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Canon U.S.A., Inc. v Giordano 2010 NY Slip Op 31733(U) July 1, 2010 Sup Ct, Nassau County Docket Number: 9126-10 Judge: Timothy S. Driscoll Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication.

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SUPREME COURT- STATE OF NEW YORK SHORT FORM ORDER Present:
HON. TIMOTHY S. DRISCOLL Justice Supreme Court
--------------------------------------------------------------------------- x , INC. CANON U.

TRIAL/IAS PART: 22 NASSAU COUNTY
Index No: 9126-

Plaintiff
- against -

Motion Seq. Nos: 1 & 2
Submission Date: 6/14/10

PAUL GIORDANO, MARIO CASTANO and NIKON, INC.,

Defendants.
--------------------------------------------------------------------------- x

The following papers have been read on this Order to Show Cause and this Motion:

Order to Show Cause , Affidavit of Immediacy, Affidavits in Support of E. Pitchford, K. Adams and G. Pavan and Exhibits..................................
Plaintiff's Memorandum of Law in Support.............................................. Affidavit in Opposition of J. Browne and Exhibits.................................... Defendant Nikon s Memorandum of Law in Opposition............................. Affidavits ofP. Giordano, M. Castano, S. Cacace, L. Pellegrino, J. Browne , J. Fowler and D. Silverman in Opposition................................. Affidavit of L. Fox and Exhibits.......................................................................... Defendants Giordano and Castano s Memorandum of Law in Opposition... Notice of Motion, Affidavits of D. Monachino, K. Adams (2),
P. Giordano, G. Pavan (2) and Exhibits.............................................................. Am ended Notice 0 f Motion. ..... .... ....................

Plaintiffs ' Memorandum of Law in Support................................................ Affidavit in Opposition of P. Giordano and Exhibit.................................
Affidavit of J .

Messina........................ ...

Defendant Giordano s Memorandum of Law in Opposition......................... Affidavit of D. Monachino in Further Support and Exhibits...................... Affidavit of K. Adams in Further Support.........................................................
Reply Memorandum of Law in Further Support....

[* 2]

This matter is before the Court for decision on 1) the Order to Show Cause fied
Plaintiff Canon U.

by

, Inc. (" Canon " or " Plaintiff' ) on May 11 2010 and 2) the Motion filed by

Canon on June 2 , 2010 , both of which were submitted on June 14 2010. For the reasons set

forth below , the Cour 1) denies

Plaintiffs Order to

Show Cause in its entirety; 2) denies

Plaintiffs motion in its entirety; and 3) vacates the Temporar Restraining Order issued on
May 11 2010.

BACKGROUND
A.

Relief Sought

In its Order to Show Cause , Plaintiff seeks an Order permitting Plaintiff to 1) engage in expedited discovery; 2) inspect and image all electronic devices , including, but not limited to
removable storage devices

(e.

thumb drives) or all other similar electronic storage devices

Devices ) belonging to , under the control of, accessible to , or operated by Defendant Paul

Giordano (" Giordano ) on which Plaintiff s information , documents , correspondence , materials

e-mails , records and propert of any kind or nature and in whatever form (collectively
Materials ) reside or may have resided; 3) inspect and image all Devices belonging to , under

the control of, accessible to , or operated by Defendant Mario Castano (" Castano ) on which

Plaintiffs Materials reside or may have resided; 4) notice the depositions of the Defendants
upon five (5) days ' written notice; 5) notice the deposition of any non- pary, pursuant to CPLR
9 3106 , upon five (5) days ' written notice; and 6) propound written discovery requests on

Defendants to which Defendants must respond within five (5) days.

In its Motion , Plaintiff seeks an Order 1) entering a judgment of liabilty

against

Giordano based on his alleged spoliation of evidence consisting of Corsair and Google thumb
drives (" Thumb Drives ); 2) directing that all issues to which the Thumb Drives and iStockphoto

images are relevant shall be deemed resolved in this action in accordance with Plaintiffs
3) prohibiting Giordano from opposing any claims , or supporting any defenses , with any physical evidence or testimony in connection with the foregoing information and devices;
4) striking any portion of Giordano s Answer and/or defenses and/or opposition to Canon

claims;

Order to Show Cause in connection with the foregoing information and devices; 5) entering a

judgment of liability in favor of Plaintiff as to the First through Sixth Causes of Action in the
Complaint against Giordano based on his alleged spoliation of evidence; and 6) directing that an

[* 3]

adverse inference instruction shall be given at trial and other proceedings in this matter based on
Giordano s alleged spoliation of evidence.
B.

The Paries '

History

1.

The Allegations in the Complaint

Paragraph one of the Complaint (Ex. 1 to OSC) describes the nature of this action as
follows:

This is an action for: (i) declaratory relief and specific performance of certain
post-employment non-compete , non- disclosure , and non-solicitation provisions

of the Individual Defendants ' respective employment agreements (" Employment Agreements ), including injunctive relief available thereunder , arising from the Individual Defendants ' blatant violation of their Employment Agreements and restrictive covenants with Canon , as well as their common law obligations by, among other things , unlawflly commencing employment with Nikon , a direct competitor of Canon , in direct violation of the narow non-competition provisions ofthe Employment Agreements and ared with confidential and proprietar trade secret information belonging to Canon , (ii) declaratory relief and injunctive relief against Nikon for its unfair competition and knowing tortious interference with contract as a result ofNikon s targeted and unlawfl efforts to gain the advantage of Canon s confidential information, business strategies , and trade secrets related to its eCommerce platform in an attempt to bolster its own foundering eCommerce efforts , by directly and indirectly hiring the Individual Defendants and soliciting other Canon employees involved in and with detailed knowledge of Canon internet marketing and eCommerce business , and (iii) substantial monetary damages against Nikon and the Individual Defendants for misappropriating Canon confidential and trade secret information , tortiously interfering with contracts, unfairly competing with Canon , and being unjustly enriched by systematically soliciting Canon s internet marketing group employees with known employment restrictions and , curently (if not imminently) replicating certain of Canon s unique and proprietar web- based platforms.

The Complaint describes Canon as a provider of consumer , business- to- business , and
industrial digital imaging solutions whose products include cameras , lenses , camcorders

facsimile machines and copiers. Defendant Nikon Inc. ("Nikon ) is described as a direct
competitor of Canon.

The Complaint alleges that Castano worked for Canon from April of 2003 until his resignation on Februar
18

2010. While at Canon , Castano held the positions of Manager in the
Senior Project Manager in the Corporate Information

Systems and Technical Support Division ,

Technology Group and Business Applications and Development Manager., Castano began

[* 4]

working for Nikon in March of2010.

