Opinion
21-cv-2409 (LJL)
06-08-2021
ACCENTURE LLP, Petitioner, v. STEPHANIE NEAL TRAUTMAN, Respondent.
OPINION AND ORDER
LEWIS J. LIMAN, UNITED STATES DISTRICT JUDGE
Petitioner Accenture LLP (“Petitioner” or “Accenture”) moves for a preliminary injunction enjoining respondent Stephanie Neal Trautman (“Respondent” or “Trautman”), a sales executive formerly employed by Accenture, from conducting work in the same or similar role as her former role at Accenture for Wipro Ltd. (“Wipro”), a competitor of Accenture. For the following reasons, the motion is denied.
The following constitute the Court's findings of fact and conclusions of law.
BACKGROUND
A. Parties
Accenture is a “leading global professional services company, provides a broad range of services in strategy and consulting, interactive, technology and operations, and has digital capabilities across all of these services.” Dkt. No. 69 (“Parker Decl.”) ¶ 4.
Wipro is also a global information technology, consulting, and business process services company that competes directly with Accenture. See Dkt. No. 67-37; Dkt. No. 91 (“Hr'g Tr.”) 60:11-24.
Trautman is a sales and marketing executive with a Masters in Business Administration from Xavier University's Williams College of Business. She has worked in the information technology services industry for over twenty years. Dkt. No. 56 (“Trautman Decl.”) ¶¶ 1, 3. Trautman joined Accenture in November 2013 and worked there until February 10, 2021, at which time she left to take a job as Chief Growth Officer (“CGO”) at Wipro.
B. Trautman's work at Accenture
Trautman began her tenure at Accenture in 2013 in the role of Sales Leader for Insurance in North America. Id. ¶ 5. “Over time, [Trautman's] responsibilities grew beyond insurance, and [she] was asked to help manage the P&L for some of Accenture's business processing outsourcings services related to its Financial Services operating unit in North America.” Id. In 2015, Trautman was promoted from “Managing Director CL-3 to a Managing Director CL-2, ” which was the last promotion she received, id., and in 2016 she began to serve as the Financial Services North America (“FSNA”) Sales Lead for Accenture, in which role she “ran a team responsible for promoting Accenture's services to clients in the financial services industry, which consists of banking, capital markets, payment, and insurance businesses, ” id. ¶ 6. In that role, Trautman, “reviewed specific proposals that members of the sales team elected to present to [her] at new business meetings, ” id. ¶ 7, which were convened every week, Hr'g Tr. 80:6-8. As FSNA Sales Lead, Trautman did not have authority to approve deals worth over $100 million, which had to be approved by Global Financial Services leadership and the Capital Committee, which consisted of management more senior than Trautman. Trautman Decl. ¶ 8.
As FSNA Sales Lead, Trautman's deal review process entailed evaluating pricing, margins, staffing, and timelines. Id. ¶ 7. Trautman's role was to “consider[] whether the financial metrics of the deal were aligned with Accenture targets” and to “provide[] feedback customized to the specific features of the particular deal to help the team close the deal at levels that were consistent with quarterly and annual financial plans as directed by Accenture.” Id. Trautman testified:
I do not remember the details of any deals presented or referenced at any new business meeting I attended. The key aspects of any matters under discussion would have been set forth in brief written summaries that I would have reviewed only at or around the time I received them.Id. ¶ 9.
In May 2019, Trautman was asked by Accenture management to spend at least half of her time in a new role, as the Client Account Lead for a single large Accenture client, Chubb. Id. ¶ 10. Since Chubb was among Accenture's top 200 clients, known as “Diamonds, ” Trautman's title became the Diamond Client Account Lead (“DCAL”) for Chubb. Id. Trautman performed this new role while continuing as FSNA Sales Lead. Id. The role of a DCAL is to be “the client's main point of contact” who “works to bring the best of Accenture to the client to serve its needs and priorities.” Dkt. No. 65 (“Parker Decl.”) ¶ 8. Thus Trautman's job as DCAL was to “immerse [herself] in the business and culture of Chubb, to get to know its executives, and to learn its service needs.” Trautman Decl. ¶ 12. Trautman was charged with being “the connecting bridge between Chubb and Accenture, the relationship manager.” Id.; see also Dkt. No. 56-1. If Chubb had a need, Trautman was the “go to” person in the first instance and would “then introduce the Chubb executive to the appropriate personnel at Accenture who could provide more detailed information about the services that might be desired and actually provide those services.” Trautman Decl. ¶ 12; see also Parker Decl. ¶ 8 (the DCAL “acts as the client's main point of contact and works to bring the best of Accenture to the client to serve its needs and priorities”). Trautman testified: “I generally had to have ‘elevator pitch' knowledge about Accenture's basic offerings, but I did not have technical mastery of any of them.” Trautman Decl. ¶ 12. David Parker (“Parker”), who is the Client Group Lead for Financial Services in the Northeast region of North America, and who supervised Trautman from September 2020 until she left Accenture, testified that Trautman's role as DCAL “also required an understanding of Accenture's broader business strategy and best practices, specifically the company's marketing and penetration strategies, so that Trautman could incorporate those strategies into her efforts to grow the relationship and sell additional Accenture services to her diamond client.” Parker Decl. ¶ 10.
In fall 2019, after Trautman had served as a Managing Director for approximately six years, Accenture considered and rejected Trautman's promotion to the level of Senior Managing Director. Trautman Decl. ¶ 16; Hr'g Tr. 237:19-25. In March 2020, Accenture implemented a corporate reorganization dubbed “NextGen Growth Model, ” which “shifted away from industry-focused groups and toward groups organized by region.” Parker Decl. ¶ 7. In connection with the realignment, Trautman “moved out of her FS[NA] Sales Lead role but continued serving as the DCAL for Chubb.” Parker Decl. ¶ 7; see also Trautman Decl. ¶ 20.
The parties dispute the nature and timeline of Trautman's transition away from her FSNA Sales Lead role. Trautman testified that she was informed in August 2019 that she would “no longer have the Sales Lead role or any equivalent role after the corporate reorganization, ” and that “[a]s a result, this period from August 20110 through the end of February 2020 was a ‘lame duck' period in my role as FSNA Sales Lead.” Trautman Decl. ¶ 20. Accenture does not dispute that in March 2020 Trautman was removed from her FSNA Sales Lead role, but it disputes the characterization of the August 2019-February 2020 period as one in which Trautman was a “lame duck” in her FSNA role, pointing out that she continued to receive communications and documents relevant to that role. See Dkt. No. 93 (“Closing Arg. Tr.”) at 292:5-293:24. For example, in December 2019, Trautman reviewed and engaged in correspondence about a document providing details about deals from the fourth quarter of 2019 that Accenture lost or from which it withdrew. See PX-59. In January 2020, Trautman was sent a spreadsheet showing deals in Accenture's Financial Services pipeline worth more than $25 million as of January 28, 2020. See Hr'g Tr. 90:17-91:9; PX-57 and PX-58. However, Trautman's uncontradicted testimony is that during this period:
Notably, as Respondent has pointed out, this spreadsheet was sent to Trautman, among others, by a different Accenture employee, more senior to Trautman, Roland Smertnig, who states in the cover email that he-not Trautman-“plan[s] to run and host common overarching origination session in the last week of Feb.” PX-57.
[M]y remaining responsibilities as FSNA Sales Lead were perfunctory. I mainly reviewed proposals in the pipeline at a relatively late stage in their development, presented to me by others, and was one of several people who decided whether to grant approval, based in large part on whether the terms presented were consistent with our unit's projected numbers.
Trautman Decl. ¶ 21. Trautman testifies she “do[es] not recall the specific details of any of the deals under discussion, each of which had their own unique characteristics” and that she “ha[s] not retained any of the documents presented for [her] review in connection with these meetings, nor h[as she] reviewed any of them since being removed as FSNA Sales Lead in February 2020.” Id.
In addition to her two roles as FSNA Sales Lead and DCAL for Chubb, Trautman served on three committees: the Northeast Leadership Team (“NELT”), the Diamond Leadership Council (“DLC”), and Global Leadership Council (“GLC”).
