Craig Vickery v. Ardagh Glass, Inc.

FILED
Oct 13 2017, 10:54 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEYS FOR APPELLANT ATTORNEYS FOR APPELLEE
Kevin W. Betz Adam Arceneaux
Sandra L. Blevins Derek R. Molter
Benjamin C. Ellis Kaitlyn J. Marschke
Betz + Blevins Ice Miller LLP
Indianapolis, Indiana Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Craig Vickery, October 13, 2017
Appellant-Defendant, Court of Appeals Case No.
49A02-1702-PL-330
v. Appeal from the Marion Superior
Court, Indiana Commercial Court
Ardagh Glass Inc., The Honorable Heather A. Welch,
Appellee-Plaintiff Judge
Trial Court Cause No.
49D01-1606-PL-23465
Baker, Judge.
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[1] Craig Vickery appeals the trial court’s order granting Ardagh Glass, Inc.’s
(Ardagh), motion for a preliminary injunction. Vickery raises the following
arguments on appeal: (1) the trial court erred in granting a temporary
restraining order when allegedly insufficient notice was provided to Vickery;
and (2) the trial court erred in entering a preliminary injunction preventing
Vickery from going to work for one of Ardagh’s competitors.
[2] We find that Vickery received insufficient notice of the temporary restraining
order proceeding, but that he has waived the right to seek relief on the issue.
We further find that the trial court did not err by entering the preliminary
injunction. We affirm and remand for further proceedings.
Facts 1
[3] Ardagh is a manufacturer of glass containers and bottles; it sells its products to
companies in the food and beverage industries. It is the North American
business unit of the international holding company Ardagh Group.
[4] Through a share purchase agreement executed in January 2013 and closed in
April 2014, Ardagh Glass Containers, Inc., purchased 100% of the stock of
Saint-Gobain Containers, Inc. (SGCI), which is a wholly-owned subsidiary of
1
We held oral argument in Indianapolis on September 25, 2017. We thank counsel for both parties for their
able written and oral presentations.
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Saint-Gobain Corporation (SGC). Following the purchase, the two companies
merged and became known as Ardagh Glass, Inc.
[5] Vickery began working for SGCI on September 8, 2004, as a temporary
employee. Two days later, he was hired by SGCI as a full-time mould
engineer. That day, September 10, 2004, Vickery signed a Noncompete
Employee Agreement (the Noncompete). The Noncompete explicitly states
that Vickery signed it “‘in consideration of my employment, continued
employment, increased compensation, change in responsibility, or other
benefit . . . .’” Prelim. Inj. Order p. 5 (quoting Noncompete). Among other
things, the Noncompete provided that Vickery could not work for a competitor
for one year following his departure from SGCI:
“I shall not, without written consent signed by an officer of the
Company, directly or indirectly (whether as owner, partner,
consultant, employee or otherwise), at any time during the one-
year period following termination of my employment with the
company, engage in or contribute my knowledge to any work or
activity that involves a product, process, apparatus, service or
development (i) which is then competitive with or similar to a
product, process, apparatus, service or development on which I
worked or (ii) with respect to which I had access to Confidential
Information while at the Company at any time during the period
prior to such termination.”
Id. (same). The Noncompete also required Vickery to protect the company’s
trade secrets and confidential information.
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[6] In 2012, Vickery was promoted to Senior Mould Engineer; he held that position
until he left the company in June 2016. As part of his responsibilities, Vickery
designed mould equipment for the company’s manufacturing process, designed
replacement moulds, and designed moulds for new products. He supplied
mould vendors with detailed engineering drawings; the vendors would then
create equipment to match the drawings. Vickery was also involved in “trouble
shooting,” or coming up with remedies for problems with the company’s mould
designs. Id. at 9. Additionally, he interacted with manufacturing plants and the
product design department, and was involved with the implementation of
Ardagh’s European design engineering standards and best practices throughout
its North American plants.
[7] After Vickery was passed over for a promotion in February 2016, he began
looking for a new employer. His uncle works for Owens-Illinois, one of
Ardagh’s primary competitors. Vickery interviewed with Owens-Illinois for the
position of Mould Design Specialist and provided Owens-Illinois with a copy of
the Noncompete in advance. On June 1, 2016, he was offered and accepted
that position with Owens-Illinois. That position would include duties that are
substantially similar to Vickery’s duties at Ardagh.
[8] On June 6, 2016, Vickery tendered his resignation letter to Ardagh; he omitted
the fact that he was going to work for Owens-Illinois. He then engaged in
additional communications with Owens-Illinois employees, including his uncle,
regarding the potential impact of the Noncompete. On June 16, 2016, Vickery
disclosed to Ardagh’s upper management that he was going to work for Owens-
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Illinois. Ardagh advised Vickery to review his Noncompete to ensure he would
remain in compliance and worked to persuade Vickery to stay with Ardagh.