The Complaint furher alleges that Giordano worked for Canon in June of 2006 until his
resignation on Februar 27 2010. While at Canon , Giordano held the positions of Software

Products Marketing Specialist , Associate Printer Marketing Specialist and Associate Internet

Marketing Specialist. Giordano began working for Nikon in or about March 2010.
The Complaint makes specific reference to the following paragraphs of the Employment

Agreements that the Individual Defendants executed (Exs. A and B to OSC): 1) paragraph
titled "Non- Disclosure of Confidential Information " 2) paragraph 8 titled " Maintaining
Records " 3) subparagraphs 1

3

, 5 and 6 of paragraph 9 titled " Obligations After Termination
Pursuant to paragraph 9. 1

and 4) paragraph 11 titled " Specific Performance. "
Agreements , the Individual Defendants agreed that:

of the

For a period of one year after my employment with CANON ends (or for a period equal to the length of my employment with CANON , if shorter), I wil not , directly or indirectly, render services in the geographic region where I performed my duties for CANON (including, where applicable , the United States as the relevant region) if my services would relate to the development , manufactue , marketing, sale merchandising, promotion or maintenance of any products or processes which are similar to , or compete with , (a) products or processes of CANON with which I worked at any time during the last two years of my employment with CANON , or (b) products or processes about which I acquired CONFIDENTIAL INFORMATION through my employment at any time during the last two years of employment with CANON.

The Definitions section of the Employment Agreements ("Agreements ) defines
Confidential Information" as follows:
CONFIDENTIAL INFORMATION" means all information of any tye or kind including know-how and INTELLECTUAL PROPERTY rights , whether of CANON or of others , including without limitation entities related to CANON and respective customers and suppliers , that is (1) disclosed to or known to you or made or conceived by you (whether solely by you or jointly with others) as a consequence of or through your employment with CANON , (2) not generally available to the public (or available only as (a) result of an unauthorized disclosure), and (3) treated by CANON as confidential during the time of your employment , regardless of whether or not such information is a "trade secret" as defined by law. In addition to technical information the term " CONFIDENTIAL INFORMATION" shall also include materials , ideas and know-how relating to the development , manufacture , maintenance , packaging and marketing of products including without limitation marketing policies and information , types and kinds of products sold or to be sold , relationships with and lists of customers, distribution procedures , pricing discounts and policies and other

[* 5]

pricing information , supplier information and vendor information , and any other financial information whether about CANON , entities related to CANON , or their respective customers. The Definitions section of the Agreements defines "Intellectual Propert" as follows: INTELLECTUAL PROPERTY" means all INVENTIONS , DESIGNS COPYRIGHT WORKS , MASK WORKS AND TRADEMARKSERVICE MARK CONCEPTS (1) made or conceived by you (whether solely by you or jointly with others), 2) which relate to the actual or anticipated business of CANON , or to the actual or anticipated research or development of CANON or are suggested by or as a result (from) any task assigned to you on behalf of CANON , and (3) which you made or conceived from the time you became employed by CANON until you leave , whether or not made or conceived during normal business hours and whether or not you used CANON resources.

The Complaint contains nine (9) causes of action: 1) a request for a declaratory

judgment , as to Giordano and Castano (" Individual Defendants ) that the restrictive covenants in
the relevant Employment Agreements are enforceable , the Individual Defendants breached those

Employment Agreements and injunctive relief is waranted , 2) a request for specific
performance and injunctive relief against the Individual Defendants in light of their allegedly

improper conduct including the misappropriation of Canon s confidential and trade secret
information , 3) misappropriation oftrade secrets against all Defendants , 4) breach of contract
against the Individual Defendants , 5) conversion against Giordano , 6) breach of the duty of

loyalty against the Individual Defendants , 7) unfair competition against Nikon , 8) unjust

enrichment against Nikon , and 9) tortious interference with the Individual Defendants

Employment Agreements against Nikon.
2.

The Temporar Restraining Order

On May 11 , 2010 , the Cour granted some , but not all , of the temporar injunctive relief

requested by Plaintiff. That temporar restraining order ("TRO" ), which has been in effect since
its issuance , directed that , pending the hearing and determination of Plaintiff s Order to Show
Cause , 1) Defendants and all persons acting in concert with them are restrained and enjoined

from directly or indirectly disclosing, reproducing, or using any confidential , proprietar and/or

trade secret information of any kind , nature or description belonging to or removed from Canon
including, but not limited to ,

information known to have been taken by Giordano from Canon

computer system ,

such additional similar information revealed through discovery in aid of this

g.,

[* 6]

application , as well as information relating to Plaintiff s web and eCommerce platforms
services , developments , processes , inventions , source codes , technology, products , software

business and financial information , and marketing and pricing strategies and techniques;
2) Defendants and all persons acting in concert with them are directed to immediately deliver

copies to Plaintiff of all information , documents , correspondence , materials , emails , records and
property of any kind or nature whatsoever and in whatever form , if any, including reproductions
of any aforementioned items (including copies thereof and computer records) obtained by the

Individual Defendants during their employment with Plaintiff and belonging to Plaintiff
(collectively referred to as "

materials ), which are within the Defendants ' possession , custody or

control; 3) Defendant Giordano is to immediately produce for inspection and imaging electronic

copies of (i) UT163 USB2 Flash Storage USB device serial number 0805130472962c&0 , (ii) a
Canon MX700 series USB device serial number 7 &32d6fdce&0& 1 00 11 E&O , and (iii) Corsair

Flash Voyager USB Device serial number 38E59B5439EOCl&0 , to verify the use , access
disclosure , printing, copying, and return of Plaintiffs
material ,

including, but not limited to , all

confidential , proprietar and/or trade secret information belonging to Plaintiff; 4) Defendant

Castano is to immediately produce for inspection and imaging electronic copies of all electronic
devices , including, but not limited to , removable storage devices
(e.

thumb drives) or all other

similar electronic storage devices (collectively " Devices ) belonging to , under the control of accessible to , or operated by Castano , to verify the use , access , disclosure , printing, copying, and
retur of Plaintiffs material ,

including, but not limited to , all confidential , proprietar and/or

trade secret information belonging to Plaintiff; 5) Defendants and all persons acting in concert with them are temporarily restrained and enjoined from directly or indirectly hiring (or

attempting to hire), recruiting, contacting, soliciting, encouraging or inducing employees of
Plaintiff (and its affiliates) to terminate their employment with Plaintiff in order to work for
Nikon where such Canon employees are subject to employment agreements containing
in the employment agreements attached as Exhibits A and B of the Affidavit of Ellen Pitchford (" Pitchford" ); 6) Giordano and all persons acting in
contained

restrictive covenants of the tye

concert with him are , within two days of the TRO , temporarily restrained and enjoined from

directly or indirectly using any images obtained from Canon s iStockphoto pre-paid account
including, but not limited to ,

Giordano

s personal business websites

ww. wiifitroutine. com and

ww. moiera. com; and 7) all paries and persons acting in concert with them shall preserve , and

[* 7]

not destroy, damage or alter in any way, all potentially relevant evidence in this action
including, but not limited to

, any of Plaintiffs material residing on the Defendant' s business or

personal computer(s) and any and all Devices , belonging to , under control of, accessible to , or

operated by the Defendants. Defendants shall also preserve , and not destroy, damage , or alter in
any way, all emails in any and all of the Defendants ' email accounts , including but not limited to
any personal email accounts , which refer to , relate to and/or contain Plaintiffs
kind.
3.

material of

any

The Submissions Regarding: Plaintiffs

Order to

Show Cause and Motion

Plaintiff provides an Affidavit in Support of Pitchford dated May 7 , 2010 in which she
affirms as follows:

Pitchford is Canon s Director ofInternet Marketing and eComrerce and worked directly
with the Individual Defendants until their resignations. Pitchford affrms that the Individual

Defendants worked with and were privy to Canon s trade secrets , proprietar systems and web-

based platforms including, but not limited to , Single Sign- On Platform and Canon Image

Gateway. She avers , furter, that these systems and platforms were the result of Canon
extensive research and testing, and provided a competitive edge to Canon.