Trautman became part of the NELT in February 2020 after she interviewed for but was denied a promotion to the position of Client Market Lead for Financial Services. Trautman Decl. ¶ 28. The NELT was a committee of “key executives who had access to, and collaborated about, Accenture's key strategic initiatives, including target markets, existing competition for new business, and pricing.” Parker Decl. ¶ 19. The NELT was composed of approximately 40 members total, including an executive committee comprising 15 to 20 executives. Trautman Decl. ¶ 28; Hr'g Tr. 193:17-194:3. Trautman was a member of the NELT, but she was not on its executive committee. The executive committee of NELT met once or twice per week “to look at exactly where [Accenture] is closing the quarter, exactly how many accounts have unpaid balances, [and] exactly what deals need to close this week and next week.” Hr'g Tr. 195:24-196:3. The broader NELT met approximately once per month for 60-90 minutes, and once per quarter for more extended “off-site” meetings (or, during the COVID-19 pandemic, virtual off-sites) to discuss “strategic matters.” Id. 196:3-16; see also Dkt. No. 64 (“Azagury Decl.”) ¶ 17 (“The NELT set Accenture's strategy for [Accenture] clients headquartered in the northeastern United States), including financial plans, staffing and hiring plans, and offerings and campaigns that Accenture would focus on in the Northeast.”). Trautman testified that at the monthly NELT (non-executive committee) meetings she attended, Jack Azagury (“Azagury”), a Senior Managing Director and Market Unit Lead for the U.S. Northeast region at Accenture, would “[lead] discussions about Accenture's efforts to deal with the pandemic, plans to improve employee morale in a work-from-home environment, and inclusion and diversity initiatives. He would also at times report on the state of the business and whether our unit was meeting its numbers, or relate various decisions that the Executive Committee had made.” Trautman Decl. ¶ 29.
Next, as DCAL, Trautman was automatically a member of the DLC, which comprises over 200 senior sales executives at Accenture, and she attended its mandatory monthly meetings. Id. ¶ 32; Azagury Decl. ¶ 22; Hr'g Tr. 210:10-12. At the DLC meetings, “DCALs across client bases and industries discuss[] their strategies and best practices for selling services to Accenture's key clients.” Azagury Decl. ¶ 22. Azagury testified that the information discussed “includ[ed] discussions of confidential information such as Accenture's most profitable accounts and the optimal mix of services to sell to clients.” Id. Trautman testified that the DLC meetings were “intended for a broad audience and thus at a very general level, ” and that she “attended these meetings with an ear to what might be of interest to Chubb only.” Trautman Decl. ¶ 33. Thus, “[s]ince Chubb was [Trautman's] sole client responsibility, if the presentation had no relevance to Chubb, [Trautman] would pay less attention and work on other things.” Id.
Trautman testified she “ha[s] not retained any of the materials circulated in connection with DLC meetings and do[es] not remember the details of anything discussed during th[ose] meetings.” Id. ¶ 34.
Finally, after March 2020, Trautman was expected to attend meetings of the GLC, id. ¶ 35, which is “a committee of senior leaders across Accenture who serve all market units and industries, ” Azagury Decl. ¶ 19. Azagury summarized:
The GLC is briefed multiple times a year by Accenture's CEO and other members of the Global Management Committee on highly confidential sales information, new product releases, and Accenture's competitive standing. For example, GLC meetings have discussed the types of deals that Accenture should seek to win and Accenture's strategy for competing with other businesses to provide cloud computing services.Id. The GLC is composed of more than 200 Accenture employees and generally held quarterly virtual meetings. Trautman Decl. ¶ 35. Trautman “never presented at any GLC meeting, prepared any materials for any GLC meeting, or performed any services in connection with [her] role on the GLC.” Id. She testified that “[l]ike other attendees, [she] merely listened to the general information that was presented, ” that “[m]uch of the information presented during GLC meetings was irrelevant for purposes of [her] work with Chubb, ” and that “[n]o materials were circulated in connection with GLC meetings, and [Trautman] do[es] not remember the details of any presentations that were made.” Id.
C. Trautman's transition from Accenture to Wipro
In or about summer 2020, Wipro engaged a professional search firm, Korn Ferry, to lead a search for a candidate to assume the role of CGO. Dkt. No. 58 (“Sarangi Decl.”) ¶ 3. “The CGO position was a new role at Wipro and was conceived by the Company's new CEO as part of a strategy to create a stronger culture of growth and pivot in the market on a global scale.” Id. Korn Ferry worked with Ayaskant Sarangi, Wipro's Senior Vice President, Human Resources, to develop a Position Specification that described the Wipro expectations for the scope of the role and the qualities of a successful candidate. Id. ¶ 4. The job description Wipro created for the position stated, under the heading “The Opportunity:”
Wipro is seeking to hire a Chief Growth Officer who will report to the CEO. This newly created role will be responsible for leading Sales Excellence, Marketing, and Alliances & Ecosystem Partners for the company. The Chief Growth Officer will be responsible for bridging the functional areas of business development, sales, marketing, and operations to help the company achieve long-term revenue growth and success.
S/he will be responsible for developing and leading the partnership efforts across multiple P&L units, working closely with vertical business unit leaders, with a singular aim to drive significantly accelerated revenue streams by taking bold, innovative and entrepreneurial approaches and advance the continued relevance, growth and success of the organization.
The leader will develop strategies that establish new relationships with emerging technology companies that can help the organization disrupt the status quo and position for growth.
PX-13 at Tratuman0000305-06.
In or about August 2020, Korn Ferry identified Trautman as a qualified candidate for the CGO position and introduced her to Wipro. Sarangi Decl. ¶ 7. Wipro decided to interview Trautman as well as two other candidates “based on the breadth of their experience, qualifications, and potential to excel in the CGO role.” Id. Trautman's first call with anyone at Wipro was on August 28, 2020, when she spoke with Saurabh Govil (“Govil”), Wipro's head of human resources. During the conversation, Govil described the CGO position. Hr'g Tr. 102:5-12. Shortly after, on September 9, 2020, Trautman had a call with Thierry Delaporte (“Delaporte”), Wipro's CEO, to discuss the role and her candidacy. Id. 103:11-18; PX-14. The same day that Trautman spoke with Delaporte, she also accessed a document from Accenture's files titled “Wipro Competitive Analysis.” She did so in order to learn more about Wipro because she was “curious about Wipro and their business.” Hr'g Tr. 104:18-105:1; PX-5 (discussed infra).
On September 18, 2020, Trautman emailed Korn Ferry her Accenture restricted stock unit (“RSU”) agreement, noting that “$1 [million] has not vested but almost all of it will vest in January [2021].” PX-16. Trautman emailed this information about her RSU's because her “RSU situation with Accenture would impact [her] offer from Wipro because [she] would have left a significant amount of RSU's at Accenture” if she left before those units vested, and Trautman “believe[d] that Wipro would have wanted to consider [her] RSUs when it made [her] its offer.” Hr'g Tr. 108:23-109:8. On October 16, 2020, Trautman spoke with Rishad Premji, Wipro's Chairman. Id. 27:1-2; PX-16. On November 6, 2020, Trautman had another call with Delaporte. PX-53. On November 13, 2020, Trautman emailed a signed employment agreement to Wipro, which contemplated a February 6, 2021 start date. PX-20; Hr'g Tr. 110:20-111:3.
After returning an executed employment agreement to Wipro, and before informing Accenture that she had accepted an offer, Trautman continued to perform her job at Accenture, including attending meetings of the committees on which she sat. On November 16, 2020 Trautman attended a NELT meeting, Hr'g Tr. 114:2-71; on December 17, 2020, Trautman attended a GLC webcast that discussed Accenture's business health, id. 116:11-16; and on January 25, 2021, Trautman attended another NELT meeting at which Accenture's “Cloud First” strategy was discussed, see id. 153:3-16.
In December 2020, Trautman offered her help to Wipro with recruiting efforts that were underway for new sales roles that would exist below Trautman. See id. 145:15-21; PX-21. Trautman wrote in a December 11, 2020 email to Govil, “If you would prefer waiting until I join, that is understandable, but I may be able to help with some of the recruiting efforts that are underway for the key sales roles, excluding Accenture people, of course.” PX-21. Wipro ultimately hired one candidate with whom Trautman-while she was still employed at Accenture-began speaking about Wipro for a sales role under her. That person was not an Accenture employee at the time they were approached by Trautman about the opportunity at Wipro. Hr'g Tr. 145:22-146:3.
On February 1, 2021, Trautman provided notice to Accenture of her departure in the form of a formal resignation letter. RX-13. The letter provided 90 days' notice and stated Trautman's intention to begin working at Wipro. Id. The letter also stated: “As is described in my employment agreement and my RSU agreements, I will . . . refrain from soliciting employees, clients with whom I have had close contact (see Attachment A) and will not disclose Accenture's confidential information.” Id. Attachment A attached to the letter of resignation listed a single Accenture client, Chubb. Id. There is some dispute over when Trautman finally told her supervisor Azagury that she was committed to accepting the position at Wipro. Azagury testified that from February 1 to February 4, he and Accenture were “trying to save her.” Hr'g Tr. 242:14-15. On February 4, 2021, Trautman “advised Mr. Azagury that [she] remained committed to leaving Accenture and that [she] believed the opportunity to advance [her] career as Wipro's CGO was too unique and exciting to pass up.” Trautman Decl. ¶ 44. On Friday, February 5, 2021, a representative of Accenture's Human Resource Department notified Trautman that Accenture was terminating her employment effective the following Wednesday, February 10, 2021. Id. ¶ 46; RX-15.
