Opinion
Civil Action No. 3:23-CV-0048-X
2023-02-23
Michael FROMHOLD, Plaintiff/Counterclaim-Defendant, v. INSIGHT GLOBAL, LLC, Defendant/Counterclaim-Plaintiff.
Shannon D. Norris, Meggan C. Burchfield, Norris Law Firm, Coppell, TX, Elizabeth Bulat Turner, Pro Hac Vice, Matthew D. Treco, Pro Hac Vice, Martenson Hasbrouck & Simon LLP, Atlanta, GA, for Plaintiff/Counterclaim-Defendant. Jared Michael Slade, Christopher Andrew Thomson, Emily A. Fitzgerald, Alston & Bird LLP, Dallas, TX, Christopher C. Marquardt, I, Pro Hac Vice, Alston & Bird LLP, Atlanta, GA, for Defendant/Counterclaim-Plaintiff.
Shannon D. Norris, Meggan C. Burchfield, Norris Law Firm, Coppell, TX, Elizabeth Bulat Turner, Pro Hac Vice, Matthew D. Treco, Pro Hac Vice, Martenson Hasbrouck & Simon LLP, Atlanta, GA, for Plaintiff/Counterclaim-Defendant. Jared Michael Slade, Christopher Andrew Thomson, Emily A. Fitzgerald, Alston & Bird LLP, Dallas, TX, Christopher C. Marquardt, I, Pro Hac Vice, Alston & Bird LLP, Atlanta, GA, for Defendant/Counterclaim-Plaintiff. ORDER DENYING MOTION FOR TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION BRANTLEY STARR, UNITED STATES DISTRICT JUDGE
At a legal conference three years ago, a professor pulled me aside. He confided that he was an atheist, he knew I believed in God, but he wanted to apologize for the treatment people of faith in America are receiving. I didn't fully know what he meant. I do now. Religious discrimination in modern America is becoming socially acceptable. But it is legally intolerable. Justices and Judges on the higher courts have sounded the alarm on such cases. This Court must too. In the past few months, this Court has had to enjoin Southwest Airlines from further discriminating against its flight attendants for their religious beliefs. This case is the second verse of the same song.
See Josh Blackman, Video and Transcript of Justice Alito's Keynote Address to the Federalist Society, THE VOLOKH CONSPIRACY (Nov. 12, 2020, 11:18 PM), https://reason.com/volokh/2020/11/12/video-and-transcript-of-justicealitos-keynote-address-to-the-federalist-society/ (quoting a public address from Justice Alito, who described religious liberty as being "in danger of becoming a second class right" and, citing multiple examples, argued that, "[f]or many today, religious liberty is not a cherished freedom" but "an excuse for bigotry" that "can't be tolerated, even when there is no evidence that anybody has been harmed"); Sambrano v. United Airlines, Inc., No. 21-11159, 2022 WL 486610, at *9 (5th Cir. Feb. 17, 2022) (per curiam) ("United has presented plaintiffs with two options: violate their religious convictions or lose all pay and benefits indefinitely. That is an impossible choice for plaintiffs who want to remain faithful but must put food on the table. In other words, United is actively coercing employees to abandon their convictions."); Sambrano v. United Airlines, Inc., 45 F.4th 877, 878 (5th Cir. 2022) (Ho, J., concurring in denial of rehearing en banc) ("Imagine that your employer suddenly declares that he finds one of your religious beliefs offensive . . . . [T]he only way you can reclaim your job is to abandon your religious convictions—and to do so irreversibly . . . . But here's the thing: What was once hypothetical is now rapidly becoming reality. Examples of this abound." (collecting examples)); Gonzalez v. Trevino, No. 21-50276, 2023 WL 2155932, at *6 (5th Cir. Feb. 22, 2023) (Ho, J., dissenting from denial of rehearing en banc) (criticizing cases for "preserving the rights of violent protesters—but not the rights of people of faith"); Horvath v. City of Leander, 946 F.3d 787, 799 (5th Cir. 2020) (Ho, J., concurring in part and dissenting in part) ("[T]he city is apparently willing to grant exemptions in arguably analogous situations, such as under its flu vaccine policy. Yet for no reason—or at least none that is apparent from the record—the city denied that same request for a religious exemption on behalf of the same firefighter when it came to the TDAP vaccine."); see also Woodruff v. Caris MPI, Inc., No. 21-11249, 2022 WL 4534987, at *2 (5th Cir. Sept. 28, 2022) (per curiam) (recognizing that Caris denied its employees' religious exemptions and terminated them "for [their] failure to comply with the vaccine policy"); Groff v. DeJoy, 35 F.4th 162, 179 (3d Cir. 2022) (Hardiman, J., dissenting) ("Neither snow nor rain nor heat nor gloom of night stayed Gerald Groff from the completion of his appointed rounds. But his sincerely held religious belief precluded him from working on Sundays. [ ] USPS has not yet shown that it could not accommodate Groff's Sabbatarian religious practice without its business suffering undue hardship[.]"), cert. granted, 600 U.S. 447, 143 S. Ct. 646, 214 L.Ed.2d 382 (2023).