Pitchford asserts her belief that Nikon does not have systems or capabilties in place that

are similar to those described above. Pickford affirms that , while Nikon has a website on which
it advertises its products , it does not have an eCommerce site that can efficiently handle direct

sales of its products. In support of these assertions , Pitchford attests to conversations she had a
year earlier with a former colleague named Lucy Pellegrino ("Pellegrino ) who is now employed

by Nikon. Pitchford affirms that Pellegrino advised Pitchford that she was responsible for
developing Nikon s eCommerce strategy and asked Pitchford if she could "pick (her) brain
(Pitchford Aff. at

8) as to how to develop Nikon s eCommerce. Pickford provides an e-mail

dated March 6 2009 from Pellegrino to Pickford (Ex. C to Pickford Aff.) in which Pellegrino
sought Pickford' s

advice in developing an " e-store

strategy. " This e-mail includes the sentence

Obviously I am not looking for any confidential information/or to create any conflcts , but if
you feel you can share any learnings (sic), I would GREATLY (emphasis in original) appreciate
it. "

Pickford also alleges that Pellegrino suggested that Pickford work for Nikon, which
Pickford "took... as a sign that Nikon was stil having difficulties setting up the eCommerce

[* 8]

platform and looking for someone with direct experience to expedite the development and
launch process " (Pickford Aff. at

11). In support of this assertion , Pickford provides a copy of

an e-mail dated June 3 , 2009 (Ex. D to Pickford Aff. ) from Pellegrino to Pickford which read "

have just listed this job on LinkedIn and thought you or someone you know might be a good fit.

Feel free to forward it on to others. "
difficulties experienced by Nikon.

Pellegrino

made no reference in this e-mail to any

Pickford also affirms inter alia that 1) at least eight (8) ofthe twelve (12) curent
Internet Marketing and eCommerce team members were contacted by Pellegrino and/or a

Canon

recruiter working on behalf of Nikon to work for Nikon in similar positions to those held at
Canon; 2) Pellegrino , as a former Canon employee , should have known about the restrictive

covenants in the Agreements; 3) as a result of their employment with Canon , the Individual

Defendants have extensive knowledge of Canon s eCommerce and internet marketing platforms
and future marketing plans; 4) even if the Individual Defendants do not attempt to replicate
Canon s systems , they will use the information they leared while at Canon to improve and/or

modify Nikon s eCommerce platform; 5) in light of the proprietar nature of Canon s platforms
and systems ,

Canon takes steps to secure that information which include requiring outside

vendors to sign non- disclosure agreements , retaining most information on password-protected
servers , requiring usernames and passwords for access to computer terminals , and locking

computers after a period of nonuse; and 6) Pickford believes , in par based on the wording of his

LinkedIn site (Ex. 0 to Pickford Aff. ), that Castano has been working for Nikon in " near
identical roles that he performed at Canon " (Pickford Aff. at
59).

Plaintiff also provides an Affidavit in Support of Kevin Adams ("Adams ) dated May 7
2010 in which he affirms as follows:
Adams is a computer forensic examiner for Protek International , Inc. ("Protek" ), a
computer forensic , advisory services , investigations and electronic discovery firm headquarered
in Ilinois.

Adams has been involved in the engineering and Information Technology field since

1979 and has specialized in computer forensics for the past three (3) years. Adams was retained
by Plaintiff s counsel to conduct a forensic examination of a forensic image of a hard drive from
a computer system that , upon information and belief, was assigned to Giordano (" Giordano
System ). Adams attempted to determine user activity on the Giordano System between

Januar 1 and Februar

28

2010.

[* 9]

Adams concluded that , on two days in the month prior to Giordano s resignation and on

the last day of his employment , a Corsair thumb drive was connected to his System.
Specifically, on Februar 26 2010 , the day before Giordano s resignation, a Corsair Flash
V oyager was connected to the Giordano System , and Adams determined that eleven (11) folders

or files were present on this device. Adams concluded that the eleven (11) LNK files pointing to
the eleven (11) folders and files accessed from the Corsair thumb drive were " specifically
targeted for deletion and wiping, presumably to avoid detection through forensic recovery
(Adams Aff. at

18). Adams bases this conclusion on several factors including the fact that the

11 LNK fies pointing to the Corsair device were not found where other LNK files were found
but rather were recovered from another , less accessible location.

Adams also affrms that , during his examination of the computer , he observed that a
software application called " Filerenamer
Basic "

had been present on the Giordano System but

was uninstalled on Februar 26 2010. Filrerenamer can be used for large scale alteration of

information about computer fies

and folders ,

including fie

and folder

names and text. Although

there are legitimate uses for this application , it may also be used " to thwar a subsequent forensic
examination to investigate user activity on a computer " (Adams Aff. at
24).

Adams concludes that his examination revealed suspicious user activities on the

Giordano System based on 1) evidence of the destruction of the 11 LNK files pointing to folders
and fies located on the Corsair device , and 2) the presence and subsequent removal of the

Filerenamer application , which Adams affirms was not authorized by Canon. Adams also
submits that his observations suggest that sensitive information was removed from the Giordano

System through the use of the Corsair device.

Plaintiff also submits an Affidavit in Support of Gar Pavan (" Pavan ) dated
May 10 2010 in which he affirms as follows:

Pavan affirms that he is the Senior Manager of Canon s CIG Internet Marketing Division Director and that he directly supervised Giordano durng his employment with Canon in 2009.
While with Canon , Giordano used a " highly advanced graphic design/developer computer
(Pavan Aff. at

3) that was specifically acquired for Giordano , and that only Giordano used. In

Pavan s experience , Canon computers require a system access password , and Giordano would be

the only individual with knowledge of his own password. In addition , each user is required by
the Information Technology department to change their login password periodically. Canon

[* 10]

requires its employees to keep their passwords safe , and to attend a course regarding the
prevention of security breaches.

As par of his duties at Canon , Giordano had access to Canon s iStockphoto account which was used to purchase images for its online marketing campaigns. Giordano researched
iStockphoto and purchase images through a pre-paid Canon account " and appl(ied) these images
into the marketing creative (sic)" (Pavan Aff. at

7).

As a result ofProtek' s investigation of the Giordano System , which suggested
Giordano s misuse of Canon s iStockphoto account for his own puroses , Pavan researched

Canon s download log from iStockphoto. Pavan affirms that he discovered that Giordano had

downloaded or purchased many images from the Canon iStockphoto account that were not par
of any planed marketing campaigns. Pavan also determined that many of these images were
downloaded or purchased outside Canon s normal business hours. Pavan concluded that many

of these downloaded images were not par of any Canon marketing effort. Pavan affirms that Giordano used these downloaded images on his own personal business
websites

ww. wiifitroutine. com

and

ww. moiera. com.

