QUANT EMPLOYEE RECORDS BUSINESS MEETINGS AND COURT REFUSES TO ENJOIN HIM
On February 14, 2019, after three full days of trial testimony, a federal judge in Connecticut denied an employer’s (Graham Capital Management in Darien, CT) motion for injunction because the employer could not demonstrate any harm beyond their mere “insecurity” about what the employee, a quantitative financial researcher, would do with recordings made during company business meetings. See full Court Decision Denying Injunction here.
The employee Steve Bongiovanni, age 56, filed an age discrimination lawsuit in Connecticut state court on December 29, 2017; he remained employed after the lawsuit was filed. Bongiovanni alleges his supervisor Ed Tricker, age 33, made the following discriminatory remark, [w]hy should we pay you so much when we can hire some young kid right out of college for $150K?” Under state and federal age discrimination laws, Mr. Tricker made an unlawful direct statement implicating not only Mr. Bongiovanni’s age but also the fact he was paid to much. Not surprisingly, Mr. Tricker denied the statement during cross examination. As far as direct evidence goes, it does not get any better than Mr. Tricker’s age based statement. Mr. Bongiovanni was later fired on October 1, 2018 for recording company meetings in attempt to capture evidence to support his age discrimination and retaliation claims.
The Court denied the employer’s injunction motion based on the following findings. “It is worth noting that the content of the audio files is sketchy and significantly limited in scope when compared to the content of confidential information accumulated in Bongiovanni’s head over years of employment with GCM. Therefore, Bongiovanni’s possession of these recordings does not significantly affect his ability to misappropriate GCM’s proprietary information.” In Connecticut, it is legal to record nontelephonic conversations with your coworkers so long as “you” consent to the conversation.
The Court went on to hold, “Bongiovanni argues that his intent in making the recordings is clear from his testimony. He testified in a believable and convincing way that his purpose in making the recordings was to support his discrimination claims against GCM. Indeed, when GCM challenged Bongiovanni’s right to unemployment benefits, the Connecticut Employment Security Appeals Division Referee found that Bongiovanni “did not knowingly violate the employer’s policy.” Moreover, Bongiovanni submits that he has no intention of utilizing the recordings to compete against GCM and no intention of disclosing the recordings to any person or entity outside of GCM. Bongiovanni has offered to stipulate with GCM to a protective order that would effect the exact confidentiality GCM seeks here through injunctive relief. Accordingly, Bongiovanni contends that GCM has failed to demonstrate any threat of disclosure by Bongiovanni to a third party.” Strangely, when Bongiovanni’s attorneys offered to enter into a protective order regarding the same company information, the employer objected!
“During the course of the three-day hearing, testimony from GCM supervisory employees focused on the primary threat of harm caused by Bongiovanni’s removal of recordings from GCM’s premises: insecurity.”…“Bongiovanni is not competing with GCM. Indeed, to date, he is not employed by anyone, much less a competitor.”
“As the court noted during the hearing, it is willing and able to order Bongiovanni to return his copies of the recordings to GCM to remedy any danger of insecurity. Moreover, as discussed above, Bongiovanni has offered to stipulate to the return of his copies of the recordings. Nevertheless, GCM is not seeking the return of Bongiovanni’s copies of the recordings. The problem for GCM is that the remedies it does seek – that Bongiovanni be enjoined from (a) using GCM’s confidential information or trade secrets in any manner or for any purpose, and from (b) disclosing GCM confidential information or trade secrets to any person or entity outside of GCM – will not prevent the harm of insecurity illustrated by GCM’s testimony.” “The instant case is one more step removed, as no evidence demonstrates that Bongiovanni is actively misappropriating from GCM”
“The court understands GCM’s wariness of Bongiovanni considering his secret recordings and discrimination lawsuit against the company. However, “a preliminary injunction is an extraordinary and drastic remedy, one that should not be granted unless the movant, by a clear showing, carries the burden of persuasion. GCM’s mistrust of Bongiovanni is not evidence of irreparable harm sufficient to warrant the injunctive relief sought by GCM. Accordingly, GCM’s motion for preliminary injunction will be denied.
During the course of the proceedings, Bongiovanni’s counsel Mark Carey, was asked by GCM’s counsel on three separate occasions to enter into a stipulated injunction; all such requests were rejected by Bongiovanni. As argued during the preliminary hearing, GCM filed the complaint and motion for injunctive relief against Bongiovanni only to create a defense to his age discrimination lawsuit.