Complaint & Exhibits v. Sean Glynn [FINAL+SIGNED 10-4-2012 ...
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JUSTIN H. SANDERS (SBN 211488) [email protected] JOHN LI-CHIEN LIN (SBN 191266) SANDERS ROBERTS LLP 355 South Grand Avenue, Suite 2450 Los Angeles, California 90071 Telephone: 213-943-1314 Facsimile: 213-234-4581 Attorneys for Plaintiff ADCONION MEDIA, INC.
7 SUPERIOR COURT OF THE STATE OF CALIFORNIA
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FOR THE COUNTY OF LOS ANGELES
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WEST DISTRICT, SANTA MONICA COURTHOUSE
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ADCONION MEDIA, INC., a Delaware corporation, Plaintiff,
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vs. SEAN GLYNN, an individual, and DOES 1 through 10, Defendants.
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Case No.: COMPLAINT FOR: 1. CONVERSION; 2. UNJUST ENRICHMENT; 3. BREACH OF DUTY OF UNDIVIDED LOYALTY; 4. BREACH OF CONTRACT; 5. MISAPPROPRIATION OF TRADE SECRETS Cal. Civ. Code 3426 et seq.; 6. COMMON LAW MISAPPROPRIATION OF PROPRIETARY AND/OR CONFIDENTIAL INFORMATION; and 7. UNFAIR COMPETITION Bus & Prof Code § 17200
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COMPLAINT
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Plaintiff Adconion Media, Inc. (“Adconion”) alleges as follows: JURISDICTION AND VENUE
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1.
This Court has jurisdiction over this action because all the parties reside in, are
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incorporated in, have their main place of business in, or conduct business in the State of
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California and a substantial portion of the acts, omissions, events and transactions alleged herein
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occurred within the State of California, County of Los Angeles.
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2.
At all times mentioned in this Complaint, Adconion was and is a corporation
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organized and existing under and in accord with Delaware law, legally qualified to do business
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and lawfully doing business in the County of Los Angeles and the State of California.
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3.
Adconion is informed and believes, and thereupon alleges that Defendant Sean
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Glynn (“Defendant”) was and is, and at all times mentioned in this Complaint an individual
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residing and domiciled in the State of California, County of Los Angeles.
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4.
Adconion does not know the true names or capacities of the Defendants whom it
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now sues as DOES 1 through 10, inclusive, and therefore sues them in this Complaint under
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fictitious names. Adconion will allege these Defendants’ true names and capacities, after
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obtaining leave of court if necessary, when ascertained. FACTS COMMON TO ALL CAUSES OF ACTION
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Unauthorized Access To Intellectual Property And Trade Secrets 5.
Adconion is in the business of technology, and possesses one of the world’s
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largest global multi-screen, multi-channel, audience platforms. Adconion’s “Digital Distribution
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Platform” enables content owners, application developers and device manufacturers to monetize
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their global audiences across multiple devices and screens.
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6.
Adconion invests substantial time, money and resources to create proprietary
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solutions, initiatives, and service strategies for its business. Adconion also spends substantial
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time, money and resources identifying and maintaining key customer relationships, designing
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customer initiatives, determining strategic new developments, allotting resources for new
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technologies and initiatives and creating business plans. The information Adconion compiles
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about the unique needs and preferences of its customers and its business leads comprises some of - 2-
COMPLAINT
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its most valuable corporate assets, particularly because the compilation of this information,
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including the identity of specific contacts, business leads, sales and profit data, value of
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individual contracts, and pricing data, is not generally known.
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7.
Furthermore, Adconion has invested substantial time, money and resources to
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maintain the confidentiality of the unique needs and preferences of its customers and business
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leads. Among other safeguards, Adconion requires each of its employees to execute non-
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disclosure agreements as a condition of their employment, with such agreements explicitly
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informing the employees that they face the possibility of termination and civil penalties should
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they violate the terms of the non-disclosure agreement.
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8.
Adconion has developed and maintained valuable relationships and substantial
goodwill with its customers. 9.
Adconion’s business information, customer relationships, and goodwill are of
paramount significance to its business and its success. 10.
At all relevant times herein, and up until on or about August 24, 2012, Defendant
was an employee of Adconion. 11.
On or about November 18, 2010, Adconion hired Defendant to serve as
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Adconion’s Director of Information Technology. Among other responsibilities, Defendant’s role
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was to deliver Information Technology (“IT”) services and to maintain, upgrade, and expand
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Adconion’s IT systems. On or about November 29, 2010, Adconion and Defendant entered into
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Adconion’s Company Confidentiality Agreement, a true and correct copy of which is attached
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hereto as Exhibit A. On November 29, 2010, Adconion and Defendant entered into Adconion’s
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Company Property Agreement, a true and correct copy of which is attached hereto as Exhibit B.
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Defendant was a key executive employee who participated in the management of Adconion’s
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business and was involved in key strategic decisions. As a high-level executive employee,
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Defendant was trusted with and had virtually unfettered access to Adconion’s most sensitive and
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confidential customer and vendor information, contract data, pricing and sales data, business
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strategy, product development, and other confidential information. Defendant also was
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intimately familiar with confidential information regarding various employees of Adconion, - 3-
COMPLAINT
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including employees’ special skills, experience, salaries, and performance histories. 12.
Upon joining Adconion, Defendant was provided access to Adconion’s trade
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secrets and confidential information, subject to nondisclosure restrictions such as those found in
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Adconion’s Company Confidentiality Agreement. As a result of his respective position with
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Adconion, Defendant had direct access to servers, databases, customer contact lists, pricing
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plans, profitability forecasts, research and development, marketing plans, strategic outlines and
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information about competitors.
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13.
Defendant agreed to keep Adconion’s trade secret and confidential information
protected and confidential both during and after his respective employment with Adconion,
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pursuant to Adconion’s Company Confidentiality Agreement, which provides, in pertinent part,
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as follows:
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Unless Employee first secures Company’s written consent, Employee will not disclose, use, disseminate, identify by topic or subject, lecture upon or publish Company’s Confidential information. Employee understands and agrees that Employee’s obligations not to disclose, use, disseminate, identify by subject or topic, lecture or publish Confidential Information shall continue after the termination of Employee’s employment for any reason.
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Employee agrees that Company Property and Confidential Information referred to in this Agreement are the sole property of Company or its associated undertakings. Employee has no right of retention with regard to Company Property and Confidential Information referred to herein.
