### IN THE COURT OF APP EALS OF TENNESS EE ATJAC KSON Jul y 22, 200 9 S es sio n
THE HAMIL TON-RYKER GROUP, LLC

v. TAM MY L. KEY MON

A p p ea l f ro m th e C h a n ce ry C o u rt fo r W ea k ley C o u n ty N o. 18946 W
. M i chael M al oan, C hancel l or

N o. W 2008- 00936- C O A

- R 3- C V - F i l ed January 28, 2010

T hi s appea l i nvol ves a noncompet e agr eementand t he Tra de Secr et s A ct

. T he def endant empl oy ee w or ked forfour t een y ear s fort he pl ai nt i ff e m pl oy er
. T he empl oy ee e xecut ed a
covena ntnott o compet e, pr ohi bi t i ng t he empl oy ee f r om s ol i ci t i ng t he empl oy er ’ s cl i ent s for one y earaft ert er m i nat i on. D ur i ng her empl oy m ent , t he empl oy ee be came t he cont actper s on fora par t i cul arcus t om er
. T he def endantempl oy ee w as t empora r i l yl ai d off. T he dayaft er th e layof f , the e m p lo y e e a n d th e c u sto m e r e n ter e d in to a n a rra n g e m e n t u n d e r w h ich th e laid off e m pl oy ee pe r for m ed the s ame w or k fort he cus t om er that the empl oy erhad bee n per for m i ng. T he empl oy ee then em ai l ed num er ous document s r el at ed t o t he cus t om erfr om herw or k emai l addr ess to h er p ersona l emai l addr es s
. A ft ert hat , t he cus t om erended the bus i nes s r el at i ons hi p w i t h t he pl ai nt i ff e m pl oy er
. Subse quent l y , t he employ er sued t he
e m p lo y e e f

o r, in tera lia , br eac h of contr act , m i s appr opr i at i on of conf i dent i al i nfor m ati o n, and vi ol at i on of Tennes s ee’ s T r ade Sec r et s A ct

. T h e tr ial cour tent er ed j udgm entfort he
em p loy eron al l count s ; t he damages aw ar d i ncl uded over$900, 000 as doubl ed damages undert he Tra de Secr et s A ct

. T he empl oy ee now appea l s
. W e af fi r m , fi ndi ng t hatt he
cov e n a n t n o t t o c o mpe t e was e n f o r c e a b l e d e s p i t e t h e l a c k o f a n y t e r r i t o r i a l l i mi t a t i o n, t hat t he i nfor m at i on emai l ed t o the em pl oy ee’ s per s onal emai l w as a tr ade s ecr et , and thatt he evidence sup po rt s t he aw ard of d am ages.
T enn. R
. A pp. P
. 3 A ppeal as of R i ght ; Judgm ent of

t he C hancery C ourt A f f i rm ed

H OL L Y M. K IRBY , J

. , del i ver ed t he opi ni on of t he C our t , i n w hi ch A L AN E. H I GHERS , P .J ., W

. S

. , and J. S TEV EN S TAFF ORD , J

. , j oi ned.Keym on is repre sented by a different attorney

on appeal than the attorney who represented

her at 1 tr ia l.
In th is O pi ni on , w e w il l u se th e te rm “ H amil to n R

yker ” to in clud e it s pr ed ec es so rs in inte re st

. 2
The record

inclu des em

ploym ent agreem ents e xecuted by Keym on on four dates: Octo ber 2 6, 1990 , 3 April 4, 1994 , January

4, 19 96, and

N ov em ber 2 6, 2001

. -2- Gr e g o r yW

. M i n t o n a n d Br a n d o n Ne wma n , M e d i n a , Te n n e s s e e , f o rth e a p p e l l a n t , Ta mmy L

. K eym on.
G r egoryD

. J or dan and W

. Paul W hi t t , J acks on, T ennes s ee, fort he appe l l ee, T he H ami l t onRyk e rGr o u p , LL C.

OP I NI ON

F AC T S AN D P ROCEEDI NGS B E L OW
A ppel l ant/ D efe ndantT amm yL

. K ey m on ( “K eym on”) began w or ki ng fort he 1 pr edec es s or - i n- i nt er es tof A ppel l ee/ Pl ai nt i ff H ami l ton -R y kerG r oup, L L C ( “H ami l t onR y ker ”) i n 1990. H ami l t on- R y ker i s a human r esou rce s companyt hatpr ovi des l abor 2
ser vices t o it s cl i ents

. A s such, H am i l t on -R y ker h as an i nternal s t aff fo r i t s ow n o perat i on s, and a st able of em ploy ees w ho se ser vices are m ade avai l able t o cli ents for a vari et yof n eeds,
s uch as t empora r yempl oy ees , s t aff fors peci al pr oj ec ts, and ongoi ng oper at i ons
. K eym on w a s a m e m b e r o f

H a m ilto n -R y k e r’ s in te rn a l s ta f f

.
I ni t i al l y , K eym on s er ved as a Servi ce Spec i al i s ti n H ami l t on- R y ker ’ s M ar t i n, T ennes s ee of

fi ce. H er dut i es cons i s t ed of coor di nat i ng appl i cant , empl oy ee, and cus t om er serv ices in th e ind u str ial an d clerical t em p o raryserv ice d ivisi o n o f H am il to n -R y k er’s oper at i ons
. O vert i m e, K eym on’ s dut i es gr ew t o encom p ass s uper vi s i on of H ami l t onRy k e r ’ s o p e r a t i o n s i n M e mph i s , Te n n e s s e e , a s wel l a s i t s f a c i l i t i es i n M o u n tJ u l i e ta n d La V er gne, T ennes s ee.
W h e n K e y m o n w a s h ire d in 1 9 9 0 , sh e e x e c u ted a n e m p lo y m e n t ag re e m e n t w ith H ami l t on- R y kert hati ncl uded a nonc om pet e cove nantand a confi dent i al i nfor m at i on cl aus e. O vert he t er m of K eym on’ s four t een- y ear empl oy m ent w i t h H ami l t on- R y ker , t he company change d i t s l egal or gani zat i on bym er gi ng w i t h, and then di s as s oci at i ng fr om , o therl abor
serv ices c o m p an ies. E ac h ti m e th at H am il ton -R y k er ch an g ed lega l fo rm , H am il ton -R y k er’s empl oy ees , i ncl udi ng K eym on, exec ut ed new empl oy m ent agr eement s
. E veryempl oy m ent 3 agr eements i gned byK eym o n included a nonc om pet e cove nantand a c onfi dent i al-3-

in f o rm a tio n c lau se . T h e o p e ra tiv e e m p lo y m e n t ag re e m e n t f o r th is a p p e a l, ex e c u ted in late 20 01 (“Em ploym ent A greem ent”) , i ncluded t he fo l l ow i ng provis i on s:

2

. CONFI DE NT I AL I TY
. T he Em pl oy ee a cknow l edges t hati n t he S t affing S ervi ces B usi ness cust om er i nfo rm at i on dev el op ed b y providers , i ncl udi ng t he Em pl oy eri s an extr emely v alua bl e bus i nes s as s et , w hi ch p ro v id e rs, in c lu d in g th e E m p lo y e r, trea t a s tra d e se c re ts b ylim iti n g a c c e ss to
s u c h c u s t o me ri n f

o r ma t i o n t o t h o s e e mp l o y e e s wh o h a v e a n e e d t o k n o w. Su ch cus t om eri nfor m at i on cons i s t s of cus t om erl i s t s , s t aff i ng needs of
cus t om er s , s peci al s t aff i ng needs of cus t om er s , cus t om ercont act s , cus t om er s t aff i ng hi s t or yand al l as pect s of t he Em pl o y er’ s pr i ci ng pol i ci es and str ateg ies w ith resp ec t t o cu stom ers (co ll ec ti v ely“C o n fid en ti al Inf o rm ati o n ”). T o pr ot ectt he Em pl oy er ’ s C o nfi dent i al I nfor m at i on, t he Em pl oy ee a g re e s a t all tim e s, b o th d u rin g a n d a f ter ter m in a tio n o f

h is e m p lo y m e n t w ith E m p loy er to k ee p an d retain in stri ct c o n f id e n ce all o f th e E m p loy er’s C onfi dent i al I nfor m at i on. T he Em pl oy ee f ur t her agr ees t hatal l C onfi dent i al I nfor m at i on w i l l be us ed sol el y for t he benefi t of t he E m pl oy er and not fort he per s onal benef

i tof t he Em pl oy ee oranyot herper s on orent i t y , i ncl udi ng t he E m ploy er’ s com peti t ors.

. . . . 3

. CO VENAN T NOT TO CO M PET E

. E m pl oy ee a g r ees t hat , dur i ng the p eriod o f h is em p loy m en t w ith E m p loy er a n d fo r on e (1 ) y ea r t h ere af ter, t he E m pl oy e e wi l l n o t , d i r e c t l yo ri n d i r e c t l y , f o rh i ms e l f

o rf o ra n yo t her p e r s o n o rb u s i n e s s e n t i t y: ( a) Sol i ci t , caus e orauthor i ze to be s ol i ci t ed, forand on beha l f of hi m s el f ort hi r d par t i es , anySt aff i ng Ser vi ces B us i nes s fr om any par t i es w ho
ar e t hen cus t om er s of t he Em pl oy er ; or ( b ) S o li cit , caus e orauthor i ze t o be s ol i ci t ed, forand on beha l f of hi m s el f ort hi r d par t i es , anySt aff i ng Ser vi ces B us i nes s fr om anypar t i es w ho
ar e then cus t om er s of t he E m pl oy erw i t h w hom t he Em pl oy ee di d bus i nes s on behal f of the Em pl oy er ; or ( c) Sol i ci t , caus e orauthor i ze to be s ol i ci t ed, forand on beha l f of hi m s el f ort hi r d par t i es , anySt aff i ng Ser vi ces B us i nes s fr om anypar t i es w ho
a re th e n c u sto m e rs o r pr o sp e c tiv e c u sto m e rs o f th e E m p lo y e r w ith re sp e c t to
w h o m the E m p loy ee ac q u ir ed C o n fid en ti al Inf o rm ati o n fro m the E m p loy er; or ( d) Sol i ci t, ca u se o rauthor i ze t o be s ol i ci t ed, on behal f of hi m s el f or t hi r d par t i es anyempl oy ee of t he Em pl oy er to t er m i nat e hi s empl oy m ent
r el at i ons hi p w i t h t he Em pl oy erorot herw i s e ac ceptempl oy m entw i t h another
em p loy er.-4-

K eym on began su p er vi s i ng H ami l t on- R y ker ’ s M emphi s fac i l i t ys om et i m e i n 1996. A tt he t i m e, H ami l t on- R y ker ’ s M emphi s oper at i on pr i m ar i l ycons i s t ed of p rov iding “ dot pr ep” s ervi ces t o F ed era l E x p ress. K ey m o n su p erv ised so m e 1 5 0 H am il ton -R y k er e m pl oy ees in m a n u a llyp re p a rin g a ir b ill s f o r F e d e ra l E x p re ss ’s s h ip p in g b u sin e ss . In late 2 0 0 2 o r e a rly 2003, H ami l t on- R y kerl earned thati tw as goi ng t o l os e t he Feder al E xpr es s acc ount

. R ather t han cl os e t he M emphi s l ocat i on, H ami l t on- R y ker hi r ed a s al es r epr es ent at i ve t o s ol i ci tnew cl i ent s fort he M emphi s fac i l i t y
. T he s al es as s oci at e ac qui r ed enough ne w cl i ent s for H ami l t on- R y k er’s M emphi s oper at i on t o keep i topen. K eym on r emai ned i n char ge of
s u p e r v i s i n g t h e M e m p h i s f a c i l i t y.
A m o n g the n e w cli en ts soli cit ed fo r H am il ton -R y k er’s M em p h is fac il ityw as M ark H oi ng ( “ H oi ng ” )

. H oi ng owned hi s own c ompa ny , O a s i s , I nc orpo r a t e d ( “ O a s i s ” ). O asi s’ bu si ness con si st ed o f providi ng shi pp i ng ser vices t o it s nearl yon e hu nd red and fi ft ycl i ents