Pavan provides a list of the files

downloaded using Canon s account (Ex. U to Pavan Aff. ) with notations highlighting the nonCanon related downloads , and printouts of personal websites managed by Giordano with

notations highlighting Giordano s improper use of these fies.

With respect to Adams ' conclusion that a Corsair thumb drive was connected to
Giordano s System in the month preceding his resignation , Pavan affirms that Canon does not

issue thumb drives to its employees , and Giordano never tured a thumb drive in to Canon prior

to his deparure. Pavan knows that Giordano possessed his own personal thumb drive.
Defendants submit an Affidavit in Opposition of John P. Browne ("Browne ) dated May 11 2010 in which he affirms as follows:
Browne is Vice President and General Counsel ofNikon and has worked for Nikon since

1978. Brown submits that Plaintiffs

Order to

Show Cause and supporting papers make

erroneous factual assertions and seek injunctive relief that is improperly broad and would require
Nikon to terminate the employment of the Individual Defendants. Browne affrms inter alia

that 1) Nikon has not specifically targeted Canon employees for hiring; the Individual

Defendants responded to a general advertisement posted on the website LinkedIn; 2) on learing
of the Agreements , Nikon spoke with the Individual Defendants who advised Nikon that they

[* 11]

a) had consulted with counsel; and b) have not disclosed any property or trade secret of Canon

during their employment with Nikon; 3) the Individual Defendants , through their attorneys
cQnfirmed to Canon that they have not disclosed , or been asked to disclose , any Canon propert

or trade secret or other Canon information during their employment with Nikon; 4) in response

to Canon s April 15 , 2010 inquiry regarding the Individual Defendants ' employment , Nikon sent
a letter to Canon dated April 23 , 2010 (Ex. K to Browne Aff. ) advising Canon inter alia that

a) Nikon did not solicit the Individual Defendants for employment; b) Nikon was unaware of the

Agreements until March 17 , 2010 when it received copies of a March 16 , 2010 letter from Canon

to the Individual Defendants (Ex. C to Browne Aff.; c) upon learing of the Agreements , Nikon
advised the Individual Defendants to speak with independent counsel to determine whether their
employment with Nikon would breach any agreement they had with Canon; d) counsel for the

Individual Defendants subsequently advised Nikon that the Individual Defendants ' employment

with Nikon complies with their obligations to Canon; and e) Nikon was prepared to meet with

Canon "to discuss the relevant facts in an effort to reach an amicable resolution of this matter(;)"

and 5) Canon has not responded to Nikon s April 23 offer , or to Browne s subsequent

invitations to Plaintiff s counsel , to discuss resolution of these issues. Browne submits that
Canon s failure to respond to Nikon s offer to meet to discuss these issues undermines its claim

that it faces immediate and irreparable har without injunctive relief.
Browne also describes Adams' forensic examination ofthe Giordano System as a " post-

hoc attempt to create the ilusion of immediacy" (Browne Aff. at p.3). Browne notes that Canon
did not submit the Giordano System for analysis until April 29, 2010 and the analysis was not

completed until several days later. Browne submits that this is fuher proof of Canon
uneasonable delay in bringing this application , and its effort to create immediacy where none

exists.

In support of Browne s assertion that Nikon was unaware of the Agreements , Browne

provides copies of the Individual Defendants ' employment applications (" Employment
Applications ) with Nikon (Exs. A and B to Browne Aff. ) dated June 16 2009 (Castano) and
Januar 12 2010 (Giordano). These Applications reflect that

Castano and Giordano answered

" to the question whether they had any agreement with their curent and/or past employers

that would restrict , limit or prevent them from being employed by Nikon and/or performing any

of the fuctions of the positions for which they were applying.

[* 12]

On March 22

2010 , in consultation with their attorneys , the Individual Defendants

signed documents in which they acknowledged inter alia that 1) they had not been requested to
disclose or use , have not disclosed or used and would not use or disclose to any third par,

including Nikon , any confidential and/or proprietar

information of

Canon acquired through

their employment with Canon; and 2) they believed that they were in compliance with the

restrictive provisions in the Agreements , including the limitation on their performance of work

in geographic areas where they performed work for Canon. These acknowledgments are
anexed to Brown s Affidavit as Exhibits F and G.

With respect to their Motion for sanctions for alleged spoliation of evidence , Plaintiff

provides Affidavits in Support of Adams and Pavan, two of which were previously submitted
and are outlined above , as well as an Affidavit of Giordano submitted in connection with the
TRO.

In his Supplemental Affidavit dated May 25 2010 , Adams reaffirms the statements in his
May 20 , 2010 Affidavit, outlined
supra.

He supplements that prior Affidavit by clarifying that a

Canon printer , known as an MX700 , should be included in the list of USB storage devices

described in his prior Affdavit. Adams suggests that this printer , which allows for storage
devices and flash cards to be attached , can be used as a means through which data from a system

can be transferred to an external storage device.

In his Affdavit dated May 19 2010 , Pavan addresses Plaintiffs

application for sanctions

based on Giordano s alleged spoliation of evidence , including the personal thumb drives that

Giordano allegedly used improperly in his System. Pavan reasserts statements contained in his
prior Affidavit , including that 1) Canon does not issue thumb drives to its employees; and

2) Pavan has personal knowledge that Giordano owned his own personal thumb drives while he
worked at Canon.
As par of the TRO , the Court directed Giordano to produce certain thumb drives for
inspection by Canon. Pavan expresses his skepticism regarding a letter from Giordano s counsel

to Canon s outside counsel (Ex. B to Pavan Aff. ), written after the issuance of the TRO , in which
Giordano s counsel stated inter alia that Giordano did not possess , and did not know whether

he ever possessed , the devices that he was directed to produce. Pavan suggests that the Cour
should reject Giordano s claim that he does not possess the thumb drives because 1) it is not
credible that Giordano , a "technically advanced person" (Pavan Aff. at

9), would be unable to

[* 13]

locate the thumb drives less than three months after his resignation from Canon; and 2) Canon

sent a letter to Giordano on March 16 2010 (Ex. C to Pavan Aff. ) regarding his possible

violation of the Agreement which "place(dJ him on notice that he was obligated to maintain all
potentially relevant information , including his thumb drives "
(Pavan Aff. at,- 9).

Although that

letter does make reference to Giordano s obligations to Canon under his Agreement , it does not

contain the explicit direction suggested by Pavan. Pavan also notes that, by letter dated
May 13 2010 (Ex. D to Pavan Aff. ), Canon s outside counsel asked Giordano to delineate all

thumb drives in his possession and account for any thumb drives he was unable to locate , and
characterized Giordano s claimed inability to locate the thumb drives as " gamesmanship.

