`
`
`UNITED STATES COURT OF APPEALS
`FOR THE THIRD CIRCUIT
`_____________
`
`Nos. 20-3584, 21-1028, and 21-1029
`_____________
`
`MALLET AND COMPANY INC.
`
` v.
`
` ADA LACAYO; RUSSELL T. BUNDY ASSOCIATES,
`INC. d/b/a Bundy Baking Solutions; SYNOVA LLC;
`WILLIAM CHICK BOWERS
`
`
` Russell T. Bundy Associates, Inc. d/b/a Bundy Baking
`Solutions; Synova LLC,
`
`
`Appellants in No. 20-3584
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
` William Chick Bowers,
`
`
`Appellant in No. 21-1028
`
`
` Ada Lacayo,
`
`Appellant in No. 21-1029
`
`_______________
`
`
`
`
`
`
`
`
`On Appeal from the United States District Court
`for the Western District of Pennsylvania
` (D.C. No. 2-19-cv-1409)
`District Judge: Hon. Cathy Bissoon
`_______________
`
`Argued
`April 16, 2021
`
`Before: JORDAN, GREENAWAY, JR., and SCIRICA,
`Circuit Judges.
`
`(Filed: September 24, 2021)
`_______________
`
`
`Laura C. Bunting
`Marla N. Presley [ARGUED]
`Jackson Lewis
`1001 Liberty Avenue – Suite 1000
`Pittsburgh, PA 15222
`
`Allison G. Folk
`Jackson Lewis
`6100 Oak Tree Boulevard, Suite 400
`Cleveland, OH 44131
` Counsel for Mallet and Company Inc.
`
`Ada Lacayo
`328 Michigan Avenue
`Lower Burrell, PA 15068
` Pro Se
`
`
`
`
`
`2
`
`
`
`Ronald L. Hicks, Jr. [ARGUED]
`Carolyn B. McGee
`Porter Wright Morris & Arthur
`6 PPG Place – Third Floor
`Pittsburgh, PA 15222
` Counsel for Russell T. Bundy Associates, Inc.,
` d/b/a Bundy Baking Solutions; Synova LLC
`
`Nicholas J. Bell
`Kathleen J. Goldman
`Buchanan Ingersoll & Rooney
`501 Grant Street – Suite 200
`Pittsburgh, PA 15219
` Counsel for William Chick Bowers
`_______________
`
`OPINION OF THE COURT
`_______________
`
`
`JORDAN, Circuit Judge.
`
`
`Behind the breads, cakes, and other treats on our
`grocery store shelves, there is a ferociously competitive market
`for baking supplies, and that is the setting for this trade secret
`and unfair competition case.
`
`In 2019, Mallet and Company Inc. (“Mallet”) learned
`that Russell T. Bundy Associates, Inc., doing business as
`Bundy Baking Solutions (“Bundy”), was becoming its newest
`competitor in the sale of baking release agents. Release agents
`are lubricants that allow baked goods to readily separate from
`the containers in which they are made. Bundy was already
`well-known for other products it offered to the commercial
`
`3
`
`
`
`baking industry when it decided to launch a new subsidiary,
`Synova LLC (“Synova”), to sell baking release agents. Synova
`hired two of Mallet’s employees, both of whom had substantial
`access to Mallet’s proprietary information. Taking some of
`that information with them from Mallet to Synova, they helped
`Synova rapidly develop, market, and sell release agents to
`Mallet’s customers. Mallet sued, saying such progress would
`have taken years to accomplish but for the misappropriation of
`its trade secrets. Agreeing with Mallet, the District Court
`issued the preliminary injunction now challenged on appeal,
`restraining Bundy, Synova, and those employees (collectively,
`“the Defendants”) from competing with Mallet.