On February 16, 2021, Trautman sent an email to Govil that “set out how [Trautman] plan[ned] to comply with her noncompete at Accenture.” Tr. 54:7-12. The email states: “I will stay away from Chubb and everything else that I did over 13 months ago is not part of my remit at Wipro, others will perform those services[.]” PX-27.
Trautman began her employment as Wipro's CGO on February 17, 2021.
D. Trautman's work for Wipro
As CGO of Wipro, Trautman works directly with the CEO. She described her job as follows:
[T]o familiarize myself with Wipro's unique assets, its strengths and weaknesses, its various departments, its customer base, and its product portfolio, and to determine how best to leverage Wipro's resources to achieve maximum opportunities for growth. Among other things, I am expected to help synthesize and coordinate activities among Wipro's various departments to assure uniformity throughout the company and move toward one set of best of practices that makes sense for Wipro as a whole. In this regard, I will oversee the development of certain broad-based processes to enable Wipro's marketing and sales functions in various general respects. I am also responsible for hiring a range of professionals who will report to me and have primary responsibility for managing different aspects of the growth effort. In addition, I will explore potential alliances with third-party IT providers to expand the range of ecosystem partners that Wipro can draw upon in offering its services to the market.
Trautman Decl. ¶ 52.
Thus, a large part of Trautman's new role consists of designing systems and processes by which Wipro can drive sales and marketing growth. As CGO, she is “not expected to manage, and will have no role in managing, Wipro's relationship with any one client or group of clients, ” and her “responsibilities as [CGO] do not pertain to individual transactions, individual clients, or specific industries.” Id. ¶¶ 54-55. By contrast, in the last 18 months of her employment at Accenture, Trautman “performed the services that were assigned to [her], and was responsible for executing strategies and following processes that [she] had no role in developing.” Id. ¶ 53. Trautman testified: “In short, rather than focusing on implementation at the deal or client-level as I did at Accenture, I now have a role in guiding strategic direction.” Id. ¶ 56. Trautman further testified that since joining Wipro, she has “not disclosed or used any Accenture confidential information or trade secrets . . . [she has] not solicited Chubb . . . [she has not solicited any Accenture employees . . . [and she] will continue to comply with these restrictions.” Id. ¶ 61.
E. Trautman's non-compete and the instant action
Petitioner has separately initiated arbitration to enforce the non-compete provision of Trautman's employment agreement with Accenture. See PX-1 (“Employment Agreement”); Dkt. No. 1 ¶¶ 1, 69. The parties have represented that they are seeking to arbitrate on an expedited basis. See Dkt. No. 42 at 4:5-21.
By this motion, Accenture seeks to enjoin Trautman during the pendency of the arbitration from engaging in certain work activities for Wipro by way of enforcing the Employment Agreement. Trautman executed the Employment Agreement with Accenture on September 23, 2013. The Employment Agreement remained effective throughout the term of her employment with Accenture. It contains a Restrictive Covenant Agreement (“RCA”), which in turn contains a Non-Competition Covenant that states:
[Trautman] shall not, during the period of [her] employment with Accenture and for a period of twelve (12) months following the termination of [her] employment with Accenture (the “Restricted Period”) associate . . . with any Competitive Enterprise in the Territory in any capacity which involves the performance of services that are the same as or similar to those you performed for Accenture or its Affiliates within the eighteen (18) months prior to the date on which your employment with Accenture terminated[.]
Employment Agreement, Ex. B § 1(b) (the eighteen months identified in the above passage is hereinafter identified as the “Lookback Period”).
The RCA also stated that Trautman “acknowledge[d] and agree[d] that in the course of [her] employment with Accenture, [she] [has] been and will be provided with access to Confidential Information, ” that “Accenture and its Affiliates would suffer significant and irreparable harm from [Trautman] competing with Accenture for a period of time following [her] termination of employment, ” and that Trautman's “unauthorized or improper use or disclosure” of Accenture's confidential information or trade secrets would “cause serious and irreparable harm to Accenture and its affiliates.” Id., Ex. B at 2.
Accenture argues that pursuant to the Non-Competition Covenant, Wipro is a “Competitive Enterprise, ” and Trautman's role as Wipro GCO “involves the performance of services that are the same or similar to those [she] performed for Accenture . . . within the eighteen months prior to the date on which [her] employment with Accenture terminated.” Ex. B § 1(b). Accenture thus argues that Trautman is in violation of the RCA.
The Employment Agreement includes a dispute resolution provision requiring that “any and all disputes . . . arising out of, relating to or in connection with . . . any or all noncompetition or non-solicitation agreements and obligations” be settled through arbitration. Id. § 13. However, parties are permitted to “bring an action or proceeding in any court of law for the purpose of . . . seeking temporary or preliminary relief....” Id.; see also Convergen Energy WI, LLC v. L'Anse Warden Elec. Co., LLC, 2020 WL 5894079, at *4 (S.D.N.Y. Oct. 5, 2020) (“Even where the parties have agreed to arbitrate a dispute, the ‘Second Circuit has repeatedly held that courts retain the power, and the responsibility, to consider applications for preliminary injunctions while a dispute is being arbitrated.'”) (quoting Gen. Mills, Inc. v. Champion Petfoods USA, Inc., 2020 WL 915824, at *3 (Feb. 26, 2020)); Am. Exp. Fin. Advisors Inc. v. Thorley, 147 F.3d 229, 231 (2d Cir. 1998) (“[C]ourts should consider the merits of a requested preliminary injunction even where the validity of the underlying claims will be determined in arbitration.”); Roso-Lino Beverage Distributors, Inc. v. Coca-Cola Bottling Co., 739 F.2d 124, 125 (2d Cir. 1984) (“The fact that a dispute is to be arbitrated, however, does not absolve the court of its obligation to consider the merits of a requested preliminary injunction.”). Accenture seeks a preliminary injunction to enjoin Trautman from performing, as Wipro's CGO, any such same or similar services as she performed for Accenture during the Lookback Period.
LEGAL STANDARD
A preliminary injunction is “an extraordinary remedy never awarded as of right.” Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 24 (2008). The movant seeking a preliminary injunction must prove each of the following elements: (1) likelihood of success on the merits; (2) irreparable harm absent injunctive relief; (3) that the public's interest weighs in favor of injunctive relief; and (4) that the balance of hardships tips decidedly in the movant's favor. See id. at 20; Metro Taxicab Bd. of Trade v. City of New York, 615 F.3d 152, 156 (2d Cir. 2010). Moreover, “[a] showing of irreparable harm is the single most important prerequisite for the issuance of a preliminary injunction.” Faively Transp. Malmo AB v. Wabtec Corp., 559 F.3d 110, 118 (2d Cir. 2009); see Singas Famous Pizza Brands Corp. v. N.Y. Adver. LLC, 468 Fed.Appx. 43, 45 (2d Cir. 2012). “To satisfy the irreparable harm requirement, Plaintiff[ ] must demonstrate that absent a preliminary injunction [it] will suffer an injury that is neither remote nor speculative, but actual and imminent, and one that cannot be remedied if a court waits until the end of trial to resolve the harm.” Faively, 559 F.3d at 118 (quoting Grand River Enter. Six Nations, Ltd. v. Pryor, 481 F.3d 60, 66 (2d Cir. 2007)). The “mere possibility of irreparable harm is insufficient to justify the drastic remedy of a preliminary injunction.” Borey v. Nat'l Union Fire Ins. Co., 934 F.2d 30, 34 (2d Cir. 1991).
Where, as here, a court considers whether to enjoin an employee from continuing to perform services that a past employer alleges violates a restrictive covenant, “[t]he Court need not apply the heightened standard applicable to mandatory injunctions, as opposed to status quo injunctions, which would require that the movant establish a clear or substantial likelihood of success on the merits.” Int'l Bus. Machines Corp. v. De Freitas Lima, 2020 WL 5261336, at *6 (S.D.N.Y. Sept. 3, 2020), aff'd sub nom. Int'l Bus. Machines Corp. v. Lima, 833 Fed.Appx. 911 (2d Cir. 2021) (citing Gen. Mills, Inc. v. Champion Petfoods USA, Inc., 2020 WL 915824, at *7 (S.D.N.Y. Feb. 26, 2020)). That is because “for purposes of granting a preliminary injunction, the ‘status quo' is not simply the status quo in the moment before relief is granted. Rather, it refers to ‘the last actual, peaceable uncontested status which preceded the pending controversy.'” Gen. Mills, 2020 WL 915824, at *8 (quoting N. Am. Soccer League, LLC v. U.S. Soccer Fed'n, Inc., 883 F.3d 32, 37 (2d Cir. 2018)). This controversy began when Trautman commenced her employment with Wipro, and granting an injunction would reinstate the “last actual, peaceable uncontested status which preceded the pending controversy.” Id. “Indeed, ‘courts in this Circuit routinely apply the ordinary standard [rather than the heightened, mandatory injunction standard] when deciding whether to issue an injunction in connection with an employment contract.'” Lima, 2020 WL 5261336, at *6 (quoting Gen. Mills, 2020 WL 915824, at *8).