See Carter v. Transport Workers Union of America, Local 556, No. 3:17-cv-2278-X (N.D. Tex. Dec. 5, 2022) (Starr, J.), ECF 374 (enjoining Southwest from "discriminating against Southwest flight attendants for their religious practices and beliefs" and from "failing to reasonably accommodate Southwest flight attendants' sincerely held religious beliefs, practices, and observances").
Here, Insight Global, LLC ("IG") is a staffing company. IG ordered its employees to get vaccinated against COVID-19. Michael Fromhold, an executive in charge of over 80% of the company's revenue, applied for a religious exemption and fully explained his beliefs. IG said it needed more information, denied Fromhold's request, and confirmed that its denial was final. (That's weird. It gets weirder.) Before the IG policy took effect, Fromhold's boss suggested Fromhold work from home to avoid awkwardness. IG then warehoused Fromhold in a sister company not known for its significant achievements, tried to cut his salary, and then moved Fromhold to a new division at IG where he supervised 4 people instead of 1,000. To cap it off, IG sidelined him from key meetings. An ostracized Fromhold left and became the CEO of another staffing company.
Now, apparently IG thinks Fromhold has talent and seeks to fire Fromhold from his new job because Fromhold and IG agreed to a noncompete and a restriction on using confidential information. The Court cannot enter an injunction either to fire Fromhold or to prohibit his use of confidential information. Regarding the noncompete, the Court must follow Texas Supreme Court precedent by narrowing the overbroad noncompete to cover the clients Fromhold personally served at IG and to his scope of work there—getting nationwide clients to sign exclusive staffing contracts. There is no evidence Fromhold is running afoul of those prohibitions. But there is evidence that IG violated Title VII by denying Fromhold's request for a religious exemption. So all factors cut against an injunction on the noncompete. On confidential information, there is no evidence Fromhold took any written confidential information or is using any confidential information that he remembers in his work at the new company. There is evidence from IG's witnesses that Fromhold is honest. Honesty and faith are not adequate bases for the Court to enjoin Fromhold or fire him from his new job. Accordingly, the Court DENIES the request for a temporary restraining order and preliminary injunction. [Doc. No. 5].
I. Factual Background
IG is a staffing services company where Fromhold worked for over 15 years, including as a senior executive. Fromhold joined IG shortly after graduating college, and as he worked there, he received various promotions.
Later, in May of 2021, IG promoted Fromhold to president of the company's Technology Division. This division has thousands of employees and produces several billion dollars in revenue—which accounts for over 80% of the company's annual revenues. As president of that division, Fromhold became a member of the Executive Leadership Team in which he would attend weekly meetings with IG's CEO, Bert Bean, and fellow senior executives. Attending those meetings required Fromhold to sign a confidentiality acknowledgement to confirm that those meetings involved sensitive information.
The Employment Agreement
Fromhold initially signed his Employment Agreement (the "Agreement") in 2019. It contains various restrictive covenants, including non-disclosure of confidential information and trade secrets and non-solicitation of clients.