. O asis’s cli en ts i n clud ed co m m uni cat i ons pr ovi derV er i zon C om m uni cat i ons , I nc. ( V er i zo n ”). O as i s had a c ont r actw i t h V er i zon t o del i verV er i zon’ s t el ephone di r ect or i es t o i ndi vi dual V er i zon cus t om er s
. T he t el ephone di r ect or i es had t o be pre par ed for del i verybyat t achi ng m ai l i ng l abel s , and O as i s w as nots etup t o do t hi s t as k. C ons equent l y , O as i s s oughtt o fi nd
a v en d o r t o p rep are V erizo n ’s d ir ec tori es fo r d eli v ery
. W h en co n tacted b yH am il ton -R y k er’s
s al es r epr es ent at i ve i n 2003, H oi ng det er m ined thatH ami l t on- R y kerw as capa bl e of pr ovi di ng t he neede d m ai l i ng pr epar at i on s er vi ce. H oi ng t hen i nfor m ed hi s cont ac t a t V er i zon, T err i J anak ( “J anak” ) , of H ami l t on- R y ker ’ s i nt er es ti n t he w or k. T ogether , H oi ng an d Jan ak d ec ided to h ir e H am il ton -R y k er to a tt ac h the m a iling labe ls t o V erizo n ’s di r ect or i es
. T he arr angementamong O asi s , V er i zon, and H ami l t on- R y kerw as verbal and f o rn o s t a t e d t e r m.
I n t he s um m erof 2003, H ami l t on- R y ker ’ s M emphi s faci l i t ybegan a t t achi ng V eri zon’s l abel s t o i t s t el ephone di r ect or i es
. T he w or k w as done on a pr oj ect

- by

- pr oj ect bas i s , w i t h eac h pr oj ectfocu s ed on a s peci fi ed geogr aphi c ar ea. K eym on s uper vi s ed H ami l t on- R y ker ’ s empl oy ees and w as H ami l t on- R y ker ’ s cont act per s on w i t h bot h V er i zon a n d O a sis . F o r e a c h g ro u p o f d ire c to rie s to b e sh ip p e d , a V e r iz o n e m p lo y e e w o u ld e m a il K eym on document s cont ai ni ng t he m ai l i ng addr es s es and the number of phone di r ect or i es t o be pr oces s ed. T he emai l ed m ai l i ng addr es s es w oul d t hen be r eform at t ed, us i ng H ami l t onR y ker ’ s comput ers oft w ar e pr ogr am, i n a mannert hatper m i t t ed the mai l i ng addr es s es t o be p rin ted a s m a ili n g lab e ls

. O a sis w o u ld d e liv e r th e V e riz o n d ire c to rie s to th e M e m p h is lo cat i on , and H am i l t on -R y ker em ploy ees w ou l d then at t ach the l abels t o the di rect ori es. T h e re a f ter , O a sis w o u ld p ick u p th e lab e led d ire c to rie s a n d d e liv e r th e m to th e a p p ro p ria te addr es s es
. A ft ercompl et i on of ea ch pr oj ect , K eym on w oul d s end a H ami l t on- R y keri nvoi ce di r ect l yt o V er i zon, and V er i zon w oul d s end i t s paym entdi r ect l yt o H ami l t on- R y ker , w i t hout go i ng t hroug h O asi s. T hu s, w hil e O asi s w as a “gatekeeper” t o V eri zon , H am i l t on -R y ker al so had a di r ectr el at i ons hi p w i t h V er i zon.-5-

For eac h proj ect , H ami l t on- R y kerw as pai d byt he number of V er i zon t el ephone di r ect or i es t hat i t pr oces s ed. A s s uch, H ami l t on- R y ker ’ s r evenue s fr om i t s w or k forV er i zon f lu c tu a ted . A t o n e p o in t, K e y m o n p re p a re d a n a n a ly sis f o r H a m ilt o n -R y k e r sh o w in g th a t,
on aver age, t he M emphi s fac i l i t y ’ s w or k forV er i zon gene r at ed a ne tpr ofi tof 32. 9% of t he amount s bi l l ed t o V er i zon.
D ur i ng t he r emai nderof 2003, t he arr angementamong H ami l t on- R y ker , O as i s and V er i zon cont i nu ed succ es s ful l y
. H ami l t on- R y kercont act ed V er i zon aboutdoi ng al l of V er i zon’ s di r ect or ypr epar at i on w or k i n 2 0 0 4

. A s a r es ul tof t hos e di s cus s i ons , V er i zon em ail e d H a m ilto n -R y k e r i ts p ro d u c tio n s c h e d u le f o r a ll o f 2 0 0 4 . H a m ilto n -R y k e r’ s d ir e c to ry processi ng w ork fo r V eri zon con t i nu ed in 200 4 o n a p roj ect -by -pr ojectbasi s.
M eanw hi l e, i n t he ea r l ys um m erof 2004, H ami l t on- R y kerdeci ded t o do a r eor gani zat i on t hati ncl uded el i mi nat i on of K eym on’ s j ob pos i t i on. H ow ever , H ami l t on- R y ker
cons i der ed K eym on t o be a v alua b le em pl oy ee a nd w ant ed t o r et ai n her

. I n addi t i on, H a m ilt o n -R y k e r w a s a w a re th a t K e y m o n w a n ted to re d u c e h e r w o rk -re late d tra v e l. T herefore, i n Jun e 20 04 , H am i l to n -R y k e r of fi cers off

ered K ey m on a new po si t i on as a Speci al Pr oj ect s M anage r at t he s ame s al ary s he had be en r ece i vi ng. T he H ami l t on- R y ker offi cer s t ol d K eym on t hatt he new l y - cr eat ed pos i t i on w oul d al l ow hert o be more eff i ci ent and w oul d decr eas e t he am ount of t r avel r equi r ed of her

. K eym on, how ever , bel i eved that t he new pos i t i on w oul d r equi r e eve n m or e tr ave l, an d she per cei ved i tt o be a “ s t ep backw ar ds ” i n hercar eer
. A l t hough H ami l t on- R ykert r i ed t o per s uade K eym on t o acc eptt he
new Speci al Pr oj ect s M anage rp o sit ion , sh e deci ded t o r ej ecti t

. K eym on’ s emai l t o t he H ami l t on- R y keroffi cer s , r ej ect i ng t he off er of t he new pos i t i on, s t at ed thats he di d noti nt end fo r t h em to co n side r he r rejecti o n to b e h er resig n ati o n fro m H am il ton -R y k er.
Shor t l yt her eaf

t er , on J ul y6, 2004, i n l i ghtof t he el i m i nat i on of K ey m o n ’ s j ob p o sitio n a n d h e r re

jec tio n o f th e n e w p o sitio n , H a m ilt o n -R y k e r V ice P re sid e n t K e lly M c Cr e i g h t( “ M c Cr e i g h t ” ) me twi t h Ke y mo n t o d i s c u s s Key mon ’ s e mp l o y me n ts t a tu s
. At t he m eet i ng, K eym on and M cC r ei ght agr eed t hat K eym on w oul d be t empora r i l yl ai d off f or a ni nety - dayper i od, eff ect i ve M ondayJ u ly 1 2 , 2004 unt i l Fr i dayO ct ober8, 2004. M cC r ei ghtt ol d K eym on t hatherl as t day of w or k befor e the t empora r yl ay off c om m ence d
w oul d b e F ri d ayJ ul y9, 2004. T heyagr eed that , dur i ng t he t empora r yl ay off, H ami l t onR y kerw oul d t r y t o fi nd a pos i t i on for K eym on at one of H ami l t on- R y ker ’ s ot herl ocat i ons t hatw oul d r eq u ir e less tr avel

. I f no s uch pos i t i on coul d be found, t heyagr eed, t hen t hey
w oul d di s cus s a per m anent l ay off i n O ct ober 2004. A s M cC r ei ght w oul d b e su p erv i s i ng H a m ilt o n -R y k e r’s M e m p h is f a c ili tyd u rin g K e y m o n ’s te m p o ra rylayof f , K e y m o n a g re e d to
as s i s tM cC r ei ght ’ s t r ans i t i on i nt o t hatr ol e.Durin gthe pend ency of the in stant law suit w ith H amilton- Ryker, Keym on and Adam s div orced. 4
-6- O n t h e morn i n g o f Sa tu r d a y J u l y 1 0 , 2 0 0 4 , Keymon t o l d Hoi n g b y t e l e p h o ne t hat H ami l t on- R y ker had l ai d her off. I n t hat t el ephone c onver s at i on, K eym on and H oi ng agr eed t hatK eym on w oul d t ake ove rt he t el ephone di r ect or ypr epar at i on w or k t hatH ami l t on- R y ker had bee n per for m i ng forV er i zon. H oi ng t hen cont act ed T err i J anak at V er i zon. J anak w as notpl eas ed t hatH ami l t on- R y kerhad l ai d off K eym on and agr eed thatO as i s , w i t h K eym on, w o u ld p e rf

o rm V e ri z o n ’s te le p h o n e d ir e c to ry p re p a ra tio n w o rk

.
L a ter in th e a f

ter n o o n o f

Ju ly1 0 , 2 0 0 4 , K e y m o n u til ize d h e r H a m ilt o n -R y k e r e m a il addr es s t o emai l appr oxi m at el y fi ft y - s i x document s conce r ni ng H ami l t on- R y ker ’ s w or k for V er i zon t o K eym on’ s per s onal emai l addr es s
. T he doc u me n t s i n c l u d e d Ver i zon’ s ant i ci pat ed produ ct i on schedu l e for al l of 2 00 4, a profit -l oss anal y si s f o r the co m plet ed p roj ect s, V eri zon ’s m ai l add res s l i st i ng s conv ert ed int o a fo rm atcapab l e of b ei ng p ri nted as l abels , and H ami l t on- R y ker ’ s i nvoi ces t o V er i zon fort he J une and J ul y2004 pr oj ect s
. W i t hi n t he nexts ever al day s , K eym on’ s H ami l t on- R y keremai l acc ountw as t er m i nat ed.

S h o rt lythere af

ter, o n Ju ly 1 6 , 2 0 0 4 , K ey m o n b eg an b il li n g H o ing fo r directo ry pr epar at i on w or k per for m ed under O as i s ’ s agr eementw i t h V er i zon. T w el ve day s l at er , on J ul y 2 6 , 2 0 0 4 , J a n a k e ma i l e d M c Cr e i g h t a t Hami l t o n - Ry k e r t o i n f o r m h i m th a tV er i zon w o u ld n o lo n g e r u til ize H a m ilt o n -R y k e r f o r its d ire c to ryp re p a ra tio n n e e d s. In th e e m a il, Janak tol d M cC rei gh tsi m plyt hat V eri zo n h a d “ d e ci ded t o p ursue ano t her aven ue fo r [i t s]
m a ilin g s .”

D ur i ng this t im e-f

ram e, K ey m o n b eg an d raw ing u n em p loy m en t ben ef it s for he rl ay off f ro m H a m ilt o n -R y k e r. H a m ilt o n -R y k e r w a s u n a w a re o f K e y m o n ’s a rra n g e m e n t w ith O a sis and V er i zon.
T hr oughoutt he t er m of K eym on’ s t hr ee- m ont h l ay off f r om H am i l t on- R y ker , s he b i l l e d Ho i n g f

o rwo r k p e r f

o r me d f o rVe r i z o n
. I n i t i a l l y , Ke y mo n b i l l e d Ho i n g u n d e r“ Ad a ms & A ss o c iate s,” a b u sin e ss e n tity c re a ted b y h e r th e n -h u sb a n d A n th o n y A d a m s f o r h is p riv a te 4 i nves t i gat i on w or k. K eym on l at eres t abl i s hed an e nt i t ycal l ed K eym on M anage m entG r oup fort he purpos e of bi l l i ng H oi ng and O as i s for t he V er i zon w or k. E ventual l y , K eym on hi r ed empl oy ees t o as s i s th e rw i t h t he V er i zon w or k; t hes e w or ker s i ncl uded s om e H ami l t on- R y ker
em p loy ee s at t h e M e m p h is fa cil ityw h o h ad w o rke d o n H am il ton -R y k er’s d ir ec tory pr epar at i on forV er i zon underK eym on’ s s uper vi s i on. I ni t i al l y , K ey m o n onl yat t ache d
m ai l i ng l abel s t o V er i zon’ s di r ect or i es , t he s ame w or k H ami l t on- R y kerhad bee n doi ng for V er i zon. A ft era w hi l e, K eym on b egan t aki ng on t as ks t hatH ami l t on- R y kerhad not p e rf o rm e d f o r V e riz o n , s u c h a s d a ta e n try a n d f ield c h e c k in g b ym a k in g tele p h o n e c a lls to cust om ers t o co nfirm recei pt of t he d i rect ori es.The Sev erance Agreem ent refe rs to the E m ploym ent A greem ent as an attachment. Howe v er, the 5 copy of the S ev erance Agreem ent in the appellate record does not hav e a copy

of any em ploym ent agreem ent be tw ee n Key

m on and H amil to n- R

yker att ac he d as an exhibi t.

