MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D), FILED
this Memorandum Decision shall not be Dec 29 2016, 8:45 am
regarded as precedent or cited before any
CLERK
court except for the purpose of establishing Indiana Supreme Court
Court of Appeals
the defense of res judicata, collateral and Tax Court
estoppel, or the law of the case.
ATTORNEYS FOR APPELLANT ATTORNEYS FOR APPELLEES
Maggie L. Smith Kathleen A. DeLaney
Amy S. Wilson Christopher S. Stake
Darren A. Craig DeLaney & DeLaney LLC
Jenai M. Brackett Indianapolis, Indiana
Frost Brown Todd LLC
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Angie’s List, Inc., December 29, 2016
Appellant-Plaintiff, Court of Appeals Case No.
29A02-1605-PL-1061
v. Appeal from the Hamilton
Superior Court
Rick Myers, Maggie Leonard, The Honorable Daniel J. Pfleging,
and Brock Crabtree, Judge
Appellees-Defendants Trial Court Cause No.
29D02-1601-PL-588
Baker, Judge.
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[1] Angie’s List, Inc. (Angie’s List), appeals the judgment of the trial court, which
denied Angie’s List’s request for a preliminary injunction against Rick Myers,
Maggie Leonard, and Brock Crabtree, and which dissolved a previously-issued
temporary restraining order. The defendants are former employees of Angie’s
List who, as part of their employment agreement with the company,
covenanted to return any proprietary information to the company and not to
solicit company employees after their employment ended. Instead, the
defendants emailed hundreds of pages of company documents to their personal
email accounts during their final days with the company, or communicated
with Angie’s List employees about leaving the company to join a competitor, or
both. We find that the trial court properly denied Angie’s List’s request to
enjoin the defendants from working for the competitor, but that the trial court
improperly declined to enjoin them from any future violations of their
covenants with Angie’s List. Accordingly, we affirm in part, reverse in part
with instructions, and remand for further proceedings.
Facts
[2] Myers, Leonard, and Crabtree are former employees of Angie’s List. While
Angie’s List did not ask them to execute a covenant not to compete, they were
required to execute a confidentiality agreement and to agree to comply with a
code of ethics. The confidentiality agreement required employees to “hold in
strictest confidence and . . . not disclose, use, lecture upon or publish any of the
Company’s Proprietary Information . . . except as . . . may be required in
connection with [their] work for the Company . . . .” Pl.’s Ex. 1. Employees
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also agreed to the following: “When I leave the employ of the Company . . . I
will deliver to the Company any and all drawings, notes, memoranda,
specifications, devices, formulas, and documents, together with all copies
thereof, and any other material containing or disclosing any Company
Inventions, Third Party Information or Proprietary Information of the
Company.” Id. The employees also agreed that, for the period of their
employment and one year thereafter, they would not “solicit, contact or
encourage” Angie’s List’s employees to leave the company for another. Id.
[3] The company’s code of ethics defines confidential proprietary information as
“all non-public information that might be useful to competitors or that could be
harmful to the Company, its members or its suppliers if disclosed.” Pl.’s Ex. 3.
The code also reinforces a promise made in the confidentiality agreement
regarding proprietary information: “Your obligation to protect the Company’s
proprietary and confidential information continues even after you leave the
Company, and you must return all proprietary information in your possession
upon leaving the Company.” Id.
[4] Leonard was hired by Angie’s List in October 2013, and she quickly became a
top sales representative at the company. Angie’s List allowed and encouraged
her to use her personal email account for business purposes so that she could
make sales calls from her home. She informed her manager on December 28,
2015, that she was planning to resign by the end of that month so that she could
work for HomeAdvisor, a competitor of Angie’s List. According to Leonard,
her manager warned her that the company would force her to leave that day
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and would fire her boyfriend, who also worked at the company, in retaliation.
As the manager left to go to a meeting, Leonard began emailing herself
hundreds of pages of documents; she later testified that she had personal
information on the computer, and to preserve this information she began
emailing the contents of her computer to her personal email account, planning
to sort through it later.1 She also put the entire contents of her desk into a bag,
which she took to her car. Her manager saw her emailing a document and told
her to stop, but told her that she could email herself an Excel spreadsheet that
she had created to monitor her sales.
[5] Myers began working at Angie’s List in March 2013. His job involved closing
sales to service providers. Like Leonard, he decided to move to HomeAdvisor,
and he told Angie’s List that his last day would be December 18, 2015. Also
like Leonard, he began emailing hundreds of pages of documents to his
personal email account.2 In addition, according to the testimony of fellow
Angie’s List employee Melissa Card-Kraus, Myers began encouraging her to
leave the company for HomeAdvisor. Even though they worked in the same
vicinity and had work phones, Myers would call Card-Kraus on his cell phone
and say, “I’m going to HomeAdvisor. I’m working with the top guy. I’m
1
Among the information Leonard took were documents relating to different zoning schemes Angie’s List
used to target customers, consumer profiles and reviews, demographic data, advertising schemes, documents
with “internal use only” printed as a watermark, a list of the top sellers from the company, and a spreadsheet
of her team’s sales statistics.