`
`While we appreciate the challenges inherent in disputes
`involving trade secrets and requests for preliminary relief, the
`injunction at issue is flawed and must be vacated. For the
`reasons that follow, we will remand for further consideration
`of what, if any, equitable relief is warranted and what sum
`Mallet should be
`required
`to post
`in a bond as
`“security … proper to pay the costs and damages sustained by
`any party found to have been wrongfully enjoined or
`restrained.” Fed. R. Civ. P. 65(c).
`
`BACKGROUND
`
`I.
`
`A.
`
`Factual Background
`
`1. Mallet and the Defendant Employees
`
`For over eighty years, Mallet has been in the business
`of developing, manufacturing, and selling baking release
`
`4
`
`
`
`agents as well as the equipment used to apply such agents.1
`Release agents are applied to commercial baking pans to
`ensure the consistent release of baked goods over hundreds of
`uses. They thus play a crucial role in large-scale baking
`operations. While the ingredients used to create them –
`mineral oils, vegetable oils, and lecithin – are commonly
`known, developing a successful release agent is not as simple
`as knowing a few of its components. There are “a wide range
`of factors that have to be considered when formulating a
`release agent,” including product performance, stability,
`application, cost, availability, and packaging. (J.A. at 10984-
`85 (Mallet2 Depo.).) And the efficacy of a release agent can
`greatly depend on the customer’s product, pan condition,
`storage conditions, and machinery used to apply the agent. As
`a result, there are different kinds of release agents, each with
`unique properties that may be further tailored to maximize
`performance when used in the production of certain goods.
`Still, competitors in the release agent market often manufacture
`and sell identical or similar products.
`
`Mallet proclaims itself “a service business delivering
`value through the combination of high quality, consistent
`products and the equipment to apply them.” (J.A. at 2232
`(Mallet Website).) Prior to 2018, it manufactured about fifty
`
`
`1 Mallet was acquired in 2016 by Vantage Specialty
`Chemicals, Inc. and, though the record is not clear on this, now
`appears to be a subsidiary operating under Vantage’s food
`division.
`
`2 We refer to Mallet’s Federal Rule of Civil Procedure
`30(b)(6) Deposition as “Mallet Depo.”
`
`5
`
`
`
`different release agents, including its “Vegalube Super P”
`(“Super P”), which it calls “the premier and best-performing
`baking release agent product in the market.” (J.A. at 2008
`(Porzio3 Decl.), 11006 (Mallet Depo.).) Mallet contends that
`it has “take[n] substantial time, research, and effort” to
`formulate and perfect its release agents, including Super P.
`(J.A. at 4332 (Ergun4 Decl.); see also J.A. at 2008 (Porzio
`Decl.).) After developing a product in the laboratory,
`additional work is needed to bring that product to scale and
`optimize its performance at a customer’s facility. Mallet says
`that its “competitive advantage … derive[s] from a unique
`ability to solve customer problems by cohesively integrating
`research and development,
`technical
`service, custom
`packaging and manufacturing, and efficient distribution.”
`(J.A. at 2220 (Mallet Website).) To safeguard that competitive
`advantage, Mallet has put in place several measures to protect
`its information, including nondisclosure and noncompetition
`agreements with its employees, restricted access to its lab and
`formulas, and password protection for its computer network.
`
`Along with its release agent “formulas and [the]
`processes used to make them[,]” Mallet considers the
`
`
`3 Robert Porzio is the Senior Vice President of Sales and
`Marketing for Vantage. In his role, he manages sales and
`marketing and he is responsible for overseeing the profits,
`losses, and overall performance for Vantage’s food business,
`including Mallet.
`
`4 Roja Ergun is the Food Technology Director for
`Mallet.
`
`6
`
`
`
`following information to be its “confidential, proprietary, trade
`secret information”:
`
`specific products sold to customers or purchased
`from suppliers; all information pertaining to
`Mallet’s business with its customers and its
`suppliers; Mallet’s sales data and cost data; the
`body of knowledge about the development,
`production, and application of Mallet’s release
`agents and equipment, including the tailoring of
`release agents and equipment for specific
`customer challenges; information about the
`internal business affairs of any customers,
`suppliers, distributors, agents and contractors
`doing business with Mallet; pricing information;
`strategies; marketing information; and exclusive
`relationships with certain suppliers of release
`agent ingredients.
