Biesse Am., Inc. v. Dominici

Biesse Am., Inc. v. Dominici, 2019 NCBC 50.

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
MECKLENBURG COUNTY 19 CVS 15033

BIESSE AMERICA, INC.,

Plaintiff,

v. ORDER AND OPINION ON MOTION
FOR PRELIMINARY INJUNCTION
LAURO DOMINICI and SCM
GROUP NORTH AMERICA, INC.,

Defendants.

1. This case presents a familiar fact pattern. Lauro Dominici, a defendant

here, worked for Biesse America, Inc., the plaintiff, for nearly three years. Upset over

a salary dispute, Dominici resigned and accepted new employment with SCM Group

North America, Inc. (“SCM America”), also a defendant and one of Biesse America’s

direct competitors. Biesse America contends that, by doing so, Dominici breached a

non-compete provision and other restrictive covenants in his employment agreement.

It further contends that, just before resigning, Dominici gathered electronic

documents containing trade secrets, took them when he left, and planned to use them

on behalf of his new employer.

2. Upon filing its complaint, Biesse America sought a temporary restraining

order enjoining Dominici’s employment with SCM America and directing Dominici to

return any trade-secret and confidential materials. (ECF Nos. 3, 5.) On July 30,

2019, the Court granted the request and now, with the benefit of full briefing and a

complete record, must decide whether to enter a preliminary injunction through the

pendency of this action. (See TRO, ECF No. 13; Mot. for Prelim. Inj., ECF No. 15.)
For the reasons discussed below, the Court concludes that a preliminary injunction

is warranted, though not to the extent urged by Biesse America. The Court therefore

GRANTS in part and DENIES in part the motion for preliminary injunction.

James, McElroy & Diehl, P.A., by Adam L. Horner and Christopher T.
Hood, for Plaintiff Biesse America, Inc.

Bray & Long, PLLC, by Jeffrey A. Long, for Defendant Lauro Dominici.

Bell, Davis & Pitt, P.A., by Edward B. Davis, and Miller & Martin,
PLLC, by Ryan A. Kurtz, for Defendant SCM Group North America, Inc.

Conrad, Judge.
I.
FINDINGS OF FACT

3. The Court makes the following findings of fact solely for the purpose of

deciding the pending motion. These findings are not binding at a trial on the merits.

See Lohrmann v. Iredell Mem’l Hosp., Inc., 174 N.C. App. 63, 75, 620 S.E.2d 258, 265

(2005).

4. Biesse America is a North Carolina corporation in the field of wood-, stone-,

and glass-working. (V. Compl. ¶¶ 1, 8.) Its business is to import, sell, and service

machinery and products manufactured by its Italian parent, Biesse S.p.A. (V. Compl.

¶¶ 8, 9; Br. Opp’n Mot. Prelim. Inj. Ex. 1 ¶ 6, ECF No. 29.1 [“Dominici Aff.”].) Biesse

America’s operations are limited to the United States and Canada; Biesse S.p.A.,

however, has a presence in more than 100 countries worldwide. (See Dominici Aff.

¶¶ 5, 23; Br. Opp’n Mot. Prelim. Inj. Ex. 2.)

5. Dominici, a native of Italy, got his start with Biesse S.p.A. in 2008.

(Dominici Aff. ¶ 7.) After eight years and a handful of promotions, Dominici moved

to North Carolina to take a new position with Biesse America. (Dominici Aff. ¶¶ 7,
10, 11.) In July 2016, he signed an employment agreement and began work in Biesse

America’s wood division, with particular responsibility for woodworking machines

known as edgebanders. (Dominici Aff. ¶¶ 12, 13, 16, 17.) There is some ambiguity

about Dominici’s official title—the employment agreement refers to “Regional Area

Manager” while Dominici refers to himself as “Product Area Manager”—but there is

no dispute that he was responsible for a territory covering thirty-eight States and

Canada. (See V. Compl. Ex. A Annex 1 [“Empl. Agr.”]; Dominici Aff. ¶ 14.) Among

other things, Dominici provided technical support to sales staff and assisted with

managing customer relationships. (See Dominici Aff. ¶¶ 19, 20.)

6. The employment agreement includes a series of restrictive covenants.

Central to this dispute is the non-compete provision in Article 17, which provides as

follows:

Employee acknowledges that the Corporation is engaged in a business
that is international in scope. In the event that either the Corporation
or the Employee terminates the employment for any reason, the
Employee covenants and agrees that, except with the prior written
consent of the Corporation, he will not, for a period of six (6) months
from and after the date of termination of the Employee’s employment,
accept a competitive position in a competitive company that is in the
wood, stone, glass working and/or plastic industries and in direct
competition with Biesse America, Inc. or Biesse SpA that is conducting
business in the same markets as the Corporation within the six (6)
months period immediately preceding the effective date of the
termination of the Employee’s employment with the Corporation . . . . It
is acknowledged and agreed that the following list of companies
includes, but does not necessarily limit, those companies in direct
competition with the Corporation: . . . SCM . . . .