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If employee fails to Company’s policies regarding Confidential Information may be subjected to disciplinary action up to, and including, termination of Employee’s employment.
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14.
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Adconion is informed and believes, and thereon alleges, that in or about August
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2012, Defendant unlawfully accessed the computer and e-mail files of Adconion’s most senior
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executives. Specifically, Defendant access files belonging to Tyler Moebius, Adconion’s Chief
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Executive Officer, Bruce Wiseman, Adconion’s Chief Operating Officer, Michael LeCoz,
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Adconion’s Controller, and Natasha Lawson, Adconion’s Human Resources Manager. In taking
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these actions, Defendant gained access to the executives’ business data and communications, as
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well as their personal and private communications. Moreover, by accessing Natasha Lawson’s
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computer and e-mail files, specifically, Defendant also gained access to Adconion’s employees’
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confidential personal employment information, including, but not limited to, health information, - 4-
COMPLAINT
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family data and employment reviews. Further, on information and belief, Defendant created a
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“dummie” IT administrator account under the pseudonym of “Andrew Adams.” Adconion is
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informed and believes, and thereon alleges, that Defendant, in turn, disclosed the contents of the
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email accounts to Adconion’s competitors. Defendant’s Competitive Business
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15.
Adconion is informed and believes, and thereon alleges, that while still employed
with Adconion, Defendant formed a competing business. 16.
Adconion is informed and believes, and thereon alleges, that Defendant used
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Adconion’s time, resources, trade secrets, and confidential information to form his competing
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business and did so during his regularly scheduled work hours in violation of the provisions of
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the Company Property Agreement, the relevant language of which states as follows:
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“Company Property” – During and after Employee’s employment, Employee will not use any Company Property . . . for any purpose other than for benefit of Company. Except for business uses related to the performance of Employee’s job, Employee will not commingle, or engage in action that could result in commingling of, Company’s Confidential Information (as defined in Section 16.1 of this Agreement) with information otherwise maintained or acquired by Employee.
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17.
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Further, pursuant to the Company Property Agreement, any and all intellectual
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property developed by Defendant, including any inventions and proprietary rights with respect
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thereto, which, by definition, did not fall within the scope of California Labor Code §2870, were
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and are the sole property of Adconion. Accordingly, Defendant assigned all of his respective
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right, title and interest in any and all inventions and related proprietary rights to Adconion. Deletion Of Key Computer Files
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18.
Adconion is informed and believes, and thereon alleges, that in or about August
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2012, upon tendering his resignation, Defendant removed all data files stored on his company-
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issued computer in violation of the Company Property Agreement before returning the computer
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to Adconion.
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19.
In addition, Adconion is informed and believes, and thereon alleges, that
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Defendant continues to use and/or disclose Adconion’s confidential and trade secret information
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in his competing business. Defendant’s continuing use of Adconion’s confidential and trade - 5-
COMPLAINT
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secret information also is in violation of the written agreements signed by Defendant. The
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Company Property Agreement reads as follows:
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Upon Company’s written instruction, which may be made at any time and from time to time during Employment or following termination thereof (for any reason), Employee agrees to immediately and unconditionally return [or destroy or delete if so instructed by Company in writing]: (1) all Company Property; (ii) all Confidential Information of Company, however recorded or stored in any medium; and (iii) any other information contained in Company Property, whether such information is Confidential Information of the Company, Information belonging to Employee, or any other type of information . . . . Employee acknowledges that failure to immediately and unconditionally return such Company Property or any other information Employee is required to return, such failure may constitute significant damage and loss to Company and subject Employee to civil and criminal penalties.
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20.
Adconion’s trade secret and confidential information is not generally known in
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the industry and is valuable because Adconion derives economic value from the information not
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being publicly available. Adconion’s trade secret and confidential information is of great value
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to Adconion and such information would give any competitor, who improperly acquired such
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information, an unfair competitive advantage by inter alia, not expending the time and resources
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to develop the trade secret information as Adconion has done.
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21.
In addition to requiring employees to keep its proprietary information confidential
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as a condition of employment, Adconion protects its information by password protecting
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computers, limiting access to information to necessary employees, requiring employees to sign
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confidentiality agreements, and restricting confidential information to high-level, trusted
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employees.
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22.
Adconion’s customer relationships and goodwill are of paramount importance to
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Adconion. Many customers entrust Adconion with their confidential information and require
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Adconion to enter into confidentiality agreements as well.
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23.
While employed by Adconion, Defendant had contact with Adconion’s customers
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and vendors. Defendant also had contact with Adconion’s trade secret and confidential
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information. Defendant was privy to pricing information, margins, customer initiatives,
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allocation of resources, product development, business planning, and strategies being used by
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Adconion that would give Defendant an unfair advantage in soliciting vendors and developing - 6-
COMPLAINT
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services. 24.
Defendant’s actions are a serious threat to Adconion’s business, are in violation of
Defendant’s contractual obligations, and applicable law, and unjustly enriched Defendant. American Express Corporate Credit Card
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25.
Upon employment, Defendant also was given an American Express corporate
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credit card (the “corporate credit card”). Per Adconion’s written policy as identified above, any
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and all transactions with the corporate credit card were required to be business related.
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Moreover, any tangible purchases with the corporate credit card were to be shipped to
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Adconion’s corporate locations. Defendant was aware that transactions with the corporate credit
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card were billed directly to Adconion. 26.
Adconion is informed and believes, and thereon alleges, that in or about the
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summer of 2012, on information and belief, Defendant made a series of personal purchases using
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the corporate credit card. Defendant arranged for some of the personal items to be shipped to
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Defendant’s home. On information and belief, in addition to purchasing items for his personal
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benefit, Defendant also purchased items for his competing business. On information and belief,
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Defendant purchased personal items from retailers such as Amazon.com and iTunes.com in an
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amount not less than $34,351.36, but according to proof at trial. At the time Defendant made
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these purchases, Defendant was aware that Adconion would pay the amounts due on the
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corporate credit card and Adconion did in fact pay the balances charged by Defendant on the
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corporate credit card. Travel & Entertainment Reimbursement
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27.
Adconion provided for Travel and Entertainment (“T&E”) reimbursement for
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Defendant, whereby Defendant would provide receipts to Adconion for expenses incurred in
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connection with business activities and Adconion would reimburse such expenses.
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28.