DISCUSSION
The motion is denied because Petitioner has failed to demonstrate that it will suffer irreparable harm absent issuance of an injunction. Petitioner has not demonstrated that Trautman was exposed to any confidential information or trade secret that she will inevitably use or disclose in performance of her duties as Wipro CGO so as to cause irreparable harm to Accenture.
“The Second Circuit has rejected the proposition that irreparable harm must inevitably be assumed in breach of covenant cases.” Uni-World Cap. L.P. v. Preferred Fragrance, Inc., 73 F.Supp.3d 209, 236 (S.D.N.Y. 2014) (quoting Singas Famous Pizza Brands Corp. v. New York Adver. LLC, 2011 WL 497978, at *6 (S.D.N.Y. Feb. 10, 2011), aff'd, 468 Fed.Appx. 43 (2d Cir. 2012)); see Baker's Aid v. Hussmann Foodservice Co., 830 F.2d 13, 15 (2d Cir. 1987). “Though courts often issue preliminary injunctions when it appears likely that the plaintiff will prevail in covenant-not-to-compete cases, this is not an automatic process, but instead depends upon the factual particulars in each case.” Uni-World Cap. L.P., 73 F.Supp.3d at 236 (quoting Singas Famous Pizza Brands Corp., 2011 WL 497978, at *6). Such is the case even where, as here, the restrictive covenant agreement to which a defendant is a party states that any violation thereto will constitute irreparable harm.
The Employment Agreement, with its acknowledgements, was signed in 2013, long before the beginning of the Lookback Period or any time period in which information acquired by Trautman could be said to still be fresh in her memory. This provision has evidentiary value and may “support[] a finding of irreparable harm, ” but it is “not dispositive.” Lima, 2020 WL 5261336, at *14; see Singas Famous Pizza Brands Corp., 2011 WL 497978, at *7 (a stipulation that violation of a restrictive covenant is “merely one factor that must be considered in deciding whether irreparable harm would result if an injunction did not issue”) (internal quotation marks and citation omitted); In't Bus. Machines Corp. v. Visentin, 2011 WL 672025, at *7 n.4 (S.D.N.Y. Feb. 16, 2021) (rejecting the argument that a similar acknowledgment establishes irreparable harm); cf. Baker's Aid, 830 F.2d at 16 (“[C]ontractual language declaring money damages inadequate in the event of a breach does not control the question whether preliminary injunctive relief is appropriate.”). Thus, such language does not alone carry a petitioner's burden to establish the fact-not merely the ex-ante agreement-that irreparable harm is actual or imminent. Petitioner has not carried that burden on this motion.
A. There is no risk of irreparable harm from the inevitable disclosure of trade secrets
A court may find a risk of irreparable harm where it is likely that a trade secret has been misappropriated or will be misused or where, based on the defendant's position, disclosure of a trade secret is inevitable. See Lima, 2020 WL 5261336, at *14 (“Courts have found irreparable harm where there is a likely risk that a former employer's trade secrets will inevitably be disclosed.”) (citing Int'l Bus. Machines Corp. v. Papermaster, 2008 WL 4974508, at *6 (S.D.N.Y. Nov. 21, 2008)); EarthWeb, Inc. v. Schlack, 71 F.Supp.2d 299, 308 (S.D.N.Y. 1999) (“In this circuit, irreparable harm may be presumed if a trade secret has been misappropriated.”). That is because “[a] trade secret once lost is, of course, lost forever and, therefore, such a loss cannot be measured in money damages.” Estee Lauder v. Batra, 430 F.Supp.2d 158, 174 (S.D.N.Y. 2006); see Papermaster, 2008 WL 4974508, at *7 (“Courts have routinely noted that it is very difficult to calculate the monetary damages that would successfully redress the loss associated with trade secret misappropriation.”) (internal quotation marks and citations omitted) (citing cases).
Petitioner has failed to establish irreparable harm on this theory because it has not established that Trautman is in possession of any trade secret that she has disclosed or as to which her “new employment ‘creates a risk that disclosure of this information is inevitable'” or even likely. Papermaster, 2008 WL 4974508, at *7 (citing Payment Alliance Int'l. Inc. v. Ferreira, 530 F.Supp.2d 477, 482 (S.D.N.Y. 2007)). To reach this conclusion, the Court conducts two inquiries: first, into the sensitivity of the information Trautman was privy to at Accenture, and second, into the risk that such information would be disclosed or used by Trautman in her new position.
“New York courts define a ‘trade secret' as ‘any formula, pattern, device or compilation of information which is used in one's business, and which gives [the owner] an opportunity to obtain an advantage over competitors who do not know or use it.'” Lima, 2020 WL 5261336, at *8 (quoting N. Atl. Instruments, Inc. v. Haber, 188 F.3d 38, 44 (2d Cir. 1999)); accord Ashland Mgmt. Inc. v. Janien, 82 N.Y.2d 395, 407 (1993) (citing Restatement of Torts § 757 cmt. b (1939)). “[C]onfidential proprietary data relating to pricing, costs, systems, and methods are protected by trade secret law.” Lima, 2020 WL 5261336, at *8 (quoting In re Dana Corp., 574 F.3d 129, 152 (2d Cir. 2009)); see also EarthWeb, 71 F.Supp.2d at 314 (“In some contexts, courts have found that particularized marketing plans, costing and price information may constitute trade secrets.”) (citations omitted). As a general matter, and except where the alleged secret conveys a competitive advantage and cannot be readily duplicated from generally available information, “marketing strategies, ” or “mere knowledge of the intricacies of a business” do not rise to the level of a trade secret. Marietta Corp. v. Fairhurst, 754 N.Y.S.2d 62, 67 (3d Dep't 2003); see Visentin, 2011 WL 672025, at *15 (‘“[M]arketing strategies,' . . . are not necessarily protected as ‘trade secrets' under New York law”) (quoting Marietta Corp 754 N.Y.S.2d at 67); Silipos, Inc. v. Bickel, 2006 WL 2265055, at *4 (S.D.N.Y. Aug. 8, 2006) (“[T]rade-secret protection does not extend to information regarding market strategies.”).
The law of trade secrets and the enforcement of restrictive covenants is designed to enhance competition by protecting a firm's investments in novel ideas that give it a competitive advantage. It is not intended to stifle competition by protecting a firm against the loss of an employee whose value resides not in the secrets she will divulge to her new employer but in the experience and skill she will bring. Cf. IDX Sys. Corp. v. Epic Sys. Corp., 285 F.3d 581, 585 (7th Cir. 2002) (“Rules limiting the extent of no-compete clauses are based on the fact that they tie up human capital and, if widely adopted, may have the practical effect of preventing horizontal competition in economically significant markets.”) (citing Paul H. Rubin & Peter Shedd, Human Capital and Covenants Not to Compete, 10 J. Legal Studies 93 (1981)).
“To determine whether information constitutes a trade secret, [] courts consider the following factors: ‘(1) the extent to which the information is known outside of the business; (2) the extent to which it is known by employees and others involved in the business; (3) the extent of measures taken by the business to guard the secrecy of the information; (4) the value of the information to the business and its competitors; (5) the amount of effort or money expended by the business in developing the information; (6) the ease or difficulty with which the information could be properly acquired or duplicated by others.'” Papermaster, 2008 WL 4974508, at *7 (quoting Haber, 188 F.3d at44).
One way in which a plaintiff can establish a likelihood of irreparable harm is to show that it is inevitable that its secrets will be disclosed. “Factors that guide a court in making the determination that disclosure of trade secrets is inevitable, ” in turn, “include: ‘(1) the extent to which the new employer is a direct competitor of the former employer; (2) whether the employee's new position is nearly identical to his old one, such that he could not reasonably be expected to fulfill his new job responsibilities without utilizing the trade secrets of his former employer; (3) the extent to which the trade secrets at issue would be valuable to the new employer; and (4) the nature of the industry and its trade secrets.'” Id. (quoting Payment Alliance Int'l, 530 F.Supp.2d at 482).