(Empl. Agr. § 17(a).) (The agreement defines “Corporation” to mean Biesse America.

(Empl. Agr. 1.)) In the event of a breach of the non-compete, “the period of restriction
shall begin to run in full from the date that Employee’s competition is enjoined by a

court or otherwise ceases.” (Empl. Agr. § 17(c).) Other provisions prohibit Dominici

from soliciting Biesse America’s customers, restrict his use and disclosure of its

confidential information, and require him to return its records and property at the

end of his employment. (Empl. Agr. § 11, 15(b), 16.)

7. A salary dispute led to a rift in May 2019. Biesse America informed

Dominici that it was planning to change its commission structure. (See Dominici Aff.

¶ 30; Aff. Jason Varelli ¶ 10, ECF No. 30.1 [“Varelli Aff.”].) Dominici objected on the

ground that the change ran afoul of Annex 4 to the employment agreement, in which

Biesse America reserved “the right to re-negotiate” the commission structure “for the

following year to a different value when the total commission earnings for the current

year reach $80,000.” (Empl. Agr. Annex 4 § 1(c); see also Dominici Aff. ¶ 27; Varelli

Aff. Ex. A.) Dominici’s commission earnings for 2018 had fallen just shy of that mark.

(Dominici Aff. ¶ 28, Ex. B.) Believing the new structure would cut his commissions

for 2019 in half, he immediately proposed a counteroffer. (See Dominici Aff. ¶¶ 31,

32; Varelli Aff. ¶ 11, Ex. A.)

8. At the same time, Dominici began looking for a new job. He contacted an

employee of SCM America. (Dominici Aff. ¶ 36; V. Compl. ¶ 22.) On May 6, 2019,

Dominici received a call from SCM America’s chief executive officer, which led to an

in-person meeting in the next week or so. (Dominici Aff. ¶¶ 37–40.) An offer followed

(when is unclear), and on June 12, Dominici signed an agreement to begin

employment with SCM America on July 15. (Dominici Aff. ¶ 44.)
9. Much of this case turns on Dominici’s actions between his meeting with SCM

America’s representatives and his acceptance of employment there. On May 24, for

example, Dominici met with Elizabeth Valentin in Biesse America’s human resources

department to discuss his compensation. (Dominici Aff. ¶ 42; Aff. Elizabeth Valentin

¶ 5 [“Valentin Aff.”].) The accounts of that meeting differ, but in later e-mail

correspondence, Dominici floated the idea that he might resign or be fired. (See

Valentin Aff. Ex. A.) Dominici sought to confirm that his existing commission

structure would remain in place “[f]or example if our relationship would end in June.”

(Valentin Aff. Ex. A.) Valentin agreed that it would. (See Valentin Aff. Ex. A.)

10. When June arrived, Dominici began making unusual requests for

documents containing Biesse America’s confidential information. (See Dominici Aff.

¶ 72.) First, Dominici requested and received all of the purchase order forms

(“MTOs”) for Biesse America’s CNC products—a product line outside of Dominici’s

area of responsibility. (See Dominici Aff. ¶ 80; Aff. Andrew De Piante ¶¶ 2, 4, ECF

No. 8.) These MTOs contain Biesse America’s confidential pricing and technical

information. (Aff. Niki Kaltsounis-Kampiziones ¶¶ 3(i)–(k), ECF No. 9 [“1st

Kaltsounis-Kampiziones Aff.”].) Dominici also requested and received the factory

global list prices for each machine model and the final discounts that Biesse America

had negotiated with its supplier (“Discount File”) as well as the price markups that

Biesse America applied to each product and used to calculate the final customer list

price (“Markup File”). (Aff. Andrea DiCara ¶¶ 2, 3, ECF No. 7; 1st Kaltsounis-
Kampiziones Aff. ¶¶ 3(e)–(h).) Dominici saved these electronic files to his personal

computer, which he regularly used for work purposes. (See Dominici Aff. ¶ 59.)

11. On June 12, the same day he accepted employment with SCM America,

Dominici gave 30-day notice of his intent to resign from Biesse America, though he

did not share the identity of his new employer. (See Dominici Aff. Ex. C.) A week

later, Biesse America informed Dominici that June 18 had been his last day with the

company. (See Dominici Aff. ¶ 45; V. Compl. Ex. B.) In that same letter, Biesse

America reminded Dominici of the restrictive covenants in his employment

agreement and asked him to return all company property, including devices and

electronic files. (See V. Compl. Ex. B.) Despite this request, Dominici kept the work

materials—including the MTOs, the Discount File, and the Markup File—stored on

his personal computer. (See Dominici Aff. ¶ 70.)

12. Visa complications prevented Dominici from beginning work for SCM

America immediately. (See Dominici Aff. ¶ 51.) Nevertheless, in mid-July, he

attended an industry trade show in Las Vegas, where he staffed SCM America’s booth

and wore its branded lanyard. (Dominici Aff. ¶¶ 52, 53; 1st Kaltsounis-Kampiziones

Aff. ¶ 3(a).) Employees of Biesse America saw Dominici and confronted him about

his non-compete. (See 1st Kaltsounis-Kampiziones Aff. ¶¶ 3(a), (b).)