On June 22 or June 23, Ardagh informed Vickery it intended to enforce the
Noncompete. On June 23, Ardagh gave Vickery a letter from outside counsel
requesting that Vickery provide the details of his new position at Owens-Illinois
and threatening a lawsuit that would include a request for injunctive relief.
Vickery never responded.
[9] On the morning of June 30, 2016, the last day of Vickery’s employment with
Ardagh, Ardagh’s counsel notified Vickery via email that it would be filing suit
with the Commercial Court later that day, requesting a temporary restraining
order (TRO) and injunction, and attached the pleadings it intended to file.
Vickery did not respond, instead emailing his uncle that “things just got serious
on the legal front as of 11:00 a.m. today.” Id. at 28.
[10] On June 30, 2016, Ardagh filed a complaint against Vickery to enforce the
Noncompete and to protect its trade secrets. That same afternoon, without
holding a hearing, the trial court issued an ex parte TRO directing Vickery to
cease and desist from “using Ardagh’s trade secrets and confidential
information to compete against Ardagh;” to refrain from “communicating with
or recruiting any of Ardagh’s employees;” and to cease and desist from
“participating or working on mould engineering, bottle design, or similar roles
on behalf of Ardagh’s main competitor, Owens-Illinois, Inc.” Appellant’s App.
Vol. II p. 48. The trial court scheduled a hearing for July 8, 2016.
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[11] On July 5, 2016, Vickery’s counsel entered an appearance and requested an
extension on all TRO deadlines. The trial court granted the request, noting that
Vickery “agrees to a continuance of the TRO entered by the Court on June 30,
2016 until the preliminary injunction hearing and to combining the hearing on
the TRO with a hearing on the request for a preliminary injunction.”
Appellee’s App. Vol. II p. 32. The order scheduled the combined
TRO/preliminary injunction hearing for a full day on July 27, 2016, and a half-
day on July 28, 2016.2
[12] On July 27, 2016, Vickery filed a motion to vacate the TRO and to dismiss the
complaint. Among other things, Vickery argued that he did not receive
sufficient notice of the TRO proceeding and that Ardagh did not have standing
to enforce the Noncompete. On August 12, 2016, Ardagh filed a motion for
partial summary judgment, seeking judgment as a matter of law that it has
standing to enforce the Noncompete. The trial court granted Ardagh’s motion
for partial summary judgment and denied Vickery’s motion to dismiss on
November 15, 2016. On January 13, 2017, the trial court issued a detailed
sixty-three-page order granting Ardagh’s motion for preliminary injunction.
Vickery now brings this interlocutory appeal.
2
The hearing ultimately spanned multiple days: July 27-29; August 23; September 2, 7, and 9; and
November 17.
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Discussion and Decision
I. Indiana Commercial Court
[13] On September 25, 2017, the day on which we held oral argument, Vickery filed
a motion to dismiss the entire lawsuit for lack of constitutional jurisdiction. He
raises the following arguments in his motion: (1) our Supreme Court exceeded
its authority by establishing the Commercial Court; (2) our Supreme Court
lacks the authority to appoint the Commercial Court judges; (3) the
Commercial Court bestows unconstitutional privileges on business entities; and
(4) the Commercial Court permits corporate plaintiffs to compel individual
defendants to distant venues, creating an extreme hardship.
[14] Vickery acts as though litigating in the Commercial Court is compulsory if the
plaintiff files a complaint there. That, however, is patently untrue. Our
Supreme Court has promulgated Interim Commercial Court Rules, and Interim
Rule 4(D)(3) plainly states that if a party to litigation that was filed in a
Commercial Court files a Refusal Notice within thirty days of being notified
that the case was filed in Commercial Court, then the clerk “shall transfer and
assign the case to a non-Commercial Court Docket . . . .” (Emphasis added).
Indeed, the Commentary to Interim Rule 4 even emphasizes that “every other
party has an absolute veto” of the placement of a case on the Commercial
Court docket. Interim Rule 4 cmt. 1. Only where, as here, no Refusal Notice is
timely filed will the case be permanently assigned to a Commercial Court
docket.
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[15] In this case, Vickery did not file a Refusal Notice within thirty days. And not
until now did he object to the jurisdiction of the Commercial Court. He
attempts to argue that he is raising questions regarding the subject matter
jurisdiction of the Commercial Court, which can be raised at any point in time,
but that is not what he is actually challenging. The Commercial Court is (in
this case) part of the Marion Superior Court, which unquestionably has subject
matter jurisdiction over this litigation. See Ind. Code § 33-29-1-1.5 (providing
that all standard superior courts have original and concurrent jurisdiction in all
civil cases). Despite Vickery’s attempt to reframe the issue otherwise, he is
actually challenging the Commercial Court’s personal jurisdiction over him,
which is a waiveable argument. E.g., Harris v. Harris, 31 N.E.3d 991, 995 (Ind.