`
`(J.A. at 1638 (Mallet’s Proposed Findings of Fact), 1937-38
`(Topercer5 Decl.).) According to Mallet, “the trade secret in
`question here is the overall body of knowledge that
`connects … the development, production, application and
`implementation of the release agent … coupled with Mallet’s
`proprietary equipment, which go hand in hand with [a]
`formulated solution.” (J.A. at 11000-01 (Mallet Depo.).)
`
`
`
`5 Benjamin Topercer is the Chief Human Resources
`Officer at Vantage and, in his role, supports human resources
`functions for Mallet.
`
`7
`
`
`
`As sweeping as that statement is, Mallet does recognize
`some limits on what it can claim as a trade secret. For example,
`it does not consider its “product data sheets” to be trade secret
`information, since those specification sheets are “produced and
`provided to consumers of its products[.]”6 (J.A. at 10993
`(Mallet Depo.).) It also agrees that some ingredients in baking
`release agents – again, mineral oils, vegetable oils, and lecithin
`– have been common knowledge in the industry for more than
`thirty years, and that the components for release agents are
`published in product data sheets, articles, and company
`websites, and are therefore public knowledge, though the
`precise ratios and processes for combining them are not. In
`addition, Mallet acknowledges that “there are numerous
`patents … that have been published … since at least the early
`1900s that talk about the manufacturing and processes and
`formulations that can be used to create bakery release
`agents[.]” (J.A. at 10982 (Mallet Depo.).) It thus admits that
`the contents of patents and other information generally known
`in the industry about “various ingredients for use in bak[ing]
`release agents” cannot be considered proprietary. (J.A. at
`10990, 11000-01 (Mallet Depo.).)
`
`Mallet further recognizes that its own patents disclose
`“various formulas for the creation of the lubricants[,]”
`“examples of blends and blend ratios[,]” and a “series of
`different formulated release agents[.]” (J.A. at 10995-96,
`
`
`6 Product data sheets are public product descriptions
`that identify the “ingredients as well as the origins of those
`ingredients for each of the baking release agents.” Mallet
`distributes product data sheets to customers and utilizes them
`as marketing materials at trade shows.
`
`8
`
`
`
`10999-11000 (Mallet Depo.).) Those patents publicize some
`properties of each formulated release agent “based on various
`tests that Mallet … had conducted,” including “viscosity,
`stability, texture and other releasing characteristics.” (J.A. at
`10999-11000 (Mallet Depo.).) While seeming to concede that
`information in patents cannot – at least by itself – constitute
`trade secrets, Mallet contends that even formulas in its patents
`can be part of its trade secrets. It says that such formulas may
`“form a part of the examples of the patent” and still be “part of
`a trade secret.”7 (J.A. at 11001-02 (Mallet Depo.).) In
`addition, it distinguishes the “particular formulation[s]” that its
`patents cover from the “know-how” that Mallet has developed
`over its eighty-year presence in the marketplace and that it
`continues to utilize on an ongoing basis for the “formulation,
`application[,] and implementation of [its] release agents for
`customers.” (J.A. at 10974, 10999 (Mallet Depo.).) According
`to Mallet, that know-how is a trade secret. And two of its
`former employees, Ada Lacayo and William Bowers, had
`substantial access to it.
`
`
`a. Lacayo’s Employment with Mallet
`
`Lacayo first worked for Mallet from 1997 to 2001 as a
`Technical Services Manager. While in that role, she “managed
`Quality Control laboratory employees, created specifications
`
`
`7 At oral argument, for the first time, Mallet drew our
`attention to a set of documents that it said are specific examples
`of formulas it treats as proprietary. Having reviewed those
`pages, and without the aid of any clarifying testimony in the
`record, we remain at a loss to know whether they contain trade
`secrets.