13. Dominici later retained counsel and responded that the non-compete was

unenforceable. (See Dominici Aff. Ex. F.) Dominici also offered to move to the west

coast and not to compete against Biesse America in the territory he covered during

his employment there. (See Dominici Aff. Ex. F.) Dominici’s agreement with SCM
America dubs him the “Area Manager of the North West” for six States in the Pacific

Northwest and “High End Edgebander Product Specialist” for the United States,

Canada, and Mexico. (See Dominici Aff. ¶¶ 47, 49; Dominici Aff. Ex. D § 1 [“SCM

Agr.”].)

14. After learning that Dominici was working for SCM America, Biesse America

began investigating the circumstances of his departure. The investigation revealed

Dominici’s interest in the MTOs, the Discount File, and the Markup File. (See 1st

Kaltsounis-Kampiziones Aff. ¶ 3(d).) Biesse America also discovered a voicemail on

Dominici’s company cell phone, which revealed that he had been communicating with

SCM America since early May. (See 1st Kaltsounis-Kampiziones Aff. ¶ 3(q).) Biesse

America filed this lawsuit shortly thereafter.

15. At the hearing on Biesse America’s motion for a temporary restraining

order, Dominici’s counsel acknowledged that Dominici still possessed the MTOs, the

Discount File, and the Markup File and agreed that they should be returned. The

Court entered a temporary restraining order and directed Dominici to return those

three files and any other confidential information of Biesse America in his possession.

(TRO ¶ 18(c).) With the help of a forensic consultant, Dominici retrieved thousands

of electronic files and provided them to Biesse America. (See Dominici Aff. ¶¶ 93, 95;

Aff. Jeffery A. Long ¶¶ 8–15, ECF No. 25.) Among the documents returned were

engineering files, price lists, and technical comparisons of Biesse America’s products

with those of its competitors. (See 2d Aff. Niki Kaltsounis-Kampiziones ¶ 3 [“2d

Kaltsounis-Kampiziones Aff.”].)
16. Dominici’s production also included a series of spreadsheets that he created

on the eve of submitting his resignation. On June 11, the day before he resigned,

Dominici created a spreadsheet (“Masterfile”) containing Biesse America’s stock

inventory and sales prices. (See 2d Kaltsounis-Kampiziones Aff. ¶¶ 6, 7.) Due to its

sensitivity, this information cannot be downloaded by Biesse America’s employees.

(See 2d Kaltsounis-Kampiziones Aff. ¶ 7.) Dominici instead copied the information

into his own spreadsheet. (See 2d Kaltsounis-Kampiziones Aff. ¶ 7.) Metadata shows

that Dominici accessed and modified the Masterfile on July 16, 2019—nearly a month

after leaving Biesse America and also one day after his employment with SCM

America was set to begin. (See 2d Kaltsounis-Kampiziones Aff. ¶ 6.)

17. On June 12, the day Dominici gave notice of his resignation, he created

another spreadsheet entitled “Tony Slaven Opportunities.xlsx” (“Opportunities

Spreadsheet”). (See 2d Kaltsounis-Kampiziones Aff. ¶ 4(e).) The Opportunities

Spreadsheet includes dozens of Biesse America’s current business opportunities in

the Pacific Northwest, which is Dominici’s anticipated area of responsibility for SCM

America. (See 2d Kaltsounis-Kampiziones Aff. ¶ 4(e).) The information, all from

Biesse America’s confidential customer information database, includes not only the

customer name and contact information but also the relevant product, price, and

confidence level attributed by Biesse America for each opportunity. (See 2d

Kaltsounis-Kampiziones Aff. Ex. 2.) Weeks later, Dominici accessed the

Opportunities Spreadsheet and divided it into eight new spreadsheets, broken down

by product type. (See 2d Kaltsounis-Kampiziones Aff. ¶¶ 4(f)–(h), Ex. 2A.)
II.
CONCLUSIONS OF LAW

18. A preliminary injunction is “an extraordinary measure taken by a court to

preserve the status quo of the parties during litigation.” Ridge Cmty. Inv’rs, Inc. v.

Berry, 293 N.C. 688, 701, 239 S.E.2d 566, 574 (1977). The plaintiff bears the burden

to establish the “right to a preliminary injunction,” Pruitt v. Williams, 288 N.C. 368,

372, 218 S.E.2d 348, 351 (1975), and is entitled to relief only: “(1) if [the] plaintiff is

able to show [a] likelihood of success on the merits of his case and (2) if [the] plaintiff

is likely to sustain irreparable loss unless the injunction is issued, or if, in the opinion

of the Court, issuance is necessary for the protection of [the] plaintiff’s rights during

the course of litigation.” A.E.P. Indus., Inc. v. McClure, 308 N.C. 393, 401, 302 S.E.2d

754, 759–60 (1983) (citation and internal quotation marks omitted). Likelihood of

success means a “reasonable likelihood.” Am. Air Filter Co. v. Price, 2017 NCBC

LEXIS 9, at *11 (N.C. Super. Ct. Feb. 3, 2017) (citing A.E.P., 308 N.C. at 404, 302

S.E.2d at 761).