Ct. App. 2015). And here, indeed, he has consented to the Commercial Court’s
personal jurisdiction over him by failing to object to it and by failing to file a
Refusal Notice. Under these circumstances, Vickery has waived the right to
challenge the Commercial Court’s jurisdiction or authority and we deny his
motion to dismiss by separate order.
II. TRO
[16] Vickery first argues that the preliminary injunction should be reversed because
it is based upon a TRO that he claims violated Indiana Trial Rule 65(B) and his
constitutional right to due process.
[17] Initially, Ardagh responds that the propriety of the TRO is not properly before
this Court and we should not even consider it. A TRO is not appealable as of
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right. Witt v. Jay Petroleum, Inc., 964 N.E.2d 198, 203 (Ind. 2012). Here,
Vickery did not request that the trial court certify the TRO for a discretionary
interlocutory appeal. Furthermore, Ardagh notes that the TRO was superseded
by the preliminary injunction, meaning that any issues with respect to the TRO
are moot. Nordman v. N. Manchester Foundry, Inc., 810 N.E.2d 1071, 1073 n.2
(Ind. Ct. App. 2004). We acknowledge the issues surrounding the reviewability
of the TRO, but elect to consider the process that took place in this case because
it is an issue of utmost public importance that is likely to recur in the future.
[18] Generally, a party taking action in a legal proceeding against another party
must provide notice to the adverse party. See Ind. Trial Rules 3
(commencement of an action), 4-4.17 (process and summons), 5 (service of
pleadings and other papers). Under certain exceptions, however, a TRO may
be granted without notice to the adverse party. Indiana Trial Rule 65(B) sets
forth the requirements for the notice exception to apply:
A temporary restraining order may be granted without written or
oral notice to the adverse party or his attorney only if:
(1) it clearly appears from specific facts shown by
affidavit or by the verified complaint that immediate
and irreparable injury, loss, or damage will result to
the applicant before the adverse party or his
attorney can be heard in opposition; and
(2) the applicant’s attorney certifies to the court in
writing the efforts, if any, which have been made to
give notice and the reasons supporting his claim that
notice should not be required.
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Every temporary restraining order granted without notice shall be
indorsed with the date and hour of issuance; shall be filed
forthwith in the clerk’s office and entered of record; shall define
the injury and state why it is irreparable and why the order was
granted without notice; and shall expire by its terms within such
time after entry, not to exceed ten [10] days, as the court fixes,
unless within the time so fixed the order, for good cause shown,
is extended for a like period or unless the whereabouts of the
party against whom the order is granted is unknown and cannot
be determined by reasonable diligence or unless the party against
whom the order is directed consents that it may be extended for a
longer period. The reasons for the extension shall be entered of
record. In case a temporary restraining order is granted without
notice, the motion for a preliminary injunction shall be set down
for hearing at the earliest possible time and takes precedence of
all matters except older matters of the same character; and when
the motion comes on for hearing the party who obtained the
temporary restraining order shall proceed with the application for
a preliminary injunction and, if he does not do so, the court shall
dissolve the temporary restraining order. On two (2) days’ notice
to the party who obtained the temporary restraining order
without notice or on such shorter notice to that party as the court
may prescribe, the adverse party may appear and move its
dissolution or modification and in that event the court shall
proceed to hear and determine such motion as expeditiously as
the ends of justice require.
Our Supreme Court has noted that when a TRO is sought, “the basic
safeguards provided by Trial Rule 65(B) are essential to due process and must
be followed.” In re Anonymous, 43 N.E.3d 568, 570 (Ind. 2015) (noting that
both attorneys and judges have ethical obligations to ensure compliance with
Trial Rule 65(B)).
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[19] Here, at 11:00 a.m. on June 30, 2016, Ardagh’s counsel notified Vickery via
email that it would be filing a lawsuit with the Commercial Court later that day
and attached the pleadings it intended to file. While the attachments indicated
that the lawsuit would be filed in a Commercial Court in Marion County, they
did not indicate the date, time, or specific location of a hearing. Indeed, the
trial court issued the TRO at 4:12 p.m. that same day without holding a hearing
at all. TRO Order p. 5.
[20] We cannot conclude that notice of an intent to file a lawsuit amounts to
sufficient notice enabling the adverse party to appear in court in opposition to
the proceeding. Furthermore, serving pleadings via email only complies with
the Indiana Trial Rules under specific circumstances that were not present in
this case, and counsel for Ardagh conceded as much at oral argument. See T.R.