-7- A tt he end of

t he t hr ee- m ont h t empora r y l ay off per i od, K eym on and H ami l t on- R y ker di d not r eac h an agr eementforK eym on t o r etur n t o H ami l t on- R y ker

. C ons equent l y , as t hey had di s cus s ed, t heyagr eed t o s evert he empl oy m entr el at i ons hi p. T hus , on O ct ober22, 2004, K eym on exec ut ed a s ever ance agr eement i n w hi ch she agr eed t o s everherempl oy m entand
r el eas e al l cl ai m s against H am il ton -R y k er (“S ev era n ce A g ree m en t”). In c o n side rati o n , under t he Sever ance A gr eement , K eym on w as t o r ece i ve a t ot al of $6000, t o be pai d byH ami l t onR y keri n bi

- w eekl yi ns t all m ent s
. T he Sever ance A gr eements t at ed thati tdi d “notr evoke,
s uper s ede, r epl ace orm odi fyanypr i oragr eement s and under s t andi ngs betw een [ H ami l t onR y ker ]

. . . and [K eym on] conce r ni ng r es t r i ct i ve cove nant s , non- di s cl os ur e of i nfor m at i on, n o n -so licita tio n o f

c lien ts o r n o n -c o m p e tit io n w ith [ H a m ilt o n -R y k e r]” a n d sp e c if ica lly refer enced K ey m on ’s E m ploym ent A greem ent. In t he S everance A greem ent, K ey m on al so 5 agr eed t o ful l ycooper at e w i t h H ami l t on- R y ker in an y inves t i gat i on i nt o a br eac h of an empl oy m entagr eement , byano ther em pl oy ee orbyK eym on her s el f, i ncl udi ng an i nves t i gat i on “conc erni ng t he w r ongful di ver s i on of busi nes s , i nt er fer ence w i t h a contr actual
re latio n sh ip a n d b re a c h o f th e d u ty o f lo y a lty .” T h e re a f ter , H a m ilt o n -R y k e r d e p o site d in to K eym on’ s bank ac count , bydi r ectdepos i t , t he fi r s tbi

- w eekl ypaym entdue t o K eym on under th e S e v e ra n c e A g re e m e n t.

A t so m e p o in t, H a m ilt o n -R y k e r b e c a m e a w a re th a t K e y m o n m ig h t b e d o in g th e m a il p re p a ra tio n w o rk o n V e riz o n ’s te lep h o n e d ire c to rie s th a t H a m ilt o n -R y k e r h a d p re v io u sly been pe r fo rm ing. T her efor e, on N ovember 11, 2004, i n acc or dance w i t h t he t er m s of K eym on’ s Sever ance A gr eement , H ami l t on- R y k er’s at t or neys enta l et t ert o K eym on r eques t i ng hercooper at ion w i t h i t s i nves t i gat i on i nt o a pos s i bl e br eac h of t he t er m s of an empl oy m entagr eementw i t h an uni dent i fi ed empl oy ee orfor m eremplo y ee. T he l et t er s ought , among ot hert hi ngs , copi es of K ey m o n ’ s cel l ul arphone bi l l s
. A l t hough K eym on pr oduced t o H ami l t o n - Ryk e rs o me o f th e r e q u e s t e d d o c u me n t s , H ami l t on- R y kerbel i eved that K e y m o n h a d n o t p ro d u c e d a ll o f th e d o c u m e n ts it s o u g h t. M o re o v e r, K e y m o n f o rw a rd e d to H ami l t on- R y kera che ck for$ 1 157. 56, m ade pa y abl e t o H ami l t on- R y ker , i n an appa r ent at t empt t o r etur n t he fi r s t paym ent m ade t o herunderherSever ance A gr eement

. H ami l t onR y kerr etur ned the unca s hed che ck t o K eym on.
O n February5, 2005, H ami l t on- R y ker f i l ed the i ns t antl aw s ui tagai ns tK eym on, al l egi ng br eac h of contr act

. In the i ni t i al compl ai nt , H ami l t on- R y keral l eged onl yt hat K eym on fai l ed t o pr oduce t o H ami l t on- R y kerthe doc u m ent s i tr eques t ed, and thus had br eac hed the provi s i ons i n her Sever ance A gr eement r equi r i ng her t o ful l y cooper at e w i t h t he company ’ s i nves t i gat i on. K eym on’ s ans w erdeni ed thats he had br eac hed the Sever ance-8-

A gr eement , and cl ai m ed thats he had pr oduced the docume n ts tha tH ami l t on- R y ker
r eques t ed. L at er , w h en H ami l t on- R y kerr efus ed t o m ake pa y m ent s t o K eym on undert he Sever ance A gr eement , K eym on amended herans w ert o i ncl ude a c ounter cl ai m forbr eac h of t he Sever ance A gr eement

. D i s covery , and di s coverydi s put es , ens ued.

D uri ng t he co urse of dis cov ery , H am i l t on -R y ker le a rned of t he o n-going b usi ness a rra n g e m e n t am o n g K e y m o n , O a sis a n d V e riz o n . H a m ilt o n -R y k e r a lso m a d e c o n tac t w ith K eym on’ s by

- t hen es t r anged hus band, A nt honyA dams. A s a r es ul t , H ami l t on- R y ker amended i t s compl ai ntt o s t at e cl ai m s agai ns tK eym on bas ed on the w or k s he per for m ed af t er bei ng l ai d off f

r om H ami l t on- R y ker , r el at ed t o t he V er i zon t el ephone di r ect or i es
. H ami l t onR y keral l eged t hatK eym on had br eac hed the noncompet e cove nantand the conf i dent i al i nfor m at i on cl aus e of her E m pl oy m ent A gr eement by us i ng H ami l t on- R y ker ’ s confi dent i al in f o rm a tio n a f

ter h e rla yo f

f , a n d b y s o li c it in g b u s in e s s f r o m H a m il to n - R yk e rc u sto m e rs O a sis and V er i zon. H ami l t on- R y keral l eged thatK eym on vi ol at ed the U ni for m T r ade Sec r et s A ct ( “Tra de Secr et s A ct ” and, al t ernat i vel y , “A ct ”) , codi fi ed atT ennes s ee Code A nnot at ed § 47- 25- 1701 et

s eq. , byemai l i ng t he V er i zon- r el at ed H ami l t on- R y kerdocument s t o her s el f ather personal em ai l add res s. A sser tin g t hat K ey m on ’s con du ctw as w i l l ful and m al i ci ou s, H ami l t on- R y kers oughtexempl arydamages undert he Tra de Secr et s A ct , s ect i on 47- 25- 1704( b)

. H ami l t on- R y keral s o i ncl uded cl ai m s for vi ol at i on of T ennes s ee Code A nnot at ed § 4 7-5-10 9 byi nd ucing breach o f con t ract ; i ntent i on al i nter ference w i t h b usi ness r e l a t i o n s h i p s ; b r e a c h o f t ru s t ; b r e a c h o f t h e d u t y o f l o ya l t y; b r e a c h o f f i d u c i a r y d u t y; con versi on ; breach o f du t y against sel f deali ng or corporat e op po rtun i t ydo ct ri ne; and u njust
e n ric h m e n t.

K ey m on answ ered H am i l t on -R y ker’ s am end ed co m plai nt by den y i ng t he all egati on s. T h e c a se w a s s e t f

o r a b e n c h trial.

D u rin g th e p e n d e n c yo f th e lit ig a tio n , K e y m o n c o n tin u e d to p e rf o rm th e m a il pr epar at i on w or k forH oi ng and O as i s on t he V er i zon t el ephone di r ect or i es
. B yt he dat e of t he tr i al , K eym on had bi l l ed appr oxi m at el y$1, 450, 388 forherV er i zon- r el at ed w or k.

T h e tri al w as co n d u cted o n M arc h 4 , 2 0 0 8

. In th e p roc ee d ing s, the tri al co u rth ea rd t es t i m onyfr om H ami l t on- R y kerV i ce Pr es i dentKel l yM c Cr e i g h t ; Ham i l t on- R y kerco- ow ner C r aw for d G al l i m or e; K eym on’ s ex- hus band A nt honyA dams; O as i s ow nerH oi ng; and K eym on. N i net een exhi bi t s w er e ent er ed i nt o evi dence , i ncl udi ng K eym on’ s cel l ul arphone
r ecor ds and K eym on’ s i nvoi ces t o O as i s and V er i zon.
A t th e o u ts e t, M cC reigh t gav e the tr ial co u rtb ac k g rou n d ab o u t K ey m o n ’s empl oy m entw i t h H ami l t on- R y ker

. I n t he cour s e of her w or k, M cC r ei ghtt es t i fi ed, K eym on d ev elop ed relati o n sh ips w ith cli en ts, an d in p arti cu lar s h e w as H am il ton -R y k er’s-9-

re p re se n tativ e f

o r th e O a sis a n d V e riz o n w o rk

. M c C re ig h t sa id th a t K e y m o n d id a “ f a n tas tic j ob” as a managerand “kne w how t o get the m o st out of t he w or ker s
. ” H e expl ai ned that H am il ton -R y k er’s eli m ination o f K ey m o n ’s j o b p o sit ion w as n o t an e ff o rtto g et ri d o f h er, beca us e theyval ued herw or k. M cC r ei ghts ai d t hatH ami l t on- R y ker cr eat ed the new pos i t i on f o r K e y m o n to m in im ize h e r tra v e l an d th e re b ya llo w h e r to b e m o re e f f icie n t. H e sa id th a t, despit e K ey m o n ’s i n it ial rejecti o n o f th e n ew p o sit ion , H am il ton -R y k er’s m anage m enthoped t hats he w oul d eventual l yacc epti tdur i ng t he t empora r yl ay off pe r i od.

D ur i ng hi s t es t i m ony , M cC r ei ghtr evi ew ed the V er i zon- r el at ed document s t hat K eym on emai l ed t o herper s onal emai l addr es s on t he aft ernoon of J ul y 10, 2004. H e s t at ed t hatt he docum ent s i ncl uded “pr et t ym uch eve r y t hi ng t hatw as neede d t o s er vi ce [ t he V e r i z o n ] a c c o u n t

. ” He o b s e r v e d t h a t t h e d o c u me n t s i n c l u d e d Ver i z o n ’ s l i s t of m ai l i ng addr es s es t hat had bee n r eform at t ed us i ng H ami l t on- R y ker ’ s comput ers oft w ar e, s o t hatt hey coul d be pr i nt ed as m ai l i ng l abel s
. M cC r ei ghtt es t i fi ed thatH ami l t on- R y kercons i der ed the i nfor m at i on i n t he document s t o be c o nfi dent i al and t ook s t eps t o l i m i tacc es s t o t he in f o rm a tio n . T h e se ste p s inc lu d e d u sin g a c o m p a n y se rv e r th a t w a s p ro tec ted b ya f ire w a ll t o pr eventout s i de ac ces s t o t he i nfo rm at i on. A ddi t i onal l y , H ami l t on- R y kerper m i t t ed empl oy ees t o acc es s onl yt he docume n ts n eede d byt he empl oy ee t o compl et e hi s j ob. M or eover , H ami l t on- R y ker ’ s empl oy m entagr eement s r out i nel yi ncl uded a c onfi dent i al i nfor m at i on cl aus e des i gned t o pr eventdi s s emi nat i on of th e i nfor m at i on. Fi nal l y , M cC r ei ght t es t i fi ed thatt he document s i n K eym on’ s emai l i ncl uded much m or e i nfor m at i on t han w as neede d forK eym on t o as s i s tM cCr e i g h ti n compl et i ng H ami l t on- R y ker ’ s i nvoi ces t o V er i zon forJ ul y2004.

