Opinion
No.C03-48P
January 10, 2003
John A. Bender, HOLLAND KNIGHT LLP, Seattle, WA, Attorneys for Plaintiff.
TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE
THIS MATTER having come on before the Court on the 10 th day of January, 2003, upon consideration of the Complaint and Motion of Plaintiff Merrill Lynch, Pierce, Fenner Smith Inc. ("Merrill Lynch") and the submissions of record, and having determined that:
1. Under Rule 10335 of the National Association of Securities Dealers Code of Arbitration Procedure, Merrill Lynch has the express right to seek temporary injunctive relief from a court of competent jurisdiction pending an expedited arbitration hearing before a full panel of duly-appointed arbitrators.
2. Merrill Lynch has demonstrated a substantial likelihood of success on the merits of its claims.
3. The rights of Merrill Lynch with respect to its property, proprietary and confidential information, competitive interests, and employment agreements with Defendants Kevin I. Patrick ("Patrick") and Peter J. Wicklund ("Wicklund") (collectively referred to herein as Defendants) are being and will continue to be violated by Defendants unless Defendants are restrained therefrom.
4. Merrill Lynch will suffer irreparable harm and loss if Defendants are permitted to: (a) convert the property of Merrill Lynch to Defendants' own personal use and benefit, and that of Defendants' new employer; and (b) solicit Merrill Lynch accounts, clients and customers.
5. Merrill Lynch has no adequate remedy at law.
6. Greater injury will be inflicted upon Merrill Lynch by the denial of temporary injunctive relief than would be inflicted upon Defendants by the granting of such relief.
IT IS HEREBY ORDERED AND DECREED THAT:
1. A Temporary Restraining Order issue immediately and that security in the amount of $10,000 be posted no later than the 13 day of January, 2003.
2. Defendants are enjoined and restrained, directly or indirectly, and whether alone or in concert with others, including any officer, agent, employee and/or representative of Defendants' new employer until hearing and thereafter until further Order of this Court from:
(a) Soliciting or otherwise initiating any further contact or communication with any client of Merrill Lynch whom Defendants served or whose name became known to Defendants while in the employ of Merrill Lynch for the purpose of advising said clients of their new affiliation or for the purpose of inviting, encouraging, or requesting the transfer of any accounts or business patronage from Merrill Lynch (excluding Defendants' family and relatives);
(b) Soliciting or initiating contact with any client whose records or information Defendants used in violation of paragraphs 2-4 of Wicklund's Financial Consultant Trainee Agreement and both Defendants' non-disclosure agreements. This specifically includes any client whom Defendants may have contacted by mail, phone or otherwise through the use of any client information obtained by Defendants while in the employ of Merrill Lynch (excluding Defendants' family and relatives); and
(c) Using, disclosing, or transmitting, for any purpose, information contained in the records of Merrill Lynch or concerning its customers, including for purposes of soliciting business or account transfers from any customer formerly serviced by Defendants.
3. Defendants, and anyone acting in concert or participation with Defendants who receives actual notice of this Order, including counsel for Defendants, any agent, employee, officer or representative of Defendants' present employer shall be further ordered to return to Merrill Lynch's Seattle, Washington office any and all records, documents, and/or information pertaining to Merrill Lynch customers, whether in original, copied, computerized, handwritten, or any other form, and to purge any such information that is not capable of being physically relinquished to Merrill Lynch from their possession, custody, or control by January 13, 2003 by 5:00 PM to John Bender's office of notice of this Order upon Defendants or their legal counsel, provided, however, that a printout of any such purged records shall first be returned to Merrill Lynch as otherwise required in this Paragraph of the Court's Order.
4. This Order shall remain in full force and effect until such time as this Court specifically orders otherwise.
5. The parties are granted leave to immediately commence discovery, including depositions, in aid of preliminary injunction proceedings before the Court.
6. Pending a preliminary injunction hearing before this Court, and pursuant to the requirements of sections 3 and 4 of the Federal Arbitration Act, 9 U.S.C. § 3-4, the parties are directed to proceed expeditiously with arbitration pursuant to Rule 10335(b) of the National Association of Securities Dealers Code of Arbitration Procedure.
7. Defendants shall show cause before this Court on the 21 day ofJanuary, 2003, at 11 o'clock a.m., or as soon thereafter as counsel may be heard, why a Preliminary Injunction should not be ordered according to the terms and conditions set forth above.