4.1(A) (summons and complaint may not be served via email), 5(B) (party may
serve another party via email only when the party being served has consented to
service by email). We can only conclude, therefore, that to meet the
requirements of due process and the Indiana Trial Rules, this proceeding had to
have qualified for the notice exception provided for by Indiana Trial Rule
65(B).
[21] As noted above, Trial Rule 65(B) provides that a TRO may be granted without
notice to the adverse party only if (1) the affidavit or verified complaint aver
that immediate and irreparable injury, loss, or damage will result to the
applicant before the adverse party or his attorney can be heard in opposition;
and (2) the applicant’s attorney certifies to the court in writing the efforts made
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to give notice and the reasons supporting the claim the notice should not be
required. Ardagh’s verified complaint does not make the showing required by
Trial Rule 65(B)(1). Appellee’s App. Vol. II p. 2-13. And the attorney
certificate does not include reasons supporting a claim that notice should not be
required. Appellant’s App. Vol. II p. 128. Therefore, this TRO litigation does
not meet any of the Trial Rule 65(B) requirements for proceeding without
notice to the adverse party.
[22] After the TRO was granted without legally sufficient notice to Vickery, he
could have objected, demanded a hearing, and/or sought to dissolve the TRO
altogether. See T.R. 65(B) (if TRO is granted without notice, adverse party
“may appear and move its dissolution or modification and in that event the
court shall proceed to hear and determine such motion”) (emphasis added).
Had he done so, the outcome on appeal may have been different. Instead,
however, Vickery’s counsel entered an appearance and requested an extension of
the TRO and agreed to combine the preliminary injunction and TRO hearings.
Appellee’s App. Vol. II p. 32. By taking this course of action, Vickery waived
any objection he may have had to the TRO process, including the lack of legally
sufficient notice.
[23] On July 27, 2016, the first day of the TRO/preliminary injunction hearing,
Vickery filed a motion to vacate the TRO. At oral argument, counsel for
Vickery argued that this action kept the issue alive and reviewable. We cannot
agree. A party may not un-waive an issue by attempting to revive it after it has
been waived. In this case, by requesting to extend the TRO and agreeing to
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combine the TRO and preliminary injunction hearings, Vickery waived any
arguments related to the TRO and we will not dispose of the appeal in this
fashion.
[24] That said, we caution attorneys and trial courts around the state to be mindful
of the notice requirements surrounding TROs. There are circumstances in
which a TRO must truly be granted immediately without affording time to the
adverse party to respond, but those circumstances must strictly meet the
requirements set forth by Trial Rule 65(B). In all other cases, both the applicant
party and the trial court are required by due process and the trial rules to ensure
that the adverse party was given legally sufficient notice before final action is
taken.
III. Preliminary Injunction
A. Standard of Review
[25] To obtain a preliminary injunction, the movant must show (1) a reasonable
likelihood of success on the merits; (2) the remedies at law are inadequate and
there will be irreparable harm during the pendency of the action; (3) the
threatened injury to the movant from denying the motion outweighs the
potential harm to the nonmovant from granting the motion; and (4) the public
interest would not be disserved by granting the injunction. E.g., Hannum Wagle
& Cline Eng’g, Inc. v. Am. Consulting, Inc., 64 N.E.3d 863, 873 (Ind. Ct. App.
2016).
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[26] In reviewing a trial court’s ruling on a motion for preliminary injunction, we
must determine whether the evidence supports the trial court’s factual findings
and whether the findings support the judgment. Id. at 874. In considering the
findings of fact, we must determine whether they were clearly erroneous; in
other words, when a review of the record leaves us with a firm conviction that a
mistake has been made. Id. We will consider only the evidence favorable to
the judgment and all reasonable inferences to be drawn therefrom, and will
neither reweigh the evidence nor reassess witness credibility. Id. We apply a de
novo standard of review to the trial court’s conclusions of law. Avemco Ins. Co.
v. State ex rel. McCarty, 812 N.E.2d 108, 115 (Ind. Ct. App. 2004).
B. Likelihood of Success on the Merits: Noncompete
1. Right to Enforce Noncompete
[27] Vickery first contends that because Ardagh is not a party to the 2004
Noncompete and because the Noncompete is not assignable, Ardagh may not
enforce it against Vickery.3
[28] Under the Noncompete’s choice of law provision, Pennsylvania law applies to
the document. Appellee’s App. Vol. II p. 17. The Pennsylvania Supreme
Court has held that when, as here, there is no assignability provision in a
3
Vickery also initially argues that Ardagh has never established that it was his employer. But from the
outset, both sides agreed that Vickery worked for Ardagh. Vickery took that position in his counterclaim, his
summary judgment motion, and his proposed order for the preliminary injunction. Appellee’s App. Vol. III
p. 14, 51; Appellant’s App. Vol. VI p. 2-6. Consequently, he has waived the right to make any argument to
the contrary.