K ey m o n ’s ex -hu sb an d , A n tho n yA d am s, test ifi ed ab o u t ov erh ea ri n g K ey m o n ’s tel ep h o n e co n v ersa ti o n s w ith H o ing af ter H am il ton -R y k er laid h er o ff , as w ell as K ey m o n ’s
w o r k f o rH o i n g a n d V e r i z o n t h e r e a f t e r
. A d a m s t e s t i f

i e d t h a t , o n F r i d a y, J u l y 9 , o rS a tu r d a y, J ul y10, 2004, he overhead a cel l phone conve r s at i on betw een K eym on and H oi ng i n w hi ch K eym on i nfor m ed H oi ng t hats he had be en l ai d off. I n t he conve r s at i on, A d ams s ai d, K e y m o n a g re e d w ith H o in g to tak e o v e r th e V e riz o n tele p h o n e d ire c to ryw o rk a n d m o v e it t o H oing’s faci l i t y
. A ft er t hat, A dam s sai d, he and K ey m on “processed book s, pri nted l abels , d id sh ip p in g o f

b o o k s. T h e sa m e th in g th a t th e yw e re d o in g a t H a m ilt o n -R y k e r.” W h ile K eym on w as dr aw i ng unempl oy m entbenef i t s , s he bi l l ed O as i s for t he V er i zon w or k under hi s company , A dams & A s s oci at es
. A dams t es t i fi ed, ats om e poi nt , that h e and K eym on began doi ng ad d it i onal w or k forO as i s and V er i zon, s uch as chec ki ng t o s ee thatt he t el ephone di r ect or i es had bee n pr oper l ydel i ver ed. L at er, A dams s ai d, K eym on hi r ed t empora r yas s oci at es fr om H ami l t on- R y kert o as s i s tw i t h t he V er i zon w or k.At the time of trial, H oingw as w orkingfor an a ir freight co m pany called Se ko. 6 Keym on argued that the no ncom pete p rohibited

her from perfo rming“staffingserv ices,” but th e 7 work she w as d oingfor Verizo n w as “o utsourc ing ” an d thu s no t prohibited under the n on- com pete c lause. Thi s argument w as r ejec te d by th e tr ia l c ourtand

is n ot r ai se d as an is su e on

a pp ea l.
-10- H am i l t o n -R y k e r cal l ed M ark H oing t o tes t i fy

. H oing t est i fi ed ab ou this bu si ness 6
r e l a t i o n s h i p wi t h Keymon
. Hoi n g s a i d t h a t Hami l t o n - Ry k e r h a d d o n e a g ood j ob of pr oces s i ng t he V er i zon t el ephone di r ect or i es
. H i s s ol e cont actw i t h H ami l t on- R y ker , H oi ng s ai d, w as K eym on. H oi ng t es t i fi ed thatK eym on cal l ed h im t o i nfor m hi m t hatH ami l t onR y kerl ai d heroff. R efe r r i ng t o V er i zon’ s t el ephone dir ec tory w o r k, H oi ng s ai d, he and K e y m o n “ sa t d o w n a n d b a sic a llysa id th a t w e w o u ld tak e it in -h o u se
. T a lk e d th a t o v e r w ith V er i zon; and that ’ s w hatw e di d, w e br oughti ti n- hous e. ” A ft ert hat , K eym on per for m ed t he s ame w ork fo r V er i zon thatH ami l t on- R y kerhad bee n per for m i ng. L at er , K eym on perform ed o t her t asks r el at ed to V eri zon as w el l , such as w ork i n tel ecom m un i cat i on s.
C raw fo rd G all im o re, co -ow n er o f H am il ton -R y k er, t esti fied ab o u t H am il ton -R y k er’s damages r es ul t i ng fr om K eym on’ s conduct

. Pr i or t o bei ng l ai d off, G al l i m or e s ai d, K eym on h a d p re p a re d a p ro f

it an a ly sis f

o r H a m ilt o n -R y k e r’s w o rk o n th e O a sis a n d V e riz o n a c c o u n t. T he pr ofi tanal y s i s s how ed t hat , on aver age, H ami l t on- R y ker m ade a 32. 9% pr ofi ton eac h d ire c to ryp ro c e ss in g p rojec t. T o d e te r m in e H a m ilt o n -R y k e r’s lo st p ro f its, h e a p p lied th is pr ofit per cent age t o t he ac tual amount s K eym on bi l l ed O as i s and V er i zon af t erH ami l t onR y kerl os tt he account

. U s i ng t hi s m ethod, G al l i m or e ca l cul at ed thatH ami l t on- R y kerhad l os t$94, 307 i n pr ofi ts f rom J ul y2004 unt i l O ct ober2005, t hati s , t he thr ee- m ont h t er m of t he t empora r yl ay off pl us t he one- y ear t er m of t he noncompet e covena nt m eas ur ed fr om t he dat e of the S ever ance A gr eement

. G al l i m or e ca l cul at ed thatH ami l t on- R y kerl os t$477, 178 in p ro f its d u rin g th e tim e p e rio d f ro m Ju ly2 0 0 4 u n til th e d a te o f trial.

K eym on t hen t est ifi ed on herow n behal f. K eym on acknow l edged s i gni ng an e m p lo y m e n t ag re e m e n t th a t in c lu d e d a n o n c o m p e te c la u se
. S h e sa id th a t sh e h a d to ld 7 H ami l t on- R y kert hats he w as unhappyw i t h the amount of t r avel s he w as doi ng i n herj ob. W hen H ami l t on- R y kerel i m i nat ed herj ob pos i t i on and offe r ed her a new pos i t i on, s he s ai d,
s he per cei ved t hatt he new j ob w oul d r equi r e eve n m or e trav el o f her

. C ons equent l y , s he
s ai d, s he r ej ect ed the new pos i t i on and thus w as l eftw i t houta j ob.

A ft ers he gotl ai d off, K eym on s ai d , s he cont i nued t o do “a l i t t l e bi t ” of w or k for H ami l t on- R y ker , namel y , pr oces s i ng s om e V er i zon i nvoi ces fort hem. K eym on s t at ed that
s he emai l ed t he V er i zon document s fr om herH ami l t on- R y keremai l addr es s t o herper s onal
e m a il ac c o u n t in o rd e r to c re a te b ill in g in v o ice s f o r H a m ilt o n -R y k e r. S h o rtlya f ter th a t, H am i l t on -R y ker t erm i nated her w ork em ai l accou nt access

.K e ym o n a l s o a s s e rt e d th at V e r i z o n w a s H ami l t o n - R yke r ’ s c u s t o m e r , b ut th at H o i ngw as n ota 8
cu st omer of H amil to n- R

yker
. B ec au se s he w as p ai d by H oi ng ’s c om

pany , O as is , and

w as n ot p ai d di re ct ly by Veriz on , Key

m on argue d, sh e di d no t s ol ic ito ne o f H amil to n- R yker ’s “ cu st omer s” and

thus w as n ot

in breachof her n onco m

pete. This argum ent w as also rejected by the trial court and i s no t raised as an issue
on a pp ea l.
-11- K eym on t hen r el at ed her ver s i on of herconver s at i on w i t h M ar k H oi ng aft ers he w as l ai d off f r om H ami l t on- R y ker

. K eym on s ai d t hat H oi ng cont act ed her , and t hatt he cont act
occurr ed s ever al day s aft erherl ay off:
Q.

. . . Now, a f

t e r y o u wen t o n t e mpo r a r y l a y o f f , . . . h o w d i d t he
conver s at i on come up bet w een y ou and M ar k H oi ng?

A

. M a rk H o in g c a lled m e a f e w d a y s a f

ter m ylayof

f a n d a sk e d if

I w o u ld be i nt er es t ed i n hel pi ng hi m do s om e – w i t h t he hand de l i verys i de of it, d o so m e f

ield o p e ra tio n s, m a n a g e m e n t, s o m e d a ta e n try , h e lp h im
w i t h hi s s t andar d oper at i on m anual , and thats or tof thi ng.
A nd I s ai d, “W el l , I ’ m notw i t h H ami l t on- R y keranym or e. ”

A nd s o t hat ’ s how t hatpr ocee ded.

K eym on t es t i fi ed thats he agr eed t o d o the w o rk beca us e s he w as no l ongerempl oy ed by H ami l t on- R y ker , and H oi ng di d not as k hert o do t he addr es s l abel s forV er i zon’ s t el ephone di r ec t o r i e s
. Hami l t o n - Ry k e r , Keymon s a i d , h a d d o n e o n l yma i l i n g l a b e l s f o rt h e Ver i z on 8 t el ephone di r ect or i es
. T he w or k s he i nvoi ced t o O as i s , s he ass er t ed, w as for w or k t hathad
n o th in g to d o w ith m a ilin g la b e ls , n a m e ly, h a n d -d e liv e ry, c o m p u te r w o rk , d a ta e n tr y, tele c h e c k in g a n d f

ield c h e c k in g , an d th u s d id n o t v io late h e r n o n c o m p e te a g re e m e n t. Keymon c o n c e d e d t h a t s h e h i r e d a c o u p l e o f Hami l t o n - Ry k e r e mpl o y e e s t o a s s i s t her , but
sa id th a t s h e th o u g h t th a t th e y m a in tain e d th e ir jo b s w ith H a m ilt o n -R y k e r a n d w o rk e d w ith K e y m o n “ in th e e v e n in g s .”

A tt he conc l us i on of t he pr oof, t he t r i al cour t i s s ued an or al rul i ng. I tfound t hat“by th e o v e rw h e lm in g p re p o n d e ra n c e o f th e p ro o f

” K e y m o n w a s li a b le to H a m ilt o n -R y k e r on a ll cl ai m s as s er t ed aga i ns ther

. I n i t s or al rul i ng, t he t r i al cour taw ar ded K eym on a j udgm entof $6000 on her count er cl ai m on t he S ever ance A gr eement , but t ook underadvi s ement t he i s s ue o f th e d am ag e a w ard to b e m ad e a g ains t K ey m o n in f av o r of H am il ton -R y k er.
O n A pr i l 7, 2008, t he tr i al cour tent er ed a w r i t t en or der r es t at i ng i t s pr i oror al rul i ng and aw ar d ing damages

. A tt he out s et , t he tr i al cour tr ej ect ed K eym on’ s ar gum entt hatt he-12-

n o n c o m p e te a g re e m e n t w a s n o t e n f o rc e a b le b e c a u se it d id n o t co n tain a g e o g ra p h ic boundary
. T he tr i al cour ts t at ed t hat K eym on’ s “ac t i ons occurr ed i n an exi s t i ng ar ea w i t h an exi s t i n g c l i e n t o r c u s t o me r , a n d a s s u c h , t h e a b s e n c e o f a g e o g r a p h i c b o u n d a r y i s of no i s s ue. ” The t r i al cour tt hen w enton t o fi nd:

11. T he D efe ndant al s o, w hi l e she w as empl oy ed by t he Pl ai nt i ff, dow nl oaded dat a fr om hercompanycomput ert o herhom e comput erw hi ch cont ai ned an
e x p a n d a b le f

o ld e r f u ll o f c o n f id e n tial, p ro p rie tar ya n d tra d e se c re ts i nfor m at i on of t he Pl ai nt i ff.

12. T he ar gum entbyt he D efe ndantt hatt he i nfor m at i on w as neede d fort he purpos e o f inv o ic i ng i s w i t houtm er i t , as t he t i m e l i ne and a l l t he fa ct s and
c irc u m sta n c e s re q u ire the C o u rt— h a v in g o b se rv e d th e w itn e ss tes tim o n yfirsthand— t o concl ude t hatt he i nfor m at i on w as us ed to i m pr oper l ygo i nt o a compet i ng bus i nes s agai ns tt he Pl ai nt i ff.

1 3 . S h o rtlya f

ter th e D e f

e n d a n t im p ro p e rlyd o w n lo a d e d th e c o n f id e n tial, pr opr i et aryand tr ade s ecr et s i nfor m at i on of t he Pl ai nt i ff, t he D efe ndantw as t empora r i l yl ai d- off byt he Pl ai nt i ff.

1 4

. S h o rt ly af

ter this ti m e, the D ef

en d an t’ s cu stom ers, V erizo n an d O asis (M r. H oi ng’ s company ) , t er m i nat ed t hei r bus i nes s r el at i ons hi ps w i t h t he Pl ai nt i ff.