Pavan also outlines observations he made that led him to conclude that Giordano had

violated the TRO including 1) Pavan determined that Giordano

ww. wiifitroutine. com website

was stil active and contained assets purchased from the Canon iStockphoto account. Pavan
submits that " (wJhile it is possible that Giordano repurchased these images at his own expense
after he left Canon , there is no doubt he purchased them without authorization while employed at

Canon" (Pavan Aff. at,- 12); 2) Pavan obtained screen shots from iStockphoto showing the last

six months of activity which reflected the use of three different Internet Protocol (" IP"

addresses on twelve different downloads between Februar

26 ,

2010 and April 14 , 2010; and

3) two of the three IP addresses were not Canon IP addresses and reflected the downloading of

images to Lindenhurst and Melvile , New York which are the cities in which Giordano lives and
works. Pavan concludes

that Giordano s 1) purortedly implausible claim that he does not
use of Canon

possess the thumb drives , 2) allegedly unlawfl

s iStockphoto account after his

resignation from Canon and 3) failure to remove iStockphoto images acquired through Canon
account from his websites , all demonstrate that Giordano is attempting to avoid discovery of

items that he impermissibly removed from Canon.

Defendants submit Affidavits in Opposition of Giordano , Castano , Stephanie Cacace
Cacace ), Pellegrino , John P. Browne (" Browne ), Jonathan P. Fowler ("Fowler ) and

Douglas Silverman (" Silverman
In his Affidavit dated May 21 2010 , which addressed certain provisions of the TRO
Giordano affirms,

inter alia that 1) while employed at Canon , he was directed to create an

account at iStockphoto. com , an online business that maintains an inventory of stock

photographs; 2) while working from home on a Canon assignment , he accessed the Canon

[* 14]

iStockphoto account on his home computer , resulting in the Canon usemame and password

being saved on his home computer; 3) he recently became aware that while he was using his

home computer to access the iStockphoto site for his own puroses , iStockphoto logged him into
the Canon account instead of his own personal account; 4) none of the photographs inadvertently

purchased through Canon s account were used for his employment with Nikon; 5) Giordano has
not disclosed , reproduced or used any confidential or trade secret information of Canon since he
left Canon , and does not possess any Materials of Canon; 6) while working for Canon , Giordano

obtained several thumb drives which he , like many of his Canon colleagues , used for puroses
including the transporting of large image files from one Canon computer to another; 7) he has
searched for but canot locate the Google and Corsair thumb drives that he purchased while

working for Canon , but believes that these drives contained no Canon information; 8) he has
and agrees to produce , the Verizon Fios thumb drive that he purchased which also contains no

Canon information; 9) he gave the Lexar thumb drive to his wife , a psychologist , who has stored
confidential patient information on this thumb drive which contains no Canon information;
10) the Canon MX700 series USB device to which the TRO refers is a printer which , along with
other computer-related items , Giordano tured over to Pitchford on his last day of employment

with Canon; and 10) with the exception of the iStockphoto images discussed above , for which
Giordano offers to reimburse Canon , he has not retained any Canon propert since his

resignation from Canon.

In his Affidavit in Opposition dated June 9 , 2010 , Giordano affirms inter alia that 1) upon beginning his employment with Canon in 2006 , Giordano was required to sign
numerous forms , including the Agreement , prior to commencing his employment with Canon;

2) Canon did not advise Giordano that he was signing a non-compete agreement or restrictive

covenant which Giordano describes as " buried within the Confidentiality Agreement" (Giordano
Aff. at

7); 3) Giordano believed that the Agreement was focused on the confidentiality of
4) no

Canon s intellectual propert;

Canon representative provided Giordano with a copy of the

Agreement or advised Giordano that there were restrictions on Giordano s employment upon his

deparure from Canon; 5) Canon has " vastly overstated (Giordano s) role as an Associate in the

Internet Marketing Group and (his) knowledge of Canon s alleged trade secrets and confidential information; " 6) Canon s eCommerce website and structue were already in place prior to
Giordano s employment with Canon and Giordano s primar tasks were to make aristic changes

[* 15]

to and modify the content of the website; 7) during his employment with Canon , Giordano had

no responsibilities with respect to the Single Sign- On Platform , SQS Repair System , or ECP
System; 8) prompted by his dissatisfaction with his employment at Canon , Giordano sought

other employment and located a public job posting for an eCommerce Graphic Designer at
Nikon on the website LinkedIn , a professional networking website of which he is a basic

member; 9) after responding to this job posting, Giordano was interviewed by several Nikon
representatives , including Cacace and Pellegrino; 10) during those interviews , Giordano did not

disclose any confidential information about Canon or discuss its future activities; the interviews
focused on Giordano s qualifications and abilities to perform the duties of a graphic designer at

Nikon; 11) Giordano believed that he answered truthfully when he stated on the Employment

Applications that there were no restrictions preventing his employment at Nikon; and
12) Giordano s responsibilities at Nikon are different than they were at Canon.

Giordano outlines the differences in his employment at the two companies , which include
1) at Nikon , Giordano provides input into the graphics and visuals ofNikon s developing

eCommerce platform; at Canon , Giordano provided no such input because the design of the

website was completed before he joined Canon s Internet Marketing Group; 2) at Nikon
Giordano assists in the graphic design and construction of the user interface of the eCommerce
site; at Canon, Giordano could not provide such assistance because the user interface had been

established prior to his joining Canon s Internet Marketing Group; and 3) at Nikon , Giordano

interacts with the vendor retained by Nikon to assist in constrcting its eCommerce site; at
Canon , Giordano never had occasion to meet with a vendor because the website was already
built.

Giordano affirms that his knowledge and performance of his job responsibilities at Nikon are not based on any confidential information obtained during his employment with Canon.
Giordano avers ,

fuher , that he has not disclosed any confidential information or trade secrets of

Canon during his employment at Nikon , and will not make any such disclosure in the futue.
Finally, Giordano affirms that any injunctive relief that results in the loss of his employment at

Nikon wil have a devastating effect on his family, for whom he is the primar breadwinner.
Since the inception of this lawsuit , he has pursued alternative employment but has been unable

to secure ajob with a different company.
In his Affidavit in Support dated June 9 , 2010 , Castano reaffirms the statements made by

[* 16]

Giordano regarding the circumstances of signing the Agreement and the fact that no Canon

representative ever orally advised him of post-employment restrictions. Castano , like Giordano
submits that Canon has overstated the importance of his role at Canon. Castano affirms that his

primar responsibilitiy for the last two years of his employment were maintenance and support
of Canon s Service , Quality, Speed Repair System (" SQS Repair System ) and the Electronic Claims Processing System (" ECP System ), both of which were " legacy" systems (Castano Aff.
at

12) because these systems are no longer supported by the manufacturer that developed them

and the underlying computer language for these programs is now obsolete.

Castano also affirms that he was not involved in high- level or marketing strategies; he
simply ensured that these strategies were implemented in accordance with management'

instructions. He denies the allegations that he attended a marketing presentation in the sumer
of 2009 , or has detailed knowledge of Canon s expansion of its Ecommerce technology or its
strategic marketing plans. Castano denies knowledge of any Canon trade secrets , and affirms
that the Single Sign- On Platform , B2C Web Platform , Canon Image Gateway, SQS Repair

System and ECP System are " simply Canon s version of widely known business concepts in the
eCommerce community" (Castano Aff. At

19). By way of example , the B2C Use Cases for

Canon s website , or any website , can be obtained by anyone with an internet connection by

clicking through all the pages on its website and observing the links among the site s various pages.
Like Giordano , Castano affirms that his responsibilities at Nikon are different than those
at Canon. Examples of work that he performs at Nikon that he did not perform at Canon

include: I) creating a new virtual warehouse in connection with the new eCommerce store; and
2) developing tables to determine how much to charge customers for shipping. Castano also avers that he does not believe that he possesses any trade secrets or

confidential information but , even if he is in possession of such information , he has never

disclosed this information to Nikon. Castano has never discussed his Canon work with Nikon
personnel , and has never used information from Canon in performing his work for Nikon.