Adconion is informed and believes, and thereon alleges, that on or about May 14,
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2012, an internal audit by Adconion discovered several irregularities with regard to Defendant’s
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T&E transactions. Specifically, and on information and belief, between July 2012 and August
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2012, Defendant made dozens of non-business related purchases using his personal credit card - 7-
COMPLAINT
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and submitted the receipts to Adconion for reimbursement. 29.
On or about August 10, 2012, Defendant tendered his resignation as the Director
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of Information Technology, with Adconion’s Chief Operating Officer accepting said resignation.
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Defendant’s last date of employment was August 24, 2012.
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FIRST CAUSE OF ACTION
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CONVERSION
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(Against all Defendants)
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30.
Adconion hereby incorporates by reference all of the allegations contained in the
above paragraphs as if fully rewritten herein. 31.
Adconion had ownership and right, title and possession of the property described
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herein, including but not limited to its trade secret, proprietary information, and business expense
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accounts.
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32.
Defendant converted the property by wrongful acts as described herein and/or
disposed of the property in a manner inconsistent with Adconion’s property rights. 33.
Adconion was damaged by Defendant’s actions.
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SECOND CAUSE OF ACTION
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UNJUST ENRICHMENT
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(Against All Defendants)
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34.
Adconion hereby incorporates by reference all of the allegations contained in the
above paragraphs as if fully rewritten herein. 35.
Defendant received a benefit as described herein, including but not limited to the
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using Adconion’s business accounts and property to establish his competing business, using
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Adconion’s corporate credit card to purchase personal items or other products for his competitive
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business without Adconion’s consent, and submitting fraudulent T&E reimbursement.
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36.
Defendant retained the benefit unjustly as described herein.
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COMPLAINT
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THIRD CAUSE OF ACTION
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BREACH OF DUTY OF UNDIVIDED LOYALTY
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(Against All Defendants)
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37.
Adconion hereby incorporates by reference all of the allegations contained in the
above paragraphs as if fully rewritten herein. 38.
By virtue of his respective position and responsibilities at Adconion, Defendant
owed Plaintiff a duty of undivided loyalty. 39.
Defendant breached this duty by inter alia unlawfully accessing the email
accounts of other Adconion executives, starting a competitive business, misappropriating
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Adconion’s trade secrets, using Adconion’s corporate credit card to purchase personal items or
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other products for his competitive business without Adconion’s consent, and submitting
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fraudulent T&E reimbursement.
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40.
As a direct and proximate result of the Defendant’s actions, as set forth above,
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Adconion suffered damages in an amount yet presently undetermined, but according to proof at
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trial, including all wages and other compensation paid to Defendant during the period in which
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he was performing services for, or in formation of, his competitive business.
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FOURTH CAUSE OF ACTION
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BREACH OF CONTRACT
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(Against Sean Glynn)
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41.
Adconion hereby incorporates by reference all of the allegations contained in the
above paragraphs as if fully rewritten herein. 42.
As alleged above, Defendant executed the Company Property Agreement and the
Company Confidentiality Agreement. 43.
Adconion’s Company Property Agreement and Company Confidentiality
Agreement with Defendant are valid and enforceable contracts. 44.
The Company Property Agreement and Company Confidentiality Agreement
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explicitly limit the use of Adconion’s property solely for the benefit of Adconion and prohibit
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employees from commingling Adconion’s property with their own. The Company Property - 9-
COMPLAINT
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Agreement and the Company Confidentiality Agreement are reasonably necessary to protect the
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legitimate interests in Adconion’s intellectual property, trade secrets, confidential information,
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customer relationships, work force, and good will.
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45.
Adconion fully performed its obligations under the Company Property Agreement
and the Company Confidentiality Agreement. 46.
By virtue of Defendant’s acts and omissions alleged above, Defendant breached
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Company Property Agreement and the Company Confidentiality Agreement by, inter alia, (i)
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using Adconion’s time, resources, trade secrets, and confidential information to form his
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competing business and did so during his regularly scheduled work hours; (ii) continuing to use
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and/or disclose Adconion’s confidential and trade secret information to benefit his competing
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business; (iii) accessing the computer and e-mail files of Adconion’s senior executives; (iv)
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using the corporate credit card for personal use; and (v) deleting all data files on his company-
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issued computer upon resigning.
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FIFTH CAUSE OF ACTION
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MISAPPROPRIATION OF TRADE SECRETS
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(Against All Defendants)
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47.
Adconion hereby incorporates by reference all of the allegations contained in the
above paragraphs as if fully rewritten herein. 48.
At all relevant times, Adconion created and/or was in possession of confidential
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and trade secret information as defined by Cal. Civ. Code Section 3426.1(d), including, without
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limitation, customer and vendor information, sales and profit data, business strategies, product
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development information, technology in development and employee information. Adconion has
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expended great efforts and substantial expense to develop its trade secrets and confidential
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information. Furthermore, the proprietary business and customer information of Adconion
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constitutes trade secrets because Adconion derives actual and potential independent economic
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value from that information not being generally known to the public nor readily ascertainable by
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proper means by other persons who can obtain economic value from its disclosure or use. As set
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forth herein, this information has been the subject of reasonable efforts, under the circumstances, - 10-
COMPLAINT
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to maintain its secrecy.
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49.
is not and was not generally known to Adconion’s competitors in the industry or to the public.
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Adconion’s confidential and proprietary trade secret information described herein
50.
Adconion is informed and believes, and on that basis alleges, that Defendant
violated the California Uniform Trade Secrets Act, Cal. Civ. Code Section 3426 et seq.
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51.
Defendant misappropriated Adconion’s trade secrets by using its trade secrets to
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form Defendant’s competing business, and disclosing Adconion’s trade secrets in furtherance of
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Defendant’s competing business, with Adconion’s consent and having acquired the trade secrets
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by improper means and/or for a purpose not authorized by Adconion.
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52.
Defendant’s misappropriation of Adconion’s trade secrets have caused and
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continue to cause irreparable injury to Adconion for which Adconion has no adequate remedy at
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law.
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53.
As a direct and proximate result of Defendant’s conduct, as set forth above,
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Adconion suffered, and will continue to suffer, actual damages in an amount yet presently
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undetermined, but according to proof at trial and within the jurisdiction of this court.
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54.
At all times herein, as a further direct, legal and proximate cause of the acts and
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conduct of Defendants herein, each of these Defendants acted with conscious disregard and their
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conduct was willful, wanton, malicious, oppressive, and fraudulent, subjecting Adconion to cruel
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and unjust hardship, harm, damages and losses, and, in doing so, acted in and with conscious
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disregard of the rights and interests of Adconion, justifying an amount of exemplary and punitive
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damages as against Defendant, according to proof and pursuant to Cal. Civ. Code Sections 3294,
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3426.3(c) and 3226.4.