15. A s s oon as t he D efe ndantw as t empora r i l yl ai d- off byt he Pl ai n ti ff, t he D efe ndantbegan pr ovi di ng t he verys ame st aff i ng s er vi ces t o V er i zon and O as i s ( M r
. H oi ng’ s company ) t hat t he P l ai nt i ff ha d pr ovi ded t o t hes e ent i t i es dur i ng t he D efe ndant ’ s empl oy m entw i t h the P l ai nt i ff, and w hi ch the D efe ndanthandl ed fort he Pl ai nt i ff.

16. T he C our tfi nds t hatt he ca us e of the t er m i nat i on of the cont r actand bus i nes s r el at i ons hi p bet w een the Pl ai nt iff an d i t s cus t om er s , V er i zon and O as i s ( M r
. H oi ng’ s com p an y ), w er e the di r ectand i nt ent i onal act i ons of t he De f e n d a n tt o s o l i c i ta n d a p p r o p r i a t e th e c o n t r a c t s a n d b u s i n e s s f o rh e ro wn p e rso n a l b e n e f

it.

17. T he ac t i ons of t he D efe ndanti n i nt ent i onal l y s ol i ci t i ng and appr opr i at i ng the c o n tr ac ts an d b u sine ss o f V erizo n an d O asis (M r. H o ing ’s co m p an y ) w ere t aken no l at ert han J ul y10, 2004, dur i ng w hi ch t i m e t he Pl ai nt i ff w as s t i l l an act i ve empl oy ee of

t he Pl ai nt i ff.A ft er Ke ym on f il ed h er n ot ic e of a pp ea l, s he f

il ed amot io n inth is C ourtto r eman d to th e tr ia l c ourt 9 for co n s i d e r at i o n o f h e r m o t i o n t o s e t a s i d e th e tr i a l c o urt ’ s f i n a l o r d e r p ur s u ant t o R u l e 60. 02 of the Tennessee Rules of Civ il Procedure. In the Rule 60.02 m otion, K eym on alleg ed that the testim ony of her
ex- husb and Adam s had been procured through fraud, alleg edly based on a secret a greem ent w ith H amiltonRyker for Adam s to prov ide fav orable testim ony in e xc ha ng e for a pro mise no t to sue. The case was rem anded to the trial court for co nsideratio n of Keym on’s R ule 6 0.0 2 motion. The trial court rejected the
m otion a s b a s ed o n h earsay ev idence. The trial c ourt a lso co nclude d that the weight of the evidence supp orted the fin al ord er ev en if Adam s’s testimony w ere stricken.

-13- 1 8

. F u rt h erm o re, th e im p rop e r d o w n load ing o f th e c o n fid en ti al, p rop ri etary
an d tr ad e se cre ts i n fo rm ati o n o f th e P lai n ti ff b ythe D ef

en d an t occ u rred m ere h o u rs a f ter th e D e f

e n d a n t in ten tio n a llyso licite d a n d a p p ro p ria ted th e c o n tra c ts
an d b u sine ss o f V erizo n an d O asis (M r. H o ing ’s co m p an y ).

19. A s s uch, t he C our t fi nds t hat by t he overw hel m i ng pr eponder ance of t he pr oof i n t hi s c a s e

— h a v i n g p e r s o n a l l yo b s er ved the w i t nes s t es t i m ony

— t hatt he D efe ndanthas b rea ch ed hercontr actual , comm on l aw and s t atut or ydut i es ow ed t o t he Pl ai nt i ff.

T h e tr ia l c o u rt a w a rd e d H a m ilto n -R y d e r, in tera lia , $94, 307 forbr eac h of t he E m pl oy m ent A g ree m entand $48, 283. 20 i n at t or ney ’ s fee s undert he Em pl oy m ent A g re e m e n t. Ita lso f

o u n d th a t K e y m o n p ro c u re d V e riz o n ’s b re a c h o f it s c o n tra c t w ith H ami l t on- R y ker , i n vi ol at i on of T ennes s ee C ode A nnot at ed § 47- 50- 109. T he damages for th is o ff en se w ere also $ 9 4 , 3 0 7 , an d thes e w ere tr eb led u n d er the statu te, fo r a total aw ard under se ct i on 47- 50- 109 of $282, 921. T he tr i al cour tfound t hatH ami l t on- R y ker ’ s t ot al
a c tu a l d a m a g e s w e re $ 4 7 7 ,1 7 8 , r e s u lti n g f ro m K e y m o n ’s in ten tio n a l in ter f e re n c e in H ami l t on- R y ker ’ s bus i nes s r el at i ons hi ps w i t h O as i s and V er i zon, K eym on’ s br eac h of her
comm on l a w an d c o n t r a c tu a l d u t i e s o f l o y a l t y , t ru s ta n d o b l i g a t i o n t o r e f r a i n f r o m s e l fd e a lin g , K e y m o n ’s c o n v e rsio n o f H a m ilt on -R yker’ s ass et s, and K eym on ’s un j ustenri ch m e n t. U ndert he Tra de Secr et s A ct , t he t ri al c o ur tfound t hatH ami l t on- R y ker ’ s actual damages
wer e , a g a i n , $ 4 7 7 , 1 7 8

. Pu r s u a n t t o s e c t i o n 4 7

- 2 5

- 1 7 0 4 ( b ) , t h i s a mou n t was d o u b l ed as exempl arydamages , due t o t he w i l l ful and mal i ci ous natur e of K eym on’ s conduct , fora t ot al
aw ar d of $954, 356. A ft ers et t i ng for t h t he damages foreac h cl ai m , t he tr i al cour taw ar ded a j udgm enti n favorof H ami l t on- R y keri n t he am ount of $948, 356 as damages foral l caus es o f actio n , af

ter o f f se tti n g K e y m o n ’s $ 6 0 0 0 a w a rd u n d e r th e S e v e ra n c e A g re e m e n t. F ro m th is j ud gm ent, K ey m on no w app eal s. 9

I SS UE S ON A PPE AL AN D S T AN DA RD OF R EVIE W
O n ap peal, K ey m on present s the fo l l ow i ng i ssues:-14-

1) W he t h e r t h e t r i a l c o u r t e r r e d i n u p h o l d i n g a n d e n f o r c i n g a l l p r o v i s i ons of t he Em pl oy m entA gr eementorw hethert he ent i r e Em pl oy m entA gr eement , or c ert ai n provi si on s of t he E m ploym ent A greem ent, shou l d have been h e ld
u n e n f o r c e a b l e p u r s u a n tt o l a w o rp u b l i c p o l i c y;
2 ) W h ethe r K ey m o n b rea ch ed an yd u tyo w ed to H am il ton -R y k er; 3) W hethert he tr i al cour terr ed i n t he ca l cul at i on o f d amages byaw ar di ng damages f

o rn e a r l yf

o u ry e a r s a n t i c i p a t e d p r o f i t s a n d b yd o u b l i n g a l l e g ed act ual dam ages fo r exem plarydam ages; 4) W hethert he fi ndi ng of unj us tenr i chment s houl d be s etas i de; 5) W hethert he t r i al cour t err ed i n hol di ng t hat damages aw ar ded t o H ami l t onR y k e r f o r in d u c in g b re a c h o f

c o n tra c t sh o u ld b e tre b led in a c c o rd a n c e w ith T ennes s ee Code A nnot at ed § 47- 50- 109; and

6 ) W h e t h e rth e t r i a l c o u r te r r e d i n r e f u s i n g t o g r a n tKe y mon a dd i t i o n a l t i me t o conductfur t heri nves t i gat i on andf o r m al di s coveryi n s uppor tt he R ul e 60. 02
m ot i on t o s etas i de j udgm ent , es peci al l y gi ven t he l ack of not i ce on the mot i on hear i ng.
A s t hi s cas e w as t r i ed byt he tr i al court sit t i ng w i t houta j ur y , w e r evi ew t he tr i al
c o u rt’s f in d in g s o f

f a c t de novo w it h a pr es um pt i on of corr ectnes s unl es s t he evi dence p re p o n d e ra te s to th e c o n tr a ry. T ENN

. R. A PP

. P. 1 3 (d ); R a w lin gs v. J o h n H a n co ck Mu t. L if

e I ns. Co. , 7 8 S .W .3 d 2 9 1 , 2 9 6 (T e n n . C t. A p p . 2 0 0 1 ). “T h e trial c o u rt’s c re d ib ili ty
a ss e ss m e n ts a re e n tit led to g re a t w e ig h t o n a p p e a l, b e c a u se th e c o u rt h a d th e o p p o rtu n ityto h ea r t he t es t i m onyand obs er ve t he demeanorof t he w i t nes s es
. ” Co lum b u s Med
. S erv s., L L C v. T hom as , N o . W 2 0 0 8

- 0 0 3 4 5 -C O A -R 3 -C V , 2 0 0 9 W L 2 4 6 2 4 2 8 , at * 1 4 (T e n n . C t. A p p
. A u g
. 1 3 , 2 0 0 9 ), no per m

. app. ( ci t i ng C & W A s s et A cquis iti on, L L C

v. Oggs , 230 S. W

. 3d 671, 676 ( T enn. C t

. A pp. 2007) )

. T he t r i al cour t ’ s concl us i ons of l aw ar e r evi ew ed de novo w ith o u t a p re s u m p tio n o f c o rr e c tn e s s
. Va n tag e T ech
. , L L C

v. Cross , 17 S. W

. 3d 637, 644 ( T enn. C t

. A pp. 1999) ( ci t i ng Campbel l v. Fla. Steel

Cor p. , 919 S. W

. 2d 26, 35 ( T enn. 1 9 9 6 ); P re sle

y v . B e n n e tt , 8 6 0 S

. W

. 2 d 8 5 7 , 8 5 9 (T en n
. 1 9 9 3 )).At trial, Keymon also contend ed that the nonc om pete c ov enant was unen forceable bec ause she was 10 already em ploy ed when Hamilton- Ryker ask ed h er to sign it, and thus it failed

for lack of consid eration. The trial court correc tly

held that Keym on’s continu ed e m ploym ent w as ad equate consid er ation for the
nonc om pete a greem ent. See Cu m m ings, In c. v. Dor gan , No

. M2 00 8- 00 59 3- C O A

- R 3- C V, 2 00 9 WL 3046 979, at * 17 (Tenn. C t. A pp. Sept. 23, 20 09), no perm . a pp. (c i t i ng R a mse

y v . M u t . Su p p l y C o. , 4 27 S.W. 2d 849, 85 2- 53 (Tenn. C t. A pp. 19 68)). This w as n ot raised as an iss ue o n ap peal.
-15- A N A LY S IS
C o v en a n t N o t to C o m p ete

K e y m o n f

irst c o n ten d s th a t th e tr ia l c o u r t er re d in e n f o rc in g th e c o v e n a n t n o t to
c o m p e t e i n h er Em ploym ent A greem ent. S he assert s that the lack of an ygeo grap h ic l i m i t at i on i n t he noncompet e cl aus e makes i t s r es t r i ct i ons unr eas onabl ybr oad, and thus
ren d ers itu n en fo rce ab le. T h e tri al co u rt h eld t h at the l ac k o f an yg eo g rap h ical bo u n d ary 10 i n t h e n o n c o mp e t e c l a u s e wa s “ o f n o i s s u e ” b e c a u s e Ke y mo n ’ s c o n d u c to c c u r r e d i n t h e s a me g eo g rap h ic area in w h ich s h e w o rke d fo r H am il ton -R y k er, w ith an ex ist ing cu stom er.
I n gener al , “co v enant s nott o compet e ar e di s favor ed i n T ennes s ee butw i l l be enfor ced i f ‘ t heyar e dee m ed r eas onabl e undert he par ti cul arci r cumst ance s
. ’ ” Colum bus Me d
. Se r v s . , LLC , 2009 W L 2462428, at*14 ( quot i ng A l lri gh t A u to P arks, Inc. v. B erry , 4 0 9 S .W .2 d 3 6 1 , 3 6 3 (T e n n . 1 9 6 6 )). T h e re f o re , the re a so n a b len e ss o f th e n o n c o m p e te pr ovi s i on, and t hus i t s enfor cea bi l i t y , i s not eval uat ed i n t he abs t r act ; r ather , i ti s det er m i ned in th e c o n tex t o f

th e c irc u m sta n c e s p re se n ted in th e c a se b e f o re th e c o u rt.

