Case 4:12-cv-00496-RC-ALM Document 9

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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS SHERMAN DIVISION

D2L LTD., Plaintiff, vs. PATRICIA ARMSTRONG, Defendant.

Civil Action No. 4:12-cv-00496

PLAINTIFFS FIRST AMENDED COMPLAINT TO THE HONORABLE JUDGE OF SAID COURT: COMES NOW Plaintiff D2L Ltd. (Plaintiff or D2L), complaining of Defendant Patricia Armstrong (Defendant or Armstrong) and respectfully shows the Court as follows: I. PARTIES 1. Baltimore, Maryland. 2. Defendant is an individual who resides at 1901 Belgium Road, Plano, D2L is a Maryland corporation with its principal place of business in

Texas. She has appeared herein, and a copy of Plaintiffs First Amended Complaint will be served by electronic delivery to her attorney of record. II. JURISDICTION AND VENUE 3. The Court has jurisdiction over the subject matter of this Complaint

pursuant to 28 U.S.C. 1332. D2L is a citizen of the State of Maryland, and Defendant is a citizen of the State of Texas. Accordingly, complete diversity of citizenship exists between the parties. The amount in controversy exceeds $75,000, excluding interest and costs.

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4.

Venue is proper in the Eastern District of Texas, Sherman Division. III. FACTS

5.

D2L is a leading provider of customizable, web-based learning platforms

to businesses and educational institutions. D2L currently provides Desire2Learn learning management systems and related services to, among other entities, hundreds of colleges and universities throughout the United States. 6. D2L employs sales representatives to promote and sell the Desire2Learn

product suite. Armstrong was hired by D2L on June 20, 2011, as a Senior Enterprise Sales Executive, Higher Education, to promote and sell the Desire2Learn product suite to colleges and universities. 7. Upon her hire with D2L, Armstrong was required to and did sign an

Employee Confidentiality, Inventions, and Non-Compete Agreement (ECIN). Through the ECIN, Armstrong agreed to use, publish, and disclose Confidential Information, including but not limited to customer and prospect information, only in the performance of her duties for D2L and in accordance with D2L policy. 8. Armstrong further agreed that for two (2) years following the date of her

leaving the employ of D2L, she would not directly or indirectly divert any business from D2L or attempt to convert any client, customer, vendor, or account of D2L to other methods of using the same or similar services as are provided by D2L. 9. Exhibit A. 10. 2012. Armstrong was terminated from her employment with D2L on March 12, A true and correct copy of the ECIN is attached to this Complaint as

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11.

In a memorandum agreement dated March 12, 2012, Armstrong was

offered continued pay by D2L through April 6, 2012, on the express condition that Armstrong not contact any current or prospective customers of D2L and that she limit her communications with D2L employees to those specified in the salary continuance agreement. These conditions were set forth in a memorandum agreement delivered to Armstrong (the memorandum agreement). Armstrong accepted this additional pay, establishing her agreement conditions set forth in memorandum agreement. 12. A true and correct copy of the memorandum agreement is attached to this

Complaint as Exhibit B. 13. Following her termination, Armstrong proceeded to contact multiple

prospective D2L customers, including those prospective customers with whom D2L had been engaging in business negotiations and were otherwise likely to enter into contract. Among other communications to these prospective customers, Armstrong has accused D2L, its employees, and its prospective customers of illegal and unethical behavior. Armstrong has also contacted employees of D2Ls prospective customers at their homes, leaving threatening and harassing messages. 14. Additionally, Armstrong has made and continues to make repeated

harassing phone calls and other communications to multiple current and former D2L employees, including those employees who Armstrong agreed not to contact in the memorandum agreement. 15. Armstrong has also made harassing, threatening, and defamatory

communications to D2L management, in which she attributes illegal and unethical conduct to other members of D2L management. 16. D2L made a demand on Armstrong to cease all activities in violation of

