURT: I saw them. But I’m trying to
7 understand — it is a term of employment that has an indefinite
9 MR. HEEKIN: Right.
10 THE COURT: And if it’s an indefinite term, then it
11 can be terminated by either party at any time.
12 MR. HEEKIN: Well, if — I sort of have to rely on
13 their reply that says that under Florida law there’s an oral
14 contract there regarding employment, even on a terminancy “at
15 will” basis.
16 THE COURT: Even if it was an oral contract, it would
17 still have been a contract of indefinite term.
18 MR. HEEKIN: Right.
19 THE COURT: Okay. Let me —
20 MR. HEEKIN: But I think there’s implied duty of good
21 faith that says you don’t just fire somebody for no reason.
22 THE COURT: I think you’ll have to cite me the case
23 law that says that would be a breach, because I’m pretty sure
24 it’s not.
25 MR. HEEKIN: Okay.
1 THE COURT: All right. Give me a moment, because I
2 know that I have — oh, you’re also arguing that the covenant
3 is unreasonable in scope and duration.
4 The duration two years is presumptively reasonable,
5 so I’m not sure what the position is there. I guess I
6 understand your — the geographic scope argument you’re saying
7 is unreasonable.
8 MR. HEEKIN: That argument on the — on the duration
9 and time for two years is predominantly Mr. Olsen. He was
10 employed by them for less than four months. Now they’re trying
11 to enforce the two-year noncompete against him.
12 THE COURT: Okay. Let me — I wanted to talk to
13 Mr. Bolling again about two things.
14 Mr. Bolling, so — so looking back at the contract,
15 if the restricted — so the employee shall not compete with the
16 company in the restricted territory.
17 If the restricted territory is North Florida and
18 they’re not selling to anybody in North Florida, then they’re
19 not in breach, are they?
20 MR. BOLLING: We argued in our motion that, yes, they
21 are. Because if you’re in North Florida trying to — doing
22 business with customers that are outside of North Florida,
23 you’re competing in North Florida.
24 And as you noted earlier, Your Honor, here —
25 AirPro’s sole office is here in River City, which, by any
1 stretch of any definition, is within North Florida.
2 And Mr. Olsen has his office here. Mr. Rodriquez,
3 from time to time, performs scans on behalf of AirPro here in
4 North Florida, at AirPro’s address, which is the same as
5 Nationwide’s. So, yes, they are competing with Repairify here
6 in North Florida.
7 And we have a reformation count, but I don’t know
8 that the court needs to get there, because you can simply
9 construe the contract as a whole and see that it’s a contract,
10 unlike the allegation in Mr. Olsen’s and Rodriquez’s
11 affirmative defense that there was no contract — they had no
12 contracts with — employment contracts with Repairify. But
13 it’s fairly obvious they did, because both contracts are a —
14 entitled Repairify, Inc. Employment Agreement.
15 And then it says, This is a contract between
16 Repairify, Inc., the employer, and the undersigned, the
17 employee, and on the following terms.
18 And, number one is, the employee can’t use
19 Repairify’s confidential information. Number two is the
20 employee can’t solicit Repairify’s employees. And number three
21 is the employee can’t compete with Repairify in the restricted
22 territory. And then it’s — any fair reading of that contract
23 where it says Discover Technologies, it should read —
24 THE COURT: Well, that’s — that goes to your
25 reformation count. And there’s — you didn’t —
1 MR. BOLLING: And then we have evidence in the form
2 of Ms. Lamey’s affidavit, which is Exhibit 2 to the motion,
3 which says that Discover Technologies is a d/b/a of
4 DiscoverTec, LLC. And DiscoverTec, LLC, does business
5 throughout the United States.
6 So there is no nevermind, really, as to whether it
7 says Repairify as wherever Repairify does business or wherever
8 Discovery — Discovery Technologies does business. They both
9 do business throughout the United States.
10 And the defendants presented evidence that Discover
11 Technologies is out of business. That’s — if you look at that
12 printout from the Florida Division of Corporations, it’s of a
13 company Discover Technologies, Inc., that’s been out of
14 business for ten years; whereas, DiscoverTec, LLC, is still in
15 business and does business throughout the United States.
16 THE COURT: What is it — you’re speaking very
17 generally about source code and weaknesses identified in the
18 AsTech device.
19 What information did Mr. Olsen obtain during his four
20 months at Repairify that is actually a trade secret, that is
21 something that he could not have done independently by testing
22 the device himself based on the knowledge that he already has
23 in the automotive industry?
24 MR. BOLLING: That’s because it’s the source code
25 computer programming that is — that allows the AsTech device
1 to do the translations, translation from the link from the —
2 the connection to the car.
3 That goes to the AsTech device, translates it into
4 Internet language. But that — but that translation is
5 performed by the software of the code.
6 And what Mr. Olsen did while he was at Repairify is
7 he did the testing and trials of the AsTech device to identify
8 weaknesses, which includes the — that translation issue. And
9 if you look at what Mr. Heekin provided you, the disclaimer —
10 THE COURT: Right.
11 MR. BOLLING: — that we have on our — apparently on
12 our bills — or that’s a scan — scan report. But there’s no
13 mention in here about — in the disclaimers about translation
14 issues. And that’s what we’re focusing on, is the software
15 allows AsTech to do these translations of computer languages.
16 Mr. Olsen, while he was employed at Repairify, by his
17 own affidavit, said that he performed testing and tried to
18 develop resolution of weaknesses identified in the AsTech
20 And of those results, he learned, while he was at
21 Repairify — and we have a significant amount of evidence in
22 the record, Mr. Kelly’s declaration and Mr. Kelly’s affidavit,
23 that say that Repairify took a lot of effort to try and
24 maintain the confidentiality of that computer programming,
25 which we specifically identified and discussed in the footnote
1 to our initial motion.