None of the information Trautman was exposed to during the Lookback Period (or even before) at Accenture-with the possible exception of information relating to Chubb, which is by and large not at issue on this motion-constitutes a trade secret. Moreover, Accenture has not established that Trautman is likely to use or disclose any information to which she was exposed.
The Court addresses the documents to which Trautman was exposed that Accenture has identified as containing sensitive information, the disclosure or use of which allegedly threatens irreparable harm.
The Court focuses on the information that was highlighted by Accenture as particularly sensitive at closing arguments, however none of other information in the record suggests that Trautman's as CGO at Wipro will cause irreparable harm either.
Accenture first highlights several documents and meetings Trautman reviewed or attended in the several months preceding her departure in connection with her committee memberships:
On November 16, 2020, Trautman attended a NELT meeting at which the NELT reviewed, inter alia, Accenture's “Top Competitive Deals” worth over $10 million in Q1 and Q2 2020. The slide included information regarding the size of each deal, Accenture's likelihood of success, and Accenture's competitors on each deal. See PX-2 at Accenture000612-13. Wipro is included as a listed competitor on some of the prospective deals. This information, however, merely lists large corporations that are customers of the services that Wipro and Accenture, as well as numerous other companies, offer. The two offer information technology services-the kinds of services for which every large company has a need and is a potential customer. Neither the companies in the industry nor the companies that are potential customers can credibly be claimed to be a trade secret. The list is inclusive of several of the largest companies in the world; such information is not secret and would not be difficult for Wipro to reproduce. The very fact that Wipro is a competitor on certain deals listed belies the notion that Wipro is or would be unaware of the existence of these prospective business partners; similarly, there is no reason to believe Wipro would not know the deals for which Accenture competes, just as Accenture knows which deals Wipro is competing for.
The November 16, 2020 presentation also includes a slide titled “Campaigns - how it all comes together for our clients.” PX-2 at ACCENTURE-000616. This slide similarly contains high-level, general strategic themes. It addresses such general themes for winning business as “Optimize Cost Structure” and “Fast-Track Move to the Cloud, ” themes that in no way are unique to or proprietary of Accenture. There are bullet points underneath each heading that provide more-but still limited-detail to elaborate what is meant, but these primarily appear to state the names of individuals or Accenture departments, Accenture products, or internal Accenture projects without giving any detail about those projects.
On December 17, 2020 Trautman attended a GLC webcast at which information was presented and updates were given regarding the state of Accenture's business health as well as challenges it faces. See PX-4. Petitioner highlighted discussion about the strength and weaknesses of Accenture's competitors, including Accenture's India-based competitors, such as Wipro. See RX-28 at ACCENTURE-0001396-98. However, this information is also presented at a high, general level. It speaks to themes that are obvious and would not be particularly be difficult for Wipro to ascertain on its own, such as that Accenture might be able to attract business through attractive pricing and the simplicity of its offerings and that Accenture's India-based competitors are focused on winning business from Accenture. The slide deck presented at the meeting also contains some high-level information about sales during Accenture's first and second quarters of 2021, see id. PX-4 at ACCENTURE-0001429-30, but that information is only at the aggregate level either across the company or by geographies such as Europe, Growth Markets, and North America; and and it does not contain any prospective margin forecasts or deal-specific profit margin information. See id.; Hr'g Tr. 216:8-15; cf. Visentin, 2011 WL 672025, at *12 (“IBM has failed to demonstrate how, absent any indication that [Defendant] possessed more specific knowledge of the underlying data, [his] supposed recollection of the overall cost of IBM's cloud investment can be of any use to a competitor and thus that it constitutes a trade secret in need of protection.”); id at *15 (crediting testimony that “margin . . . based on overall business . . . won't help you in the deal-to-deal combat with the client”).
For example, Accenture highlights as sensitive comments that it's India-based competitors are “really focusing on our Diamond[] [clients]” and “one of our best weapons the [India-based competitors] don't have is the integrated approach with our ecosystem partners.” Id.; see Accenture Closing Presentation at 41.
On January 25, 2021, Trautman attended a NELT meeting regarding Accenture's “Cloud First” strategy. As characterized by Petitioner, the meeting “focused on the importance of cloud for closing large deals, and the priority accounts Accenture was targeting with its cloud strategy.” Closing Arg. Tr. 297:21-298:2; see PX-44. Petitioner emphasizes that the presentation displayed “Cloud First Priority Accounts” in New England, which listed Accenture's Financial Services clients, including both Chubb and one of Accenture's largest clients. See PX-44 at ACCENTURE-0008661. But the slide merely lists several of the largest companies in the United States which are clients of Accenture. That Accenture is maintaining such clients and seeking to expand the scope of the services provided to them is no trade secret. It is a rare service provider indeed that does not seek to expand its relationship with its clients. See also Hr'g Tr. 271:7-13 (Parker admits that Accenture has “let the world know that it targets the cloud and views cloud-related work as a major priority” and that is “not something that would be unknown to its competitors”). Moreover, the very evidence Petitioner adduces establishes that the entire industry is aware there is a demand in the market for cloud-based services. See RX-28 at ACCENTURE-0001396 (“[Accenture's competitors] are on cloud. We did cloud first. Their [sic] following.”). Respondent argued, without rebuttal at the hearing, that using the cloud for information technology was not unique to Wipro; it is a strategy that most companies employ. There is no record evidence that Accenture's cloud services are proprietary or not interchangeable with services offered by its competitors-and certainly no information that, to the extent such proprietary information exists, Trautman was aware of it.
Petitioner also highlights two documents Trautman sent to herself in connection with being recruited by and ultimately departing for Wipro:
On September 9, 2020, in preparation for her call with Wipro's CEO, Trautman accessed a document marked “for internal use only” and “confidential” which provides a competitive analysis of Wipro. See PX-5; Hr'g Tr. 104:18-106:8. Although the document contains information regarding Accenture's strategy for competing with Wipro, such as information under the heading “Why should we be concerned about [Wipro]” and “Compete to Win [against Wipro] Themes, ”-the slides Accenture highlighted at closing arguments, see Closing Arg. Tr. at 33-34-the information is of the most general character and not such as would cause irreparable harm to Accenture if it were disclosed to Wipro. The stated reasons why Accenture “should be concerned” about Wipro contain only high-level information already known to Wipro, such as information about their workforce, partnerships, and solutions. That information merely describes the dimensions upon which companies compete. See id. Wipro and Accenture were known competitors. Knowing that Accenture viewed Wipro's workforce, partnerships, or solutions as general competitive threats would not convey any information to Wipro beyond that Accenture viewed Wipro as a potential competitive threat-information as to which Accenture was aware.
Likewise, the information contained on Accenture's “Compete to Win Themes” slide itself is general and intuitive. For example, it highlights Wipro's client-engagement strategies (in broad strokes) and its “aggressive pricing, ” and it advises Accenture to take steps that any company seeking to compete with another might take, such as “differentiate Accenture solutions, ” “[h]ighlight the scale and breadth in skills of our geographically dispersed low-cost delivery capabilities as compared to Wipro's Offshore centric delivery approach, ” and “[h]ighlight [Accenture's] ability to offer end-to-end services with strong onshore delivery presence.” Id. There is no evidence that any of those would come as a surprise to Wipro. The document does not appear to contain information that would be especially valuable to Wipro, or that a large degree of effort or money was expended to develop, or that could not be easily acquired or duplicated by others. See Papermaster, 2008 WL 4974508, at *7.
Finally, in her final weeks at Accenture, Trautman emailed herself two documents containing Accenture information:
On January 28, 2021, Trautman sent to herself a copy of an Excel spreadsheet titled “Financial Services North America Scorecard data as of February 29, ‘20.” PX-42; PX-43 (“FSNA Scorecard”). The FSNA Scorecard contains “Accenture financial data about the performance of the Financial Services North America sales team.” Hr'g Tr. 122:25-123:4; see PX-43. When asked whether she forwarded this spreadsheet to herself “because you wanted a record of your performance in [the role of FSNA Sales Lead], ” Trautman testified credibly that she “wanted a memento from the . . . first tab [showing] the performance of the FS North
America Team. It was the last month that we existed and I wanted a memento from that, yes.” Hr'g Tr. 123:5-9. Other tabs in the spreadsheet contain detailed information about Accenture's Financial Services sales pipeline in February 2020.