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SIXTH CAUSE OF ACTION
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COMMON LAW MISAPPROPRIATION OF CONFIDENTIAL AND/OR
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PROPRIETARY INFORMATION
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(Against All Defendants)
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55.
Adconion hereby incorporates by reference all of the allegations contained in the
above paragraphs as if fully rewritten herein. - 11-
COMPLAINT
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56.
Adconion owns the confidential and proprietary customer, vendor, business,
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technology, and financial information alleged in this Complaint. Adconion has invested
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substantial time and money in developing its confidential and proprietary information. Adconion
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has expended reasonable efforts to maintain the secrecy of its confidential and proprietary
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information and it derives independent economic value from the information because it is not
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generally known. By misappropriating Adconion’s confidential and proprietary information and
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property as described herein, Defendant has unfairly gained a competitive advantage over
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Adconion.
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57.
The Defendant’s misappropriation of Adconion’s confidential and proprietary
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information has caused and continues to cause irreparable injury to Adconion for which
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Adconion has no adequate remedy at law.
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58.
Adconion is entitled to an injunction restraining Defendant, as well as their
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officers, agents, employees, and all persons acting in concert with them, from using, copying,
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publishing, disclosing, transferring, or selling Adconion’s confidential and proprietary
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information, or any product that is based on or incorporates part or all of such material, and from
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obtaining any commercial advantage or unjust enrichment from their misappropriation of
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Adconion’s confidential and proprietary information.
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59.
As a direct and proximate result of Defendant’s conduct as set forth above,
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Adconion has also suffered, and will continue to suffer, actual damages in an amount yet
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presently undetermined, but according to proof at trial and within the jurisdiction of this Court.
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60.
As a direct and proximate result of Defendant’s conduct as set forth above,
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Defendant has been unjustly enriched and Adconion is entitled to all recoverable damages in an
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amount yet presently undetermined, but according to proof at trial and within the jurisdiction of
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this Court.
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61.
As a further direct and proximate result of Defendant’s wrongful conduct,
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Adconion has been injured, irreparably and otherwise, and is threatened with additional ongoing
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injuries. Upon information and belief, Defendant will be unjustly enriched, and unless
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restrained, will continue to use, divulge, disclose, acquire, and/or otherwise misappropriate - 12-
COMPLAINT
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Adconion’s trade secret and confidential information. Adconion has no adequate remedy at law
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to fully protect it. If Defendant’s actions go unchecked, they will necessarily diminish the value
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of Adconion’s trade secret and confidential information, diminish Adconion’s goodwill,
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negatively impact customer relationships, and give Adconion a strategic advantage to building
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customer relationships and to exploiting Adconion’s strengths and weaknesses. Adconion is
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threatened with losing customers, technology, vendors, its competitive advantage, its trade
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secrets, and goodwill, in amounts which may be impossible to determine, unless Defendant is
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enjoined and restrained by Order of this Court. Because Adconion’s remedy at law is
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inadequate, Adconion seeks preliminary and permanent injunctive relief.
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62.
At all times herein, as a further direct, legal and proximate cause of the acts and
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conduct of Defendants herein, each of these Defendants acted with conscious disregard and their
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conduct was willful, wanton, malicious, oppressive, and fraudulent, subjecting Adconion to cruel
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and unjust hardship, harm, damages and losses, and, in doing so, acted in and with conscious
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disregard of the rights and interests of Adconion, justifying an amount of exemplary and punitive
15
damages as against Defendant, according to proof and pursuant to Cal. Civ. Code Sections 3294,
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3426.3(c) and 3226.4.
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SEVENTH CAUSE OF ACTION
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VIOLATION OF CALIFORNIA BUSINESS & PROFESSIONS CODE § 17200
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(Against All Defendants)
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63.
Adconion hereby incorporates by reference all of the allegations contained in the
above paragraphs as if fully rewritten herein. 64.
Defendant’s conduct, as set forth above, constitutes “unfair competition” and
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“unfair and fraudulent business practices” as defined under California Business & Professions
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Code Section 17200 et seq.
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65.
Defendant’s acts of unfair competition and unfair and fraudulent business
26
practices have caused and continue to cause irreparable injury to Adconion for which Adconion
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has no adequate remedy at law.
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66.
As a direct and proximate result of Defendant’s conduct, as set forth above, - 13-
COMPLAINT
1
Adconion suffered, and will continue to suffer, actual damages in an amount yet presently
2
undetermined, but according to proof at trial and within the jurisdiction of this Court.
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67.
At all times herein, as a further direct, legal and proximate cause of the acts and
4
conduct of Defendants herein, each of these Defendants acted with conscious disregard and their
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conduct was willful, wanton, malicious, oppressive, and fraudulent, subjecting Adconion to cruel
6
and unjust hardship, harm, damages and losses, and, in doing so, acted in and with conscious
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disregard of the rights and interests of Adconion, justifying an amount of exemplary and punitive
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damages as against Defendant, according to proof and pursuant to Cal. Civ. Code Sections 3294,
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3426.3(c) and 3226.4. PRAYER FOR RELIEF
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WHEREFORE, Adconion requests relief as follows:
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1.
Preliminary and permanent injunctive relief enjoining and restraining Defendant,
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along with their respective agents, employers, attorneys, servants, representatives,
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successors, assigns, and all persons acting under, in concert, in participation with,
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or for them from (a) directly or indirectly disclosing Adconion’s trade secrets and
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confidential information; and (b) committing any other unfair business practice
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directed towards obtaining for the Defendant the business and customers of
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Adconion;
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2.
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including all Confidential Information of Adconion; 3.
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An Order requiring Defendant to return to Adconion all Adconion property,
An accounting from Defendant of his unjust profits and misuse of Adconion’s trade secrets and confidential information;
4.
A constructive trust for the benefit of Adconion to be imposed upon all funds,
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assets, revenues, and profits and Defendant has or will derive from his unlawful
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acts and misappropriation of Adconion’s information and property;
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5.
For general damages in an amount within the jurisdictional limits of this court;
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6.