Section 5 is the "Confidential Information" provision, which states that Fromhold "agrees not to use, disclose or otherwise make available, directly or indirectly, any Confidential Information" and that this obligation "shall survive the termination of this Agreement and/or the termination of [Fromhold's] employment with [IG] and shall continue for so long as such information meets the definition of Confidential Information as stated below."
Doc. 3-1 at 8.
Section 7 is the noncompete, which states that Fromhold cannot for one year after leaving IG
own, acquire or control any interest, financial or otherwise, in, and/or otherwise manage, operate, control, or participate in the ownership, management, operation or control of, be employed by or otherwise provide services to, or otherwise engage in, any Restricted Business in any geographic area in which [IG] or any of its affiliates does business or is actively planning to do business during his employment[.]
Id. at 11.
Section 7(a) defines "Restricted Business" as:
temporary, permanent and enhanced staffing services, (a) principally in the information technology, accounting, government, finance and engineering sectors, or (b) in the healthcare sector, to the extent such services described in this subsection (b) are provided or in active planning to be provided by any of the Acquired Companies during the Employment Period, or with respect to the portion of the Noncompete Period that follows the termination of Executive's employment, as of the date of termination, and any other business that [IG] or any of its Subsidiaries engages in during the Employment Period or, with
respect to the portion of the Noncompete Period that follows the termination of [Fromhold's] employment, as of the date of termination.
Id. at 9.
In the Agreement, Fromhold agreed that any breach or threatened breach of the confidential information and non-competition provisions of the Agreement would cause IG irreparable harm, that IG has the right to enjoin him as a result of such breach or threatened breach, and that no bond should be required for the injunction.
Enter COVID
On September 9, 2021, President Biden issued an executive order requiring federal contractors to require their employees to get vaccinated for COVID-19. The executive branch guidance from November set a deadline of January 18, 2022 for employees to get vaccinated. Also in November, IG instituted its COVID-19 vaccination policy (the "Covid Policy"). The Covid Policy required certain employees, including Fromhold, to provide proof of receiving the vaccine. Fromhold informed IG that his sincerely held religious beliefs prohibited him from receiving the vaccine, and he requested an accommodation. Specifically, Fromhold explained that his Christian belief is that God made his immune system the way God intended, the vaccine would alter it, and his religious beliefs have kept him from receiving past vaccines. As Fromhold explained at the second hearing:
Exec Order No. 14042, 86 Fed. Reg. 50,985 (Sept. 9, 2021), https://www.govinfo.gov/content/pkg/FR-2021-09-14/pdf/2021-19924.pdf.
Safer Federal Workforce Task Force COVID-19 Workplace Safety: Guidance for Federal Contractors and Subcontractors, (Nov. 10, 2021), https://www.saferfederalworkforce.gov/downloads/GuidanceforFederalContractors_SaferFederalWorkforceTaskForce_20211110.pdf ("Covered contractor employees must be fully vaccinated no later than January 18, 2022.").
I'm a Bible-believing Christian. I grew up Catholic. Throughout my life I've always believed that Jesus is our savior, he died for our sins, he was risen from the dead and he was—we were created in his image. And I'm not going to put something in my body that will change my immune system based on how God created me. That's been my belief for a long time. I also believe that my body is a temple of the Holy Spirit. When I was in 6th grade, in Catholic school, I received, you know, the sacrament of confirmation, where you receive the Holy Spirit. And that's been a longstanding belief of mine. So I haven't gotten a vaccine in my adult life. And when this came about, this is something that I knew exactly what my beliefs were.
Doc. 26 at 17.
IG asked Fromhold four additional questions, which Fromhold answered. IG then denied the exemption request for lack of sufficient information. But IG never asked Fromhold for more information and instead said that its decision was final. On November 5, 2021, IG informed Fromhold it would be removing him from leadership and any role involving federal contracting and would move him to a sister company called Monument Consulting, a company Fromhold testified that the CEO and others at IG "have not spoken very highly of." And when Fromhold still dutifully reported to work before the policy took effect, his boss told him to "go home and work from home" because "[i]t is going to be awkward if you are in the office" or even "in the building."
Id. at 22.
Id. at 23.