`
`9
`
`
`
`and qualified new vendors, and developed nutritional
`information for products, among other things.” (J.A. at 2423
`(Lacayo Decl.).) After a few years away from the company –
`during which she did not work with baking release agents –
`Lacayo returned to Mallet in 2006 to work as the Director of
`Lab Services until 2014, when she became the Director of
`Technical Services in the Sales and Marketing group.
`
`Lacayo’s job responsibilities spanned all aspects of
`Mallet’s release agent business, from product development and
`quality control to customer-specific applications and technical
`support. Through her director positions, she obtained
`extensive access to Mallet’s technical information. That
`information allowed her to analyze ingredient interactions,
`create over two dozen new product formulas and processing
`methods, and perform “economic justifications and case
`studies to substantiate improvements.” (J.A. at 4737 (Lacayo
`Resume).) In addition, Lacayo played a key role in quality
`control, running onsite tests for customers, troubleshooting
`issues, and recommending changes to improve product
`performance. Along with educating individual customers,
`Lacayo promoted Mallet’s products, solutions, and machinery
`more generally.
` She “wrote and designed manuals,
`instructional
`programs, marketing materials,
`[and]
`presentations,” which she “delivered … to diverse audiences in
`English and Spanish.” (J.A. at 4737 (Lacayo Resume).) She
`also participated in trade shows, “[m]anaged the Latin
`American machinery and product introduction program,” and
`“[c]onducted seminars on product lines.” (J.A. at 4737
`(Lacayo Resume).) Lacayo was, as she describes herself, a
`“product portfolio and applications expert” for Mallet. (J.A. at
`4737 (Lacayo Resume).) And as a result of her extensive
`exposure to all sides of Mallet’s business and the “know-how
`
`10
`
`
`
`[she] gleaned from Mallet over decades[,]” she was widely
`known by “the customer base of the baking industry[.]” (J.A.
`at 2004 (Porzio Decl.).)
`
`Given the extent to which she was engaged in Mallet’s
`business, the company insisted that, as a condition of her
`employment, Lacayo
`execute
`a nondisclosure
`and
`noncompetition agreement. According to that agreement,
`Lacayo could “not disclose any information regarding
`[Mallet’s] affairs” during or after her employment.8 (J.A. at
`
`
`8 The scope and validity of that agreement is not before
`us now. To the extent Mallet seeks relief for disclosure or use
`of non-trade secret information that it contends is contractually
`protected under the nondisclosure agreement, that is an inquiry
`for the District Court to resolve in the first instance. In
`deciding to impose the injunction now at issue, the District
`Court tied the reasonableness of Lacayo’s noncompetition
`agreement and the irreparable harm deriving from her breaches
`of that agreement to Mallet’s trade secrets. (See J.A. at 19 ¶ 8
`(“Lacayo’s three-year restrictive covenant was reasonably
`tailored to protect trade secrets given her work with Mallet’s
`formulas, its most secret information.”); J.A. at 35 ¶ 82 (“The
`irreparable harm Mallet would suffer without injunctive relief
`is varied and evident. Lacayo … [is] actively working for a
`direct competitor in [a] high-level position[] in which [she]
`ha[s] used and disclosed Mallet’s trade secrets in violation of
`[her] covenant[].”).) Since consideration of Lacayo’s alleged
`nondisclosure agreement breaches was limited to her alleged
`disclosure and use of Mallet’s trade secrets, we limit our
`discussion to trade secrets and do not separately consider
`Lacayo’s contractual obligations.
`
`11
`
`
`
`1950.) She also agreed not to “directly or indirectly” work for,
`“engage in, or be connected with, any business competitive
`with [Mallet’s] business” in any capacity for three years after
`her employment with Mallet ended. (J.A. at 1950.)