2
The documents Myers took mainly related to Angie’s List’s future business strategies, plans to improve
customer relations, and several documents watermarked “internal use only.”
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building a team. You’re at the top of my list.” Tr. p. 255. 3 The day after he left
Angie’s List, he went to a business meeting with HomeAdvisor and sent the
following text message to several Angie’s List employees: “Brock [Crabtree]
and I are on a flight from Chicago to Kansas City. We are going to be
leveraging AL and HA positions to get what everyone deserves. You will be
happy but remember to keep your poker face on.” Pl. Ex. 8.
[6] Crabtree began working at Angie’s List in February 2013, but was fired in
August 2015. While Leonard was still working there, Crabtree sent her the
contact information for HomeAdvisor. As mentioned above, he was also part
of the group text regarding leveraging Angie’s List employees’ skills to obtain
positions at HomeAdvisor.
[7] After Leonard and Myers left Angie’s List, the company reviewed their email
accounts and found that they had been emailing themselves company
documents. The company sent the three employees cease and desist letters, and
on January 22, 2016, filed a complaint and a request for a temporary restraining
order (TRO), seeking “to enjoin Employee Defendants from using or disclosing
Angie’s List’s confidential business information and trade secrets, and to
compel Defendants to return the confidential information and trade secrets
Myers and Leonard and any other Defendants took.” Appellant’s App. p. 37.
It also requested that the court enjoin Myers and Leonard from working for
3
Myers testified that, while these interactions took place, it was Card-Kraus who initiated the conversations.
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HomeAdvisor until they could prove that they no longer possessed confidential
information. After a January 25, 2016, hearing, a magistrate judge granted the
TRO in part, ordering the employees to return any documents they took from
Angie’s List, to refrain from sharing the confidential information, and to refrain
from soliciting any other Angie’s List employees to leave their jobs. The trial
court did not grant Angie’s List’s request that the defendants be prevented from
working for HomeAdvisor.
[8] On February 5, 2016, Angie’s List filed a motion for preliminary injunction.
After a March 2, 2016, hearing, the trial court on April 13, 2016, denied
Angie’s List’s motion and dissolved the previously-issued TRO. Angie’s List
now appeals.
Discussion and Decision
[9] When reviewing findings of fact and conclusions of law entered upon the denial
of a motion for preliminary injunction pursuant to Trial Rule 52(A)(1), we must
determine if the trial court’s findings support its judgment and will reverse the
judgment only when clearly erroneous. M.K. Plastics Corp. v. Rossi, 838 N.E.2d
1068, 1074 (Ind. Ct. App. 2005). Findings of fact are clearly erroneous only
when the record lacks any evidence or reasonable inferences therefrom to
support them. Id. The trial court’s judgment is clearly erroneous only if it is
unsupported by the findings and the conclusions that rely upon those findings.
Id. We will neither reweigh the evidence nor reassess witness credibility. Id.
We will reverse only if the trial court’s decision is against the logic and effect of
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the facts and circumstances before the trial court or when the trial court
misinterprets the law. Richie v. Cmty. Howard Reg’l Health, 51 N.E.3d 1212, 1216
(Ind. Ct. App. 2016).
[10] In seeking a preliminary injunction, Angie’s List had the burden of establishing:
(1) that its remedies at law are inadequate, causing irreparable harm pending
resolution of its lawsuit; (2) that it has at least a reasonable likelihood of success
on the merits at trial; (3) that the threatened injury to Angie’s List outweighs the
potential harm to the defendants resulting from the proposed injunction; and (4)
that the public interest would not be disserved by the granting of injunctive
relief. M.K. Plastics, 838 N.E.2d at 1075. An injunction is an extraordinary
remedy that should be granted only in rare instances where the law and facts
are clearly within the moving party’s favor. Id.
[11] We first find that the trial court’s judgment was not clearly erroneous insofar as
it declined to enjoin the defendants from working for HomeAdvisor. Angie’s
List had the burden of proving that the threatened injury to Angie’s List from
these employees working for HomeAdvisor outweighed the potential harm to
the employees of not being able to work. As HomeAdvisor is now the main
source of income for the defendants, the trial court did not err by finding that
the potential harm of an injunction against working and earning income
outweighed the threatened injury to Angie’s List.
[12] The other aspects of the trial court’s decision, however, are not as clearly
supported by the record or the law. We note that, while the trial court’s order
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analyzes Angie’s List’s claims under the Indiana Uniform Trade Secrets Act, 4 it
never once mentions or analyzes the confidentiality agreement the defendants
signed as employees of Angie’s List. The existence of these covenants was
uncontroverted, and while trial courts have broad discretion to weigh evidence
as they see fit, they “cannot ignore competent, uncontradicted evidence.”