I n gener al , one of t he fa ct or s t o be cons i der ed i n det er m i ni ng t he r eas onabl enes s of
a cove nantnott o compet e i s w hether t he t err i t or i al l i m i t at i ons i n t he cove nantar e r eas onabl e. Colum b us Med. Se r v s . , LLC , 2009 W L 2462428, at*15 ( quot i ng Murf r ees bor o Med. Clini c, P
. A
. v. U

dom , 166 S. W

. 3d 674, 678 ( T enn. 2005) )

. T he “t err i t or i al l i m i t s m us tbe no gr eat ert han nec es s aryt o pr ot ectt he bus i nes s i nt er es tof t he em p loy er. ” I d. ( quot i ng U dom , 1 6 6 S

. W

. 3 d at 67 8 ).

I n s om e cas es , how ever , a r es t r i ct i on agai ns t s ol i ci t i ng t he empl oy er ’ s cus t om er s can i n eff ects ubs t i tut e fora geogr aphi c l i m i t at i on, bys t at i ng t he i m per m issi b le a cti ons of t he empl oy ee byot herm eans
. For exampl e, i n T homps on, B r eeding, D unn , Cr es w el l & Sparks
v . B o w lin , 765 S. W

. 2d 743 ( T enn. C t

. A pp. 1987) , t he def endantacc ount ant ’ s empl oy m ent
a g re e m e n t w ith th e p la in tif f a c c o u n tin g p a rt n e rs h ip in c lu d e d a c o v e n a n t n o t to c o m p e te

. I d.
a t 7 4 3 -4 4 . T h e c o v e n a n t p ro h ib ited th e a c c o u n tan t f ro m so licitin g th e p a rtn e rsh ip ’s c lien ts fo r three y ea rs af

ter term ination o f his em p loy m e n t. I d. T he cove nanthad no t err i t or i al lim ita tio n
. See id. A ft erl eavi ng t he ac count i ng par t ner s hip, the account ants ol i ci t ed and-16-

b e g a n p ro v id in g a c c o u n tin g s e rv ic e s to tw e n ty o f th e p a rt n e rs h ip ’s c u rr e n t c lie n ts

. I d
. at744. T he part ner s hi p s ued t he ac count antt o enfor ce the nonco m p ete clause i n t he empl oy m ent
c o n tr a c t. I

d. at 74 3

. T h e tri al co u rth eld t h at t h e c o v en an t w as u n en fo rce ab le, in p art b e c a u s e it d id n o t in c lu d e a te rr ito ri a l lim ita tio n
. I d. a t7 4 4

. T h e e mp l o y e ra p p e a l e d

. On
a p p e a l, th is C o u rt h e ld th a t an e m p lo y e r h a s a leg iti m a te p ro tec tab le b u sin e ss in ter e st in its
c u rre n t clie n ts. It f

o u n d th a t th e o m iss io n o f a ter rito ria l li m itatio n in th e n o n c o m p e te
c o v e n a n t w a s n o t f

a ta l. I d. at745- 46. T he C our texpl ai ned:

R a th e r th a n b e in g lim ited b yg e o g ra p h ic b o u n d a rie s, [ B o w lin ] is o n ly pr ohi bi t ed fr om s ol i ci t i ng t he bus i nes s of and w or ki ng for a s peci fi c gr oup of per s ons , t he Par t ner s hi p’ s cl i ent s
. . . . B ow l i n knew w ho thes e cl i ent s w er e .

. .. “ [ A ]s th e sp e c if

icity o f lim itatio n re g a rd in g th e c las s o f p e rso n [ sic ] w ith
w h o m c o n tac t is p ro h ib ited in c r e a s e s , th e n e e d f o r lim itatio n e x p re ss e d in te rr ito ri a l te rm s d e c re a s e s .”

I d. ( quot i ng Seach v. R i char ds, D i eter le & Co. , 4 3 9 N

. E

. 2 d 2 0 8 , 2 1 3 (Ind

. C t. A p p
. 1 9 8 2 )). T h e a p p e llate c o u rt c o n c lu d e d th a t th e re stra in t o n th e e m p lo y e e w a s re a so n a b ly
comm ens u rat e w i t h t he goal of pr ot ect i ng t he empl oy er ’ s l egi t i m at e bus i nes s i nt er es t , and th u s th a t th e c o v e n a n t n o t to c o m p e te w a s e n f o rc e a b le

. I

d. at746.

A s i n B o w lin , al t hough t he noncompet e pr ovi s i on i n K eym on’ s E m pl oy m ent A gr eementdi d nots t at e a t err i t or i al l i m i t at i on, i t pr ohi bi t ed her fr om s ol i ci t i ng bus i nes s fr om e n tit ies w h o w e re c u sto m e rs o f H a m ilt o n -R y k e r w ith w h o m K e y m o n d id b u sin e ss o n b e h a lf
o f H am il ton -R y k er. T h e a cti o n s tha t w ere p roh ib ite d af ter K ey m o n ’s t erm ination w ere cl ear l ydel i neat ed byt hi s l i m i t at i on, and the r es t r ai nt on K eym on w as r eas onabl e undert he ci r cumst ance s
. T hus , w e agr ee w i t h t he conc l us i on of t he tr i al cour tand af fi r m i t s hol di ng t hatt he cove nantnott o compet e i n K eym on’ s E m pl oy m entA gr eementw as enfor cea bl e.
T rade Secr et s A ct

T h e larg est aw ard o f d am ag es a g ains t K ey m o n w as m a d e p u rsua n t t o T en n esse e’s U ni for m T r ade Sec r et s A ct , T ennes s ee Code A nnot at ed §§ 47- 25- 1701 t o -17 0 9

. T he dam age aw ar ds underot herl egal t heor i es w er e s ubs um ed w i t hi n t he Tra de Secr et s A ct damage aw ar d. T her efore, w e co n si dernextt he i s s ues r ai s ed on appe al undert he Tra de S e c re ts A c t.
O n appea l , K eym on cont ends t hatt he V er i zon- r el at ed i nfor m at i on s he emai l ed t o her per s onal emai l addre s s on J ul y10, 2004 di d notcons t i tut e a “ t r ade s ecr et ” w i t hi n t he
m ea n ing o f the T r ade Sec r et s A ct

. She ar gues thatt he tr i al cour terr ed i n fi ndi ng t hather act i ons w er e “w i l l ful and mal i ci ous ” undert he Tra de Secr et s A ct , w hi ch w as t he bas i s forThe Ha lij an article in the Univ ersity of Mem phis LawR ev iew prov ides an ex cellent o v erv iew of 11 Tenne ss ee ’s Uni fo rm

Tra de S ec re ts A ct

. -17- t he tr i al cour t ’ s aw ar d of exempl ary damages

. Fi nal l y , s he as s er t s t hat t he tr i al cour terr ed in its c a lcu latio n o f

d a m a g e s p u rsu a n t to th e T ra d e S e c re ts A c t.

O ver view
U nderT ennes s ee’ s comm on l aw , a pl ai nt i ff bus i nes s coul d as s er ta claim for
m i sapprop ri at i on of a tr ade secreti f t he p l ai nti ff p roved the foll ow i ng el em ents : ( 1) t he exi s t ence of a tr ade s ecr et ; ( 2) comm uni cat i on of t hat t r ade se cr et t o t he defe ndantw hi l e the d ef endantw as i n a pos i t i on of t rus tand conf i dence ; ( 3)
us e of the tr ade s ecr et ; and ( 4) damage t o t he pl ai nt i ff.

D o u g l a s F . H a lija n , The P as t , P r es ent , and Fut ur e of Trade Secr et s Law i n Tennes s ee: A P r act i t i oner ’s G ui de Fol l ow i ng the Enactm ent of the U ni f or m Trade Secr et

s A ct , 3 2 U. M EM

. L. R EV

. 1, 9 ( 2001) ( ci t i ng H i ckor y Specialti es, I

nc. v. B & L L abs
. , I

nc. , 592 S. W

. 2d 583, 586 ( T enn. C t

. A pp. 1979) )

. I n par t i cul ar , empl oy ees ar e “bound by t he gener al dut ynot 11 to d iscl o se c o n fid en ti al i n fo rm ati o n o r t ra d e se cre ts be lon g ing to the fo rm er e m p loy er; viol at i on of thi s dutygives r i se t o a cause o f act i on i n the em ploy er t o o btai n rel i ef ag ai nst t he form erempl oy ee. ” W r i ght Me d. Tec h. , I

nc . v . G r is oni , 1 3 5 S .W .3 d 5 6 1 , 5 8 8 (T e n n . C t. A pp. 2001) ( ci t i ng Ed Nowog r o s k i I ns . , I nc . v. R ucker , 971 P. 2d 936, 941- 42 ( W as h. 1 9 9 9 )).

U ndert he com m on l aw , a t r ade se cr et w as defi ned as “anyfor m ul a, pr oces s , pat t er n, devi ce orcompi l at i on of i nfor m at i on t hati s us ed i n one’ s bus i nes s and w hi ch gi ves hi m an oppor tuni t yt o obt ai n an adva nt age over c om pet i t or s w ho do notus e i t

. ” I d. ( quot i ng H i ckor y Specialti es, I

nc. , 5 9 2 S

. W

. 2d at586)

. T ennes s ee c as es “us ed the t er m s ‘ t r ade
secr et ’ and ‘confidenti al i nfo rm at i on ’ in t erchang eably , ho l ding t hat confident i al bu si ness i nfor m at i on s uch as cus t om er l i s t s , know l edge of t he buy i ng habi t s and nee ds of par t i cul ar cl i ent s , and pr i ci ng i nformat i on, w as pr ot ect abl e onl yt o t he ext entt hati ts at i s fi ed the d e f in itio n o f

a tr a d e s e c re t.” H a lija n , s upr a, a t 1 3 ; s e e G r is oni , 135 S. W

. 3d at5 88 ( “C onfi dent i al i nfor m at i on i s cl os el yanal ogous t o a tr ade s ecr et an d w arr ant s s i m i l ar pr ot ect i on. ”)

. T o det er m i ne w hethert he tr ade s ecr etorconfi dent i al i nfor m at i on w as pr ot ect abl e, cour t s cons i der ed fa ct or s s uch as t he m eas ur es t aken by t he bus i nes s t o guar d t he
s ecr ecyof t he i nfor m at i on, t he val ue of t he i nfor m at i on, and t he ea s e w i t h w hi ch i tcoul d be d u p lic a te d o r a c q u ir e d b y o th e rs . H a lija n , supra , at9 ( ci t i ng V e n tu re E x p re ss , In c . v. Zill

y , 9 7 3 S

. W

. 2 d 6 0 2 , 6 0 6 (T en n
. C t. A p p
. 1 9 9 8 )).-18-

E nact ed i n 2000, T ennes s ee’ s T r ade Secr et s A ct “pr eempt s and di s pl ace s confl i ct i ng o r in c o n s is te n t co m m o n la w in T e n n e s s e e re g a rd in g th e m is a p p ro p ri a tio n o f tr a d e s e c re ts .” I d. at5 ( ci t i ng T

. C

. A

. § 47- 25- 1708( a) ( Supp. 2000) )

. T he A ctpr ovi des t hata pl ai nt i ff may obt ai n i nj unct i ve r el i ef a nd/ oran aw ar d of damages fo r “m i s appr opr i at i on” of a “t r ade
s e c re t” a s th o s e t e r m s a re d e f in e d in th e A c t. See T

. C

. A

. § 47- 25- 1702( 2) , ( 4) ( pr ovi di ng defi ni ti ons of “mi s appr opr i at i on” and “ t r ade s ecr et , ” r es pect i vel y ) ; T

. C

. A

. § 47- 25- 1703 (pro v iding fo r i n

jun cti v e re li ef

); T

. C

. A

. § 4 7 -25 -17 0 4 (pro v iding fo r da m ag es).