2 THE COURT: Well, I mean, all you said — it’s —
3 it’s a one-sentence footnote. You referred to it as footnote
4 11. It was actually footnote five on page 11, because it took
5 me a while to find it.
6 But all you say — you just said that — you took a
7 lot of effort to try and maintain the confidentiality of that
8 programming, which we — which you specifically identified in
9 the footnote.
10 All the footnote says is, for example, the computer
11 programming which allows AsTech to remotely use the OEM scan
12 tools to diagnose a vehicle’s problems through the computer is
13 a trade secret.
14 MR. BOLLING: We identify it there. We say that it
15 was kept secret by AEST. That’s in the purchase agreement.
16 We’ve already talked about that.
17 And then in the Kelly declaration, on — which is
18 Exhibit 3 to the reply, he says that the testing and trials of
19 the — AsTech on the research and development are trade
20 secrets, and that they were maintained with the same level of
21 secrecy that he described in his previous affidavit.
22 And he says that AEST and then Repairify maintain the
23 confidentiality of the results of these tests and trials and
24 the research and development.
25 THE COURT: You’re not claiming that he’s disclosing
1 the trade secret, then? You’re saying that he’s using the
2 knowledge that he obtained while at AEST in competing against
3 AirPro, right? Because AirPro’s device doesn’t use this
4 computer programming.
5 MR. BOLLING: I — I think I agree with you, Your
6 Honor. What we’re saying is that Mr. Olsen is using
7 Repairify’s trade secrets, the results of these tests and
8 trials that he performed as a Repairify employee, and
9 identifying the weaknesses of the AsTech device, and then
10 disclosing that and using that trade secret information against
11 Repairify in places such as Exhibit J, which is the December
12 21, 2016, document where Mr. Olsen is advocating in favor of
13 AirPro and against Repairify using our trade secret
14 information, namely, the results of this testing and trials,
15 when he says that we’ve got translation problems, which is a
16 function of our software.
17 And then to go to the patent information, the patent
18 had been issued back in 2014, I think it was. And all of this
19 testing and trials that Mr. Olsen performed at Repairify was
20 some months thereafter, a year thereafter.
21 THE COURT: How — how did the testing results from
22 the — that identified the weaknesses in Repairify —
23 Repairify’s product derive independent economic value from not
24 being generally known or ascertainable to the public?
25 I understand how the computer program does, and I
1 understand how the computer program would be a trade secret.
2 But how — how did the testing results derive independent
3 economic value from not being generally known?
4 MR. BOLLING: Because if you have identified
5 weaknesses in your product, you want to be able to correct them
6 before they become a problem.
7 And then we have — we also cited to a case where it
8 says that identifying the weaknesses in a product — that those
9 weaknesses can be a trade secret.
10 And that’s the Massachusetts District Court — U.S.
11 District Court in Massachusetts case, the Lombard case, which
12 we cited in our reply, and is found at 729 F.Supp.2d 432.
13 And on page 442 of the published decision, it talks
14 about the weaknesses of a product being — can be, and was in
15 this case, a trade secret.
16 THE COURT: Just a moment.
17 MR. BOLLING: And what the court said is — on page
18 442, Ultimately, the court finds it difficult to believe that
19 in their time at Lombard, Johannessen and Sassler did not pick
20 up any confidential or proprietary information. Johannessen
21 and Sassler are intimately familiar with the weaknesses in
22 Aorifix, have extensive contacts at medical centers through
23 Lombard, and are knowledgeable about Lombard’s non-public
24 clinical trial analyses.
25 And so the trials and testing and the results of
1 that, which disclosed weaknesses in the AsTech device, are —
2 can be, and were in that case, subject to being confidential
3 trade secret information of the employer.
4 And we say the same thing here, that we sick
5 Mr. Olsen on — to find out what’s wrong with AsTech. He does
6 and tries to start to fix it. And now he’s using against us
7 what he found out during the time that we were paying him to
8 find out, and it was confidential.
9 THE COURT: All right. Let me talk to Mr. Heekin.
10 And let me just start with some premises. One, I
11 don’t — as I understand it, Mr. Rodriquez wasn’t involved
12 in — well, there’s — there isn’t any allegation in the
13 evidence that Mr. Rodriquez was involved in that testing,
14 right, Mr. Bolling?
15 MR. BOLLING: Yes, there is, because it — the
16 testing is what — it was part of the development of
17 improvements. And he’s alleged —
18 THE COURT: Show me — show me in the evidence,
19 because I didn’t see that.
20 MR. BOLLING: All right. That is in the reply, as I
21 recall. And, also, he mentions it in his affidavit, which says
22 that he was involved in the development at his time at CDS.
23 And then we say that he — and I think I — apparently it was
24 easier for me to find the first time you asked this question.
25 THE COURT: Well, you pointed me to paragraph ten of
1 the reply, which just globally says — well, paragraph ten of
2 Mr. Kelly’s affidavit — or declaration and reply, which just
3 globally says he was involved in the —
4 MR. BOLLING: That he was involved in the development
5 of that software. And the development of that software —
6 embedded in that is the trials and testing of the problems with
7 AsTech 1.
8 THE COURT: Yeah. I think you’re going — you’re too
9 broadly construing what the affidavit says in that regard.
10 All right. Let me talk to Mr. Heekin.
11 Mr. Heekin, while he was at Repairify, Mr. Olsen,
12 using what, at that point in time, was Repairify’s — well, let
13 me step back.
14 Why wouldn’t the computer programming, the
15 software — why wouldn’t that be a trade secret of — that
16 belongs to Repairify?