Steenhoven v. College Life Ins. Co. of America, 458 N.E.2d 661, 666 n.13 (Ind. Ct.
App. 1984).
[13] In finding that Angie’s List did not have protectable trade secrets, the trial court
also made several errors of law. Indiana Code section 24-2-3-2(1) defines a
trade secret as information that “derives independent economic value, actual or
potential, from not being generally known to, and not being readily
ascertainable by proper means by other persons who can obtain economic value
from its disclosure or use.” Rather than go through all eighty-nine findings of
fact and law, we will note four types of error that run through the trial court’s
order.
[14] First, the trial court emphasized that Angie’s List employees were allowed to
take documents home so that they could make sales calls outside of the office.
The trial court concluded that, therefore, this information was not secret and
that Angie’s List did not take the proper steps to secure it. But this conclusion
ignores the confidentiality agreement whereby the employees promised to
4
Ind. Code § 24-2-3-1, et seq.
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refrain from sharing the information with others who might obtain economic
value from the information. And it ignores the company’s code of ethics,
which mandated that the employees “return all proprietary information in your
possession upon leaving the Company.” Pl.’s Ex. 3 (emphasis added).
[15] Second, the trial court emphasized that there were no exit interviews, that no
one specifically asked the defendants not to take documents, and that no one
asked the defendants to return documents they may have taken. But these
factual findings are irrelevant to the case; the defendants promised to return all
confidential information to Angie’s List and Angie’s List was under no
obligation to remind the defendants of this promise in order to enforce it.
[16] Third, the trial court emphasized that Angie’s List could not prove that the
information had been shared. Again, the defendants did not only agree to
refrain from dispersing company documents; they agreed to return all
confidential information, but did the opposite by emailing hundreds of pages to
their personal email accounts.
[17] And fourth, the trial court emphasized the defendants’ testimony that they did
not take confidential documents for a malicious purpose. For instance,
Leonard admitted that she emailed herself a list of the top salespersons at
Angie’s List, which could easily be used by HomeAdvisor to solicit the most
productive workers from Angie’s List, but she testified that she only wanted the
list because she was proud that she was a top earner. But the confidentiality
agreement does not include an exception for company documents to which an
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employee has a sentimental attachment; it requires that the documents be
returned, regardless of the intent behind taking them.
[18] In short, the defendants’ confidentiality agreements obligated them to return
Angie’s List documents. Regardless of their intent, or the lack of reminder, or
the permitted access during their employment, or the absence of sharing those
documents with third parties, the defendants emailed themselves hundreds of
pages of confidential information and did not return the information upon
leaving the company. The trial court’s decision to deny a preliminary
injunction against sharing this information and dissolve the TRO prohibiting
the defendants from sharing any confidential information they may still possess
was against the logic and effect of the facts before the trial court.
[19] As we turn to the employees’ covenant not to solicit employees away from
Angie’s List, we note that the one-year period of non-solicitation has already
expired for Crabtree, who was fired from Angie’s List in August 2015.
Whether Crabtree should have been enjoined from soliciting employees is
therefore moot, and we will not address the issue.5
[20] As for Myers, the trial court made a factual finding that “Myers has not
solicited, contacted, or encouraged employees of Angie’s List to end their
5
We also note that the issue will be moot for Myers in December 2016, but as of the date of writing, the issue
is still in controversy.
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employment at Angie’s List, and/or join HomeAdvisor.” Appellant’s App. p.
21.
[21] The trial court does not mention Myers’s text message, sent to several then-
current Angie’s List employees, that he and Crabtree were “going to be
leveraging AL and HA positions to get what everyone deserves. You will be
happy but remember to keep your poker face on.” Pl.’s Ex. 8. At the least, this
message was contacting and encouraging Angie’s List employees to leave their
jobs. The trial court’s finding to the contrary is simply against the logic and
effect of the facts before it. We find the trial court’s decision to decline to
enjoin Myers from engaging in this behavior for the remaining months of his
covenant to be error.
[22] In summary, the trial court properly found that an injunction against working
for HomeAdvisor would unduly burden the employees, and it properly ruled in
the employees’ favor on that issue. But the evidence unambiguously shows that
Leonard and Myers, at the very least, took and failed to return proprietary
information. And the evidence unambiguously shows that Myers, at the very
least, contacted and encouraged Angie’s List employees to leave their jobs to
join HomeAdvisor. As the employees covenanted not to take company
documents and not to solicit employees away from the company, the trial court
should have granted Angie’s List’s request for a preliminary injunction on these
matters.
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[23] The judgment of the trial court is affirmed in part, reversed in part, and
remanded with instructions to enter a preliminary injunction against the
defendants to act in accord with their covenants.
Mathias, J., and Pyle, J., concur.
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