Castano affirms that during his exit interview prior to leaving Canon , he advised his
interviewer that he was leaving Canon because he had been passed over for promotion several
try to convince Castano to stay, or offer to renegotiate his salary, and made no mention of Castano s post-employment obligations
times and did not see a future there. The interviewer did not

,"

[* 17]

to Canon. The interviewer did not ask Castano about thumb drives , and Castano avers that
nearly all IT personnel possessed thumb drives.
Like Giordano , Castano submits that Canon has exaggerated the importance of his

position at Canon and outlines his disagreements with Pitchford' s description of his
responsibilities. Castao affirms that injunctive relief that prevents his employment at Nikon
wil have a

devastating effect on his family, for whom he is the primar

breadwinner , and his

parents whom he supports. Castano also submits that Nikon would suffer injur if the Cour
grants injunctive relief because Castano s absence may affect Nikon s ability to have its website
operating in time for the holiday shopping season.

Pellegrino and Cacace also dispute many of Canon

s allegations regarding,

inter alia

1) Nikon s need for assistance in developing an eCommerce platform, 2) Nikon s knowledge of

the restrictive aspects ofthe Agreements , and 3) Nikon s intention to target Canon employees for
employment.

Browne , Vice President and General Counsel ofNikon , and Douglas Silverman , General

Manager of Human Resources ofNikon , dispute certain Canon claims in its Responses to
Nikon s First Set ofInterrogatories (Ex. A to Fox Aff. ).
Specifically,

Canon asserted in its

Response to Interrogatory Number 14 that Robert Rothschild (" Rothschild" ), Canon s Director
of Compensation and Benefits

contacted Nikon employee Mr. Silverman in or about December
Silverman admits speaking

2009 to inform Nikon of the Individual Employees restriction. "

with

Rothschild in December of 2009 , but affirms that during that conversation 1) Silverman disputed
Rothschild' s suggestion that Nikon was targeting Canon employees; 2) Rothschild never

mentioned the Agreements; and 3) Rothschild never said that Nikon s recruiting efforts would

pose any non-compete/confidentiality issues or lead to a breach of the Agreements. Silverman
notes , further , that Plaintiff has not submitted an Affidavit of Rothschild regarding this

conversation. Silverman affrms that he first became aware of the Agreements on or about
March 17

2010.

Fowler , a Senior Regional Practice Leader for the Computer Forensics practice of First

Advantage Litigation Consulting, outlines several weaknesses he perceives in the methodology
used by Adams in reaching the conclusions set forth in his May 7
2010 Affdavit. Those

include 1) Adams ' failure to describe the maner in which the original forensic image of the

Giordano System was created , 2) the lack of information regarding which personnel had access

[* 18]

to the Giordano System subsequent to his resignation , 3) Adams ' temporal limitation of his
examination which may have resulted in his failure to consider activity on the System by other
Canon personnel , and 4) Adams ' failure to explain the manner in which he conducted the

examination ofthe LNK files. Fowler submits that the facts described by Adams do not suggest
the targeted destruction of fies

by Giordano or the suspicious or improper use of the Giordano

System.

In his Affidavit in Furher Support dated June 9 , 2010 , Adams disputes alleged
misstatements by Defendants and reaffrms his opinion that Giordano intentionally destroyed
evidence of his activities on the System.
C.

The Paries '

Positions

Plaintiff submits that it has demonstrated its right to the relief sought by establishing,
inter alia that 1) while employed at Canon , the Individual Defendants were directly involved in

the development and support of Canon s eCommerce and internet marketing platforms and
eCommerce business; 2) while employed at Canon , the Individual Defendants leared
information regarding Canon s marketing plans; 3) the Individual Defendants signed the

Agreements which limit their future employment in a reasonable maner; 4) Nikon was

aware of

the Agreements , including the restrictive covenants therein , prior to hiring the Individual

Defendnats; 5) Nikon targeted Canon employees , including the Individual Defendants , to assist

Nikon in developing its eCommerce platform which was inferior to Canon s; 6) Giordano
intentionally destroyed computer files , installed a tool assigned to avoid detection by a forensic
examiner , retained Canon information on several thumb drives and misappropriated fies
using

Canon s iStockphoto account; and 7) without injunctive relief, the Individual Defendants will

divulge Canon s confidential and proprietar information to Nikon , resulting in the irreparable

harm of Canon s loss of goodwil. In light of the foregoing, Plaintiff contends that it has

demonstrated its right to injunctive relief by establishing a likelihood of success on the merits
irreparable har without the requested injunctive relief and a balancing of the hardships

weighing in Plaintiffs favor. Plaintiff also submits that , under the circumstances , the Cour
should order expedited discovery.

Plaintiff also submits that , in light of Giordano s inability to produce two of the thumb
drives based on his claimed lack of possession of those items , the Cour should impose

sanctions. Plaintiff argues that , in light of 1) Giordano s knowledge of Canon s claims on

[* 19]

March 16

2010 2) Giordano s use of the Corsair USB drive on the last day of his employment

with Canon and 3) the fact that " Giordano should reasonably have anticipated future litigation
and preserved all relevant data and information because he knew he was resigning to work for a
competitor , Nikon , Inc. , and that this competing position was in violation of the covenant not-to-

compete contained in his Employment Agreement" (P' s Memorandum of Law at p. 8), the Court

should impose the sanctions outlined in Plaintiffs motion. Alternatively, Plaintiff argues that

the Cour should draw an adverse inference against Giordano at trial.
Nikon submits that the Cour should deny Plaintiffs application for injunctive relieffor
reasons including 1) Canon s failure to file this application for over eight weeks after learng of

Nikon s employment of the Individual Defendants demonstrates that Canon is not in danger of
immediate har without injunctive relief; 2) the restrictive covenant " buried" in the Agreements
(Nikon s Memorandum of Law at p. 2) is unenforceable because it is uneasonably long in

duration and broad in geographic scope; 3) Canon has not demonstrated Nikon s knowledge of
the Agreements prior to its hiring of the Individual Defendants , and the submissions are more
consistent with the conclusion that Nikon did not know about the Agreements prior to employing

the Individual Defendants; 4) Canon has failed to establish that the alleged trade secrets are , in
fact , trade secrets , and the submissions suggest that the information at issue is readily available

and frequently used on numerous websites; 5) Nikon s hiring of the Individual Defendants does
not constitute unfair competition; and 6) a balancing of the equities favors Nikon because its loss

of the Individual Defendants would affect Nikon s abilty to launch its eCommerce initiative , the

public wil lose the opportunity to choose among competing providers and the Individual
Defendants s ability to earn a livelihood wil
be adversely affected ,

while Canon has not

demonstrated that Defendants have engaged in conduct injurious to Canon. Giordano and
Castano join in the arguments ofNikon in opposing Plaintiffs application.
With respect to Canon s application for sanctions in connection with the alleged
spoliation of evidence , Giordano submits that he has not negligently or intentionally spoiled any

evidence in this matter. Giordano submits that he first leared of Canon s request for evidence
more than two weeks after his last day at Canon. Giordano contends that he has been
cooperative in attempting to locate the thumb drives as demonstrated by 1) his search of his

home and personal belongings to locate all Devices in his possession , 2) his preparation of an
affidavit describing the Devices he used while employed at Canon , 3) his production of a thumb

..