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restrictive covenant not to compete, the covenant is not assignable. Hess v.
Gebhard & Co., 808 A.2d 912, 922 (Pa. 2002). Pennsylvania has also, however,
held that “when an individual, group of individuals or company purchases
some or all of the stock in a corporation, the corporation’s shareholders change,
but the corporation itself remains the same legal entity as it was prior to the
stock purchase.” Missett v. Hub Int’l Pa., LLC, 6 A.3d 530, 535 (Pa. Super. Ct.
2010). In other words, unlike a sale of assets, a sale of stock does not alter the
identity of the employer holding the restrictive covenant and, therefore, does
not require an assignment of the restrictive covenant to a new entity. Id. at 536-
38.
[29] In this case, the relevant timeline of events and parties is as follows:
• In September 2004, Vickery was hired by SGCI and signed the
Noncompete. The “Company” that was the other party to the agreement
was SGC and/or its affiliates, including SGCI.4 Appellee’s App. Vol. II
p. 15.
• In January 2013, Ardagh Glass Containers, Inc., purchased 100% of the
stock of SGCI.
• Following that purchase, Ardagh Glass Containers, Inc., and SGCI
merged and became known as Ardagh.
Ardagh, Ardagh Glass Containers, Inc., and SGCI are/were organized under
the laws of the state of Delaware, so Delaware law governs issues related to
4
Although Vickery argues that only SGC was a party to the Noncompete, the plain language of the
agreement includes SGC’s affiliates. Appellee’s App. p. 15. And in the Noncompete itself, SGCI is
explicitly named as an SGC affiliate. Consequently, SGCI was a party to and had the right to enforce the
agreement.
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their corporate form and governance. Pursuant to Delaware law, when Ardagh
Glass Containers, Inc., acquired 100% of the outstanding shares of SGCI’s
common stock, it acquired all of SGCI’s rights associated with the stock,
including contractual rights held by SGCI before the stock purchase. E.g., Del.
Code tit. 8, § 302; Viking Pump, Inc. v. Century Indem. Co., 2 A.3d 76, 99 (Del.
Ch. 2009).
[30] Consequently, under Delaware law, Ardagh Glass Containers, Inc., which
became Ardagh, acquired all of SGCI’s contractual rights following the stock
purchase. Under Pennsylvania law, a stock purchase does not alter the
corporate identity of the employer holding the restrictive covenant. In other
words, Ardagh stepped into the shoes of SGCI and acquired all of its rights,
including those related to the Noncompete. Therefore, the trial court did not
err by finding that Ardagh may enforce the Noncompete.
2. Noncompete Requirements
[31] Vickery argues that even if Ardagh has the right to enforce the Noncompete, the
Noncompete itself fails to comply with the requirements for such an agreement:
Restrictive covenants are not favored in Pennsylvania, but have
long been held to be enforceable if: (1) they are incident to an
employment relationship between the parties; (2) they are
supported by adequate consideration; (3) the restrictions imposed
by the covenant are reasonably necessary for the protection of
legitimate interests of the employer; and (4) the restrictions
imposed are reasonably limited in duration and geographic
extent.
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Pulse Techs., Inc. v. Notaro, 67 A.3d 778, 784 (Pa. 2013). Vickery argues that the
Noncompete fails to satisfy each of the three latter requirements.
a. Consideration
[32] Vickery contends that the Noncompete is unenforceable because it was imposed
by SGC after Vickery’s employment had already begun, without the provision
of additional consideration. He notes that he began his employment on
September 8, 2004, but was not asked to sign the Noncompete until September
10. Pulse Technologies, however, explicitly holds that
a restrictive covenant need not appear in an initial employment
contract to be valid; rather, it has been long held that, if a
restrictive covenant “is an auxiliary part of the taking of
employment and not a later attempt to impose additional
restrictions on an unsuspecting employee, a contract of
employment containing such a covenant is supported by valuable
consideration and is thereby enforceable.”
[33] 67 A.3d at 784-85 (quoting Modern Laundry & Dry Cleaning Co. v. Farrer, 536
A.2d 409, 411 (Pa. Super. 1988)).