17 MR. HEEKIN: Your Honor, because there’s nothing —
18 there’s nothing technical or proprietary or confidential or
19 anything else about that.
20 Anybody that knows the — any of the 10 or 12
21 product — competing products in this area can look at a
22 machine and tell you what the shortfalls of that one are versus
23 this one versus that one.
24 There’s nothing they imparted on him that — they
25 didn’t tell him, Go look at this and go look at that, or,
1 Here’s a bunch of data.
2 THE COURT: But it — wouldn’t the computer program
3 that — or the software that — that he’s using give — is it
4 generally known to the public?
5 MR. HEEKIN: Yes, sir — yes, ma’am. I think it was.
6 They got — I think they give the codes to the — their
8 Your Honor, can I correct one thing?
9 THE COURT: Sure.
10 MR. HEEKIN: The affidavit of — excuse me. The
11 declaration of Doug Kelly submitted in reply —
12 THE COURT: Uh-huh (affirmative).
13 MR. HEEKIN: — in paragraph four, he says, I was
14 involved beginning in April of 2015 in Jacksonville in due
15 diligence with Repairify’s ultimate July 2015 purchase of AEST
16 assets from the bankruptcy court. Rodney Margol was no longer
17 employed by AEST at the time. I persuaded AEST to perform
18 testing and trials to identify AsTech’s weaknesses and begin
19 research and development to correct weakness.
20 Charles Olsen was intimately involved in the testing
21 trials and research and development. AEST, and then Repairify,
22 maintain the confidentiality of these tests and trials. So the
23 time period they’re talking about was actually before the
25 THE COURT: Yeah. That wasn’t clear to me. That’s
1 why I thought that — because somewhere it said the AsTech 2
2 was released in 2015. I thought that clarified the time frame.
3 But then when it was corrected to — and I see it here to 2016,
4 it —
5 MR. HEEKIN: Yeah.
6 THE COURT: — lumped it. But I —
7 MR. HEEKIN: So the time frame is before the
8 purchase, which goes into the whole line of cases about, you
9 know, whether you have to discuss about the — you know, what’s
10 being purchased.
11 THE COURT: All right.
12 MR. HEEKIN: And then, Your Honor, you cited earlier
13 about the burden and shifting. Both the affidavits, that of
14 Chuck Olsen and Wilfredo Rodriquez, specifically say that —
15 for instance, in Chuck Olsen’s — he says that he was not
16 involved in the design or in the development of AirPro. And
17 then he lists — that’s paragraph 81 on page 23. And then he
18 lists, paragraph 82, all of his training, or all — excuse me,
19 all of his activities.
20 None of these are involving any top secret or — of
21 anything other than routine troubleshooting. And he says, My
22 position with AirPro Diagnostics, at paragraph 83, is vastly
23 different than my — than was my position with Repairify,
24 because I’m not involved in any research, development, or
25 design of the AirPro device.
1 THE COURT: Well, but their contention is that he’s
2 using the knowledge that he — that he obtained while at
3 Repairify regarding the weaknesses of the Repairify product.
4 So even if he’s doing something different, if he’s using that
5 knowledge, particularly to their detriment —
6 MR. HEEKIN: But they have to have something other
7 than just an allegation and conclusory thing. They don’t —
8 they don’t have anything at all of any substance, on such a
9 date he did this or he authored this paper or he talked to this
10 person and told him X, Y, and Z.
11 THE COURT: Well, but that — they don’t have to
12 prove use. That’s what we talked about earlier. Proof of use
13 is not required if there’s a rebuttable presumption of
14 irreparable harm.
15 All right. Let me look at my notes and see.
16 I think I’m going to take a recess and look over my
17 notes. Before I do that — well, since you’re at the podium,
18 I’ll ask you, and then I’ll ask Mr. Bolling — is there
19 anything else, Mr. Heekin, that you want the court to consider?
20 MR. HEEKIN: Not at this time, Your Honor.
21 THE COURT: Okay. Mr. Bolling, anything further?
22 MR. BOLLING: Yes, if I could.
23 THE COURT: Absolutely. Of course.
24 MR. BOLLING: You asked Mr. Heekin about what record
25 evidence is there that this software and development is not
2 And I think the unrebutted record evidence is that
3 it’s secret based upon — the purchase agreement says it’s
4 secret. The — and the declarations and — or declaration and
5 affidavit of Mr. Kelly also say that.
6 THE COURT: Yes.
7 MR. HEEKIN: Your Honor, there is one thing. I
8 apologize. There’s a recent Eleventh Circuit case dealing with
9 this idea about whether or not you just have to show that he
10 knows about it and has never used it.
11 It’s the TransUnion Risk and Alternative Data
12 Solution versus Challa case. It’s Eleventh Circuit, January
13 12th, 2017.
14 And I believe it holds that the plaintiff, in a
15 situation like this, must show that the irreparable injury is
16 actual and imminent and that a prior injury to the business
17 does not count any others.
18 They haven’t talked about it today, but they’ve
19 talked about other things that have happened in the past, like
20 a loss of one unnamed, unspecified customer. And that’s the
21 Alabama versus U.S. Corps of Engineers case, at 424 F.3d
22 1117 [sic], Eleventh Circuit, 2005.
23 THE COURT: All right.
24 MR. HEEKIN: Thank you, Your Honor.
25 THE COURT: Go ahead, Mr. Bolling.
1 MR. BOLLING: I don’t know — do you have extra
2 copies of those cases?