[* 20]

drive and external hard drive to Canon s forensic experts for examination , and 4) his offer to
reimburse Canon for stock photos inadvertently purchased on its account. Giordano submits

that , through his Affidavit , he has satisfactorily explained his use of the System prior to his

deparure from Canon and established that he did not improperly remove Canon information
from that System. Giordano also argues that Canon has not demonstrated any prejudice
by the

loss of certain thumb drives because 1) the lost thumb drives contained only personal photos and
other non- Canon material; and 2) Nikon did not obtain or use the thumb drives. In light of the

foregoing, Giordano submits that the Cour should deny Canon s application for sanctions.

RULING OF THE COURT
A.

Standards for Preliminary Injunction

A preliminar injunction is a drastic remedy and wil only be granted if the movant
establishes a clear right to it under the law and upon the relevant facts set forth in the moving
papers.

Wiliam M Blake Agency, Inc. v. Leon 283 A.D. 2d 423
35 ,

424 (2d Dept. 2001);

Peterson

v. Corbin 275 A.D. 2d

36 (2d Dept. 2000). Injunctive relief wil lie where a movant
unless the

demonstrates a likelihood of success on the merits , a danger of irreparable har
injunction is granted and a balance of the equities in his or her favor.

Aetna Ins. Co. v. Capasso
Merscorp,Inc.

75 N. Y.2d 860 (1990);

WT. Grant Co.

v.

Srogi 52 N. Y.2d496 , 517 (1981);
Neos v. Lacey,

Romaine 295 A.D. 2d 431 (2d Dept. 2002);

291 A.D. 2d 434 (2d Dept. 2002).

The decision whether to grant a preliminar injunction rests in the sound discretion of the
Supreme Cour. Doe v.

Axelrod 73 N. Y.2d

748 ,

750 (1988);

Automated Waste Disposal, Inc.
City of Long Beach v.

Mid-Hudson Waste, Inc. 50 A. D.3d 1073 (2d Dept. 2008);
American Capital, LLC 40 A. D.3d 902 , 903 (2d Dept. 2007);

Sterling

Ruiz

v.

Meloney,

26 A. D.3d 485

(2d Dept. 2006).

Proof of a likelihood of success on the merits requires the movant to demonstrate a clear
right to relief which is plain from the undisputed facts.

Related Properties,

Inc. v Town Bd

Town/Vilage of Harrison 22 A. D.3d 587 (2d Dept. 2005);
396 (2d Dept. 2007); Gagnon Bus Co., Inc.

Abinanti v Pascale 41 A. D. 3d 395

2004).

Vallo Transp. Ltd 13 A.D. 3d 334 335 (2d Dept. Thus , while the existence of issues of fact alone wil not justify denial of a motion for a

preliminar injunction , the motion should not be granted where there are issues that subvert the
plaintiff s likelihood of success on the merits to such a degree that it cannot be said that the
plaintiff established a clear right to relief.

Advanced Digital Sec. Solutions, Inc.

Samsung

[* 21]

Techwin Co., Ltd 53 A.D. 3d 612 (2d Dept. 2008), quoting
327
328 (2d Dept. 2003); see also

Milbrandt

Co.

Grifn

1 A.D.

CPLR 9 6312(c).

A plaintiff has not suffered irreparable har waranting injunctive relief where its
alleged injuries are compensable by money damages. See White Bay Enterprises v.

Newsday,

258 A. D.2d

520 (2d Dept. 1999) (lower cour' s order granting preliminary injunction reversed
Schrager

where record demonstrated that alleged injuries compensable by money damages);

Klein 267 A.

2d 296 (2d Dept. 1999) (lower court' s order granting preliminar injunction

reversed where record failed to demonstrate likelihood of success on merits or that injuries were
not compensable by money damages).
B. Relevant Causes of Action

To establish a claim of tortious interference with contract, plaintiff must show the

existence of a valid contract with a third par, defendant's knowledge of that contract
defendant's intentional and improper procuring of a breach , and damages.
Apron v.

White Plains Coat &

Cintas Corp. 8 N. Y.3d 422 426 (2007). It is well settled that , absent an agreement

establishing a fixed duration , an employment relationship is presumed to be a hiring at will
terminable at any time by either par,
Supertek, Inc. 308 A.
Co./NYNEX for any reason or even for no reason. DeSimone

2d 501 (2d Dept. 2003), citing,

inter alia, Lobosco

v.

New York Tel.

96 N. Y.2d 312 316 (2001).

To establish a claim for conversion , a plaintiff must show that he had an immediate
superior right of possession to the propert
and the

exercise by defendants of unauthorized
Bankers Trust Co.

dominion over the propert in question to the exclusion of plaintiff s rights.
v.

Cerrato, Sweeney, Cohn, Stahl

Vaccaro,

187 A.D.2d 384 , 385 (lst Dept. 1992).

To establish a cause of action for breach of contract, one must demonstrate: 1) the
existence of a contract between the plaintiff and defendant , 2) consideration , 3) performance by
the plaintiff,

4) breach by the defendant , and 5) damages resulting from the breach.

Furia

Furia 116 A.D.2d 694 (2d Dept. 1986).
The essential inquiry in any action for unjust enrichment is whether it is against equity

and good conscience to permit the defendant to retain what is sought to be recovered. Such a
claim is undoubtedly equitable and depends upon broad considerations of equity and justice.

[* 22]

Generally, courts wil determine whether 1) a benefit has been conferred on defendant under

mistake of fact or law; 2) the benefit stil remains with the defendant; and 3) the defendant's
conduct was tortious or fraudulent. Paramount Film Distributing Corp. v.

New York 30 N.

415 421 (1972). Plaintiff may not maintain an action for unjust enrichment where the matter in
dispute is governed by an express contract.

Scavenger, Inc.

v.

Interactive Software Corp. , 289

A.D.2d 58 (1st Dept. 2001).

An employee owes a fiduciar

duty to

his employer as a matter of law and is prohibited

from acting in any maner inconsistent with that relationship and is at all times bound to
exercise the utmost good faith and loyalty in the performance of his duties. Lamdin v.

Broadway

Surface Advertising Corp.

272 NY 133 , 138 (1936);

DDS Partners, LLC

v.