19. “Injunctive relief is granted only when irreparable injury is real and

immediate.” Hall v. City of Morganton, 268 N.C. 599, 600–01, 151 S.E.2d 201, 202

(1966). The plaintiff may demonstrate irreparable injury by showing “that the injury

is one to which the complainant should not be required to submit or the other party

permitted to inflict, and is of such continuous and frequent recurrence that no

reasonable redress can be had in a court of law.” A.E.P., 308 N.C. at 407, 302 S.E.2d

at 763 (emphasis omitted). In addition, the trial court must weigh the potential harm

a plaintiff will suffer if no injunction is entered against the potential harm to a
defendant if the injunction is entered. See Williams v. Greene, 36 N.C. App. 80, 86,

243 S.E.2d 156, 160 (1978).

20. For the reasons discussed below, the Court determines that Biesse America

is entitled to a preliminary injunction, but limited to its claim for misappropriation

of trade secrets. The Court determines that Biesse America is not entitled to an order

enjoining Dominici from competing against Biesse America or soliciting its

customers.

A. Unclean Hands

21. Dominici and SCM America contend that that the Court should not reach

the merits of the motion for preliminary injunction because Biesse America’s request

for injunctive relief is barred by its own unclean hands. “[C]ourts have long

recognized that a party seeking equitable relief, such as injunctive relief, must come

before the court with ‘clean hands.’ ” Combined Ins. Co. of Am. v. McDonald, 36 N.C.

App. 179, 182–83, 243 S.E.2d 817, 819 (1978).

22. Dominici and SCM America offer two theories. The first is that Biesse

America breached Dominici’s employment agreement before he resigned and

therefore cannot seek to enjoin Dominici for his own breach of that agreement

afterward. This issue relates to Dominici’s commission earnings. In Annex 4 of the

employment agreement, Biesse America reserved the right to renegotiate future

commission payments once Dominici’s total commissions for a given year exceeded

$80,000. Dominici’s commissions for 2018 fell short of that mark, and he contends

that Biesse America breached the agreement by altering the commission structure
anyway. (See Dominici Aff. ¶¶ 26–32; Br. Opp’n Mot. Prelim. Inj. 7–8, ECF No. 29

[“Opp’n”].)

23. There is no evidence, though, that Biesse America actually altered the

commission structure. Dominici’s supervisor informed him of a proposed change, and

Dominici sent an immediate counteroffer. (See Dominici Aff. ¶ 30; Varelli Aff. ¶ 10,

Ex. A.) It is unclear whether any further negotiations took place. Either way, Biesse

America agreed to honor the existing commission structure for 2019. (See Valentin

Aff. ¶ 8, Ex. A.) This evidence is insufficient to show that Biesse America breached

the agreement and approached the Court with unclean hands.

24. The second theory is that Biesse America cannot complain about Dominici’s

decision to join SCM America because it has also attempted to lure away SCM

America’s employees in the past. (See Opp’n 8–9, Ex. 7 ¶¶ 6–11.) But even if Biesse

America’s conduct in that regard were wrongful, “[a] person is not barred from his

day in court in a particular case because he acted wrongfully in another unrelated

matter or because he is generally immoral.” Shaw v. Gee, 2018 NCBC LEXIS 109, at

*17 (N.C. Super. Ct. Oct. 19, 2018) (quoting High v. Parks, 42 N.C. App. 707, 711, 257

S.E.2d 661, 663 (1979)). The Court therefore concludes that the doctrine of unclean

hands does not bar Biesse America’s request for injunctive relief.

B. Misappropriation of Trade Secrets

25. Turning to the merits, the Court first addresses Biesse America’s claim for

misappropriation of trade secrets. Dominici and SCM America do not challenge

whether the MTOs, the Discount File, or the Markup File are entitled to trade-secret
protection. Nor do they dispute that Dominici kept the files after leaving Biesse

America. Instead, they argue that Dominici’s activities do not amount to

misappropriation and that there is no ongoing risk of harm to Biesse America because

all trade-secret and confidential information has been returned. (See Opp’n 19–22.)

26. By statute, misappropriation is defined as the “acquisition, disclosure, or

use of a trade secret of another without express or implied authority or consent,”

unless the trade secret was obtained through other legitimate means, such as

independent development. N.C.G.S. § 66-152(1). A prima facie case of

misappropriation requires substantial evidence that the wrongdoer “(1) [k]nows or

should have known of the trade secret; and (2) [h]as had a specific opportunity to

acquire it for disclosure or use or has acquired, disclosed, or used it without the

express or implied consent or authority of the owner.” Id. § 66-155. A party may rely

on direct or circumstantial evidence to prove misappropriation. See, e.g., TSG

Finishing, LLC v. Bollinger, 238 N.C. App. 586, 595, 767 S.E.2d 870, 878 (2014).