[34] Ardagh notes that the trial court observed Vickery’s “lack of candor to the
Court” regarding his employment timeframe and noted that as a result, it
afforded greater weight to Ardagh’s testimony on this issue. Prelim. Inj. Order
p. 41. Specifically, while Vickery did begin working for SGC on September 8,
he began as a temporary employee; it was only on September 10—the day on
which he signed the Noncompete—that he became a full-time, permanent
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employee. Under these circumstances, the trial court did not err by finding that
Vickery’s employment was sufficient consideration to support the Noncompete.
b. Protectable Interests
[35] Vickery argues that Ardagh has failed to identify any protectable interest to
justify keeping him from beginning work at Owens-Illinois. In support of this
argument, he highlights and discusses some, but not all, of the proprietary or
confidential information found by the trial court to constitute a protectable
interest. Specifically, Ardagh notes that Vickery omits many of the trial court’s
findings with respect to Ardagh’s protectable interests:
Vickery does not address the remaining confidential and trade
secret information that the trial court discussed. [Prelim. Inj.
Order p. 8-9.] (discussing Vickery’s work designing mould
equipment and replacement moulds, supplying vendors with
detailed engineering drawings of Ardagh’s moulds, trouble
shooting Ardagh’s mould designs, and interacting with Ardagh’s
manufacturing and product design departments); id. [at 13-14]
(discussing Vickery’s role in a rapid prototyping project); id. [at
14-15] (discussing Vickery’s role in pursuing more business from
Customer A, which is a customer of both Ardagh’s and Owens-
Illinois); id. [at 17-18] (discussing Vickery’s role in servicing
Customer C, which is an Ardagh customer that Owens-Illinois is
pursuing); id. [at 18-19] (discussing Vickery’s role on a team
working to reduce the incidents of a glass defect known as
“birdswing”); id. [at 19-20] (discussing Vickery’s role in
developing a new product).
Appellee’s Br. p. 50-51.
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[36] It is apparent that Vickery’s arguments on this issue amount to a request that
we reweigh the evidence. The trial court considered the evidence and found
that, as a senior mould engineer, “Vickery participated in meetings where he
learned of new drawings and designs, discussed new business opportunities,
discussed which business required further focus to retain, and discussed product
lines to be updated.” Id. at 49 (citing Prelim. Inj. Order p. 22). Vickery was
also involved in discussions about Ardagh’s best practices in the engineering
department, including implementing standards and practices imported from
Ardagh’s European operations. See Prelim. Inj. Order p. 50-51 (finding sixteen
categories of information in Vickery’s possession that constitute trade secrets).
[37] Additionally, and more generally, the trial court found that “protecting trade
secrets and confidential information, and preventing a competitor from
profiting from an employee’s specialized training and skills” are protectable
interests. Id. at 43. We agree, and find that the trial court did not err by
concluding that Ardagh had established that it had protectable interests at stake.
c. Geographic Restriction
[38] Vickery argues that the Noncompete has no geographic restriction whatsoever.
Instead, the Noncompete is “overwhelmingly and unjustifiably broad . . . .”
Appellant’s Br. p. 42.
[39] The trial court held that, “[h]aving weighed the evidence presented during the
hearing,” the Noncompete does contain a geographic scope—North America.
Prelim. Inj. Order p. 44. Specifically, the trial court found as follows:
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Here, the Noncompete Agreement included the text “Policies
and Procedures for North America” in the header and “United
States” in the footer. Based on the inclusion of this language,
coupled with the fact that Vickery worked in Muncie, Indiana,
which would fall within the United States and North America, it
is reasonable to assume that the parties were not careless in
including “United States” and “North America” in the
agreement. Thus, the Court finds that the Noncompete
Agreement is limited to Ardagh’s North American division,
which includes the United States but does not include Canada or
Mexico.
Id. We find the evidence sufficient to support the trial court’s conclusion that
the Noncompete is limited in geographic scope to North America. Vickery’s
arguments to the contrary amount to a request that we reweigh the evidence,
which we decline to do.
[40] Courts applying Pennsylvania law have readily enforced nationwide—and even
global—restrictive covenants where, as here, the former employer’s business
was itself nationwide or global. E.g., Quaker Chem. Corp. v. Varga, 509 F. Supp.
2d 469, 476-77 (E.D. Pa. 2007) (applying Pennsylvania law and noting that
“the notion of a too-broad geographic scope has become ‘antiquated’ in light of
the increasingly global economy”); Voluntary Firemen’s Ins. Servs., Inc. v. CIGNA
Prop. & Cas. Ins. Agency, 693 A.2d 1330, 1338 (Pa. Super. Ct. 1997) (enforcing
nationwide noncompete). In this case, Ardagh has fifteen manufacturing plants
located throughout the United States and provides goods and services to
customers throughout the country. Ardagh competes directly with Owens-
Illinois for business from major customers throughout the United States.