However, Trautman testified credibly that she was “not familiar with the other tabs in the spreadsheet” apart from the first tab, which shows “high-level information on a summary of [Accenture's] pipeline.” Id. 123:20-124:2; see also id. 230:3-8 (Defense counsel: “what this [first tab] shows are top-level results from about February 2020, correct?” Azagury: “Correct”). It did not contain any “deal-specific” information. Id. 230:17-19. Azagury testified that apart from preparing for this litigation, he “never had any occasion in [his] role as the head of the northeast to look at [the spreadsheet]” Id. 231:10-13. When asked whether he had “any reason to think that in downloading [the spreadsheet] [] Trautman was doing anything other than keeping a memento of her unit's performance at the time she stepped down, ” Azagury responded “I don't know. Maybe she wants to design a similar scorecard. I don't know why she downloaded it.” Id. 231:21-232:2. When Accenture requested that Trautman delete her personal copy of this spreadsheet, she “complied with the request immediately.” Trautman Decl. ¶ 48. She testified that she has “not reviewed [the spreadsheet] since leaving Accenture or used any information [it] contain[s] in connection with [her] employment with Wipro.” Id. The first tab of this FSNA Scorecard-which Trautman credibly testified is the only tab with which she is familiar- contains only high-level information about Accenture's 2020 Financial Services sales pipeline as of February 2021. Trautman was also credible in testifying that she downloaded it to have a “memento” or record of the performance of that unit, and that she deleted the document when Accenture requested that she do so. Petitioner has failed to demonstrate that this information is particularly valuable to Accenture, or that it has expended money or effort to develop it. Azagury's own testimony that he does not know what reason Trautman had for downloading it undermines the notion that it is a valuable trade secret and will cause irreparable harm.
Also in her final weeks, on a date not specified in the record, Trautman emailed herself a two page “performance achievement” document that she had prepared in 2020 to support her application for promotion to senior managing director at Accenture. See Tr. 76:8-19; 120:15-18; PX-7 (“Performance Achievement Document”). This document describes at a high-level Trautman's achievements as FSNA Sales Lead and DCAL for Chubb, addressing both sales results and growth Trautman achieved in those roles as well as examples of her successes in collaborating with colleagues and clients to deliver results for Accenture. Under the heading “Metrics, ” the document contains statements of sales results in terms of revenue growth percentage that Trautman represents she achieved as FSNA Sales Lead and DCAL. This section reflects only top-level, backward-facing, aggregate information about growth and revenue, and does not include profit margin or address any specific deals. The document does list “[n]otable opportunities in FY20” and makes general reference to certain prospective deals with certain clients, but it does not provide any details about those prospective deals. Id. The only client or project-specific information in the document concerns Chubb. Trautman testified that she emailed this document to herself because she “wanted a copy for my records.” Hr'g Tr. 120:15-18.
On the whole, Petitioner has “failed to provide specific examples of confidential or trade secret information that could actually be used to [Accenture's] detriment if [Trautman] were allowed to [continue in her] new position at [Wipro].” Visentin, 2011 WL 672025, at *10. The information Accenture highlights is all of a general nature, would not be valuable to Wipro in competing against Accenture, and generally constitutes the sort of “marketing strategies” which are not entitled to trade-secret protection. See id. at *14. Much of the information, such as descriptions of the competitive landscape, general best practices around marketing, and even the identification of fortune 500 companies that are Accenture clients are is likely to be known outside of the business. Virtually none of the information alleged to constitute a trade secret was tightly guarded within Accenture; indeed, the committees on which Trautman sat comprised more than 200 employees in the case of the GLC and DLC, and approximately 40 employees in the case of the NELT, and there is no evidence on the record regarding security protocols to protect that information. Cf. Lima, 2020 WL 5261336, at *8 (“The information [at issue] is shared only with small groups of IBM's top executives responsible for overseeing IBM's strategies, may not be copied, and is subject to security protocols.”). Petitioner has adduced no evidence about the amount of effort or money expended by Accenture in developing the information to which Trautman was exposed, and much of it does not appear to be difficult to acquire or duplicate by others.
Some of the information identified by Accenture includes sales pipelines, namely: (1) a spreadsheet showing deals in Accenture's Financial Services pipeline worth more than $25 million as of January 28, 2020, see PX-57, PX-58, and (2) the FSNA Scorecard, see PX-42, PX-43. However, the former information is over a year old and would not likely be competitively valuable, and the latter shows a high-level summary. As to all of the pipeline information adduced by Accenture, the reasoning adopted by the Visentin is apposite here: “[S]imply knowing the client and the projected amount of the deal would not tell [a defendant] about the scope of services to be provided, the length of the contract, the cost to [the company], or the nature of the solution itself....[Petitioner] has not demonstrated that, absent such additional detail, general pipeline information would be useful to a competitor.” 2011 WL 672025, at *13. Similarly, to the limited extent the information identified reveals profit margin, it was only backward-looking, aggregate information that would not be damaging in the context of competition over particular deals with particular clients. Cf. id. at *15. Trautman's more current and more granular knowledge of the details about the needs of Chubb's needs are not likely to harm Accenture, as Trautman has committed to avoiding any work that could involve Chubb, and there is no evidence that she has violated or will violate that commitment or that such a violation will be difficult to enforce. See PX-27; cf. Lima, 2020 WL 5261336, at *13 (injunction issued where, inter alia, it was not clear how an employee or his new employer could “police” or “enforce” a screen between that employee and 77 accounts he managed at his former employer, which were also clients of the new employer).
Even assuming Trautman was exposed to trade secrets, Petitioner has not established that disclosure of such secrets is inevitable. There is no dispute that the parties are competitors, and there is little evidence on the record as to the nature of the industry and its trade secrets. However, with respect to the second and third prongs of inevitable disclosure: (2) “whether the employee's new position is nearly identical to his old one, such that [s]he could not reasonably be expected to fulfill h[er] new job responsibilities without utilizing the trade secrets of [her] former employer, ” and (3) “the extent to which the trade secrets at issue would be valuable to the new employer, ” those factors both weigh against a finding for Petitioner. Papermaster, 2008 WL 4974508, at *7 (quoting Payment Alliance Int'l, 530 F.Supp.2d at 482). The parties are currently arbitrating the contractual issue whether Petitioner's job at Wipro is “the same or similar” to her job at Accenture within the meaning of the Employment Agreement, a question that will turn, in part, on the meaning of that language and its function when considered within the agreement as a whole. Without passing or necessarily opining on the intent of the parties as a matter of contract law, it cannot be said as a matter of New York's inevitable disclosure standard-which informs part of the irreparable injury analysis here-that the roles are “nearly identical.” Lima, 2020 WL 5261336, at *8 (quoting Payment Alliance Int'l, 530 F.Supp.2d at 482). The evidence establishes that Trautman's CGO role entails substantially greater strategic and supervisory responsibilities than her role as either FSNA Sales Lead or DCAL at Accenture, and far less involvement with specific clients or specific contracts. Whereas at Accenture, Trautman was charged with executing established sales processes with respect to particular clients, at Wipro she is charged with designing those processes and supervising those employees that directly engage clients. The third factor cuts against Petitioner for the same reasons described above: the information is of a general nature that is likely to be either generally known in the industry or easy to duplicate.
B. There is no risk of irreparable harm from the disclosure of trade secrets or confidential information on any other theory
A plaintiff need not necessarily satisfy each of the elements of the doctrine of inevitable disclosure of trade secrets to establish a likelihood of irreparable harm from disclosure of trade secrets or confidential information. A past employer may still be exposed to a likelihood of irreparable harm where its former employee privy to its trade secrets does not take on a position with a competitor that is identical or nearly identical to her old position-for example, if the former employee has already disclosed trade secrets or has shown such a disregard for her legal and contractual obligations in the past that there is a risk she will disregard those obligations in the future. See City of New York v. Gordon, 1 F.Supp.3d 94, 109 (S.D.N.Y. 2013) (“In general, ‘[a] federal court has broad power to restrain acts which are of the same type or class as unlawful acts which the court has found to have been committed or whose commission in the future, unless enjoined, may fairly be anticipated from the defendant's conduct in the past.'”) (quoting N.L.R.B. v. Express Pub. Co., 312 U.S. 426, 435 (1941)); but see Spiro v. Healthport Techs., LLC, 73 F.Supp.3d 259, 271 (S.D.N.Y. 2014) (“Although a past wrong is relevant evidence as to whether there is a real and immediate threat of repeated injury, ‘[p]ast exposure to illegal conduct does not in itself show a present case or controversy regarding injunctive relief . . . if unaccompanied by any continuing, present adverse effects.'”) (quoting O'Shea v. Littleton, 414 U.S. 488, 495-96 (1974)).