27. The evidence of misappropriation here is compelling. Dominici retained the

MTOs, the Markup File, and the Discount File after leaving Biesse America and while

intending to work for its direct competitor. (Dominici Aff. ¶¶ 72, 80.) In response to

the Court’s temporary restraining order, Dominici also identified thousands of other

electronic files in his possession that contain Biesse America’s confidential

information. The documents include non-public price lists, technical descriptions of

products, and analyses of competitors’ products, among other things. (See 2d

Kaltsounis-Kampiziones Aff. ¶ 3.) These are precisely the types of valuable
confidential information that North Carolina courts regularly protect as trade

secrets. See, e.g., Red Valve, Inc. v. Titan Valve, Inc., 2018 NCBC LEXIS 31, at *26–

28 (N.C. Super. Ct. Apr. 10, 2018) (collecting cases).

28. More troubling, there is evidence showing that Dominici acquired some of

this highly sensitive information on the eve of his resignation. On June 11, 2019—

the day before Dominici gave notice of his resignation—he created the Masterfile, a

spreadsheet containing all of the stock inventory and sales prices for Biesse America

and one of its affiliates. (2d Kaltsounis-Kampiziones Aff. ¶¶ 6, 7.) The next day,

Dominici gathered information about dozens of current sales opportunities for Biesse

America in the Pacific Northwest and put that information into the Opportunities

Spreadsheet. (See 2d Kaltsounis-Kampiziones Aff. ¶¶ 4(c), (e), Ex. 2A.) The

information included customer names, products, and negotiated prices for each

opportunity. (See 2d Kaltsounis-Kampiziones Aff. ¶ 4(c), Ex. 2.) There is no obvious

reason why Dominici would have needed this information to perform his duties for

Biesse America; his assigned territory excluded the Pacific Northwest. (See Empl.

Agr. Annex 1.) But the information had self-evident value for his next job. He had

that very day signed an agreement to join SCM America as its “Area Manager of the

North West.” (Dominici Aff. ¶¶ 44, 49; SCM Agr. § 1; 2d Kaltsounis-Kampiziones Aff.

¶ 5.)1

1 This evidence was discovered in the materials produced by Dominici as required by the

Court’s temporary restraining order and was therefore first introduced in Biesse America’s
reply brief. The Court gave Dominici’s counsel an opportunity to respond at the hearing. As
best the Court can tell, Dominici’s position is that he never intended to contact these
customers but instead identified them so that he would know which customers not to contact
during his employment with SCM America. Nothing in the record lends credence to this
29. Dominici and SCM America argue that this evidence shows nothing more

than access and opportunity to acquire trade secrets. (See Opp’n 20–21.) Not so. All

of the relevant files were stored on Dominici’s personal devices. He plainly acquired

them.

30. And he did so under highly suspicious circumstances. Dominici requested

the MTOs, the Discount File, and the Markup File after meeting with SCM America

to discuss future employment and after confirming that Biesse America would pay

his full commission earnings “if our relationship would end in June.” (Valentin Aff.

Ex. A.) He then created the Masterfile and the Opportunities Spreadsheet within

hours of announcing his resignation. (2d Kaltsounis-Kampiziones Aff. ¶¶ 4(f), 6, Ex.

2A.) There is ample evidence supporting an inference that Dominici accessed and

gathered this confidential information while intending to resign and join a

competitor. He also kept the information after resigning and after Biesse America

reminded him of his obligation to return its records and related property. (See V.

Compl. Ex. B.) Taken together, these facts demonstrate Dominici’s unauthorized

acquisition and retention of the disputed files. See Addison Whitney, LLC v. Cashion,

2017 NCBC LEXIS 23, at *18–19 (N.C. Super. Ct. Mar. 15, 2017) (“[A]n employer

may demonstrate unauthorized access by showing that an employee continued to

access trade secrets after receiving a job offer from a competitor and then later

accepted the offer.”); see also Am. Air Filter, 2017 NCBC LEXIS 9, at *24.

alleged motive, which is extremely difficult to square with Dominici’s acquisition of specific
opportunities by product and the pricing information related to those opportunities.
31. There is also evidence that Dominici used the information he acquired. On

July 10, 2019, weeks after leaving Biesse America, Dominici modified the

Opportunities Spreadsheet and then used the information within it to create eight

new spreadsheets, divided by product type. (2d Kaltsounis-Kampiziones Aff. ¶¶ 4(f)–

(h), Ex. 2A.) He then modified the Masterfile on July 16—the day after his

employment was set to begin. (See 2d Kaltsounis-Kampiziones Aff. ¶ 6.) To what end

Dominici used the information is unclear, but it coincided with his start date with

SCM America and with his attendance of an important trade show on its behalf.

32. In short, the record as a whole includes substantial evidence that Dominici

acquired and used Biesse America’s trade secrets without its express or implied

consent. See N.C.G.S. § 66-155. The Court therefore concludes that Biesse America

has established a likelihood of success on the merits of its claim for misappropriation

of trade secrets.