What more could IG have wanted to know? What parish Fromhold attended? Certifications from CVS and Walgreens they had never given Fromhold a flu shot? Fromhold's religious exemption request was incredibly thorough. If there's one thing IG couldn't have validly responded with, it would be that Fromhold needed to provide more information. Perhaps that's why IG never actually asked for more information.
Id. at 27 (Fromhold testifying that "I was told by [IG's general counsel] that there would be no appeals, and that the termination was final for my accommodation request").
Id. at 28.
Id. at 34-35.
Fast forwarding to December, the federal contractor vaccine mandate (with a January compliance deadline) was a bit under the weather. A federal court in Georgia enjoined the mandate nationwide. Days later, the Biden administration enjoined itself, announcing it would not take action against contractors pending the outcome of the litigation over the contractor vaccine mandate.
See, e.g., Georgia v. Biden, 574 F. Supp. 3d 1337, 1343 (S.D. Ga. 2021) (granting nationwide injunction against contractor vaccine mandate). The Eleventh Circuit later narrowed that injunction. Georgia v. President of the United States, 46 F.4th 1283, 1308 (11th Cir. 2022) (narrowing the injunction to Georgia, the six other plaintiff states, and the non-state plaintiffs).
See Conner v. Biden, No. 6:21-CV-074-H, 2021 WL 6773174, at *2 (N.D. Tex. Dec. 28, 2021) (Hendrix, J.) ("After the nationwide injunction issued, the Task Force published a notice on its website that '[t]he Government will take no action to enforce the clause implementing requirements of Executive Order 14042, absent further written notice from the agency, where the place of performance identified in the contract is in a U.S. state or outlying area subject to a court order prohibiting the application of requirements pursuant to the Executive Order' . . . . And the Task Force has made clear that currently excluded states and outlying areas include '[a]ll of the United States and its outlying areas.' " (cleaned up)).
Later, IG moved Fromhold from Monument Consulting to be president of a new division called IG Prime & Payroll ("IG Prime"). He was given the title of president of this division some ten months after IG removed him from his leadership role. IG Prime boasted four employees. As president of IG Prime, IG sidelined Fromhold from vice-president meetings, meetings with the Vice President of Revenue, and financials meetings. IG initially excluded Fromhold from P-Zone meetings and monthly Compass meetings but later folded him back into those. IG also tried to significantly lower Fromhold's base salary, but it ultimately relented when he protested. In July 2022, Fromhold and IG entered into a new employment agreement, which contained the same material noncompete and confidential information covenants as the 2019 employment agreement.
Unfulfilled, Fromhold resigned from IG on December 21, 2022 and accepted the CEO job with Collabera, another IT staffing company. According to Fromhold, IG's CEO responded: "this sucks, man. I get it. I get it, but it sucks. You are too talented. You were meant to make a bigger impact. You are meant to play a bigger role in a company and I understand your decision." In January 2023, Collabera made a public announcement that it had hired Fromhold to serve as the company's CEO.
Doc. 26 at 44.
The Lawsuit and the TRO
Fromhold filed this lawsuit seeking a declaratory judgment that his noncompete is invalid and an injunction against IG for interfering with his current job. IG moved for a temporary restraining order to enforce the noncompete and the restriction on use of confidential information.
The Court held two evidentiary hearings on the motion in order to hear from key live witnesses. And IG asked at the hearings for the Court to consider its request for such an order also as a request for a preliminary injunction so that the nonprevailing party could immediately appeal.
II. Legal Standard
An applicant seeking a temporary restraining order or a preliminary injunction "must show: (1) a substantial likelihood of success on the merits; (2) a substantial threat of irreparable harm if the injunction is not granted; (3) that the threatened injury outweighs any harm that the injunction might cause to the defendant; and (4) that the injunction will not disserve the public interest." An injunction "is an extraordinary and drastic remedy, not to be granted routinely, but only when the movant, by a clear showing, carries the burden of persuasion." The applicant bears the burden of persuasion on all four elements, and failure on any one of them warrants denial.
Opulent Life Church v. City of Holly Springs, 697 F.3d 279, 288 (5th Cir. 2012).
White v. Carlucci, 862 F.2d 1209, 1211 (5th Cir. 1989).