`
`
`b. Bowers’s Employment with Mallet
`
`Bowers began working for Mallet in 1978. Except for
`two brief stints away from the company, he was employed by
`Mallet until January 2019. Over that forty-year period, Bowers
`worked in sales and ultimately became Mallet’s Director of
`National Accounts. Throughout his long tenure with Mallet,
`Bowers gained access to its trade secrets and worked with some
`of its most valued customers. He understood how to provide
`service to Mallet’s customers and was privy to information
`about Mallet’s sales strategies and the “types of [product
`application equipment] Mallet might use
`for
`some
`customers[.]” (J.A. at 5668-70 (Bowers Depo.).) Bowers also
`worked closely with Mallet’s research lab to improve product
`performance and with its customers to test products and resolve
`complaints.
`
`As a condition of his employment, Bowers entered into
`a nondisclosure agreement prohibiting him from disclosing or
`using Mallet’s trade secrets except in furtherance of Mallet’s
`interests.9
`
`
`9 Although Bowers did enter into a noncompetition
`agreement with Mallet when he initially joined the company in
`1978, he did not have one in place at the time of his departure
`in 2018, and Mallet has not pleaded the existence of such an
`agreement in its complaint. As with Lacayo’s nondisclosure
`and noncompetition agreement, see supra note 8, Bowers’s
`
`12
`
`
`
`
`
`2. Bundy, Synova, and the Baking Release
`Agent Industry
`
`Founded in 1964, Bundy is a privately-held company
`with twenty-six facilities worldwide and a large customer base.
`It operates under several brands and is “dedicated to offering
`products and services in the industrial baking business[.]”
`(J.A. at 2409-10 (R. Bundy10 Decl.).) Bundy manufactures and
`sells baking pans and coatings, offers commercial food
`services, provides pan cleaning and recoating services, buys
`and resells pre-owned bakery equipment, and offers mixers and
`processing equipment for sale. Touching off the present battle,
`Bundy has added baking release agents to its list of product
`offerings. According to the Defendants, several of Bundy’s
`customers wanted “to see some alternatives brought to the
`[release agent] marketplace” and requested that Bundy enter
`the market. (J.A. at 13331 (R. Bundy Hearing Testimony); see
`also J.A. at 2411 (R. Bundy Decl.).) That led to the creation
`of the most recent Bundy brand, Synova.
`
`
`
`nondisclosure agreement is relevant now only to the degree
`that it overlaps with his obligation not to misappropriate
`Mallet’s trade secrets, so it is not treated separately. (See J.A.
`at 35 ¶ 82 (“The irreparable harm Mallet would suffer without
`injunctive relief is varied and evident. … Bowers [is] actively
`working for a direct competitor in [a] high-level position[] in
`which [he] ha[s] used and disclosed Mallet’s trade secrets in
`violation of [his] covenant[].”).)
`
`10 Robert Bundy is the president of Synova.
`
`13
`
`
`
`Synova was formally “created on April 27, 2017 and
`launched on May 15, 2019 to manufacture and distribute
`external baking release agents and oils.” (J.A. at 2410
`(R. Bundy Decl.).) Between its creation and its launch,
`Synova’s President, Robert A. Bundy, was “engaged in
`business development[,] … looking for as much information
`on as many topics as [he] could get” on the baking release agent
`industry. (J.A. at 3628-29 (Bundy/Synova Depo.).) Along the
`way, he sought information from and recruited Lacayo and
`Bowers.