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the ECIN and memorandum agreement. Demand was also made for the immediate return of any and all electronic storage devices which were used at any time to store information used by Armstrong at D2L. Armstrong did not comply with this demand. 17. performed. IV. CAUSES OF ACTION A. BREACH OF CONTRACT - ECIN 18. length herein. 19. D2L and Defendant entered into a valid and enforceable confidentiality Plaintiffs re-allege and incorporate Paragraphs 1-17 above as if set forth at All conditions precedent to this suit have occurred or have been

and noncompetition agreement, the ECIN. 20. Defendant was placed in a position of trust with respect to D2Ls

customers, prospective customers, employees, and was give access to confidential information which was necessary for her to perform her job. In consideration for her being placed in this position of trust, Defendant agreed to keep the information confidential and comply with the terms of the ECIN. 21. As set forth in full above, following her termination from D2L, Defendant

repeatedly contacted prospective D2L customers, using the confidential information she obtained during her employment with D2L. By her threats and harassment of prospective D2L customers, including accusations that D2L and its prospective customers engaged in illegal and unethical behavior, Defendant damaged the relationships between D2L and its prospective customers. Defendant intended to and did divert business from D2L through this conduct. 22. These uses of confidential information, prospective customer contacts,

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diversion of business, and other acts set forth in this Complaint constitute a breach of Defendants ECIN. This breach has caused and continues to cause damage to D2L, including but not limited to damage to these business relationships, including lost time, effort, and goodwill, and loss of revenue from prospective customers. 23. conduct. B. BREACH OF CONTRACT MEMORANDUM AGREEMENT 24. length herein. 25. D2L and Defendant entered into a valid and enforceable severance Plaintiffs re-allege and incorporate Paragraphs 1-23 above as if set forth at D2L is entitled to recover its damages proximately caused by Defendants

agreement, the memorandum agreement. 26. Armstrong was offered and accepted additional pay in consideration for

her agreement not to contact any current or prospective customers of D2L and limit her communications with D2L employees to those specified by D2L. 27. As set forth in full above, following her termination from D2L, Defendant

repeatedly contacted prospective D2L customers and D2L employees other than those specified by D2L in the memorandum agreement. 28. These contacts and other acts set forth in this Complaint constitute a

breach of Defendants memorandum agreement, which has caused and continues to cause damage to D2L, including but not limited to the additional pay Defendant received from D2L in exchange for her agreement. 29. conduct. D2L is entitled to recover its damages proximately caused by Defendants

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C. TORTIOUS INTERFERENCE WITH PROSPECTIVE RELATIONS 30. at length herein. 31. As a leading provider of customizable, web-based learning platforms, D2L Plaintiff re-alleges and incorporates Paragraphs 1-29 above as if set forth

seeks out and maintains positive relationships with business and educational institutions. D2L, through its sales representatives, consistently cultivates a large number of prospective client relationships, which can and do result in profitable contracts between D2L and the businesses and educational institutions. 32. Defendant obtained the identity of and contact information for prospective

D2L customers as part of her professional responsibilities during her employment as a sales representative with D2L. Through such employment, Defendant had significant contact with prospective customers and learned the status of their relationships with D2L, including the likelihood that D2L would have entered into business relationships with such prospective customers. Assessing and strengthening prospective customer relationships for the purpose of entering into business with D2L was a major job function of Armstrong during her D2L employment. 33. As set forth in full above, following her termination from D2L, Defendant

repeatedly contacted prospective D2L customers with whom she was aware that D2L was otherwise likely to enter into contract, accusing D2L, its employees, and its prospective customers of illegal and unethical behavior. Such conduct was independently tortious or

unlawful, constituting defamation as well as a breach of contracts between Defendant and D2L. 34. By repeatedly contacting, harassing, and communicating defamatory

information to D2Ls prospective customers with whom D2L was otherwise likely to enter into

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contract, as well as other acts set forth in this Complaint, Defendant intended to and did interfere with D2Ls prospective business relations. Defendant was not justified or privileged to engage in such conduct, and such conduct was carried out with malice. 35. It is reasonably likely that D2L would have entered into business

relationships with its prospective customers, and Defendants intentional tortious interference with the same has caused and continues to cause damage to D2L, including but not limited to the loss of contracts with D2Ls prospective customers that Defendants conduct prevented from occurring. 36. conduct. D. DEFAMATION 37. at length herein. 38. Defendant has made false statements and assertions of fact that were Plaintiff re-alleges and incorporates Paragraphs 1-36 above as if set forth D2L is entitled to recover its damages proximately caused by Defendants

injurious to D2Ls business reputation and imputed crime to D2L, including but not limited to false assertions that D2L committed and/or ratified theft and bribery. 39. Plaintiff published such false statements and assertions of fact both orally

and in writing to prospective clients of D2L and current and former employees of D2L. 40. Defendant was not justified or privileged to make such statements and

assertions of fact, and such statements and assertions of fact were made with malice. 41. These statements and assertions of fact constituted defamation per se.