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Therefore, Vickery’s work for Owens-Illinois would involve the same
geographic scope as his work for Ardagh. Under these circumstances, the
nationwide scope of the Noncompete is reasonable.5
[41] In sum, we find that the trial court did not err by concluding that Ardagh has
established a likelihood of success on the merits of its breach of contract claim
based on the Noncompete.
C. Likelihood of Success on the Merits: Trade Secrets
Act
[42] The trial court also found that Ardagh was entitled to injunctive relief under the
Indiana Trade Secrets Act.6 Vickery contends that Ardagh has not showed a
reasonable likelihood of success on the merits of this claim.
[43] Indiana Code section 24-2-3-3(a) provides that actual or threatened
misappropriation of trade secrets may be enjoined. “Trade secret” is defined as
follows:
information, including a formula, pattern, compilation, program,
device, method, technique, or process, that:
5
We find a nationwide scope reasonable in this particular case, given the nature of Ardagh’s business and the
limited number of competitors it faces. It may be that in other cases, a national scope would be
unreasonable; for example, a nationwide noncompete might be unreasonable for a dentist’s office. Each case
must be evaluated on its own facts.
6
Ind. Code ch. 24-2-3.
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(1) 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; and
(2) is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy.
I.C. § 24-2-3-2. “Misappropriation” includes, in relevant part, the “disclosure
or use of a trade secret of another without express or implied consent by a
person who . . . knew or had reason to know that his knowledge of the trade
secret was . . . acquired under circumstances giving rise to a duty to maintain its
secrecy or limit its use[.]” Id.
[44] Initially, we note that at oral argument, counsel for Vickery conceded that
Vickery may not share Ardagh’s trade secrets. Counsel also noted that multiple
Ardagh employees have stated in the record that they do not question Vickery’s
trustworthiness. According to counsel, the problem is that Ardagh has never
identified or described what trade secrets it contends are in Vickery’s
possession.
[45] As discussed above, the trial court found sixteen general categories of
information that qualify as trade secrets to which Vickery had access. Prelim.
Inj. Order p. 50-51. The trial court was reasonable in concluding that these
general categories of information may constitute trade secrets.
[46] As for Ardagh’s efforts to maintain the secrecy of this data, the trial court made
the following findings: (1) a key fob and passcode is required to enter Ardagh’s
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corporate offices; (2) its computers and emails are password protected;
(3) Ardagh limits access to certain files; and (4) the code of conduct and the
Noncompete require employees to protect Ardagh’s intellectual property, trade
secrets, and confidential information. We decline Vickery’s invitation to
second-guess the trial court’s findings that these steps amount to efforts that are
reasonable under the circumstances to maintain the secrecy of Ardagh’s
information.
[47] Vickery also argues that there is no evidence of actual or threatened
misappropriation of this data. The trial court found that Vickery’s future
employment with Owens-Illinois “threatens misappropriation of Ardagh’s trade
secrets because it risks disclosure or use of Ardagh’s trade secrets, which
Vickery acquired under circumstances giving rise to a duty to maintain its
secrecy or limit its use.” Prelim. Inj. Order p. 53. While it may be that Vickery
had no intent to misappropriate any trade secrets, we cannot say that the trial
court’s conclusion that his employment with Owens-Illinois bore a risk of
disclosure of those trade secrets was erroneous.
[48] We note, again, that Vickery is amenable to an agreement not to disclose any
trade secrets in his possession. But if this case proceeds to a permanent
injunction, Ardagh and the trial court will have to set forth in specific detail
what, precisely, Vickery is restrained from disclosing. General categories of
information will not suffice—there must be clear, explicit guidelines included in
any permanent injunction.
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D. Adequacies of Remedy at Law/Irreparable Harm
[49] Vickery directs our attention to well-settled authority that if an award of post-
trial damages is sufficient to make the movant whole for its economic injury,
then a preliminary injunction is not warranted. Daugherty v. Allen, 729 N.E.2d
228, 234 (Ind. Ct. App. 2000). Vickery argues that because Ardagh represented
to the trial court that its injuries are strictly economic and its damages are
calculable, it has an adequate remedy at law.
[50] At the outset, we note that a breach of a covenant not to compete is prima facie
evidence of irreparable harm justifying injunctive relief. E.g., Central Ind.
Podiatry, P.C. v. Krueger, 882 N.E.2d 723, 732-33 (Ind. 2008). Additionally, it is
undisputed that Vickery would be unable to satisfy a multi-million-dollar
judgment; consequently, the trial court did not err by concluding that Ardagh
has no adequate remedy at law. See Jay Cty. Rural Elec. Membership Corp. v.