Bluefield Water Ass'n, Inc. v. City of Starkville, 577 F.3d 250, 253 (5th Cir. 2009); Enter. Int'l, Inc. v. Corporacion Estatal Petrolera Ecuatoriana, 762 F.2d 464, 472 (5th Cir. 1985).
III. Analysis
At issue are both the noncompete and the prohibition on using confidential information. Regarding the noncompete, the Court concludes that IG failed to make the required showing on all four factors. Regarding confidential information, the Court concludes there is no imminent threat of breach based on the current record.
A. Noncompete
The parties agree Texas law applies. Texas law upholds a noncompete if it "contains limitations as to time, geographical area, and scope of activity to be restrained that are reasonable and do not impose a greater restraint than is necessary to protect the goodwill or other business interest of the promise." And the Texas Supreme Court has made clear that the fundamental legitimate business interest is preventing departing employees from using their business contracts and rapport from their prior employment to take the former company's customers. The Texas Supreme Court has held covenants to be overbroad when they apply to clients of the former company that the employee had no contact with or when they bar the employee from undertaking activity outside the scope of the former employee's duties at the former job. And the appropriate legal remedy is to reform such noncompetes to only cover the former company's legitimate business interests.
IG moved for a temporary restraining order under the Texas Uniform Trade Secrets Act (TEX. CIV. PRAC. & REM. CODE § 134A.002, et seq.) and the Texas Covenants Not to Compete Act (TEX. BUS. & COM. CODE § 15.50, et seq.). Doc. 5 at 1. And Fromhold's request for declaratory relief includes a request that Texas law applies. Doc. 1 at 12 (asking the Court to declare that "the laws of the State of Texas must be applied to determine the enforceability of the Non-Compete Clause in the Agreement as against Mr. Fromhold, a citizen of the State of Texas").
Peat Marwick Main & Co. v. Haass, 818 S.W.2d 381, 387 (Tex. 1991) ("The fundamental legitimate business interest that may be protected by such covenants is in preventing employees or departing partners from using the business contacts and rapport established during the relationship of representing the accounting firm to take the firm's customers with him.").
Id. at 386 ("The provision we held reasonable in Henshaw defined and limited the term 'competition' to the 'providing of any similar services to the then clients of the partnership or to those clients who have ceased being clients within the twelve months immediately preceding such termination.' " (quoting Henshaw v. Kroenecke, 656 S.W.2d 416, 417 (Tex. 1983))); id. at 387 (discussing reforming of noncompetes to only cover clients that former employee had personal involvement with).
Id. ("[T]he restrictive covenant must bear some relation to the activities of the employee. It must not restrain his activities into a territory into which his former work has not taken him[.]").
TEX. BUS. & COM. CODE § 15.51(c) ("If the covenant . . . contains limitations as to time, geographical area, or scope of activity to be restrained that are not reasonable and impose a greater restraint than is necessary to protect the goodwill or other business interest of the promisee, the court shall reform the covenant to the extent necessary to cause the limitations contained in the covenant as to time, geographical area, and scope of activity to be restrained to be reasonable and to impose a restraint that is not greater than necessary to protect the goodwill or other business interest of the promisee and enforce the covenant as reformed[.]").
Here, Fromhold's noncompete is the one IG points to from the summer of 2022 (when he was transferred to be president of IG Prime). That noncompete prohibits Fromhold from working for a staffing company in technology and other staffing sectors for one year after leaving IG. That noncompete is overbroad in the ways discussed above (clients, lookback, and scope of activity). On clients, Fromhold's noncompete nowhere limits itself to covering Fromhold's clients or even IG's clients. It prevents Fromhold from serving businesses that were never clients of IG. The type of noncompete the Texas Supreme Court allows is one that prohibits an employee from taking clients the employee has worked with in the past 12 months.
Haass, 818 S.W.2d at 386.
In a similar vein, this agreement would sideline Fromhold from any job at another technology staffing firm, regardless of Fromhold's duties at IG or his duties at the new firm. This is also overbroad under Texas Supreme Court precedent. Fromhold's job in the 12 months prior to his leaving IG involved running a division that obtained exclusive staffing agreements from nationwide clients. To conform to Texas Supreme Court precedent, the Court must prohibit Fromhold from taking clients he personally worked with in the 12 months prior to his departure and from working to obtain exclusive staffing agreements (which he sought in his last 12 months at IG).