33. The Court also concludes that Biesse America would be irreparably harmed

in the absence of an order enjoining Dominici and SCM America from using and

disclosing its trade secrets. The Trade Secrets Protection Act “permits preliminary

injunctions where a prima facie case for ‘actual or threatened misappropriation of a

trade secret’ is established.” Horner Int’l Co. v. McKoy, 232 N.C. App. 559, 569–70,

754 S.E.2d 852, 859 (2014) (quoting N.C.G.S. § 66-154(a)) (emphasis omitted).

Dominici’s acquisition of Biesse America’s trade secrets while planning to compete

against it and his retention of those trade secrets after joining its competitor in the

face of a demand for their return are “precisely the type[s] of threatened
misappropriation, if not actual misappropriation, that the [statute] aims to prevent

through the issuance of a preliminary injunction.” TSG Finishing, 238 N.C. App. at

595, 767 S.E.2d at 878.

34. Dominici and SCM America argue that any harm has been cured by the

Court’s temporary restraining order, which required the return of Biesse America’s

confidential information. (See Opp’n 19; Dominici Aff. ¶¶ 93–97; Opp’n Ex. 4 ¶¶ 6–8;

Opp’n Ex. 5 ¶¶ 7–16; Opp’n Ex. 6 ¶¶ 8–11.) This is simply not the law. “The very

nature of a trade secret mandates that misappropriation will have significant and

continuous long-term effects.” Barr-Mullin, Inc. v. Browning, 108 N.C. App. 590, 597,

424 S.E.2d 226, 230 (1993). Dominici acquired substantial amounts of Biesse

America’s confidential information while intending to compete against it, and he

returned the relevant files only after litigation began and under court order. He also

intends to perform similar work for SCM America, a direct competitor, albeit in a new

territory. A preliminary injunction is not only necessary to prevent irreparable harm

to Biesse America but also to protect its rights during the course of this litigation.

35. For the same reasons, the balancing of the equities supports granting a

preliminary injunction. See Williams, 36 N.C. App. at 86, 243 S.E.2d at 160. The

irreparable harm that Biesse America would suffer in the absence of injunctive relief

far outweighs any potential harm to Dominici or SCM America if the injunction is

issued. Indeed, Dominici and SCM America conceded at the hearing that they would

suffer no harm at all from the imposition of an injunction against the use and

disclosure of the claimed trade secrets.
36. SCM America appears to contend that it should be excluded from any

injunction because it did not participate in Dominici’s actions. The Court disagrees.

Some of the relevant activity took place after Dominici began his employment with

SCM America. And in any event, SCM America is now on notice of Dominici’s

activities. Biesse America is entitled to a preliminary injunction preventing Dominici

and all persons in active concert or participation with him, including his employer,

SCM America, from retaining, using, disclosing, or distributing any trade-secret

information. See N.C. R. Civ. P. 65(d). Of course, Dominici remains free “to use [his]

own skills, experience, and personal relationships with clients.” Addison Whitney,

2017 NCBC LEXIS 23, at *23 (collecting cases).

C. Breach of Contract Claims

37. Biesse America also argues that it is likely to succeed on its claim for breach

of Dominici’s employment agreement. It contends that Dominici has breached at

least the agreement’s non-compete and non-solicitation provisions. (See Br. in Supp.

Mot. Prelim. Inj. 3, ECF No. 16.) Dominici responds that both provisions are

unenforceable and that there is no evidence he has breached the non-solicitation

provision. (See Opp’n 9–18.)

38. The Court concludes that Biesse America has not shown that it is likely to

succeed as to the non-solicitation provision. Its opening brief is silent on that point,

and there is no evidence that Dominici has solicited its customers. Without evidence

of a breach, Biesse America is not likely to succeed on the merits. The Court therefore

need not address whether the non-solicitation provision is enforceable.
39. The Court also concludes that Biesse America has not shown a likelihood of

success as to the non-compete provision. It appears to be undisputed that Dominici’s

employment with SCM America runs afoul of the covenant not to compete. But Biesse

America, as the party seeking to enforce the covenant, has the burden to prove that

it is reasonable in scope “as to both time and territory.” Hartman v. W.H. Odell &

Assocs., 117 N.C. App. 307, 311, 450 S.E.2d 912, 916 (1994). Biesse America has not

shown that it is likely to carry that burden.

40. Our appellate courts have repeatedly observed that “[c]ovenants not to

compete between an employer and employee are ‘not viewed favorably in modern

law.’ ” Farr Assocs., Inc. v. Baskin, 138 N.C. App. 276, 279, 530 S.E.2d 878, 881 (2000)

(quoting Hartman, 117 N.C. App. at 311, 450 S.E.2d at 916); accord VisionAIR, Inc.

v. James, 167 N.C. App. 504, 508, 606 S.E.2d 359, 362 (2004). “To be valid, the

restrictions on the employee’s future employability by others must be no wider in

scope than is necessary to protect the business of the employer.” VisionAIR, 167 N.C.

App. at 508, 606 S.E.2d at 362 (citation and quotation marks omitted).