For special damages against all Defendants, and each of them, in a sum to be
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established according to proof; - 14-
COMPLAINT
EXHIBIT A
EXHIBIT B
JUSTIN H. SANDERS (SBN 211488) [email protected] JOHN LI-CHIEN LIN (SBN 191266) SANDERS ROBERTS LLP 355 South Grand Avenue, Suite 2450 Los Angeles, California 90071 Telephone: 213-943-1314 Facsimile: 213-234-4581 Attorneys for Plaintiff ADCONION MEDIA, INC.
7 SUPERIOR COURT OF THE STATE OF CALIFORNIA
8
FOR THE COUNTY OF LOS ANGELES
9
WEST DISTRICT, SANTA MONICA COURTHOUSE
10 11 12
ADCONION MEDIA, INC., a Delaware corporation, Plaintiff,
13 14 15 16 17 18 19 20
vs. SEAN GLYNN, an individual, and DOES 1 through 10, Defendants.
) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )
Case No.: COMPLAINT FOR: 1. CONVERSION; 2. UNJUST ENRICHMENT; 3. BREACH OF DUTY OF UNDIVIDED LOYALTY; 4. BREACH OF CONTRACT; 5. MISAPPROPRIATION OF TRADE SECRETS Cal. Civ. Code 3426 et seq.; 6. COMMON LAW MISAPPROPRIATION OF PROPRIETARY AND/OR CONFIDENTIAL INFORMATION; and 7. UNFAIR COMPETITION Bus & Prof Code § 17200
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COMPLAINT
1
Plaintiff Adconion Media, Inc. (“Adconion”) alleges as follows: JURISDICTION AND VENUE
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1.
This Court has jurisdiction over this action because all the parties reside in, are
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incorporated in, have their main place of business in, or conduct business in the State of
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California and a substantial portion of the acts, omissions, events and transactions alleged herein
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occurred within the State of California, County of Los Angeles.
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2.
At all times mentioned in this Complaint, Adconion was and is a corporation
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organized and existing under and in accord with Delaware law, legally qualified to do business
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and lawfully doing business in the County of Los Angeles and the State of California.
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3.
Adconion is informed and believes, and thereupon alleges that Defendant Sean
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Glynn (“Defendant”) was and is, and at all times mentioned in this Complaint an individual
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residing and domiciled in the State of California, County of Los Angeles.
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4.
Adconion does not know the true names or capacities of the Defendants whom it
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now sues as DOES 1 through 10, inclusive, and therefore sues them in this Complaint under
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fictitious names. Adconion will allege these Defendants’ true names and capacities, after
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obtaining leave of court if necessary, when ascertained. FACTS COMMON TO ALL CAUSES OF ACTION
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Unauthorized Access To Intellectual Property And Trade Secrets 5.
Adconion is in the business of technology, and possesses one of the world’s
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largest global multi-screen, multi-channel, audience platforms. Adconion’s “Digital Distribution
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Platform” enables content owners, application developers and device manufacturers to monetize
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their global audiences across multiple devices and screens.
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6.
Adconion invests substantial time, money and resources to create proprietary
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solutions, initiatives, and service strategies for its business. Adconion also spends substantial
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time, money and resources identifying and maintaining key customer relationships, designing
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customer initiatives, determining strategic new developments, allotting resources for new
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technologies and initiatives and creating business plans. The information Adconion compiles
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about the unique needs and preferences of its customers and its business leads comprises some of - 2-
COMPLAINT
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its most valuable corporate assets, particularly because the compilation of this information,
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including the identity of specific contacts, business leads, sales and profit data, value of
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individual contracts, and pricing data, is not generally known.
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7.
Furthermore, Adconion has invested substantial time, money and resources to
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maintain the confidentiality of the unique needs and preferences of its customers and business
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leads. Among other safeguards, Adconion requires each of its employees to execute non-
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disclosure agreements as a condition of their employment, with such agreements explicitly
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informing the employees that they face the possibility of termination and civil penalties should
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they violate the terms of the non-disclosure agreement.
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8.
Adconion has developed and maintained valuable relationships and substantial
goodwill with its customers. 9.
Adconion’s business information, customer relationships, and goodwill are of
paramount significance to its business and its success. 10.
At all relevant times herein, and up until on or about August 24, 2012, Defendant
was an employee of Adconion. 11.
On or about November 18, 2010, Adconion hired Defendant to serve as
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Adconion’s Director of Information Technology. Among other responsibilities, Defendant’s role
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was to deliver Information Technology (“IT”) services and to maintain, upgrade, and expand
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Adconion’s IT systems. On or about November 29, 2010, Adconion and Defendant entered into
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Adconion’s Company Confidentiality Agreement, a true and correct copy of which is attached
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hereto as Exhibit A. On November 29, 2010, Adconion and Defendant entered into Adconion’s
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Company Property Agreement, a true and correct copy of which is attached hereto as Exhibit B.
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Defendant was a key executive employee who participated in the management of Adconion’s
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business and was involved in key strategic decisions. As a high-level executive employee,
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Defendant was trusted with and had virtually unfettered access to Adconion’s most sensitive and
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confidential customer and vendor information, contract data, pricing and sales data, business
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strategy, product development, and other confidential information. Defendant also was
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intimately familiar with confidential information regarding various employees of Adconion, - 3-
COMPLAINT
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including employees’ special skills, experience, salaries, and performance histories. 12.
Upon joining Adconion, Defendant was provided access to Adconion’s trade
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secrets and confidential information, subject to nondisclosure restrictions such as those found in
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Adconion’s Company Confidentiality Agreement. As a result of his respective position with
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Adconion, Defendant had direct access to servers, databases, customer contact lists, pricing
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plans, profitability forecasts, research and development, marketing plans, strategic outlines and
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information about competitors.
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13.
Defendant agreed to keep Adconion’s trade secret and confidential information
protected and confidential both during and after his respective employment with Adconion,
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pursuant to Adconion’s Company Confidentiality Agreement, which provides, in pertinent part,
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as follows:
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Unless Employee first secures Company’s written consent, Employee will not disclose, use, disseminate, identify by topic or subject, lecture upon or publish Company’s Confidential information. Employee understands and agrees that Employee’s obligations not to disclose, use, disseminate, identify by subject or topic, lecture or publish Confidential Information shall continue after the termination of Employee’s employment for any reason.
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Employee agrees that Company Property and Confidential Information referred to in this Agreement are the sole property of Company or its associated undertakings. Employee has no right of retention with regard to Company Property and Confidential Information referred to herein.