`
`But first, Mr. Bundy approached Shane Zhou, a former
`Mallet employee. He wanted Zhou to help design Synova’s
`production facility. He asked Zhou for “the type and general
`formula” for ten products – and more specifically, whether
`those products “are pan oils, greases, etc. and some
`information about the quantities of the different base
`ingredients” – to “help [him] size some of the bulk tanks and
`piping.” (J.A. at 1894 (R. Bundy Email).) On January 4, 2018,
`Mr. Bundy offered Zhou a position as Synova’s Lab Director
`and agreed to indemnify Zhou “for any non-compete and/or
`legal action that may result from [his] becoming an employee
`of Synova.” (J.A. at 4283-84 (Offer Letter).) Synova
`withdrew its offer when Zhou sought only to become a
`consultant but still wanted the same indemnification. Shortly
`thereafter, on January 22, 2018, Mr. Bundy interviewed and
`hired Lacayo as Synova’s Lab Director, while she was still
`employed with Mallet. Around the same time, he reached out
`to Bowers, who was also then with Mallet, asking him if he
`“would be comfortable … helping [Synova] gather some
`information about the oils that [its] future customer base will
`require.” (J.A. at 2023 (R. Bundy Email).) Specifically,
`Mr. Bundy sent Bowers a questionnaire that Synova had put
`
`14
`
`
`
`together to use as “a data collection form” that would help
`Synova understand “what the customer order patterns will look
`like[,]” since it was new to the business. (J.A. at 2023-24
`(R. Bundy Email).) “That data would be very helpful” while
`Synova was “still designing the process[,]” and Mr. Bundy
`“wanted to see if [Bowers] thought [the questionnaire] was the
`right idea[.]” (J.A. at 2023-24 (R. Bundy Email).)
`
`
`a. Lacayo’s Employment with Synova
`
`Although Lacayo secretly interviewed and accepted a
`position with Synova on January 22, 2018, she remained
`employed with Mallet until February 12, 2018. When she did
`finally announce that she was leaving Mallet, Lacayo
`concealed her employment with Synova and informed Mallet
`that she was instead leaving to take care of her mother.
`
`Just three days before her interview with Synova, on
`January 19, 2018, Lacayo copied 1,748 files onto a USB drive.
`Those “bulk copied files were stored across four main (root)
`folders” titled: “Mallet Lab Methods, MRO Project, Supplier
`Approval Program, and Supplier Information.” (J.A. at 6105
`(Price11 Decl.).) She also emailed information, including
`screenshots of two formulas, from Mallet’s files to her private
`Gmail account. On February 28, 2018, when she was no longer
`employed with Mallet, Lacayo emailed to herself a spreadsheet
`with technical data from Mallet’s research.
`
`
`11 Paul Price is a digital forensic expert for Mallet, who
`was asked to determine if any of Mallet’s data had been
`transferred to Lacayo’s devices, including those she used while
`working for Synova.
`
`15
`
`
`
`
`Around that time, Mallet discovered that Lacayo had
`sent emails containing Mallet’s formulas from her Mallet email
`account to her personal Gmail account just before she resigned.
`It consequently sent Lacayo a cease-and-desist
`letter,
`demanding that she honor her obligation not to work for a
`competitor, immediately return all of Mallet’s data, and stop
`using or disclosing Mallet’s confidential information. Lacayo
`responded that she had not shared Mallet’s information and
`that she would destroy all Mallet information in her possession.
`She continued to conceal that she was working for Synova,
`saying that she was “taking some time off.” (J.A. at 4571
`(Lacayo Depo.); see also J.A. at 1941-42 (Topercer Decl.).)
`
`During discovery in this case, “over 1,000 documents”
`containing “metadata associated with Mallet” were found on
`Lacayo’s Synova computer, with 649 of those documents
`having “a Mallet logo … [branded] on the face of the
`document.” (J.A. at 6109-10 (Price Decl.).) Another “108 files
`that are an exact match for documents on” Lacayo’s Mallet
`computer were found on her Synova computer. (J.A. at 6106
`(Price Decl.).) Digital forensic evidence indicates that Lacayo
`not only copied those documents but also used them,12
`
`
`12 Price explained that “use” of a Mallet document
`involved copying the document from Lacayo’s USB drive – on
`which she had originally copied documents from her Mallet
`computer – to her Synova computer and then editing that
`document “some time later. What that means is the document
`was opened, changes were made, and those changes were
`saved on the date shown as ‘File System Last Modified Date.’”
`(J.A. at 6110 (Price Decl.).)
`
`16
`
`
`
`including a Mallet release agent formula and associated pricing
`information, while working for Synova.