T h e ter m “ m isa p p ro p ria tio n ” h a s m u lti p le d e f in iti o n s u n d e r th e T ra d e S e c re ts A c t. T he def i ni t i on m os tappl i cabl e t o t he ca s e atbari s t he fol l ow i ng: “[a ] cqui s i t i on of a tr ade
s ecr etof anotherbya per s on w ho know s orhas r eas on t o kno w that the t r ade s ecr etw as a c q u ire d b yim p ro p e r m e a n s.” T .C .A . § 4 7 -2 5 -1 7 0 2 (2 )(A ) (2 0 0 1 ). T h e ter m “ tra d e se c re t” has a s t atut or ydefi ni t i on t hati s s i m i l art o t he comm on l aw defi ni t i on: [ I]n f o rm a tio n , w ith o u t r e g a rd to f o rm , inc lu d in g , b u t n o t li m ited to , tec h n ica l,
n o n t e c h n i c a l o rf

i na n c i a l d a t a , a f

o r mu l a , p a t t e r n , c o mp i l a t i o n , p r o g r a m, d e v ice , m e th o d , tec h n iq u e , p ro c e ss , o r p lan th a t: ( A ) D er i ves i ndepende nteconomi c val ue, actual orpot ent i al , fr om not bei ng gener al l yknow n t o, and not bei ng r eadi l yas cert ai nabl e bypr oper m e a n s b y o th e r p e rso n s w h o c a n o b tain e c o n o m ic v a lu e f ro m its di s cl os ur e orus e; and ( B ) I s t he s ubj ectof ef

for t s t hatar e r eas onabl e undert he ci r cumst ance s to m a in ta in its s e c re c y
.
T

. C

. A

. § 47- 25- 1702( 4) ( 2001)

. T he Tennes s ee l egi s l atur e adopt ed the def i ni t i on of “tr ade
s ecr et s ” undert he U n ifo r m T r ade Sec r et s A ct , and al s o adopt ed addi t i ons w hi ch make T e n n e s s e e ’ s d e f

i n i t i o n e v e n b r o a d e rt h a n t h e d e f i n i t i o n i n t h e U n i f

o r m A c t

. S p e c i f

i c a l l y,

“ Te n n e s s e e ’ s d e f

i n i t i o n o f ‘ t r a d e s e c r e t ’ i n c l u d e s a n yi n f o r ma t i o n ‘ wi t h o u tr e g a r d t o f o r m, in c lu d in g , b u t n o t lim ite d to , te c h n ic a l, n o n te c h n ic a l o r f in a n c ia l d a ta .’ ” H a lija n , supra , at 21. T ennes s ee’ s defi ni t i on “al s o adds t he w or d ‘ pl an’ t o t he non- excl us i ve l i s tof i nfor m at i on and i t ems t hat m aycons t i tut e a tr ade s ecr et

. ” I d. at 21- 22. T hus , t he def i ni t i on of a “ t r ade
s ecr et ” undert he A cti s su ffi ci ent l ybr oad t o i ncl ude i nfor m at i on w hi ch atcomm on l aw w oul d have be en cons i der ed confi dent i al i nfor m at i on. I n contr as tt o t he comm on l aw , for t he i nfor m at i on t o be pr ot ect abl e undert he Tra de Secr et s A ct , t he bus i nes s need onl ys how

“ re a s o n a b le ” e f

f o rt s to m a in ta in th e s e c re c yo f th e in f o rm a tio n
. I

d. at21.

N ot abl y , undert he Tra de Secr et s A ct , t he dama ges r ecove r abl e fort he
m i s appr opr i at i on of a tr ade s ecr et “can i ncl ude both t he ac tual l os s caus ed by
m isa p p ro p ria tio n a n d th e u n ju st e n ric h m e n t ca u se d b ym isa p p ro p ria tio n th a t is n o t tak e n in to
acc ounti n compu ti ng actual l os s
. ” T. C

. A

. § 47- 25- 1704( a) ( 2001)

. I f t he courtfi nds t hat-19-

t he mi s appr opr i at i on w as “w il lfu l an d m al i ci ous , ” i tm ayaw ar d “exe m pl arydamages ” by d o u b li n g the a w ard o f d am ag es. T

. C

. A

. § 4 7 -25 -17 0 4 (b) (2 0 0 1 ).

T r ade Secr et
O n a p p e a l, K e y m o n a ss e rts th a t sh e d id n o t m a k e u se o f a n y in f o rm a tio n th a t w o u ld
con st i tute a “trade secr et

. ” S he d oes no tdis pu t e t hat s he sent t o h er per sonal em ai l add res s a v a rie tyo f

V e riz o n -re late d d o c u m e n ts a n d in f o rm a tio n . S h e a rg u e s, h o w e v e r, th a t sh e c o u ld have e as i l yobt ai ned the s ame i nfor m ati o n di r ect l yfr om V er i zon, and thatt he pr oces s of
as s i s t i ng V er i zon i n pr epar i ng i t s tel ep hone di r ect or i es fordi s t r i but i on cons t i tut ed gene r al know l edge thatw as w el l know n oreas i l yas cert ai nabl e.
In th e c a se a t b a r, K e y m o n e m a iled h e rse lf f if ty -six d o c u m e n ts p e rta in in g to H ami l t on- R y ker ’ s w or k on t he O as i s and V er i zon account

. T hes e document s i ncl uded V er i zon’ s ant i ci pat ed pr oduct i on s chedul e fort he r emai nderof t he ca l endary ear , H ami l t onR y ker ’ s i nt er nal pr ofi tanal y s i s of t he w or k, m ai l i ng addr es s es fr om V er i zon thathad al r eady been reform at t ed w i t h H am i l t on -R y ker’ s com pu t er soft w are t o be pri nted as m ai l i ng l abels , and H ami l t on- R y ker ’ s i nvoi ces fori t s m os tr ece ntw or k on t he V er i zon ac count

. M cC r ei ght tes tifie d th a t th e se d o c u m e n ts c o n tain e d e v e ry th in g n e e d e d to se rv ice th e V e riz o n a c c o u n t. T he tr i al cour tfound thatK eym on h ad emai l ed t o her s el f “a n expanda bl e fol derful l of
co n fid en ti al, p rop ri etaryan d tr ad e se cre ts i n fo rm ati o n ” o f H am il ton -R y k er.
R e g a rd le ss o f

w h e th e r K e y m o n c o u ld h a v e a c q u ire d th e m a ili n g a d d re ss e s d ire c tly fr om V er i zon, t he aggr egat e of the i nfor m at ion t hatK eym on emai l ed t o her s el f m aybe consi d ere d a t r ade s ecr et

. E ven i f K eym on coul d have obt ai ned “i ndi vi dual pi ece s of i nfor m at i on” byot her m eans, t he i nt egr at i on and aggr egat i on of i tm aybe dee m ed
c o n f id e n tia l o r a tr a d e s e c re t. Se e G r is oni , 135 S. W

. 3d at589 ( quot i ng E s s ex G r oup, I nc. v. Southw ir e Co. 5 0 1 S .E .2 d 5 0 1 , 5 0 3 (G a
. 1 9 9 8 )). M o re o v e r, ev e n if th e in f o rm a tio n c o u ld have be en deve l oped byi ndepende ntm eans , “i tm aybe pr ot ect i bl e i f t he form erempl oy ee d o e s n o t d e v e lo p it b y in d e p e n d e n t [ m e a n s] b u t in f a c t o b tain s h is kn o w led g e
. . . fr o m h is for m erempl oy er and t hen us es t hi s know l edge t o compet e w i t h t he form erempl oy er
. ” I d.

A s n o ted b yth e trial c o u rt, th e sp e e d w ith w h ich K e y m o n u til ize d th is in f o rm a tio n to begi n compet i ng di r ect l yw i t h H am il t on- R y ker- a mer e s i x day s el aps ed betw een the acqui s i t i on of t he i nfor m at i on and the comm ence m ent o f bi l l abl e w or k byK eym on - dem on strat es i t s i nd epen den tecon om i c value. M oreove r, K ey m on ben efi t t ed fr om t he u se of H ami l t on- R y ker ’ s s oft w ar e, i nas muc h a s th e ma i l i ng addr es s es obt ai ned fr om V er i zon had been r eform at t ed s o as t o be pr i nt ed on mai l i ng l abel s , t o be af fi xed t o V er i zon’ s t el ephone di r ect or i es
. Fur t her , t he document s i ncl uded V er i zon’ s ant i ci pat ed pr oduct i on s chedul e and t he det ai l s of H ami l t on- R y ker ’ s i nvoi ces t o V er i zon. O n t he el ement of sec r ecy , M cC r ei ght-20-

t est i fi ed thatH am i l t on -R y ker t oo k st eps t o keep the i nfo rm at i on con fi den t i al , i ncludi ng use of a fi r ew al l

- pr ot ect ed s er ver , confi dent i al i t y agr eement s w i t h empl oy ees , and l i m i t at i ons on t he em ploy ees’ el ect roni c access t o d ocu m ents

. C ons i der i ng t he aggr egat e of t he i nfor m at i on i n t he V er i zon- r el at ed document s t hat K e y m o n e m a iled to h e rse lf , w e m u st c o n c lu d e th a t itm e e ts th e d e f in iti o n o f a “ tra d e se c re t”
u n d er T en n esse e C o d e A n n o tat ed § 4 7 -25 -17 0 2 (4).

W il l f ul and Mali ci ous M

is appr opr i ati on
K eym on nextcont ends t hat t he tr i al cour terr ed i n fi ndi ng t hats he ac t ed w i l l ful l yand
m al i ci ous l yi n mi s appr opr i at i ng H ami l t on- R y ker ’ s t r ade s ecr et s , t he fi ndi ng t hats uppor t s t he tr ial co u rt ’s aw ard of exe m pl arydamages un d er T en n esse e C o d e A n n o tat ed § 4 7 -25 -17 0 4 (b). K eym on ar gues t hat“w i l l ful and m al i ci ous ” i n t he T r ade Secr et s A ct s houl d be i nt erpr et ed t o i ncl ude an e l ement o f “hatr ed, i l l w i l l ors pi t e, ” s i m i l art o t he “mal i ce” s t andar d foran aw ar d of puni t i ve damages

. She al s o m ai nt ai ns t hatt he r ecor d i s devoi d of evi dence s how i ng t hats he ac t ed w i t h i l l w i l l , hat r ed ors pi t e.
A s n o ted a b o v e, T en n esse e C o d e A n n o tat ed § 4 7 -25 -17 0 4 (b) p rov ides fo r an aw ard
o f e x e m p la ry d a m a g e s in th e e v e n t th a t “w illf u l an d m a lic io u s m is a p p ro p ri a tio n e x is ts .” T

. C

. A

. § 4 7 -25 -17 0 4 (b) (2 0 0 1 ). T h e T rad e S ec rets A ct do es n o t i n clud e a statu tory defi ni t i on of “w i l l ful and mal i ci ous
. ” See T

. C

. A

. § 4 7 -25 -17 0 2 (20 0 1 ) (“ D ef init ion s”). N ei t herpar t yci t es a T enness ee c as e i nt erpr et i ng t he phr as e “w i l l ful and mal i ci ous ” i n t he cont extof t he Tra de Secr et s A ct , and w e have found none.

In th e a b se n c e o f

a n yT e n n e ss e e c a se s inte rp re tin g th e T ra d e S e c re ts A c t o n th is p o in t, K ey m on ci t es P r im e Co. v. W il kinson & Snow den, I

nc. , No

. W2 0 0 3

- 0 0 6 9 6

- CO A- R3

- CV , 2004 W L 2218574 ( T enn. C t

. A pp. Sept

. 30, 2004)

. I n P r im e C o. , t he C our thel d t hatt he pr operdefi ni t i on of “mal i ce” i n a pr ocur ement of br eac h of contr actcas e i s “w i l ful vi ol at i on o f a k n ow n r i ght

. ” See id. at*4 ( ci t i ng Cr ye- L eike R eal

tors, I nc. v. W D M , I nc. , N o. 02A 01- 9711- C H

- 00287, 1998 W L 651623, at * 6 (T enn. C t

. A pp. Sept

. 24, 1998) )

. T he C ou rtreferred t o the defini t i on of “m al i ce” ap pli cable t o an aw ard of p un i tive dam ages, namel y : “hatr ed, i l l w i l l ors pi t e. ” I d. Fr om t hi s , K eym on s ub m it s that “w i l l ful and
m al i ci ous ” as us ed i n t he T r ade Secr et s A ctw i th r es pectt o an aw ar d of exe m pl arydamages
s h o u ld b e in te rp re te d to in c lu d e “ h a tr e d , ill w ill o r s p ite .”