Celenza 16 A.
are: 1) existence

114 , 115 (151 Dept. 2005). The elements of a claim for breach of fiduciar

duty

of a fiduciar relationship, 2) misconduct , and 3) damages directly caused by the wrongdoer
misconduct. Fitzpatrick House III, LLC v. Neighborhood Youth

Family Services 55 A.D.3d

Bergstol 40 A.D. 3d 588 590 (2d Dept. 2007). A cause of action for aiding and abetting breach of fiduciar duty requires a prima facie showing of 1) a
664 (2d Dept. 2008); Kurtzman v.

fiduciar duty

owed to plaintiff by another , 2) a breach of that duty, and 3) defendant'
Keystone Int'
v.

substantial assistance in effecting the breach , and 4) resulting damages.
57 A.D. 3d 205 , 208 (151 Dept 2008).

Suzuki

It is well settled that , absent an agreement establishing a fixed duration, an employment

relationship is presumed to be a hiring at wil , terminable at any time by either par, for any
reason or even for no reason. DeSimone v.

Supertek, Inc. 308 A.D. 2d 501 (2d Dept. 2003),

citing,

inter alia , Lobosco

v.

New York Tel. Co./NYNEX 96 N. Y.2d 312 316 (2001).

A trade secret is any formula , pattern , device or compilation of information which is used
in one s business , and which gives him an opportunity to gain an advantage over competitors
who do not know or use it. Ashland Mgt. v.

Janian 82 N. 2d 395 , 407 (1993), citing

Restatement of Torts Section 757 , comment b. In deciding a trade secret claim , the cour should

consider the following factors: 1) the extent to which the information is known outside of the
business , 2) the extent to which it is known by employees and others involved in the business

3) the extent of measures taken by the business to guard the secrecy of the information , 4) the

value of the information to the business and its competitors , 5) the amount of effort or money

, .

[* 23]

expended by the business in developing the information , 6) the ease or difficulty with which the
information could be properly acquired or duplicated by others.

Id.

C.

Sanctions for Failure to Provide Discovery

CPLR 9 3126 provides as follows:

If any pary, or a person who at the time a deposition is taken or an examination inspection is made is an officer , director , member, employee or agent of a par otherwse under a par' s control , refuses to obey an order for disclosure or wilfully fails to disclose information which the cour finds ought to have been disclosed pursuant to this aricle , the cour may make such orders with regard to the failure or refusal as are just , among them:
1. an order that the issues to which the information is relevant shall be deemed resolved for purposes of the action in accordance with the claims of the par obtaining the order; or

2. an order prohibiting the disobedient par from supporting or opposing designated claims or defenses , from producing in evidence designated things or items of testimony, or from introducing any evidence of the physical , mental or blood condition sought to be determined , or from using certain witnesses; or
3. an order striking out pleadings or pars thereof, or staying furher proceedings until the order is obeyed , or dismissing the action or any par thereof, or rendering a judgment by default against the disobedient pary.
In addition , under the common- law doctrine of spoliation , when a par

negligently loses

or intentionally destroys key evidence , thereby depriving the non-responsible
to prove its claim , the responsible party may be sanctioned by the striking of the pleading.
v.

par of the ability
Gotto

Eusebe- Carter 69 A.D.3d 566

567 (2d Dept. 2010) citing,

inter alia , Denoyelles

Gallagher 40 A.D. 3d 1027 (2d Dept. 2007). A less severe sanction is appropriate , however
where the absence of the missing evidence does not deprive the moving
establish its case. Id.

par of the ability to

at 567- 568 citing,

inter alia , Gerber

v.

Rosenfeld 18 A.D. 3d 812 (2d Dept.

2005). The determination of a sanction for spoliation is withn the broad discretion of the cour.
Id. at 568 citing,

inter alia , Dennis
v.

v.

City of New York 18 A.D. 3d 599 (2d Dept. 2005).

Huezo

Silvercrist 68 A. D.3d 820 (2d Dept. 2009) is instructive on the issue of

sanctions for spoliation. There , the Second Department held that the trial court had
improvidently exercised its discretion in granting plaintiffs ' motion to strike appellant's answer
based on the loss or spoliation of evidence. Id.

at 821. The Second Deparment reasoned that

[* 24]

plaintiffs failed to demonstrate that the evidence in question was central to their case , or that they
were prejudiced by the purorted loss of the evidence.
Id.

Plaintiffs also failed to establish that

the purported loss of the evidence was the result of intentional or negligent conduct on
defendant's par after it was placed on notice that the evidence might be needed for future
litigation. Id.

In light ofthese determinations , the Second Deparment reversed the trial cour'
Id.

order and denied plaintiffs ' motion.
Similar reasoning was employed in

at 820.

Sloane v. Costco 49 A.

3d 522 (2d Dept. 2008).

There , the Second Deparment affirmed the trial cour' s denial of plaintiff s cross motion to

strike defendant's answer , pursuant to CPLR

3126 , based on spoliation of evidence.
had properly

/d.

The

Second Deparment held that the trial cour
plaintiffs failure to establish that the

exercised its discretion in light of

defendant intentionally or negligently failed to preserve

crucial evidence after being placed on notice that such evidence might be needed for future
litigation.

Id.
D.

Restrictive Emplovment Covenants

Powerful considerations of public policy militate against sanctioning the loss of a
person
s livelihood.

Post v. Merril Lynch 48 N. Y.2d 84 , 86 (1979), citing

Purchasing Assoc. v.

Weitz 13 N. Y.2d 267 , 272 (1963). This policy is so potent that covenants tending to restrain

anyone from engaging in any lawfl

vocation

are almost uniformly disfavored , and are sustained

only to the extent that they are reasonably necessar to protect the legitimate interests of the

employer , and are not unduly harsh or burdensome to the one restrained.

Id.

at 87 , citing,

inter

Carbon Mfg. Co. v. A- A Corp. 42 N. Y.2d 496 499 (1977). Restrictive covenants contained in employment contracts are disfavored by the cours and are
, Columbia Ribbon

alia

be enforced only if reasonably limited temporally and geographically, and to the extent
necessar to protect the employer s use of trade secrets or confidential customer information.
Gilman

Ciocia, Inc. v. Randel/a 55 A. D.3d

871

872 (2d Dept. 2008).

E.

Application of these Principles to the Instant Action
inter alia

The submitted papers present numerous disputed issues of fact regarding,

1) the nature and level of responsibility ofthe positions held by the Individual Defendants at

[* 25]

Canon, 2) the extent to which the Individual Defendants were privy to , or involved in decisions

regarding, the design and promotion of Canon s eCommerce website, 3) the circumstances under
which the Individual Defendants left Canon and went to work for Nikon , 4) Nikon s knowledge

of the Agreements prior to hiring the Individual Defendants , 5) the extent , if any, to which
Giordano improperly obtained Canon information from his computer immediately prior to his

deparure from Canon , and 6) the sophistication ofNikon s eCommerce system and its need , if

any, for input from Canon for its improvement.

In light of these factual disputes , the Cour concludes that Canon has not demonstrated its

likelihood of success on the merits. Moreover , even assuming

arguendo

that Defendants were

fully aware of the content of the Agreements , the Cour stil has doubts regarding the

enforceability of the restrictive covenants in those Agreements. Those doubts come , in par
from the geographical restriction that arguably limits the ability of the In

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