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If employee fails to Company’s policies regarding Confidential Information may be subjected to disciplinary action up to, and including, termination of Employee’s employment.
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14.
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Adconion is informed and believes, and thereon alleges, that in or about August
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2012, Defendant unlawfully accessed the computer and e-mail files of Adconion’s most senior
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executives. Specifically, Defendant access files belonging to Tyler Moebius, Adconion’s Chief
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Executive Officer, Bruce Wiseman, Adconion’s Chief Operating Officer, Michael LeCoz,
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Adconion’s Controller, and Natasha Lawson, Adconion’s Human Resources Manager. In taking
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these actions, Defendant gained access to the executives’ business data and communications, as
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well as their personal and private communications. Moreover, by accessing Natasha Lawson’s
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computer and e-mail files, specifically, Defendant also gained access to Adconion’s employees’
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confidential personal employment information, including, but not limited to, health information, - 4-
COMPLAINT
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family data and employment reviews. Further, on information and belief, Defendant created a
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“dummie” IT administrator account under the pseudonym of “Andrew Adams.” Adconion is
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informed and believes, and thereon alleges, that Defendant, in turn, disclosed the contents of the
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email accounts to Adconion’s competitors. Defendant’s Competitive Business
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15.
Adconion is informed and believes, and thereon alleges, that while still employed
with Adconion, Defendant formed a competing business. 16.
Adconion is informed and believes, and thereon alleges, that Defendant used
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Adconion’s time, resources, trade secrets, and confidential information to form his competing
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business and did so during his regularly scheduled work hours in violation of the provisions of
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the Company Property Agreement, the relevant language of which states as follows:
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“Company Property” – During and after Employee’s employment, Employee will not use any Company Property . . . for any purpose other than for benefit of Company. Except for business uses related to the performance of Employee’s job, Employee will not commingle, or engage in action that could result in commingling of, Company’s Confidential Information (as defined in Section 16.1 of this Agreement) with information otherwise maintained or acquired by Employee.
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17.
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Further, pursuant to the Company Property Agreement, any and all intellectual
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property developed by Defendant, including any inventions and proprietary rights with respect
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thereto, which, by definition, did not fall within the scope of California Labor Code §2870, were
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and are the sole property of Adconion. Accordingly, Defendant assigned all of his respective
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right, title and interest in any and all inventions and related proprietary rights to Adconion. Deletion Of Key Computer Files
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18.
Adconion is informed and believes, and thereon alleges, that in or about August
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2012, upon tendering his resignation, Defendant removed all data files stored on his company-
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issued computer in violation of the Company Property Agreement before returning the computer
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to Adconion.
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19.
In addition, Adconion is informed and believes, and thereon alleges, that
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Defendant continues to use and/or disclose Adconion’s confidential and trade secret information
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in his competing business. Defendant’s continuing use of Adconion’s confidential and trade - 5-
COMPLAINT
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secret information also is in violation of the written agreements signed by Defendant. The
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Company Property Agreement reads as follows:
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Upon Company’s written instruction, which may be made at any time and from time to time during Employment or following termination thereof (for any reason), Employee agrees to immediately and unconditionally return [or destroy or delete if so instructed by Company in writing]: (1) all Company Property; (ii) all Confidential Information of Company, however recorded or stored in any medium; and (iii) any other information contained in Company Property, whether such information is Confidential Information of the Company, Information belonging to Employee, or any other type of information . . . . Employee acknowledges that failure to immediately and unconditionally return such Company Property or any other information Employee is required to return, such failure may constitute significant damage and loss to Company and subject Employee to civil and criminal penalties.
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20.
Adconion’s trade secret and confidential information is not generally known in
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the industry and is valuable because Adconion derives economic value from the information not
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being publicly available. Adconion’s trade secret and confidential information is of great value
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to Adconion and such information would give any competitor, who improperly acquired such
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information, an unfair competitive advantage by inter alia, not expending the time and resources
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to develop the trade secret information as Adconion has done.
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21.
In addition to requiring employees to keep its proprietary information confidential
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as a condition of employment, Adconion protects its information by password protecting
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computers, limiting access to information to necessary employees, requiring employees to sign
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confidentiality agreements, and restricting confidential information to high-level, trusted
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employees.
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22.
Adconion’s customer relationships and goodwill are of paramount importance to
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Adconion. Many customers entrust Adconion with their confidential information and require
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Adconion to enter into confidentiality agreements as well.
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23.
While employed by Adconion, Defendant had contact with Adconion’s customers
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and vendors. Defendant also had contact with Adconion’s trade secret and confidential
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information. Defendant was privy to pricing information, margins, customer initiatives,
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allocation of resources, product development, business planning, and strategies being used by
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Adconion that would give Defendant an unfair advantage in soliciting vendors and developing - 6-
COMPLAINT
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services. 24.
Defendant’s actions are a serious threat to Adconion’s business, are in violation of
Defendant’s contractual obligations, and applicable law, and unjustly enriched Defendant. American Express Corporate Credit Card
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25.
Upon employment, Defendant also was given an American Express corporate
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credit card (the “corporate credit card”). Per Adconion’s written policy as identified above, any
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and all transactions with the corporate credit card were required to be business related.
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Moreover, any tangible purchases with the corporate credit card were to be shipped to
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Adconion’s corporate locations. Defendant was aware that transactions with the corporate credit
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card were billed directly to Adconion. 26.
Adconion is informed and believes, and thereon alleges, that in or about the
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summer of 2012, on information and belief, Defendant made a series of personal purchases using
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the corporate credit card. Defendant arranged for some of the personal items to be shipped to
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Defendant’s home. On information and belief, in addition to purchasing items for his personal
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benefit, Defendant also purchased items for his competing business. On information and belief,
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Defendant purchased personal items from retailers such as Amazon.com and iTunes.com in an
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amount not less than $34,351.36, but according to proof at trial. At the time Defendant made
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these purchases, Defendant was aware that Adconion would pay the amounts due on the
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corporate credit card and Adconion did in fact pay the balances charged by Defendant on the
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corporate credit card. Travel & Entertainment Reimbursement
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27.
Adconion provided for Travel and Entertainment (“T&E”) reimbursement for
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Defendant, whereby Defendant would provide receipts to Adconion for expenses incurred in
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connection with business activities and Adconion would reimburse such expenses.
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28.