I n r es pons e, H ami l t on- R y kerpoi nt s t o cas e l aw fr om ot herj ur i s di ct i ons i nt erpr et i ng t he “e xempl ar ydamages ” pr ovi s i on i n t he U ni for m T r ade Sec r et s A ct

. T hes e ca s es differ enti at e “exem plary dam ages” i n the U nifor m A ct from t radi t i on al pu nitiv e d a m ages. See Y eti by Mol

l y, L td. v. D ecke rs O utdoorCor p. , 259 F. 3d 1101, 1111- 12 ( 9t h C i r
. 2001)-21-

( “W e conc l ude t hatt he M ont ana l egi s l atur e di d noti ncorp o rate the defi ni t i on of puni t i ve d a m a g e s into th e tra d e se c re ts a c t.”); Zaw el s v. E dutr oni cs, I

nc. , 520 N

. W

. 2d 520, 523- 524 (M in n . C t. A p p . 1 9 9 4 ); McFar land v. B r i er , 769 A

. 2d 605, 611- 612 ( R

. I

. 2001)

. W hi l e not bi ndi ng on t hi s C o u rt , the int erpr et at i on gi ven t o a pr ovi s i on of a uni for m actbyot her ju ri s d ic tio n s is h ig h ly p e rs u a s iv e
. See D ew itt v. A l

-H addad , N o. 89- 394- I I , 1990 W L 50727, at *4 ( T enn. C t

. A pp. A pr
. 25, 1990) ( quot i ng Holi day I nns, I nc. v. O l s en , 692 S. W

. 2d 850, 853 ( T enn. 1985) ( “W hi l e opi ni ons by cour t s of s i s t er s t at es cons t rui ng a uni for m actar e not bi ndi ng upon t hi s cour t , w e ar e mi ndful t hatthe obj ect i ve of uni for m i t ycannotbe ac hi eved byi gnor i ng ut t er ance s of ot herj ur i s di ct i ons
. ”)

. M or eover , t he legi s l atur e has s t at ed
ex p r e s s l y t h a t t h e Act s h o u l d b e c o n s t ru e d “ t o e f f e c tu a t e i t s g e n e r a l p u rp os e t o m ake
co n sist en t th e law

. . . am o n g s tat es e n ac ti n g it

. ” T

. C

. A

. § 4 7 -25 -17 0 9 (20 0 1 ). W e a re p e rsu a d e d b yth e se c a se s th a t th e sta n d a rd f o r ex e m p lar yd a m a g e s u n d e r th e T ra d e S e c re ts A ctshou l d b e i nterpret ed d i fferent l yfrom t he t radi t i on al st and ard for pun i t i ve d am ages so as nott o r equi r e a f

i ndi ng of “ha t r ed, i l l w i l l ors pi t e. ”

H er e, t he evi dence s how s t hat t he day aft er K eym on’ s l as t day of w or k forH ami l t onR y ker , s he cont act ed H oi ng fort he expr es s purpos e of s ol i ci t i ng t he V eri zon w or k. I m m edi at el yaft ert hat , s he emai l ed her s el f H ami l t on- R y ker ’ s t r ade s ecr et i nfor m at i on on t he V e riz o n a c c o u n t. C lea rly , this w a s t o e n a b le K e y m o n to ste p in a n d im m e d iate lyb e g in per for m i ng for V er i zon t he s ame se r vi ces t hatH ami l t on- R y kerhad bee n pr ovi di ng. T he tr i al
cour tbrus hed as i de K eym on’ s as s er t i on t hat s he emai l ed t he i nfor m at i on t o her s el f i n or der t o as s i s tH ami l t on- R y keri n get t i ng i nvoi ces t o V er i zon, fi ndi ng her ar gum ent t o be “w i t hout
m eri t. ” T h i s i s ful l ys uppor t ed byt he evi dence i n t he r ecor d. T hus , w hi l e dr aw i ng u n e m p lo ym e n t c o m p e n s a ti o n a n d a c c e p tin g se v e ra n c e p a ym e n ts, K e ym o n w a s s u rre p tit io u sly
u ti li zing H am il ton -R y k er’s tr ad e se cre t i n fo rm ati o n to p u rl o in V erizo n ’s t elep h o n e d ir ec tory b u sin e ss , ev e n u til izin g H a m ilt o n -R y k e r e m p lo y e e s to d o so . W e m u s t c o n c lu d e th a t th is
c o n d u c t am o u n ts to w ill f u l an d m a licio u s m isa p p ro p ria tio n u n d e r th e T ra d e S e c r e ts A c t. T hus , t he tr i al cour tdi d noterri n aw ar di ng exempl ary damages pur s uant t o T ennes s ee Code A n n o tat ed § 4 7 -25 -17 0 4 (b).

D am age Calculati on
K ey m on con t end s that the t ri al cou rterr ed in cal culat i ng H am i l t on -R y ker’ s dam ages. T o d e ter m in e H a m ilt o n -R y k e r’s d a m a g e s f o r K e y m o n ’s v io latio n o f th e T ra d e S e c re ts A c t, t he tr i al cour tappl i ed H ami l t on- R y ker ’ s 32. 9% pr ofi tcal cul at i on t o t he ent i r e $1, 450, 388 th a t K e y m o n a c tu a llyb ill e d O a sis a n d V e riz o n f ro m Ju ly2 0 0 4 to th e d a te o f th e trial. F irst, K eym on ar gues thati ti s t oo s pecul at i ve t o concl ude thatH ami l t on- R y kerw oul d have pr ovi ded s er vi ces t o O as i s and V er i zon dur i ng t hi s near l y four y ear t i m e p eriod fr om K eym on’ s l ay off t o t he dat e of tr i al

. N ext , K eym on ar gues th at nei t herG al l i m or e, w ho t es t i fi ed as t o H ami l t on- R y ker ’ s l os tpr ofi t s , norK eym on, w ho cal cul at ed the 32. 9% aver age-22-

profi tm argi n fo r H am i l t on -R y ker’ s w ork fo r V eri zon , w ere qu al i fi ed as ex pert s i n b usi ness pr ofi tand l os s anal y s is. Fi nal l y , K eym on as s er t s t hatt he ac tual damage cal cul at i on of $477, 178 forvi ol at i on of t he Tra des Secr et s A cti s i ncons i s t entw i t h t he ac tual damage cal cul at i on of $94, 307 for i nducement t o br eac h t he contr actbetw een H ami l t on- R y kerand O as i s and V er i zon.
A s not ed above , T ennes s ee’ s T r ade Secr et s A ct author i zes t he t r i al cour t t o m ake a n aw ar d of damages t hat i ncl udes bot h t he pl ai nt i ff’ s “ac tual l os s caus ed bym i s appr opr i at i on”
a n d th e d e f

e n d a n t’s “ u n

ju st e n ric h m e n t c a u se d b ym isa p p ro p ria tio n th a t is n o t tak e n in to
acc ounti n comput i ng actual l os s
. ” T

. C

. A

. § 47- 25- 1704( a) ( 2001)

. I n ot herw or ds , t he tr i al
cour tm ay , in it s di s cr et i on, aw ar d t he moni es actual l yl os tbyt he pl ai nt i ff be caus e of the defe ndant ’ s m i s appr opr i at i on; how ever , i f t he amount of t he def endant ’ s unj us tenr i chment i s gr eat ert han t he amount of t he pl ai nt i ff’ s actual l os s , t he damage aw ar d m aybe i ncr eas ed
u p to th e a m o u n t o f

th e d e f e n d a n t’s u n

ju st e n ric h m e n t.

H e re , the trial c o u rt u til ize d th e to tal a m o u n t th a t K e y m o n h a d b ill e d H o in g a n d O a sis forherw or k on t he V er i zon t el ephone di r ect or i es
. I tt hen ap p li ed the pr ofi tper cent age K eym on cal cul at ed forH ami l t on- R y ker ’ s V er i zon w or k. R egar dl es s of w hetherH ami l t onR y ker w ou l d h ave co nti nu ed d oing V eri zon ’s dir ect oryprocessi ng w ork du ri ng t he n e a rly four

- y e a r t i me s p a n f

r o m Ke y mon ’ s l a y o f

f , t h i s was a r e a s o n a b l e me t h o d t o c a l c u l at e t he amount byw hi ch K eym on w as unj us t l yenr i ched f ort he V er i zon w or k s he obt ai ned byvi r tue of t he tr ade s ecr eti nfor m at i on s he m isap pr opr i at ed fr om H ami l t on- R y ker

. T he aw ar d as cal cul at ed byt he t r i al co ur tdi d notr equi r e the us e of e xper tt es t i m ony , and i s i n no w ay inco n sist en t w ith the c alcu lat ion o f H am il ton -R y k er’s ac tual d am ag es f o r K ey m o n ’s i nducementof O as i s and V er i zon t o br eac h t he contr act w i t h H ami l t on- R y ker

. W e fi nd t hat t he t r i al cour t ’ s cal cul at i on of damages undert he Tra de Secr et s A cti s ful l ys uppor t ed byt he evi dence i n t he r ecor d.

D e ni al of M ot i on t o Se t A s i de Judg m e nt

K eym on ar gues t hatt he t r i al cour t err ed i n deny i ng her R ul e 60. 02 m ot i on t o s etas i de th e f in a l ju d g m e n t w ith o u t a llo w in g h e r a d d itio n a l tim e to c o n d u c t d is c o v e ry.
D eni al of a Rul e 60. 02 m ot i on t o s etas i de j udgm enti s r evi ew ed underan abus e of d is c re tio n s ta n d a rd

. B anks v. D em ent Constr. Co. , I

nc. , 8 1 7 S

. W

. 2 d 1 6 , 1 8 (T en n
. 1 9 9 1 ). K eym on’ s 60. 02 m ot i on w as pr edi ca te d upon a purpor t ed agr eementbetw een A dams and H ami l ton -R y k er, underw hi ch A dams’ favor abl e t es t i m onyw as excha nged forH ami l t onR y ker ’ s pr om i s e nott o s ue. I n s uppor tof t he mot i on, K ey m o n incl uded an a ffi davi tfr om J ames Bow l es s t at i ng t hatA dams had infor m ed B ow l es of t he purpor t ed agr eement

. T he t r i al cour tdeni ed t he mot i on, fi ndi ng t hat t he affi davi t cont ai ned i nadmi s s i bl e hea r s ayand-23-

t hatt he evi d ence s uppor t ed the fi nal j udgm enteven i f A dams’ t es t i m onyw er e s t r i cken. Fur t her m or e, t hr ee y ear s el aps ed betw een the fi l i ng of the compl ai ntand the tr i al dat e, and K ey m on had am ple t i m e pen ding the tri al t o cond uct dis cov ery i nto t his m at t er. W e m u st concl ude t hatt he t r i al cour tdi d notabus e i t s di s cr et i on i n deny i ng K eym on’ s R ul e 60. 02
m o tio n to se t as id e th e ju d g m e n t.

C ONC L US I ON

In su m , w e ho ld th a t K e y m o n ’s n o n c o m p e te c o v e n a n t w a s re a so n a b le a n d e n f o rc e a b le
even w i t houta geogr aphi c l i m i t at i on. W e fi nd thatt he V er i zon- r el at ed i nfor m at i on m i s appr opr i at ed byK eym on cons t i tut ed a tr ad e s e c r et , and thatt he evi dence s uppor t s t he tr i al
cour t ’ s fi ndi ng t hatherm i s appr opr i at i o n w as w il l ful and mal i ci ous
. W e af fi r m t he tr i al
co u rt ’s aw ard o f d am ag es, an d ex em p lary d am ag es, u n d er the T rad e S ec rets A cts. W e a ff irm t he tr i al cour t ’ s deni al of K eym on’ s R ul e 60. 02 m ot i on. T hes e hol di ngs pr et er m i tal l ot her iss u e s ra ise d o n a p p e a l.

T he dec i s i on of t he tr i al cour ti s aff i r m ed. T h e co st s of t hi s appea l ar e t axed t o t he A p p e l l a n tT a m m y L

. K e ym o n , a n d h e rs u r e t y, f o rw h i c h e x e c u t i o n m a y i s s u e i f n e c e s s a r y.

_________________________________ HOL L Y M

. KI RB Y, J UDGE