3 MR. HEEKIN: Sure. Oh, I think we do. Hold on.
4 THE COURT: Thank you.
5 MR. HEEKIN: And, Your Honor, referring particularly
6 on the recent Eleventh Circuit case, page four of six — and it
7 starts TRADS, T-R-A-D-S, argues that the district court applied
8 an incorrect legal standard in conducting its irreparable
9 injury analysis because —
10 THE COURT: Oh, you know what, I printed this — I
11 read this case, because I thought it was —
12 MR. HEEKIN: Familiar?
13 THE COURT: Yeah. Well, I knew when you said it, it
14 sounded familiar, because it explains that all — all 542.335
15 does is it creates a rebuttable presumption, but that the
16 parties still have to show — still have to show irreparable
17 injury —
18 MR. HEEKIN: Yes.
19 THE COURT: — that the statute doesn’t —
20 MR. HEEKIN: That’s the next sentence. It says, In
21 TRADS’s view, Challa’s mere presence at IDI created an
22 “irreparable injury,” irrespective of the likelihood that
23 Challa actually would disclose TRADS’s proprietary information
24 or the imminence of actual disclosure. We disagree.
25 And then they go on — it’s the last sentence on page
1 four. It says — and then they go on with the discussion on
2 the better part of page five, and they — they conclude on page
3 six, TRADS’s proposed rule fundamentally conflicts with the law
4 of this circuit that “irreparable” injuries must be “actual and
6 And then it cites the General Contractors case, at
7 896 F.2d at 1285. So I think the Eleventh Circuit has sort of
8 defined a little bit better the presumption and how it applies.
9 THE COURT: All right. I still don’t — I mean, I
10 think you do have to show — I think what happened in this case
11 was the evidence that the employee came forward with — was
12 that basically they were doing an entirely different thing and
13 not, in any way, using any information or trade secrets, and
14 that’s why there was no potential irreparable harm. But I
15 don’t think we need to spend any more time on that.
16 Let me — let me have a few moments and I’ll come
17 back out.
18 I feel the need to explain why I’m walking this way.
19 I broke my ankle and I’m not quite healed.
20 (Recess, 3:50Â p.m. to 4:00Â p.m.)
21 COURT SECURITY OFFICER: All rise. This Honorable
22 Court is now in session. Please be seated.
23 THE COURT: All right. You-all are going to have to
24 bear with me, because I think it’s important in the case of a
25 preliminary injunction to rule properly. So I’m going to do
1 this from the bench, but I’m going to be flipping through
2 stuff. So you’ll just have to be patient.
3 I think everybody starts with the premise that in the
4 Eleventh Circuit, to obtain a preliminary injunction, the
5 movant bears the burden to clearly establish a substantial
6 likelihood of success on the merits, a substantial threat of
7 irreparable injuries if the injunction is not granted, that the
8 threatened injury to the movant outweighs the harm an
9 injunction would cause the opposing party, and that granting
10 the injunction would not disserve the public interest.
11 And that’s in the American Red Cross versus Palm
12 Beach Blood Bank, Inc., case 143 F.3d 1407 of the Eleventh
13 Circuit. It’s also in Robertson versus McDonald’s, 147 F.3d
14 1301, and a myriad of other Eleventh Circuit cases.
15 The movant has the burden of persuasion as to all of
16 these elements. And the failure to establish any element,
17 whether it’s a substantial likelihood of success on the merits
18 or the lack of irreparable harm — either one is fatal and
19 obviates the need for the court to discuss any remaining
21 And the Eleventh Circuit has said that in the Pitmann
22 versus Cole, 267 F.3d 1269, 1292, and the Northeastern Florida
23 Chapter of Association of General Contractors of Americas
24 versus City of Jacksonville, 896 F.2d 1283, at 1285.
25 The — the claim on which the preliminary injunction
1 is based is premised on Florida Statute 542.335, which allows a
2 party to enforce a restrictive covenant based upon pleading and
3 proof of the existence of one or more legitimate business
4 interests justifying the restrictive covenant, and that the
5 restrictive covenant is reasonably necessary.
6 And Florida law, in fact — under that statute, there
7 was a rebuttable presumption of irreparable harm once a party
8 establishes the existence of a restrictive covenant that is
9 reasonably necessary to protect a recognized legitimate
10 business interest.
11 And — and here I think the difficulty — well,
12 starting with Mr. Rodriquez, I think the — the problem with
13 the claim against Mr. Rodriquez is simply that there’s — that
14 plaintiff can’t show a substantial likelihood of success on the
15 merits of the claim that’s before the court, and — I mean, the
16 claim that’s before the court is that Mr. Rodriquez is working
17 for AirPro. And the evidence says that he’s not working for
18 AirPro. The evidence says that he’s working for Nationwide
19 Parts Distributors.
20 Now, it’s — it is suggested that Nationwide Parts
21 Distributor — well, it’s undisputed that Nationwide Parts
22 Distributor is likely an affiliate, but the contract doesn’t
23 say you can’t work for an affiliate of a competitor, it just
24 says you can’t work for a competitor.
25 And there’s nothing in the complaint and there’s
1 nothing in the evidence that tells me whether National Parts
2 Distributors actually competes in the industry that Repairify
4 The suggestion is that because Mr. Rodriquez
5 acknowledges that through his employment with National Parts
6 Distributors, he some- — he, at times, performs scans for
7 AirPro — I don’t think that’s sufficient to say that he is
8 employed by a competitor or is competing against Repairify.
9 And now I’ve lost my copy of the actual agreement.
10 And I wanted to read the language from it, so I need to find
11 it. Just a moment.
12 And so I — I think that would be fatal to Mr. — the
13 claim against Mr. Rodriquez. The — and I — I want to point
14 out, again, that — and I’ll read from — this is Colucci
15 versus Kar Kare — that’s with a K, car with a K, and care with
16 a K — Automotive Group, 918 So.2d 431, where the court
17 stresses that it can’t uphold an agreement whose purpose is to
18 prevent competition per se, because such agreements are void as
19 a matter of law.