`
`The purloined documents, however, are not the whole
`of the problem Mallet has with Lacayo. It says that “the value
`she brings [to a competitor] goes far beyond any particular
`formula she may have provided” or any documents she may
`have stolen. (J.A. at 10988 (Mallet Depo.).) “It’s really the
`know-how that she brings” to Synova that Mallet says it is
`worried about. (J.A. at 10988 (Mallet Depo.).) After
`“work[ing] for Mallet for” so long, Lacayo “has quite a lot of
`know-how that went with her to the Bundy organization[,]”
`including information about “the formulation, application and
`implementation of release agent” products that Mallet had
`“developed over the course of its 80 years.” (J.A. at 10972-74
`(Mallet Depo.).) And that know-how, it says, “would be
`impossible to erase from her mind.” (J.A. at 10973 (Mallet
`Depo.).)
`
`In January 2018, Synova was in the earliest stages of its
`existence, and while “[t]he development of the release agents
`had already begun,” it had not completed a final product. (J.A.
`at 3578, 3626 (Bundy/Synova Depo.).) Synova had “identified
`the archetypes of ingredients that would be required and
`broadly [knew] the ratios of those ingredients.” (J.A. at 3581
`(Bundy/Synova Depo.).) But it was still in the research and
`development process and had not yet conducted “any internal
`product testing on a release agent[.]”
` (J.A. at 3578
`(Bundy/Synova Depo.).) As Mr. Bundy explained, “that was
`part of the reason to hire someone with a good science
`background[,]” like Lacayo. (J.A. at 3578 (Bundy/Synova
`Depo.).) Less than ten months after joining Synova, Lacayo
`had formulated a lineup of release agents, which Synova
`
`17
`
`
`
`marketed as direct replacements for Mallet’s release agents.
`Indeed, in internal correspondence it explicitly described its
`new formulas as “Synova=Mallet.” (J.A. at 6032-34 (Lacayo
`Email).) Lacayo provided oil blend recipes to Synova, built
`Synova’s processes and programs, and touted her ability to
`match a Mallet product for a customer.
`
`
`b. Bowers’s Employment with Synova
`
`Bowers was not burdened with a sense of loyalty either.
`After learning that Bundy was considering entry into the
`baking release agent marketplace, and while he was still
`employed with Mallet, Bowers began sharing information with
`Mr. Bundy about the release agent business generally and
`about Mallet’s business specifically. He forwarded to
`Mr. Bundy internal emails about Mallet’s customers, its
`pricing, its overall performance, and problems that customers
`were experiencing with Mallet. He later said he did so to “save
`[Mr. Bundy and Synova] some legwork.” (J.A. at 5714
`(Bowers Depo.).)
`
`When he resigned from Mallet, Bowers forwarded
`Mallet’s customer and product information to his wife’s
`email account and wiped clean all of his Mallet electronic
`devices. He admitted that if Mallet had the opportunity to
`search his personal email account, it could find emails about
`Mallet’s business dealings with customers, tech sheets, and
`pricing.
`
`On January 23, 2019, Synova hired Bowers as its
`Business Development Manager. His position with Synova,
`similar to his previous position with Mallet, centered on selling
`release agents. But he joined Synova in a more limited
`
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`
`
`
`capacity. His role was to “com[e] in, mak[e] the introductions,
`and [the Bundy reps] took it from there.” (J.A. at 5715-16
`(Bowers Depo.).) Bowers “was just [t]here to help things get
`off the ground.” (J.A. at 5716 (Bowers Depo.).)
`
`At that point, Synova’s facility was still under
`construction but it was already testing with a prospective
`customer an early version of its new Supra 130 product, a
`release agent Synova marketed as a direct competitor of
`Mallet’s Super P. Over the next couple of months, Synova
`completed five successful product test runs with several of
`Mallet’s top customers, placing Synova in a position to gain
`immediate market penetration. And that gain was realized
`when those test runs in fact led to business for Synova. As a
`result of Lacayo’s success in bringing several products to
`market, along with Bowers’s concentrated efforts to sell to
`companies whose accounts he had serviced at Mallet, Synova
`was able to make its competitive debut before the construction
`of its baking release agent production facility was fully
`completed.