Id.
To be clear, the Court is not entering a declaratory judgment on the reformed noncompete at this procedural posture. Any final reformation would be at summary judgment. But the Court in this initial posture cannot issue an injunction based on an overbroad noncompete. So the Court can only enjoin now what it would reform the noncompete to be.
So if the Court were to reform Fromhold's noncompete to Texas standards, has IG made its showing of a substantial likelihood of success on the merits and irreparable harm? No. The two concerns are clients and scope of work. On scope of work, the evidence shows that the scope of Fromhold's work at IG Prime was to lock in nationwide clients to exclusive staffing contracts. Collabera's founder testified that Collabera doesn't offer such a program or have any plans to do so. On clients, Fromhold testified that he was not asked to solicit any of IG's clients or customers and that any attempt to do so would be a distraction. As a result, there is no evidence of harm within the scope of the reformed noncompete. Because IG cannot show it is likely to be irreparably harmed in a manner that would make IG likely to prevail on the merits, IG cannot obtain a temporary restraining order or preliminary injunction on the noncompete.
Doc. 24 at 105 ("Does Collabera have a department that is similar in any way to that Prime & Payroll Services department at Insight Global? A. No, we do not. Q. Are you planning to create one? A. No, we do not.").
Doc. 26 at 52 ("Q. . . . [H]as Collabera asked you to solicit or go after any of [IG's] clients or customers? A. No. Q. Do you intend to do that in your role at Collabera? A. No. It would be a distraction to do so. It would, actually, I think, be hurtful to our business now that I understand their current client base and where they are at. It would - it would not be a strategic move."). As Fromhold and the founder of Collabera explained at the hearing, Collabera targets lower margin staffing situations than IG does. So, any attempt to woo IG customers would require some changing of the Collabera business model at a time Collabera is seeking to do its business better, not differently.
The Court believes the public interest and balance of the equities to be an alternate and independent basis for denying the request for injunctive relief. The Court concludes IG likely violated Title VII's prohibition on religious discrimination. This matters to requests for injunctive relief because the public interest is in supporting federal law like Title VII, and courts should consider the equities to avoid completing an employer's unlawful scheme.
IG's briefing on Title VII argues that the affirmative defense of unclean hands is inapplicable in a case like this. But the equities and public interest are things that courts must look at for injunctive relief.
The clearest facet of the Title VII analysis is that IG's religious exemption request process did not meet the requirements of the law. When Fromhold applied for an exemption, IG asked Fromhold four questions, got the answers, told Fromhold it denied his exemption request due to a lack of information, told Fromhold the denial was final, and told Fromhold it wouldn't reconsider its decision even after the Biden administration announced it wouldn't enforce the mandate. But the federal guidance on Title VII indicates that accommodations should occur on request: "After an employee or prospective employee notifies the employer or labor organization of his or her need for a religious accommodation, the employer or labor organization has an obligation to reasonably accommodate the individual's religious practices." So IG violated Title VII by issuing a final denial of Fromhold's request when it said it needed more information.
29 C.F.R. § 1605.2(c)(1). And even if IG had carefully interrogated Fromhold and found his religious claims unconvincing, an employer may not simply discount its employee's religious beliefs because it believes they are implausible, or even nonsensical. See U.S. v. Ballard, 322 U.S. 78, 86, 64 S.Ct. 882, 88 L.Ed. 1148 (1944) ("Men may believe what they cannot prove. They may not be put to the proof of their religious doctrines or beliefs."); Thomas v. Review Bd. of the Ind. Emp. Sec. Div., 450 U.S. 707, 714, 101 S.Ct. 1425, 67 L.Ed.2d 624 (1981) ("[R]eligious beliefs need not be acceptable, logical, consistent, or comprehensible to others in order to merit First Amendment protection.").