Similarly, the category of “confidential information” is broader than trade secrets. See Marietta Corp., 754 N.Y.S.2d at 67 (finding that the lower court erred in “adopted an overly expansive definition of ‘trade secret' so as to encompass nearly all confidential business documents”); Inflight Newspapers, Inc. v. Magazines In-Flight, LLC, 990 F.Supp. 119, 137 (E.D.N.Y. 1997) (“[A]n employee's use of an employer's trade secrets or confidential customer information can be enjoined even in the absence of a restrictive covenant when such conduct violates a fiduciary duty owed by the former employee to his former employer.”) (emphasis added). To be sure, a plaintiff may have a legitimate interest in protecting not only its trade secrets but also its confidential information that does not meet the definition of a trade secret. See Intertek Testing Servs., N.A., Inc. v. Pennisi, 443 F.Supp.3d 303, 337 (E.D.N.Y. Mar. 9, 2020) (plaintiff had a “legitimate interests in . . . maintaining its trade secrets and confidential information”) (emphasis added). It is not the case that irreparable harm can flow only from the threat of disclosure of trade secrets; it can also flow from the threat of disclosure of confidential information not rising to the level of a trade secret. See Airbnb, Inc. v. City of New York, 373 F.Supp.3d 467, 499 (S.D.N.Y. 2019) (“The disclosure of private, confidential information ‘is the quintessential type of irreparable harm that cannot be compensated or undone by money damages.'”) (quoting Hirschfeld v. Stone, 193 F.R.D. 175, 187 (S.D.N.Y. 2000)); Unisource Worldwide, Inc. v. Valenti, 196 F.Supp.2d 269, 280 (E.D.N.Y. 2002) (“The ‘use and disclosure of an employer's confidential information and the possibility of loss of customers through such usage' can constitute irreparable harm.”) (quoting Ecolab v. Paolo, 753 F.Supp. 1100, 1110 (S.D.N.Y. 1991)).
However, the mere exposure of an employee to the trade secrets or confidential information of a former employer does not, without more, create a threat of irreparable harm. The operative question is whether there is a risk that such information will be used or disclosed in a way to cause harm. See Unisource Worldwide, Inc., 196 F.Supp.2d at 280.
Accenture argues that it is at risk of Trautman gratuitously disclosing its trade secrets or confidential information in the future even if her new job would not put her in a position where she would inevitably have to use those secrets. She did not inform Accenture until February 2021 that she signed the Wipro employment agreement in November, 2020, notwithstanding language in her Employment Agreement that states: “If you accept an offer to provide services to any third party during your employment with Accenture . . . you will immediately . . . (ii) notify Accenture . . . of such offer, the name of the company, and such other details relating to the role that Accenture . . . may request in order to ascertain its rights under the terms of this Agreement. PX-1 § 11(d) (emphasis added); see Hr'g Tr. 112:7-14. Trautman also accessed and reviewed the document containing Accenture's competitive analysis of Wipro for her own personal reasons, even though the document was marked as confidential as containing “Material, NonPublic Information” as “Not to be Distributed Further” and contained a statement “All Accenture people have a responsibility to protect Accenture confidential and propriety information against disclosure and improper use....” PX-5; Hr'g Tr. 104:18-106:8. She accessed the document to inform herself about Wipro as a prospective employer, and not for any proper Accenture use. She also emailed to herself the FSNA Scorecard and Personal Achievement Document and did not delete them-until Accenture later requested that she do so-even after signing an employment agreement with Wipro that stated “[i]t is essential that you return to your previous employer all company property and business information in your possession that belongs to it . . . you should not copy, download, or remove any information or data from [your previous employer].” PX-20 at TRAUTMAN-0000320.
The Court is not convinced that this evidence demonstrates that Accenture is likely to suffer irreparable harm without an injunction, for essentially four reasons.
First, although the Court does not condone Trautman's apparent violations of her contractual obligations to Accenture, not every past contractual violation (if there were any) is sufficient to demonstrate that an employee will violate its obligations to the former employer not to disclose its confidential information. See Spiro, 73 F.Supp.3d at 271. Trautman's defalcations here can be explained by reasons other than a desire to benefit her new employer at her old employer's expense and which are understandable. Although it is true that before she left, Trautman emailed to herself the FSNA Scorecard and the Performance Achievement Document, the evidence is undisputed that she has not used any of that information or been in a position to use it during the many months she has been at Wipro. This is not a case where, for example, a defendant has downloaded documents (or retained documents at home) that could only have been-or even appear to have been-downloaded for their competitive value to the new employer. The documents Trautman downloaded related to her personal performance. They are of the type that a person would download if they were trying to keep a record of their past accomplishments, for their own benefit and enjoyment, and not to disclose to or use to benefit the new employer. It is understandable that Trautman would want to keep a record of her successes and those of her team. The Court credits her testimony to that effect, as well as her testimony that she deleted the documents at issue “immediately” upon request. Trautman Decl. ¶ 48; Hr'g Tr. 121:7-11 (“I thought it was okay to take my performance review of myself for my personal records . . . It happened to contain information that I now understand is sensitive to Accenture. I should have removed it before I sent the information to myself, and I didn't.); cf. Am. Airlines, Inc. v. Imhof, 620 F.Supp.2d 574, 580 (S.D.N.Y. 2009) (Kaplan, J.) (where a former employee took from his former employer copies of allegedly confidential information, threat of irreparable harm subsided after-having come to understand the sensitivity of the documents and on advice of counsel-the employee “offered to return or destroy all copies of the[] materials, ” whereafter “there [was] no material risk that [the employee] would retain copies of the documents, much less that he would disclose them to [his new employer]”).
Similarly, Trautman's actions in accessing Accenture's competitive analysis on Wipro ahead of her conversation with the Wipro's CEO is best explained as she explained them. See PX-5; Hr'g Tr. 104:18-106:8. She did not access the analysis to share it with Wipro or use it for Wipro's benefit; she did so out of curiosity to find out information about Wipro-information to which she now has access from Wipro itself-to determine whether she wanted to join the firm. At the time, she had not received an offer from Wipro; that came a month later.
In addition, although Trautman executed an employment agreement with Wipro in November 2020 but did not tender her resignation or notify anyone at Accenture of the employment agreement until February 2021, that conduct itself does not demonstrate a risk that Trautman will violate her confidentiality duties to Accenture while she is at Wipro. Trautman offered a credible reason why she did not want to depart until February-she did not want to switch jobs before the year-end holidays, and subsequently decided to stay on through January 2021 in order to attend meetings she had set up with key executives at Chubb. Trautman Decl. ¶ 41. Even if the Court discounts that testimony and assumes that a portion of the reason she wanted to say on through the year-end holidays was to ensure that her outstanding RSUs would vest, that self-interested objective-when she had put in many years of work at Accenture- would not itself demonstrate that she will disregard her legal duties to keep Accenture's confidential information secret and not use it while she is at Wipro.
The evidence that, in not informing Accenture of the Wipro employment agreement, Trautman violated her Accenture Employment Agreement is somewhat more troubling. There is a risk that a person who knowingly violates her legal or contractual duties in the past will do so in the future. The record, however, does not reflect the reason Trautman did not give notice of her accepted offer in November or December 2020. Trautman was not asked questions about that provision on cross-examination at the hearing and Plaintiff presented no evidence that Trautman was aware of the provision and decided nonetheless to violate it. From the limited evidence at the hearing, the most plausible inference is that Trautman simply had not focused on the requirement but instead was focused on the requirement under her Accenture Employment Agreement that she give twelve weeks advance written notice before her resignation could be effective and she could start her new job. See Employment Agreement § 11(a). She, in fact, did so. Even if she had focused on the provision requiring “immediate” notice of an accepted offer of new employment, there is no evidence that she delayed her departure or delayed giving notice for the purpose of secretly acquiring confidential information for sharing with Wipro. There also is a degree of no-harm, no foul quality to this evidence. The evidence at the hearing established that as early as October 2020, when Accenture informed Trautman that she would not be promoted, Accenture was aware that she was a flight risk and thus would have known that- regardless of when she agreed to employment with a competitor-there would likely come a time when she would be employed by a competitor. Hr'g Tr. 239:4-241:5.
Second, the information Trautman accessed was mostly generic in nature or of transitory value. The case might be different had Trautman accessed information of true strategic value. It thus makes sense that, as Trautman testified, she did not access any of the information after she joined Wipro and that with respect to the FSNA Scorecard and Performance Achievement Document, she deleted her copies immediately when asked. The Court credits her testimony that has “not reviewed either document since leaving Accenture or used any information they contain in connection with [her] employment with Wipro.” Trautman Decl. ¶ 48.