Adconion is informed and believes, and thereon alleges, that on or about May 14,
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2012, an internal audit by Adconion discovered several irregularities with regard to Defendant’s
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T&E transactions. Specifically, and on information and belief, between July 2012 and August
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2012, Defendant made dozens of non-business related purchases using his personal credit card - 7-
COMPLAINT
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and submitted the receipts to Adconion for reimbursement. 29.
On or about August 10, 2012, Defendant tendered his resignation as the Director
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of Information Technology, with Adconion’s Chief Operating Officer accepting said resignation.
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Defendant’s last date of employment was August 24, 2012.
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FIRST CAUSE OF ACTION
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CONVERSION
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(Against all Defendants)
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30.
Adconion hereby incorporates by reference all of the allegations contained in the
above paragraphs as if fully rewritten herein. 31.
Adconion had ownership and right, title and possession of the property described
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herein, including but not limited to its trade secret, proprietary information, and business expense
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accounts.
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32.
Defendant converted the property by wrongful acts as described herein and/or
disposed of the property in a manner inconsistent with Adconion’s property rights. 33.
Adconion was damaged by Defendant’s actions.
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SECOND CAUSE OF ACTION
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UNJUST ENRICHMENT
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(Against All Defendants)
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34.
Adconion hereby incorporates by reference all of the allegations contained in the
above paragraphs as if fully rewritten herein. 35.
Defendant received a benefit as described herein, including but not limited to the
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using Adconion’s business accounts and property to establish his competing business, using
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Adconion’s corporate credit card to purchase personal items or other products for his competitive
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business without Adconion’s consent, and submitting fraudulent T&E reimbursement.
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36.
Defendant retained the benefit unjustly as described herein.
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COMPLAINT
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THIRD CAUSE OF ACTION
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BREACH OF DUTY OF UNDIVIDED LOYALTY
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(Against All Defendants)
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37.
Adconion hereby incorporates by reference all of the allegations contained in the
above paragraphs as if fully rewritten herein. 38.
By virtue of his respective position and responsibilities at Adconion, Defendant
owed Plaintiff a duty of undivided loyalty. 39.
Defendant breached this duty by inter alia unlawfully accessing the email
accounts of other Adconion executives, starting a competitive business, misappropriating
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Adconion’s trade secrets, using Adconion’s corporate credit card to purchase personal items or
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other products for his competitive business without Adconion’s consent, and submitting
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fraudulent T&E reimbursement.
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40.
As a direct and proximate result of the Defendant’s actions, as set forth above,
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Adconion suffered damages in an amount yet presently undetermined, but according to proof at
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trial, including all wages and other compensation paid to Defendant during the period in which
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he was performing services for, or in formation of, his competitive business.
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FOURTH CAUSE OF ACTION
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BREACH OF CONTRACT
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(Against Sean Glynn)
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41.
Adconion hereby incorporates by reference all of the allegations contained in the
above paragraphs as if fully rewritten herein. 42.
As alleged above, Defendant executed the Company Property Agreement and the
Company Confidentiality Agreement. 43.
Adconion’s Company Property Agreement and Company Confidentiality
Agreement with Defendant are valid and enforceable contracts. 44.
The Company Property Agreement and Company Confidentiality Agreement
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explicitly limit the use of Adconion’s property solely for the benefit of Adconion and prohibit
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employees from commingling Adconion’s property with their own. The Company Property - 9-
COMPLAINT
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Agreement and the Company Confidentiality Agreement are reasonably necessary to protect the
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legitimate interests in Adconion’s intellectual property, trade secrets, confidential information,
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customer relationships, work force, and good will.
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45.
Adconion fully performed its obligations under the Company Property Agreement
and the Company Confidentiality Agreement. 46.
By virtue of Defendant’s acts and omissions alleged above, Defendant breached
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Company Property Agreement and the Company Confidentiality Agreement by, inter alia, (i)
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using Adconion’s time, resources, trade secrets, and confidential information to form his
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competing business and did so during his regularly scheduled work hours; (ii) continuing to use
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and/or disclose Adconion’s confidential and trade secret information to benefit his competing
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business; (iii) accessing the computer and e-mail files of Adconion’s senior executives; (iv)
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using the corporate credit card for personal use; and (v) deleting all data files on his company-
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issued computer upon resigning.
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FIFTH CAUSE OF ACTION
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MISAPPROPRIATION OF TRADE SECRETS
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(Against All Defendants)
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47.
Adconion hereby incorporates by reference all of the allegations contained in the
above paragraphs as if fully rewritten herein. 48.
At all relevant times, Adconion created and/or was in possession of confidential
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and trade secret information as defined by Cal. Civ. Code Section 3426.1(d), including, without
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limitation, customer and vendor information, sales and profit data, business strategies, product
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development information, technology in development and employee information. Adconion has
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expended great efforts and substantial expense to develop its trade secrets and confidential
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information. Furthermore, the proprietary business and customer information of Adconion
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constitutes trade secrets because Adconion derives actual and potential independent economic
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value from that information not being generally known to the public nor readily ascertainable by
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proper means by other persons who can obtain economic value from its disclosure or use. As set
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forth herein, this information has been the subject of reasonable efforts, under the circumstances, - 10-
COMPLAINT
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to maintain its secrecy.
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49.
is not and was not generally known to Adconion’s competitors in the industry or to the public.
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Adconion’s confidential and proprietary trade secret information described herein
50.
Adconion is informed and believes, and on that basis alleges, that Defendant
violated the California Uniform Trade Secrets Act, Cal. Civ. Code Section 3426 et seq.
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51.
Defendant misappropriated Adconion’s trade secrets by using its trade secrets to
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form Defendant’s competing business, and disclosing Adconion’s trade secrets in furtherance of
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Defendant’s competing business, with Adconion’s consent and having acquired the trade secrets
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by improper means and/or for a purpose not authorized by Adconion.
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52.
Defendant’s misappropriation of Adconion’s trade secrets have caused and
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continue to cause irreparable injury to Adconion for which Adconion has no adequate remedy at
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law.
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53.
As a direct and proximate result of Defendant’s conduct, as set forth above,
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Adconion suffered, and will continue to suffer, actual damages in an amount yet presently
15
undetermined, but according to proof at trial and within the jurisdiction of this court.
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54.
At all times herein, as a further direct, legal and proximate cause of the acts and
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conduct of Defendants herein, each of these Defendants acted with conscious disregard and their
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conduct was willful, wanton, malicious, oppressive, and fraudulent, subjecting Adconion to cruel
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and unjust hardship, harm, damages and losses, and, in doing so, acted in and with conscious
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disregard of the rights and interests of Adconion, justifying an amount of exemplary and punitive
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damages as against Defendant, according to proof and pursuant to Cal. Civ. Code Sections 3294,
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3426.3(c) and 3226.4.