The more interesting question arises in IG's argument that it provided Fromhold a reasonable accommodation anyway. Initially, the Court wonders why IG denied and then accommodated. Wouldn't a company grant and then accommodate? The denial sure seems like an admission that the accommodation was inadequate. Whether an accommodation is adequate is a difficult matter. We know from Sambrano v. United Airlines, Inc. that there can be irreparable harm when an employer mandates employees to get vaccinated over their religious objections. We know from Horvath v. City of Leander that an accommodation offering the same salary and benefits can be reasonable. We also know from Bruff v. North Mississippi Health Services, Inc. that alternate positions that would require an employee to take a "significant reduction in salary" do not alone make an accommodation unreasonable. And we know from Eversley v. MBank Dallas that we must look at "the entire context and situation" of an alternate job to see if the accommodation is reasonable. But there is precious little in Fifth Circuit cases about accommodations for executives holding leadership roles over 80% of the revenue of a large company and what all context we should consider. And while the Supreme Court will add some clarity to the accommodation field soon, that case may not shed light on accommodating positions in the C suite.
2022 WL 486610, at *4.
244 F.3d 495, 503 (5th Cir. 2001).
843 F.2d 172, 176 (5th Cir. 1988).
See Groff, 35 F.4th at 164-65 ("The accommodation Groff sought (exemption from Sunday work), however, would cause an undue hardship on USPS, and so we will affirm the District Court's order granting summary judgment in USPS's favor."), cert. granted, 600 U.S. 447, 143 S. Ct. 646, 214 L.Ed.2d 382 (2023).
Given what the Court can glean from caselaw, the Court believes IG's accommodation was not reasonable. What IG did right in the transfer was keeping Fromhold's salary the same. (To be fair to Fromhold, IG only kept his salary the same after Fromhold protested a reduction.) IG Prime had four employees under Fromhold, a far cry from over a thousand. And even though Fromhold was president of IG Prime, IG excluded him from vice-president meetings, meetings with the Vice President of Revenue, and financials meetings. This exclusion seems to flow logically from his boss's suggestion before the vaccine policy took effect that Fromhold working from home would prevent awkwardness. Keeping Fromhold from key meetings also lessened the awkwardness for IG. IG initially excluded Fromhold from P-Zone meetings and monthly Compass meetings but later folded him back into those. On balance, it appears that IG gave Fromhold a similar title and salary to his old job while treating him a bit like a leper.
IG argues that, even so, Fromhold voluntarily signed his new employment agreement and noncompete in the summer of 2022 and waived any Title VII arguments by not timely filing a charge with the Equal Employment Opportunity Commission. IG cites a recent holding from this judge that an unclean-hands defense is not "a legally proper method of raising an unpreserved discrimination claim." IG misses the distinction between a court at law and a court in equity. In the above case, the request for injunctive relief was moot, and the case became one about damages that would go to a jury. But courts issuing injunctions are sitting in equity. Their scope broadens to assess the equities and public interest so they do not mechanically aid a party in completing its inequitable conduct. The question then becomes whether the Court must ignore these equity facts because Fromhold did not file a charge within 180 days of his "transfer." The only case IG cites is where a judge in this district quite correctly held that a plaintiff's Title VII claims were time barred when they failed to file a charge with the Commission within 180 days. But that case involved a plaintiff using Title VII as a sword, not as a shield to injunctive relief his unlawfully discriminating opponent is seeking.
Clark v. Truist Bank, No. 3:19-CV-00589-X, 2022 WL 296053, at *6 (N.D. Tex. Feb. 1, 2022) (Starr, J.).
Id. at *7 ("BB&T's summary judgment motion generally argues . . . any request for injunctive relief is now moot . . . . Clark also agrees the claim for injunctive relief is now moot.").
Id. at *8 ("Because a portion of Clark's unpaid commission claim and the other live claims not at issue in these motions will go to trial, the Court needs to enter an amended scheduling order with a trial date and pretrial deadlines.").
See Abrams v. Am. Airlines, Inc., No. 4:04-CV-919-Y, 2007 WL 9775358, at *2 (N.D. Tex. Aug. 30, 2007) (Means, J.) ("Initially, the Court concludes that Plaintiff's Title VII and TCHRA claims are time barred. A Title VII plaintiff must file a charge of discrimination with the Equal Employment Opportunity Commission within 180 days after the occurrence of the unlawful discrimination."), aff'd, 302 F. App'x 242 (5th Cir. 2008) (per curiam).