41. Six factors bear on the reasonableness of a geographic restriction:

(1) the area, or scope, of the restriction; (2) the area assigned to the
employee; (3) the area where the employee actually worked or was
subject to work; (4) the area in which the employer operated; (5) the
nature of the business involved; and (6) the nature of the employee’s
duty and his knowledge of the employer’s business operation.

Hartman, 117 N.C. App. at 312, 450 S.E.2d at 917 (citation omitted). Restrictions on

time and territory must be considered in tandem—“[a] longer period of time is

acceptable where the geographic restriction is relatively small, and vice versa.” Farr

Assocs., 138 N.C. App. at 280, 530 S.E.2d at 881.
42. Here, the non-compete provision has no geographic restriction. It prohibits

Dominici from accepting “a competitive position in a competitive company” so long as

that company is in the same industry as Biesse America, is in direct competition with

Biesse America or Biesse S.p.A., and currently operates “in the same markets as”

Biesse America. (Empl. Agr. § 17(a).) As written, this could catch companies that

compete against Biesse America in Canada but also operate in Europe or Asia.

Dominici is barred from taking a “competitive position” with such companies

regardless of where that position may be located.2

43. A worldwide covenant not to compete is not per se invalid. See, e.g., Market

Am., Inc. v. Christman-Orth, 135 N.C. App. 143, 153–54, 520 S.E.2d 570, 578 (1999)

(holding that non-compete with “no fixed geographic restriction” was not

“unreasonable as a matter of law”). But it must bear some rational relationship to

the employer’s operations and the employee’s duties. And the party attempting to

enforce the covenant must show that its unlimited territorial breadth is both

reasonable when considered in tandem with the length of the restriction and

necessary to protect the party’s interests. That’s a tall order. It bears noting that

2 During the hearing on its motion for a temporary restraining order, Biesse America’s
counsel appeared to concede that the non-compete has no territorial limitation. In its reply
brief in support of the motion for preliminary injunction, Biesse America argued, for the first
time, that the non-compete is limited to the markets in which it operates, namely the United
States and Canada. (See Reply Br. 6 n.3, ECF No. 30.) At the preliminary-injunction hearing,
Biesse America retreated from that position and argued that the non-compete extends at
least to the markets of Biesse S.p.A., which would include more than 100 countries around
the world. (See Opp’n Ex. 2.) Neither of these proposed territorial limitations finds support
in the plain language of the non-compete provision. Biesse America also argued at the
hearing, in another position not contained in any of its briefs, that the term “competitive
position” amounts to a territorial limitation. It is hard to see why this would be so.
Competition doesn’t necessarily stop at the border. The Court will not read in a territorial
limitation where none exists.
Biesse America has not presented, nor has the Court found through its own research,

any case in which a North Carolina court has granted a preliminary injunction to

enforce a worldwide covenant not to compete.

44. Biesse America has not shown why either its own operations or Dominici’s

duties would require a worldwide non-compete. In proceedings on the temporary

restraining order, the limited record before the Court showed that Biesse America’s

business was international in scope. It is now clear that “international” means the

United States and Canada. (See Dominici Aff. ¶ 23.) Dominici had responsibility for

only part of that territory. (See Empl. Agr. Annex 1.) No evidence suggests that

Biesse America has customers outside of the United States and Canada, and no

evidence shows where its customers are located within those two countries or even

how many there are. It is also unclear whether Dominici actually made contact with

customers throughout his assigned territory during his employment with Biesse

America. In the absence of such evidence, Biesse America has not shown that it is

likely to succeed in proving the reasonableness of the covenant’s geographic scope.

See Moonracer, Inc. v. Collard, 2013 U.S. Dist. LEXIS 126120, at *7 (E.D.N.C. Sept.

4, 2013); Patch Rubber Co. v. Toelke, 2013 U.S. Dist. LEXIS 84104, at *7–9 (E.D.N.C.

June 14, 2013).

45. The duration of the non-compete does not sufficiently mitigate its boundless

territorial scope. In effect, the non-compete would bar Dominici from working

anywhere in the world for numerous companies—the nonexclusive list in the

employment agreement includes twenty-three—for a period of six months. Biesse
America has not shown why this restriction would be reasonable even though,

standing alone, the six-month period seems relatively short. (Empl. Agr. § 17(a).)

46. Nor has Biesse America shown that a worldwide non-compete is necessary

to protect its legitimate business interests. One primary purpose of a non-compete is

to protect customer relationships when an employee who had close contact with those

customers leaves. See Hartman, 117 N.C. App. at 312–13, 450 S.E.2d at 917. On this

record, it is unclear where Biesse America’s customers are located and where

Dominici’s customer contacts were concentrated. What is clear, though, is that any

relevant customers were located somewhere in the United States or Canada. No

evidence suggests that Biesse America needed a worldwide covenant not to compete

to maintain its customer relationships.

47. Biesse America argues that it also has an interest in preserving its

confidential information. Our courts have recognized that protection of confidential

information and trade secrets is a legitimate purpose of a non-compete. See United

Labs., Inc. v. Kuykendall, 322 N.C. 643, 650, 370 S.E.2d 375, 380–81 (1988); XPO

Logistics Inc. v. Anis, 2016 NCBC LEXIS 54, at *19 (N.C. Super. Ct. July 12, 2016).