20 The agreement has to — the purpose of the agreement
21 has to be — to protect legitimate business interests that
22 belong — that belong to the party.
23 Now, turning to Mr. Olsen, the — the evidence is
24 that Mr. Olsen began competing directly — or began his
25 employment with — with AirPro as early as July 11th of 2016.
1 And I take that from — there was a — there was an
2 e-mail that’s attached as an exhibit — I think it was to
3 Mr. Kelly’s affidavit. I have to find it. But there’s an
4 e-mail attached as an exhibit that shows Mr. Olsen on the
5 e-mail chain at — as an employee of AirPro.
6 But regardless, certain we knew it as late as
7 August 2nd — I’m sorry, I think it’s as early as July 11th.
8 And I point that out because the — the record in this case is
9 that the competition began as early as July. The complaint was
10 filed in August.
11 At the time the complaint was filed, there — it was
12 alleged that there was an intention to seek preliminary
13 injunctive relief, but no motion for preliminary injunction was
15 The motion for preliminary injunction wasn’t filed
16 until almost five months after the filing of the complaint, on
17 December 27th of 2016.
18 And the Eleventh Circuit, in looking at precisely
19 that type of delay, has noted — and I’m quoting, A delay in
20 seeking a preliminary injunction of even only a few months,
21 though not necessarily fatal, militates against a finding of
22 irreparable harm.
23 A preliminary injunction requires showing imminent
24 irreparable harm, and they’ve got the citations there. Indeed,
25 the very idea of a preliminary injunction is premised on the
1 need for speedy and urgent action to protect the plaintiff’s
2 rights before a case can be resolved on its merits.
3 Skipping citations, For this reason, our sister
4 courts and district courts within this circuit and elsewhere
5 have found that a party’s failure to act with speed or urgency
6 moving for preliminary injunction necessarily undermines a
7 finding of irreparable harm.
8 And what is particularly relevant about this decision
9 is that the delay that the court found to be too long was that
10 the plaintiff failed to offer any explanation for its
11 five-month delay, the five-month delay between the filing of
12 the complaint and the motion for preliminary injunctive relief.
13 And that — that’s exactly what is before the court
14 here today; that is, the — a at least five-month delay from
15 learning of the competition and almost five months between the
16 filing of a preliminary — the filing of a complaint that says
17 it intends to seek preliminary injunctive relief and then the
18 actual filing of the motion for preliminary injunction on
19 December 27th.
20 And that decision — I apologize. I have the slip
21 opinion, so…
22 But it’s Wreal — spelled W-r-e-a-l — LLC, versus
23 Amazon.com. It’s a published Eleventh Circuit decision. It
24 was published October 28th, 2016. And the case number of the
25 appellate case is 15-14390.
1 That — the sentiment expressed in that decision,
2 though, has been expressed repeatedly in other decisions. I
3 will cite to Badillo, B-a-d-i-l-l-o, versus Playboy
4 Entertainment. That’s 14 Fla. L. Weekly Fed. D, at 529, and,
5 also — what did I do with the Pippin case — there’s
6 another — there’s another Middle District of Florida decision,
7 2003 Westlaw 21981990. That’s Pippin versus — oh, also versus
8 Playboy Entertainment.
9 The citation for Wreal is 840 F.3d 1244.
10 Thank you, Mr. Blumeyer.
11 All right. So I’m satisfied that the delay here
12 alone would be sufficient to deny the motion for preliminary
13 injunction as to Mr. Olsen. It wouldn’t apply to
14 Mr. Rodriquez, because Mr. Rodriquez was closer in time.
15 And so because of that, I — even though I could stop
16 here, I — I looked further at whether — whether I thought the
17 motion was otherwise — would otherwise be due to be granted as
18 to either Mr. Rodriquez and — or Mr. Olsen. And I don’t — I
19 don’t think that it is.
20 I don’t think that — that Repairify has carried its
21 burden of proving a substantial likelihood of success on the
22 merits of its claims.
23 And the — the starting point, I think, is that
24 Repairify is seeking to enforce a nondisclosure agreement
25 entered into between the plaintiff and Repairify — or, I’m
1 sorry, the defendants and Repairify, that, by its own terms,
2 limits what is protected to information which the employee may
3 have acquired in the course of his employment with the company.
4 And so going back, again, to the — the premise that
5 you can’t just prohibit employment, you — or prohibit
6 competition, you have to — you can only prohibit — or protect
7 your legitimate business interests. Because the employee —
8 Repairify employment agreement only protects information that
9 was acquired in the course of the employment with Repairify,
10 the legitimate business interests that they seek to enforce or
11 protect have to be limited to the time that they were employed
12 by Repairify, or that they attained them.
13 And there’s a — one particular decision that I think
14 is quite helpful in this regard in understanding that
15 distinction. It’s GPS Industries, LLC, versus Lewis, 691
16 F.Supp.2d 1327.
17 And I’m going to read from — I think it’s 1218 —
18 no, oops, sorry — from 1355 and -56. And there — there
19 was — just a moment.
20 There was an asset purchase. And the employee became
21 an employee of the subsequent — of the purchaser and executed
22 the noncompete with the purchaser and then resigned.
23 And they sought to enforce a preliminary injunction.
24 And the court found that the party had failed to carry its
1 And there’s one particular part of the decision that
2 I’m going to read: Even more problematic is the movant’s
3 attempt to preclude the former employee from using contacts and
4 expertise obtained during his work at the company the movant
5 took over — that is the prior employer — rather than any
6 information or expertise obtained during his one-month tenure
7 at the new employer.
