Our client and its president were sued in the U.S. District Court for the Western District of New York. The plaintiff, a medical device company, was alleging trade secret misappropriation and breach of restrictive covenants in the parties’ consulting agreement and seeking injunctive relief. Almost a year into the case, we were asked to advise with respect to a more aggressive strategy than our client’s incumbent counsel. We recommended and were engaged to implement a strategy that involved filing an arbitration in California to seek a judgment declaring the restrictive covenants invalid under California law (Cal. Bus. & Prof. Code § 16600) and that the plaintiff’s attempted enforcement of them constituted a violation of California’s Unfair Competition Law (Cal. Bus. & Prof. Code § 17200). We quickly defeated a motion to transfer the arbitration to New York and convinced the arbitrator to permit us to file an immediate motion for summary judgment.
Shortly after we filed the California arbitration, the plaintiff filed a separate arbitration in New York seeking damages arising out of the alleged breach of the restrictive covenants in the consulting agreement. We quickly asserted multimillion-dollar counterclaims for breach of the earnout provisions of a related acquisition agreement.
After briefing our claims in the California arbitration and further outlining our counterclaims in the New York arbitration, the plaintiff finally came to the table, and we were able to negotiate a settlement that involved the plaintiff paying our client and its president and included no injunctive relief (or anything else of substance) against our client or its president.
Results may vary depending on your particular facts and legal circumstances.