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SIXTH CAUSE OF ACTION
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COMMON LAW MISAPPROPRIATION OF CONFIDENTIAL AND/OR
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PROPRIETARY INFORMATION
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(Against All Defendants)
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55.
Adconion hereby incorporates by reference all of the allegations contained in the
above paragraphs as if fully rewritten herein. - 11-
COMPLAINT
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56.
Adconion owns the confidential and proprietary customer, vendor, business,
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technology, and financial information alleged in this Complaint. Adconion has invested
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substantial time and money in developing its confidential and proprietary information. Adconion
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has expended reasonable efforts to maintain the secrecy of its confidential and proprietary
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information and it derives independent economic value from the information because it is not
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generally known. By misappropriating Adconion’s confidential and proprietary information and
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property as described herein, Defendant has unfairly gained a competitive advantage over
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Adconion.
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57.
The Defendant’s misappropriation of Adconion’s confidential and proprietary
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information has caused and continues to cause irreparable injury to Adconion for which
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Adconion has no adequate remedy at law.
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58.
Adconion is entitled to an injunction restraining Defendant, as well as their
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officers, agents, employees, and all persons acting in concert with them, from using, copying,
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publishing, disclosing, transferring, or selling Adconion’s confidential and proprietary
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information, or any product that is based on or incorporates part or all of such material, and from
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obtaining any commercial advantage or unjust enrichment from their misappropriation of
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Adconion’s confidential and proprietary information.
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59.
As a direct and proximate result of Defendant’s conduct as set forth above,
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Adconion has also suffered, and will continue to suffer, actual damages in an amount yet
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presently undetermined, but according to proof at trial and within the jurisdiction of this Court.
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60.
As a direct and proximate result of Defendant’s conduct as set forth above,
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Defendant has been unjustly enriched and Adconion is entitled to all recoverable damages in an
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amount yet presently undetermined, but according to proof at trial and within the jurisdiction of
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this Court.
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61.
As a further direct and proximate result of Defendant’s wrongful conduct,
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Adconion has been injured, irreparably and otherwise, and is threatened with additional ongoing
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injuries. Upon information and belief, Defendant will be unjustly enriched, and unless
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restrained, will continue to use, divulge, disclose, acquire, and/or otherwise misappropriate - 12-
COMPLAINT
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Adconion’s trade secret and confidential information. Adconion has no adequate remedy at law
2
to fully protect it. If Defendant’s actions go unchecked, they will necessarily diminish the value
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of Adconion’s trade secret and confidential information, diminish Adconion’s goodwill,
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negatively impact customer relationships, and give Adconion a strategic advantage to building
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customer relationships and to exploiting Adconion’s strengths and weaknesses. Adconion is
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threatened with losing customers, technology, vendors, its competitive advantage, its trade
7
secrets, and goodwill, in amounts which may be impossible to determine, unless Defendant is
8
enjoined and restrained by Order of this Court. Because Adconion’s remedy at law is
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inadequate, Adconion seeks preliminary and permanent injunctive relief.
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62.
At all times herein, as a further direct, legal and proximate cause of the acts and
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conduct of Defendants herein, each of these Defendants acted with conscious disregard and their
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conduct was willful, wanton, malicious, oppressive, and fraudulent, subjecting Adconion to cruel
13
and unjust hardship, harm, damages and losses, and, in doing so, acted in and with conscious
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disregard of the rights and interests of Adconion, justifying an amount of exemplary and punitive
15
damages as against Defendant, according to proof and pursuant to Cal. Civ. Code Sections 3294,
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3426.3(c) and 3226.4.
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SEVENTH CAUSE OF ACTION
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VIOLATION OF CALIFORNIA BUSINESS & PROFESSIONS CODE § 17200
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(Against All Defendants)
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63.
Adconion hereby incorporates by reference all of the allegations contained in the
above paragraphs as if fully rewritten herein. 64.
Defendant’s conduct, as set forth above, constitutes “unfair competition” and
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“unfair and fraudulent business practices” as defined under California Business & Professions
24
Code Section 17200 et seq.
25
65.
Defendant’s acts of unfair competition and unfair and fraudulent business
26
practices have caused and continue to cause irreparable injury to Adconion for which Adconion
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has no adequate remedy at law.
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66.
As a direct and proximate result of Defendant’s conduct, as set forth above, - 13-
COMPLAINT
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Adconion suffered, and will continue to suffer, actual damages in an amount yet presently
2
undetermined, but according to proof at trial and within the jurisdiction of this Court.
3
67.
At all times herein, as a further direct, legal and proximate cause of the acts and
4
conduct of Defendants herein, each of these Defendants acted with conscious disregard and their
5
conduct was willful, wanton, malicious, oppressive, and fraudulent, subjecting Adconion to cruel
6
and unjust hardship, harm, damages and losses, and, in doing so, acted in and with conscious
7
disregard of the rights and interests of Adconion, justifying an amount of exemplary and punitive
8
damages as against Defendant, according to proof and pursuant to Cal. Civ. Code Sections 3294,
9
3426.3(c) and 3226.4. PRAYER FOR RELIEF
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WHEREFORE, Adconion requests relief as follows:
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1.
Preliminary and permanent injunctive relief enjoining and restraining Defendant,
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along with their respective agents, employers, attorneys, servants, representatives,
14
successors, assigns, and all persons acting under, in concert, in participation with,
15
or for them from (a) directly or indirectly disclosing Adconion’s trade secrets and
16
confidential information; and (b) committing any other unfair business practice
17
directed towards obtaining for the Defendant the business and customers of
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Adconion;
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2.
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including all Confidential Information of Adconion; 3.
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An Order requiring Defendant to return to Adconion all Adconion property,
An accounting from Defendant of his unjust profits and misuse of Adconion’s trade secrets and confidential information;
4.
A constructive trust for the benefit of Adconion to be imposed upon all funds,
24
assets, revenues, and profits and Defendant has or will derive from his unlawful
25
acts and misappropriation of Adconion’s information and property;
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5.
For general damages in an amount within the jurisdictional limits of this court;
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6.
For special damages against all Defendants, and each of them, in a sum to be
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established according to proof; - 14-
COMPLAINT
EXHIBIT A
EXHIBIT B