8 Based on the record before the court, it appears that
9 most, if not all, of the former employee’s knowledge and
10 expertise derives from his experience at the former company
11 prior to working at the new company.
12 The movant has not shown that the former employee
13 obtained any valuable confidential business or professional
14 information, nor any extraordinary or specialized training
15 during his time at the new company.
16 And it goes on to say — to explain that while the
17 new employer may well have hired the former employee — or the
18 employee for information and expertise he obtained when he was
19 with the prior company, that doesn’t mean that the employer can
20 be allowed to prohibit the employee from using that information
21 and expertise.
22 And quoting again, it says, In fact, an employer
23 cannot preclude a former employee from using contacts and
24 expertise gained during the former employment.
25 And so the problem — well, so to the extent that
1 Repairify is trying to enforce this Repairify agreement, it’s
2 limited to — in my mind, it’s limited to whatever information
3 Mr. Rodriquez or Mr. Olsen got from Repairify.
4 And the description of what Mr. Olsen may have gotten
5 from Repairify is entirely too generic and — and conclusory,
6 particularly in light of both Mr. Kelly and Mr. Olsen’s
7 affidavits that reflect that this testing of the AST — AEST
8 device, or the AsTech device, was occurring even before the
9 sale to Repairify.
10 So the burden would be on Repairify to come forward
11 with specific information that Mr. Olsen obtained from
12 Repairify, not from his employment with AsTech — or AEST, that
13 is a trade secret or is confidential business information.
14 And, you know, the general reference to computers and
15 programming, I think, is too broad, but any of that still came
16 from AEST.
17 And so I’m not saying that there isn’t protected
18 information that he got from — during the four months that he
19 worked for Repairify.
20 But what I am saying is that the record fails to
21 carve out and identify what specific information he actually
22 got from Repairify, rather than from AEST. And that failure
23 means that plaintiff has failed to carry its burden,
24 remembering that a preliminary injunction is an extraordinary
25 remedy. And a party has to be held to their proof to justify
1 that relief.
2 And as to Mr. Rodriquez, the general statement
3 that — well, that both he and Mr. Olsen had access to a hard
4 drive or the J drive, I think it was called, that may have had
5 that information on it, that that’s very different than — than
6 identifying the specific trade secret or information that
7 you’re seeking to protect.
8 And the allegation in the — in support of the reply
9 that Mr. Rodriquez was involved in the — in the creation of
10 the software and that somehow embedded in that means he was
11 involved in the testing of the AEST device, that’s just not
12 what the affidavit says. The affidavit says that he was
13 involved in the creation of the software. That’s not alleged
14 to have occurred while he was at Repairify.
15 And so the Repairify confidentiality agreement, which
16 is limited to what they got from Repairify, can only be used to
17 protect information that they got from Repairify. And
18 plaintiff has failed to show what they got from Repairify.
19 Now, in an abundance of caution, I looked at whether
20 the fact that Repairify owns whatever trade secrets there may
21 be — would somehow give Repairify the right to enforce — to
22 protect the trade secret.
23 And in order to do that — if I had an identified
24 trade secret, it would be easier. But assuming that the
25 programming and software is a trade secret, that’s information
1 that Repairify got from AEST.
2 And I’m just not convinced that Repairify has made a
3 showing that it is entitled to protect the confidential
4 information, whether it’s trade secrets, customer lists, or
5 anything else, that either defendant got from their time at
7 And there are — there are a myriad of reasons why I
8 have concerns about that. And I’m going to go through them.
9 First of all, there is no confidentiality agreement
10 that’s been produced. There’s a — there’s a warranty and an
11 asset purchase agreement that everybody has a confidentiality
12 agreement, but that doesn’t mean that there actually is one.
13 The — there is a reliance on a handbook, a January
14 2005 handbook, that says everyone was required to sign the
15 confidentiality agreement, but both defendants. And I think
16 Mr. Margol — but I know both defendants specifically deny that
17 they signed a confidentiality agreement, and nobody — nobody
18 has produced it. So I don’t know whether it exists.
19 Second, without seeing a confidentiality agreement,
20 there’s no way for me to determine if it was permitted to be
22 The — as we discussed, the law — the Florida
23 Supreme Court has said that in order for it to be assigned, the
24 employee has to consent, and then subsequently, based on the
25 new statute, at least one court has said that that — that
1 consent is sufficient if the contract says — or if the — the
2 agreement says it can be assigned, but we don’t know if it said
3 it could be assigned.
4 Additional difficulty is that the Repairify
5 employment agreement, in paragraph six, says that it is the
6 entire agreement among the parties, and that it supercedes all
7 prior agreements and understandings relating to its subject
9 And then there are the questions that I asked about
10 the asset purchase agreement. And looking at the asset
11 purchase agreement, it is not at all clear to me that the — if
12 there was a written confidentiality agreement, and that — even
13 if it says it could be assigned, it’s not at all clear to me
14 from the asset purchase agreement that the nonconfidentiality
15 agreement actually was an asset that was one of the transferred
16 assets, that that specific agreement is included within the
17 agreement that — that were transferred.
18 The section that — that is relied upon by Repairify
19 is section 3.11, which lists — is a listing of the types of
20 contracts and agreements that were being assigned.
21 But Repairify has to establish that this particular
22 agreement was one of the assigned agreements in order for it to
23 attempt to enforce that agreement.
24 And not showing that, I don’t see how Repairify can
25 show a substantial likelihood of success on its claim that it
1 can enforce the information that it obtained from — from —
2 that the employees obtained during their time at AEST.