Here, Fromhold opted not to sue and explained that IG "was my family, and it still is. I have friends over there that were at my wedding. I was in their weddings. And, you know, my wife worked for [IG] for nine years. We met there." He elaborated with a statement his wife said to her employees in the Kansas City office she had opened for IG: "never leave—never quit when you are down. It's a moment in time. It is temporary . . . . If you are still unhappy when things are better, then you will know this isn't the right spot for you." Fromhold applied that statement to himself: "So I didn't quit because it was a low. Again, 15 years of building the company, felt kicked to the curb, gosh, I can't quit at this point."
Doc. 26 at 36.
Id. at 37.
Id.
If the Court were to ignore the equities and public interest here, it would complete the former employer's line of inequitable conduct and religious discrimination. The Court will not do so without authority saying it must.
In sum, IG cannot show it is likely to prevail on the merits and will suffer irreparable harm because the Court must narrow the noncompete to cover Fromhold's clients and scope of work. And there is no evidence indicating he has violated or will violate that narrowed noncompete. Alternatively, the Court concludes that firing Fromhold from Collabera would be inequitable and not in the public interest because it would complete IG's scheme of unlawful religious discrimination. As a result, the Court DENIES IG's request to issue a temporary restraining order and preliminary injunction to enforce the noncompete.
B. Confidential Information
Separately, the employment agreement also prohibits Fromhold from using, disclosing, or making available any confidential information he obtained in his employment from IG. That agreement survives as long as the information is still confidential (unlike the one-year noncompete).
The Court concludes that IG has not shown sufficiently specific conduct of Fromhold that violates this agreement. Confidential information here fits in two buckets: written information and information Fromhold retained in his memory. Regarding written information, there is no evidence Fromhold took any written confidential information with him. To the contrary, an IG employee testified:
Q: Now those account books, you have no knowledge that Mr. Fromhold took any of those when he left Insight Global, do you?
A. No.So much for evidence of misuse of written confidential information.
Q. And you have no knowledge that Mr. Fromhold is using any of the account books or client sheets in his employment at Collabera, correct?
A. No.
. . .
Q. Now you have no reason to believe Mr. Fromhold took any of these call sheets when he left [IG]?
A. I believe From is an honest person. I don't believe he took anything.
Doc. 24 at 82.
The battle over confidential information then shifts to what is in Fromhold's head. At the second hearing, counsel for IG made Fromhold squirm with deposition testimony Fromhold gave years ago as a Rule 30(b)(6) corporate representative for IG in another lawsuit. Fromhold's testimony was that the other former employee could use the confidential information they had in their head from their time at IG to help a competitor. In this hearing, Fromhold testified that he was not using any of the categories of confidential information IG raised at the hearing in his job at Collabera. And no other evidence from the hearing suggested he was using IG confidential information in his head to benefit Collabera. What we know from the new and old Fromhold testimony is that he has IG information in his head but he isn't using it at Collabera.
Doc. 26 at 54 ("You heard Ms. Garber's testimony about a number of confidential and proprietary pieces of information that she had access to and that she testified that you had access to at [IG]. Some of them were, included the account books, call sheets, snap reports, financial, books of business, weekly review packet, training materials, the Tablo database, Four Pillars. Are you using any of those categories of information that Ms. Garber mentioned to benefit you in your job at Collabera or are you using them at all? A. No. Q. Would they be helpful to you in successfully performing your job at Collabera? A: No.").
If this showing were sufficient for an injunction, then every departing employee with a confidential-information restriction should be under a preliminary injunction. But that's not a sufficient showing of an imminent use of IG's confidential information. So the Court DENIES IG's request for a temporary restraining order and preliminary injunction regarding confidential information.
IV. Conclusion
In sum, the Court DENIES IG's request for a temporary restraining order and preliminary injunction regarding either Fromhold's noncompete or his use of confidential information.
IT IS SO ORDERED this 23rd day of February, 2023.