Therefore, Defendant is strictly liable for general damages. 42. Defendants statements and assertions of fact were made with a specific

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intent to injure or harm D2L. Defendant is therefore liable for exemplary damages. E. BUSINESS DISPARAGEMENT 43. at length herein. 44. Defendant communicated false and disparaging statements about Plaintiff re-alleges and incorporates Paragraphs 1-42 above as if set forth

Plaintiffs economic interest, including but not limited to false assertions that Plaintiff engaged in and/or condoned unethical conduct in its sales functions. 45. Plaintiff published such false and disparaging statements both orally and

in writing to prospective clients of D2L and current and former employees of D2L. Plaintiff made this publication with knowledge of the falsity of the statements, reckless disregard for the truth of the statements, with ill will, and/or with the intention to interfere with Plaintiffs economic interest. 46. Defendant was not justified or privileged to make such statements and

assertions of fact, and such statements and assertions of fact were made with malice. 47. Defendants statements and assertions of fact caused direct pecuniary loss,

including but not limited to the loss of prospective contracts, and Defendant is liable to Plaintiff for all actual damages. 48. Defendants statements and assertions of fact were made with a specific

intent to injure or harm Plaintiff. Defendant is therefore liable to Plaintiff for exemplary damages. F. TEMPORARY AND PERMANENT INJUNCTIVE RELIEF 49. at length herein. Plaintiff re-alleges and incorporates Paragraphs 1-48 above as if set forth

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50.

Plaintiff seeks temporary and permanent injunctive relief. As a direct and

proximate result of Defendants conduct, Plaintiff stands to lose customer goodwill and competitive advantage. Defendant will continue to irreparably harm Plaintiff unless this Court enjoins her from using or disclosing all confidential and proprietary information in her possession, and orders Defendant to comply with her ECIN and memorandum agreement. 51. Money damages alone will not adequately compensate Plaintiff for past or

future violations of its rights. Further, Plaintiffs damages are continuing, and to a large degree, incalculable. A lawsuit for damages alone will not give Plaintiff complete relief. Therefore, Plaintiff is without a complete remedy at law for violations which are and will continue to irreparably damage it. Plaintiff is willing to post a bond. 52. Based on the foregoing, Plaintiff moves and prays for injunctive relief

described in greater particularity in the Prayer, which is incorporated by reference as if set forth verbatim, to redress the wrongs committed by Defendant and to protect Plaintiff. V. PRAYER FOR RELIEF THEREFORE, Plaintiff prays that Defendant answer herein; and A. This Court issue a temporary injunction enjoining Defendant from: (1) soliciting, contacting, or calling upon current customers of Plaintiff; soliciting, contacting, or calling upon prospective customers of Plaintiff whose identities Defendant learned while employed by D2L and those prospective customers of Plaintiff with whom Defendant communicated while employed by D2L; directly or indirectly using or disclosing to any business person or enterprise any confidential or proprietary information or trade secrets of Plaintiff;

(2)

(3)

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B.

Upon final trial, enter a permanent injunction and enter judgment in favor

of Plaintiff against Defendant for general, special, and exemplary damages in an amount in excess of the minimum jurisdictional limit of this court and for reasonable and necessary attorneys fees, reasonable and necessary paralegal fees, costs of court, pre- and post judgment interest at the highest rates allowed by law; and C. For such other and further relief, general or special, at law or in equity, to

which Plaintiff may show itself justly entitled. Respectfully submitted, By: /s/ Paul E. Hash Paul E. Hash Attorney-In-Charge Texas Bar No. 09198020 phash@jacksonlewis.com Anastasia L. Villescas Texas Bar No. 24070803 Anastasia.Villescas@jacksonlewis.com Jackson Lewis LLP 500 N. Akard, Suite 2500 Dallas, Texas 75201 PH: (214) 520-2400 FX: (214) 520-2008 ATTORNEYS FOR PLAINTIFFS

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CERTIFICATE OF SERVICE I certify that a true and correct copy of the foregoing pleading was electronically filed with the clerk for the U.S. District Court, Eastern District of Texas, using the electronic case filing system of the court, and the electronic case filing system sent a Notice of Electronic Filing to the following attorneys of record who have consented in writing to accept this Notice as service of this document by electronic means as follows: Raul Loya Loya & Associates, P.C. 10830 N. Central Expressway, Suite 200 Dallas, Texas 75231 PH: (214) 521-8766 FX: (214) 521-8820 Sept. 28, 2012 Date /s/ Paul E. Hash Paul E. Hash

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