Wabash Valley Power Ass’n, 692 N.E.2d 906, 909 (Ind. Ct. App. 1998) (holding
that a “judgment for damages . . . is rendered meaningless when the collection
of damages by the injured party is impossible, uncertain, or unusually
difficult”).
E. Threatened Injury to Ardagh v. Threatened Injury to
Vickery
[51] Vickery argues that Ardagh has identified no more than a marginal interest, and
no significant business secrets, that are at risk if Vickery goes to work for
Owens-Illinois. Vickery, on the other hand, has been out of work for over a
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year, and states that the harm he and his family have suffered is “devastating.”
Appellant’s Br. p. 47.
[52] Ardagh observes that the trial court found that if an injunction were not issued,
Ardagh would be denied the benefit of the Noncompete into which Vickery
voluntarily entered as a condition of his employment and that Vickery “would
be allowed to work for Ardagh’s direct competitor armed with knowledge of
Ardagh’s confidential and proprietary information and trade secrets as well as
Ardagh’s strategic plan for growing its business.” Prelim. Inj. Order p. 56.
[53] As for the harm to Vickery, the trial court found that much of it was self-
imposed. He freely entered into the Noncompete, he was aware Ardagh might
enforce it, he took steps to hide his employment with Owens-Illinois from
Ardagh, and he has made no efforts to find other employment. Moreover,
while Vickery initially testified that he was “completely cut off from all income”
after the TRO was entered, he later told the court that “he had actually been
placed on paid leave” by Owens-Illinois. Id. at 32 n.2. The trial court noted
that it could not “ignore Vickery’s lack of candor to the Court in regards to his
‘paid leave’ status with [Owens-Illinois] when weighing the credibility of
Vickery’s testimony on other matters.” Id.
[54] Further undercutting Vickery’s claimed harms is the fact that he has not
pursued his case expeditiously. He repeatedly sought continuances in the trial
court, asked the trial court to delay ruling on the preliminary injunction, took
all thirty days available to him to file his notice of appeal, did not seek to
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expedite the preparation of the record or the transcript, and obtained multiple
extensions of time from this Court to file his appellant’s brief. Indeed, Ardagh
emphasizes that Vickery waited so long “that the remedy he focuses his brief
on—vacating the injunction against working for Owens-Illinois—is now moot
because that provision of the Noncompete and the related injunction provision
expires the day the appellee’s brief is due.” Appellee’s Br. p. 60.
[55] Under these circumstances, we find that the trial court did not err in weighing
the potential harm to Vickery against the potential harm to Ardagh.
F. Public Interest
[56] Finally, Vickery argues that the Noncompete is against the public interest
because it further consolidates a non-competitive, $5 billion industry “by
increasing one of the barriers to entry—the availability of skilled labor.”
Appellant’s Br. p. 47. Additionally, Vickery contends that enforcement of the
Noncompete would intimidate other Ardagh employees who may be
considering leaving the company.
[57] The trial court disagreed, first noting the strong public interest in enforcing
contracts that represent the freely bargained-for interests of the contracting
parties. Prelim. Inj. Order p. 58. It further found that enforcement of the
Noncompete would not disserve the public interest in allowing parties to an
employment contract to freely terminate employment with or without cause:
a. First, whether the Court decides to issue a preliminary
injunction enforcing Vickery’s Noncompete Agreement
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against him has nothing to do with other Ardagh
employees’ decisions to terminate their employment with
the company.
b. Second, even with a noncompete agreement, employees
are still free to terminate employment-at-will; they would
just need to make sure that their subsequent employment
complies with the terms of the noncompete agreement, if
any, that the employee signed with the company.
Id. at 58-59. Finally, the trial court noted that the enactment of the Indiana
Trade Secrets Act shows a public interest in protecting trade secrets from
misappropriation. We find no error in the trial court’s analysis, and decline to
reverse on this basis.
Conclusion
[58] In sum, we find that, while the notice procedure in the underlying TRO was
insufficient, Vickery has waived the right to make the argument on appeal. We
also find that the trial court did not err when it concluded that (1) Ardagh has
the right to enforce the Noncompete; (2) Ardagh has established a reasonable
likelihood of success on the merits of its breach of contract claim based on the
Noncompete; (3) Ardagh has established a reasonable likelihood of success on
the merits of its claim under the Indiana Trade Secrets Act; (4) Ardagh has
established that its remedies at law are inadequate and it would suffer
irreparable harm during the pendency of the action; (5) the threatened harm to
Ardagh outweighs the threatened harm to Vickery; and (6) the public interest
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would not be disserved by granting the injunction. In short, the trial court did
not err by issuing the preliminary injunction.
[59] The judgment of the trial court is affirmed and remanded for further
proceedings.
Bailey, J., and Altice, J., concur.
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