`
`B.
`
`Procedural Background
`
`After discovering that Lacayo was working for Synova
`in violation of her noncompetition agreement, Mallet filed this
`lawsuit. It brought claims for trade secret misappropriation
`under both federal and state law, inevitable disclosure,
`conversion, and unfair competition against the Defendants;
`breach of contract and breach of fiduciary duty against Lacayo
`and Bowers; and tortious interference with contractual
`relations and aiding and abetting breach of fiduciary duty
`against Bundy and Synova. Based on those claims, Mallet
`
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`
`
`
`sought to preliminarily enjoin the Defendants from engaging
`in any competition against it.
`
`The District Court promptly acted upon Mallet’s
`application for emergency relief, denying a motion for a
`temporary restraining order, granting limited discovery, and
`entering an order governing the preliminary injunction
`proceedings. It twice granted extensions of the expedited
`proceedings, first in response to a joint motion and then for the
`benefit of Bowers, who was only informed nine days before
`discovery ended, during his deposition, that Mallet intended to
`amend its motion for preliminary injunction to seek injunctive
`relief against him.13 After dealing with multiple discovery
`disputes, the District Court presided over a preliminary
`injunction hearing where it took testimony, admitted 181
`exhibits, and ultimately considered more than 10,000 pages of
`evidence. It then decided that Mallet was entitled to injunctive
`relief on most of its claims.14
`
`Adopting many of Mallet’s proposed findings of fact,
`with the injunction order in turn incorporating certain factual
`findings by broad reference to the ranges of paragraph numbers
`listed in Mallet’s proposed order, the Court determined that
`Mallet had demonstrated a likelihood of success on the merits
`
`
`13 Mallet initially sought to preliminary enjoin Bundy,
`Synova, and Lacayo. Bowers was not added as a defendant
`until January 29, 2020.
`
`14 The District Court concluded that it was unnecessary
`to address Mallet’s claims for inevitable disclosure and
`conversion.
`
`20
`
`
`
`trade secret
`its
`including
`its claims,
`for several of
`misappropriation claims. Specifically, the District Court found
`that “[a]t least some of the Mallet information in question,
`possessed by Defendants,
`satisfies
`the
`trade
`secret
`definition(s),” including, “among other things, highly sensitive
`details about how Mallet produces, markets and sells its release
`agents[.]” (J.A. at 25.) The Court listed thirteen categories of
`Mallet information it deemed “protected materials,” as
`follows:
`
`Mallet’s formulas; customer purchase orders
`demonstrating Mallet’s pricing; identification of
`customers experiencing difficulty with Mallet’s
`products; internal discussions of “actual major
`problems” at customer
`locations;
`internal
`discussions of how Mallet would address issues
`with
`its products;
`internal discussions of
`customers’ preferences and complaints; Mallet’s
`completed organic certifications; identification
`of Mallet’s
`supply
`source
`for product
`ingredients; Mallet’s
`internal manuals and
`procedures showing how Mallet’s
`lab
`is
`operated; pricing and volume data; information
`about Mallet’s equipment; Mallet’s training
`materials showing how Mallet markets and sells
`its products; and a compilation of Mallet’s
`product specification sheets.
`
`(J.A. at 25-26.) The Court then held there had been “a
`misappropriation of Mallet’s trade secrets[,]” based on “[t]he
`timing of Bowers’s and Lacayo’s sending Mallet information
`to themselves – around the time they agreed to work for
`Bundy/Synova[.]” (J.A. at 28.) It also concluded that Bundy
`
`21
`
`
`
`and Synova had “acquired a substantial volume of Mallet’s
`confidential and trade secret information and [had] done
`nothing to stop use of this data, even after litigation
`commenced.” (J.A. at 29.) And it found that “[a]ctively
`concealing plans to form a competing company; using
`employee status t