3 Again, I’m not saying Repairify won’t be able to
4 establish it. I’m just saying that the record before the court
5 at this time is insufficient for me to be able to make that
7 The — I understand Repairify to have conceded, at
8 least for purposes of the summary judgment, the — that there
9 was no specialized training by Repairify or customer lists or
10 other confidential information that the employees got from
11 Repairify, so it would be relying only on — for those things,
12 it would be relying only on that information from AEST.
13 And — and for the reasons I’ve just explained, I
14 don’t think it can do so, particularly the extraor- — it
15 cannot rely on the extraordinary training that the employee got
16 from AEST. The case law is very clear that it has to be the
17 training that they — the moving party provided.
18 Give me a moment.
19 And so what I’m — I’m kind of saying two things.
20 One is, that I don’t think that Repairify has made a showing
21 that it has an enforceable covenant not to compete beyond the
22 one that was actually signed that only protects the Repairify
24 And so to the extent that — that Repairify seeks to
25 protect information gained before that, or separate, I would
1 say that Repairify has failed to show — make a substantial —
2 or has failed to show a substantial likelihood of success that
3 it has a restrictive covenant at all.
4 But even as to the Repairify information, what I’m
5 concluding is that, on this record, Repairify has failed to
6 carry its burden of showing a specific legitimate business
7 interest that it is trying to protect.
8 It’s just the — the references to a trade secret are
9 too broad. The information, as I said, that — was already —
10 was AEST’s, I don’t think Repairify can rely on.
11 And Repairify simply hasn’t distinguished or
12 identified specifically for the court what information either
13 Mr. Olsen or Mr. Rodriquez actually obtained during their
14 employment with Repairify, as opposed to the time that they
15 were employed with AEST.
16 It’s also not entirely clear to me, based on the
17 evidence, that even the results of this testing that was
18 discussed is actually a trade secret or confidential
19 information, because the record before me doesn’t suggest — or
20 doesn’t explain why someone else couldn’t have duplicated —
21 duplicated that testing.
22 For example, Mr. Margol, who has all of the knowledge
23 that Mr. Olsen has about the — as a coinventor of the AEST
24 device, I don’t — it’s not at all clear to me, and no one has
25 explained, why he wouldn’t have been able to do the same type
1 of testing that Mr. Olsen did and identified the same
3 And so because of that, and because there was no
4 restriction on Mr. Margol, it’s hard to see how the — how that
5 is a — trade secret information.
6 And, last, one of the requirements for a trade secret
7 is that the — that the information — that the party has taken
8 reasonable steps to maintain the confidentiality of the — of
9 the information.
10 And with regard to, for example, the computer source
11 code and programming, Mr. Margol left the company in 2014.
12 Nobody has suggested to me that he was under any restrictions.
13 It may be that he was. It may be that he — he
14 signed a confidentiality agreement when he left. But nobody’s
15 given me that. So I don’t have a basis to determine that he
16 couldn’t have provided all of that information. And so the
17 record is just lacking for me to be able to grant the — the
18 remedy of preliminary injunctive relief.
19 There’s also the question of whether any damage would
20 be repairable and whether — why it couldn’t be — couldn’t be
21 satisfied by money damages.
22 But because the motions are — the motion is due to
23 be denied for all the other reasons, I don’t even think I need
24 to further discuss the availability of money damages.
25 So Repairify’s motion for preliminary injunction,
1 document number 41, is — is denied. Obviously, the — and
2 this is always the case.
3 The facts that the court may find at the end of the
4 trial may very well be different than the record before the
5 court here today.
6 So it may be that Repairify can plug in these
7 deficiencies and can show why it should be given permanent
8 injunctive relief or other damages. But based on the record
9 that I have, I can’t find that Repairify has shown a
10 substantial likelihood of success.
11 Mr. Bolling, you got — you mentioned something
12 earlier that I said I was going to follow up on, because it’s
13 something that has been confusing me about the complaint, and
14 that is — there are parts of the complaint in which Repairify
15 is alleging that AirPro is making statements that are false and
16 misleading, that they are literally false, and that they are
18 And then there are other places in which Repairify is
19 complaining that Mr. Olsen is using what, I guess, is factual
20 information that he got from Repairify — from his time at
21 Repairify, that is, the weakness testing, that he’s unfairly
22 using that information.
23 And I can’t tell when it’s — whether the claim is
24 that he’s using factual true information, that is, the trade
25 secret, or whether the claim is that he’s saying false
2 Can you clarify that for me?
3 MR. BOLLING: I believe the answer to your question
4 is yes, that he’s doing both, that he’s using our trade secret
5 information to compete against us, and he’s also — he and
6 Repairify generally are both making false and misleading
7 advertisements and statements that violate FDUTPA and the
8 Lanham Act.
9 THE COURT: Okay. Then here’s — and here’s what I’m
10 going to do. I’m going to — Mr. Heekin, did — you had a
11 counterclaim at one point. Do you still have a counterclaim,
12 AirPro’s counterclaim?
13 MR. HEEKIN: Yes, Your Honor, we do.
14 THE COURT: And does that — does that
15 counterclaim — I didn’t print it. Does it have a FDUTPA
17 MR. HEEKIN: Yes, Your Honor.
18 THE COURT: Okay. Here’s what I’m going to require
19 both of you to do, then. I, quite some time ago, joined the
20 majority of my colleagues in the Middle District of Florida in
21 finding that a claim under FDUTPA which is based on alleged
22 misrepresentations is a claim that is grounded on fraud and,
23 therefore, is governed by rule 9(b)’s heightened pleading
24 standard and that you have to plead the fraudulent statements
25 with specificity.