Third, the isolated instances in which Trautman accessed information before she left Accenture are not representative of the entirety of her conduct with respect to her departure. Trautman's departure letter stated that she would “abide by section (c) [of her Employment Agreement] and refrain from soliciting employees, clients with whom I have had close contact . . . and will not disclose Accenture's confidential information.” RX-13. Trautman subsequently “drafted a transition plan with Chubb, introduced [] Parker to [her] main contact at Chubb, sent emails to a few other Chubb executives with positive remarks about Accenture, and met with the internal Chubb team to make sure that business would go on as usual until [her] replacement could be named.” Trautman Decl. ¶ 45; RX-14. The 5-page transition plan Trautman created is impressive in its detail and in its apparent desire to assist in the transition and to ensure that whatever she built at Accenture would not be destroyed. She lists twenty “key relationships” at Chubb and with whom Trautman co-managed those relationships; it lists nine “Key Opportunities by business area, ” describing each opportunity and contacts at Chubb; it describes the “Account Team” in place at Accenture for managing the Chubb account and describes each employee's role; it lists six “major themes” that characterize Chubb's needs in order to suggest ways Accenture can continue to serve them; and it lists nine “Key competitors, ” briefly summarizing why each is a competitive threat. RX-14. This is not the conduct of an employee bent on sabotaging its employer's business on the way out. It is the conduct of an employee who is proud of her work and hopes that others will continue it after her departure and wants to depart on a positive note. It is inconsistent with the notion that she would disregard her obligations to Accenture now that she is at Wipro.
Trautman listed Chubb as the only such client.
Fourth, there is the procedural context in which this motion arises. Accenture understandably argues that the Court should not accord too much weight to the evidence that Trautman has not disclosed or the fact that she has not used any of Accenture's trade secrets or confidential information in the four months since she has joined Wipro. During most of that time, she was operating under the shadow of a federal lawsuit, or at least the threat of one. The existence, or threat, of that lawsuit would have deterred her from disclosing or using Accenture's trade secrets. But, if that is so, then it follows that the Court should accord some weight to the fact that Accenture requests an injunction pending and in aid of arbitration and that, after this hearing is concluded, Trautman still will face an arbitration in which Accenture is arguing that she breached her Employment Agreement and should, among other things, be deprived of equity she earned with Accenture. See Closing Arg. Tr. 348:12-14. That is a substantial threat. If the threat of a federal lawsuit would have had some deterrent value, so too must the arbitration: if evidence is produced in that arbitration that she disclosed trade secrets or confidential information of Accenture to Wipro, that will undoubtedly impair her defense in that lawsuit. Given the transitory value of the limited information to which she was exposed and that would now still be in her memory, the fact of the arbitration further diminishes any likelihood of irreparable harm.
C. The cases Petitioner cites are each distinguishable on the facts
In each of the cases on which Petitioner relies a court issued an injunction on the basis of finding a threat of irreparable harm from the inevitable disclosure of trade secrets. Each is distinguishable on the facts.
Some of the facts of Lima, 2020 WL 5261336, at *6-on which Petitioner primarily relies-are similar, but they are also different in important ways. Lima was a senior business executive at IBM who was enjoined from performing certain services for Microsoft in violation of his non-compete. As in this case, the confidential information and trade secrets to which Lima was allegedly exposed consisted of information regarding business strategy and operations, including cloud computing strategy.
However, the confidential information identified in Lima, while similar in some respects to the information identified here, appears to be more sensitive, more closely guarded, and more competitively valuable. The court summarized it as “includ[ing], but . . . not limited to, IBM's strategic initiatives, particulars concerning the financial services cloud, IBM's competitive business and pricing strategies, the identity of new client targets, anchor clients, IBM's competitive strategies with respect to ‘head-to-head' competition with Microsoft, and IBM's plans to ‘catch up' as regards the public cloud.” Id. at *8. Although these categories could accurately describe some of the allegedly sensitive information identified in this case, Lima included information that was more detailed and more sensitive than anything identified here, for example “the next geographic region in which IBM intends to launch the financial services cloud, its next anchor client in that region, and IBM's financial services cloud client targets, which includes IBM's anchor client for financial services cloud in Latin America, the region [Lima] agreed to run for Microsoft.” Id.; see id. at *3 (Lima accessed confidential information about “investments, cost structure, efficiency programs, automation programs, incentive systems and many other dimensions of the business that are not public and are the core of [the] company's business”). Indeed, unlike the instant case, the sensitivity of the information was reflected in its limited distribution and in security protocols created restricting access to it. See id. at *3 (“[S]ome of the confidential information to which Mr. Lima was privy is of such limited distribution at IBM that it is not shared with the larger IBM operation, may not be copied, and is subject to security protocols.”). Moreover, unlike Trautman, Lima did not only encounter such information in presentations before a large audience; rather, as an executive charged with developing global strategy for IBM, he delivered presentations on it. See id. (“Mr. Lima prepared and presented the GTS Fall Plan projections for North America which provided a business action plan for IBM to execute throughout 2020.”); id. at *4 (“Mr. Lima testified that in his role as General Manager, Integrated Accounts, he was exposed to, prepared, and presented IBM confidential information in connection with IBM's largest global accounts, including information concerning IBM's financial services cloud, budget, and client targets.”).
In addition to the more sensitive information at issue in Lima, the risk that the information would be disclosed was also greater. First, the information at issue in Lima was more valuable to Microsoft than the information at issue here would be to Wipro. Trautman was a DCAL for a single client. At IBM, by contrast, Lima had acted as the “General Manager of Integrated Accounts.” In the relevant lookback period, Lima was responsible for the strategy for managing 77 accounts constituting “IBM's largest and most significant clients, ” which “also work with Microsoft, ” and as to which Lima could not describe how Microsoft could fence him off from doing work concerning those clients. Id. at *3, 13. The Lima court found that there was “compelling” testimony “that if Microsoft knows IBM's strategies with those clients, they can pivot and preempt IBM in the market.” Id. at *13. There has been no such compelling testimony in this case regarding the information to which Trautman was exposed at Accenture. Finally, in Lima, there was a much closer identity between Lima's positions at IBM and Microsoft, as his new role would not have entailed, as here, a jump from strategy implementation and client management to strategy formation and process development. See id. at *12.
The other cases on which Petitioner relies are similarly inapposite. Estee Lauder involved a “marketing strategist responsible for developing brand strategies behind a line of cosmetic dermatology skin care products” who sought to assume a position as “a marketing strategist for a competitor that also sold cosmetic dermatology skin care products.” Visentin, 2011 WL 672025, at *17 (characterizing Estee Lauder, 430 F.Supp.2d at 176). Not only were defendant's old and new positions nearly identical, unlike here, but defendant was also “knowledgeable about confidential products currently under development and product innovations scheduled for the coming years” as well as “confidential information about the stage of development of products in the pipeline.” Estee Lauder, 430 F.Supp.2d at 176.
Lumex, Inc. v. Highsmith, 919 F.Supp. 624, 629 (E.D.N.Y. 1996), which Petitioner also highlights, involved an executive at a fitness equipment manufacturer who had “interacted with virtually every part of the company, including sales, engineering, marketing, manufacturing and research and development” and was enjoined from working for a competitor. The court characterized the industry as a “‘copy cat' or cloning industry” in which the “[t]im[ing] of the introduction of a product is important because a new or innovative machine has a selling advantage” and the “goal is to be ‘first to the market.'” Id. The individual defendant, meanwhile, was privy to confidential information regarding, among other things, “the [plaintiff's] prototypes of new and future equipment, including manufacturing costs and pricing structure, sales training, projected release dates and projected life span.” Id. The court identified such information as trade secrets-a conclusion that was not even disputed by the corporate defendant. Id. at 630. Those facts are markedly different from the instant case. Petitioner has not established Trautman's knowledge of any proprietary products or equipment which, if disclosed, would risk any plan by Accenture's to be “first to market.” Petitioner emphasized Trautman's knowledge of its strategy to grow its cloud business, but it has not established that the value of such a strategy is not widely understood, or that there is any particular aspect of its strategy that gives it a competitive edge and which could not be duplicated but for disclosure of trade secrets. To the contrary, the very presentations Trautman attended specifically confirmed that Accenture's competitors are already pursuing cloud-based business. See RX-28 at ACCENTURE-0001396.
CONCLUSION
Because Petitioner has failed to establish that it is likely to suffer irreparable harm absent a preliminary injunction, the Court need not reach the issue of likelihood of success on the merits, which is currently pending in arbitration.
For the foregoing reasons, Accenture's request for a preliminary injunction is DENIED.
The petition having been resolved, the parties are ORDERED to advise the Court by letter, with one week of this Opinion and Order, whether there are outstanding issues or if the case can be closed.
For reasons explained in an accompanying Order, this Opinion and Order will be filed temporarily under seal until the Court can review any redactions the parties would propose. The Clerk of Court is respectfully directed to file this Opinion and Order under seal, viewable only to the Court and all parties to this action.
SO ORDERED.