Again, though, Biesse America has not shown why such an interest would support a

worldwide non-compete. Dominici appears to have been a mid-level employee with

assigned responsibilities for a single product, albeit over a relatively large geographic

area. Although he had access to confidential information as needed for his duties,

there is no evidence that he had the type of wide-ranging access that might be

available to a company officer or other high-level employee. In fact, Biesse America
accuses Dominici of having acquired and taken confidential information outside of

his assigned area of responsibility, for which he should have had limited or no access.

48. There is always some risk that an employee, regardless of station, might

skirt the employer’s security systems and obtain trade secrets with ill intent. That

risk is not a sufficient reason to impose onerous competition restrictions unconnected

to the employee’s duties. As the Court of Appeals for the Fourth Circuit has

persuasively observed, “[n]on-competition agreements cannot prevent disclosure [of

trade secrets] anywhere in the world and until the end of time, for they would be held

unreasonable. Instead, a non-competition agreement will merely prevent the illegal

use of a trade secret next door in the near future, where the use might do the most

damage.” Eden Hannon & Co. v. Sumitomo Tr. & Banking Co., 914 F.2d 556, 562

(4th Cir. 1990).

49. Finally, the blue-pencil rule “severely limits” this Court’s authority to alter

the covenant so as to save it. Hartman, 117 N.C. App. at 317, 450 S.E.2d at 920. It

is perhaps possible not to enforce “a distinctly separable part of the covenant,” but

the Court may not revise or rewrite it. Id. At the hearing, Biesse America’s counsel

suggested striking “or Biesse SpA” from the phrase “in direct competition with Biesse

America, Inc. or Biesse SpA.” But this is not a distinctly separable part of the

covenant, which later goes on to identify a nonexclusive list of twenty-three

companies that qualify as relevant competitors. There is no evidence as to how many

of these companies are competitors of Biesse S.p.A. but not competitors of Biesse

America. And in any event, striking the phrase “or Biesse SpA” would leave in place
a worldwide territorial restriction against employment by competitors of Biesse

America.

50. Biesse America’s counsel also argued that if Article 17(a) is unenforceable,

a separate non-compete in Article 17(b) would remain enforceable. That alternative

covenant includes a customer-based restriction. (See Empl. Agr. § 17(b).) Even if

Article 17(b) is enforceable, though, Biesse America has not shown any evidence of a

breach of this alternative provision.

51. The Court therefore concludes that Biesse America has not shown that it is

likely to succeed on the merits of its claim for breach of the non-compete provision.

III.
CONCLUSION

52. Based on these findings of fact and conclusions of law, the Court GRANTS

in part and DENIES in part the motion for preliminary injunction. In its discretion,

the Court orders that, pending resolution of this action, and until otherwise ordered:

a. The temporary restraining order is DISSOLVED.

b. Dominici and SCM America, and any persons or entities in active concert

with them, are ENJOINED during the pendency of this action from

using or disclosing Biesse America’s trade secrets, including but not

limited to the confidential information contained in the MTOs, the

Discount File, the Markup File, the Masterfile, and the Opportunities

Spreadsheet.

c. To the extent he has not done so already, as required by the temporary

restraining order, Dominici shall return to Biesse America within seven
days of this Order, any confidential information of Biesse America in his

possession, custody, or control.

d. Counsel for Dominici may retain one copy of all information delivered to

counsel for Biesse America pursuant to paragraph (c) on an attorney-

eyes-only basis. Such information shall be accessible only to Jeffrey A.

Long, counsel of record for Dominici, and necessary employees of Mr.

Long. The parties are urged to confer and present a consent protective

order for the Court’s consideration as soon as possible.

e. Dominici shall preserve the laptop and tablet he used during his

employment with Biesse America and make no efforts to destroy or delete

any files save and except as necessary to comply with this Order.

f. In its discretion, the Court determines that the existing bond of $2,000

is adequate to protect the interest of Dominici and SCM America. No

further bond shall be required to secure this Order

53. Except as stated, the motion for preliminary injunction is DENIED.

54. Finally, Biesse America has requested a forensic examination of the

relevant devices used by Dominici. The Court elects not to require such an

examination as part of this Order but intends to resolve any dispute in that regard

as a discovery matter. Within seven days of the entry of this Order, the parties shall

meet and confer in an attempt to resolve or narrow their dispute, if any, as to a

forensic examination of the relevant devices. In the event the parties do not reach

agreement, Biesse America shall submit an e-mail summary of the dispute, limited
to 750 words, to the law clerk assigned to this case on or before August 30, 2019.

Defendants shall submit a responsive e-mail of 750 words or less within three

business days thereafter. The Court will then determine whether to set the matter

for a status conference or hearing.

SO ORDERED, this the 19th day of August, 2019.

/s/ Adam M. Conrad
Adam M. Conrad
Special Superior Court Judge
for Complex Business Cases