1 I think — I think every judge in the Middle District
2 has reached that conclusion with the exception of one, and that
3 is — Judge Steele recently disagreed with that, although he
4 simply disagreed in principle. He didn’t explain why. But
5 every other judge has agreed on that.
6 And so I’m going to require Repairify to file an
7 amended complaint that pleads the fraudulent statements, at
8 least for the FDUTPA claim, with specificity. And with the
9 exception of making that change — and, obviously, you can
10 correct your allegation as to Mr. Rodriquez.
11 But don’t add any new claims or anything — if you
12 want to do that, then you need to file a motion for leave to
13 file an amended complaint.
14 But just to plead the fraud with specificity and to
15 correct the allegations against Mr. Rodriquez, I’ll give you a
16 deadline to file an amended complaint.
17 And then, Mr. Heekin, I’ll require you to do the same
18 thing in AirPro’s counterclaim. To the extent you’re going to
19 rely on the FDUTPA claim, you’re going to have to plead the
20 misrepresentations with specificity is required under the
21 Eleventh Circuit. And, basically, it’s that you have to say
22 the who, what, when, and where of the statements.
23 And similarly as to them, you can’t add any other new
24 claims or make any other changes to the claims unless you file
25 a motion for leave to amend.
1 So today is January 20th.
2 Mr. Bolling, if I give you until February 13th, is
3 that enough time to amend your complaint, sir?
4 MR. BOLLING: Yes, Your Honor.
5 THE COURT: All right. And, Mr. Heekin, can you
6 respond by February 28th?
7 MR. HEEKIN: Yes, Your Honor.
8 THE COURT: Or not respond, but file your — you’ll
9 have to file the answers and your amended — your renewed
11 MR. HEEKIN: Does it have to be an answer, or can we
12 attack the specificity of their 9(b) claim?
13 THE COURT: You can respond. You don’t have — it
14 does not have to be an answer.
15 MR. HEEKIN: Thank you, Your Honor.
16 THE COURT: Whatever is appropriate based on the
17 pleading. And then you’ll — obviously, you’ll respond to
18 his — whether you think his pleading is appropriate. I
19 probably just made more work for myself by bringing that up.
20 But the truth is, I didn’t because I learned my
21 lesson before for not having that. Because what happens is I
22 get to summary judgment and all of a sudden I don’t know what
23 the fraudulent allegations are or what was pled. And so I try
24 to — try not to repeat the same mistake.
25 All right. I saw that you-all already mediated.
1 Would it — would it make sense for you to mediate again based
2 on having heard some of my thoughts? Or are your clients both
3 sufficiently entrenched?
4 I have to say, I fear that this — that this
5 litigation is one of those instances that’s — it almost feels,
6 to me, like one of those family breakups that — cases that is
7 equally about principle, and that a lot of good money may be
8 thrown after bad if — if it isn’t resolved.
9 So I see this as being very expensive litigation to
10 pursue. And it might be better if you-all could resolve it in
11 some way, but I’m going to leave that to you-all to see if you
12 can work it out.
13 Mr. Bolling, is there anything else that I can
14 address from the perspective of the plaintiff, sir?
15 MR. BOLLING: You gave one exception to what is —
16 what we can’t amend in our complaint regarding Rodriquez. And
17 I — I think you were talking about where he’s employed.
18 THE COURT: Yeah. I thought — I mean, in fairness,
19 you have to be able to correct that. Obviously you would want
20 to correct that. I just meant don’t bring new claims, but
21 certainly you can correct the allegation as to Mr. Rodriquez.
22 And if you want to bring new claims, you’re free to
23 file a motion for leave to file an amended complaint.
24 That’s — I’m not precluding you from doing that. I just
25 didn’t want to make that part of this.
1 MR. BOLLING: Understood.
2 THE COURT: Mr. Heekin, anything further from your
4 MR. HEEKIN: No, Your Honor.
5 THE COURT: All right. Just a moment.
6 (Judge confers with courtroom deputy.)
7 THE COURT: Because she doesn’t let me forget
8 anything, Madam Deputy points out that the objection, slash,
9 motion to strike is still out there.
10 I considered all the information. I think that the
11 arguments that were raised in the objection and motion to
12 strike were well-taken.
13 But under the circumstances, I actually considered
14 everything that was in the reply and still didn’t find it to be
15 sufficient to carry the burden. And so I’m just going to deny
16 it as moot.
17 MR. HEEKIN: Your Honor, I’m sorry. I do have
18 something. Your Honor has recently, I believe, granted their
19 motion to amend to add the reformation count.
20 Can we — we haven’t responded to that yet. Can we
21 respond when we do our response on February 28th?
22 THE COURT: Yeah. That makes sense. That’s fine.
23 MR. HEEKIN: Thank you, Your Honor.
24 THE COURT: I think the magistrate judge ruled on
25 that. I don’t think I ruled on that.
1 MR. HEEKIN: Oh. Sorry about that.
2 THE COURT: But that’s fine. Yeah. But there’s no
3 reason to — to drive attorneys’ fees up higher on either side
4 by making multiple responses.
5 All right. Have a good weekend. We’re in recess.
6 COURT SECURITY OFFICER: All rise.
7 MR. HEEKIN: Thank you, Your Honor.
8 MR. BOLLING: Thank you.
9 THE COURT: And y’all are free to go. I’m slow
10 getting off.
11 (The proceedings concluded at 4:40Â p.m.)
12 – – –
UNITED STATES DISTRICT COURT )
MIDDLE DISTRICT OF FLORIDA )
I hereby certify that the foregoing transcript is a
true and correct computer-aided transcription of my stenotype
notes taken at the time and place indicated herein.
DATED this 24th day of January, 2017.
s/Shannon M. Bishop
Shannon M. Bishop, RDR, CRR