Preview
Filed: 5/15/2015 11:12:35 AM
JOHN D. KINARD - District Clerk
Galveston County, Texas
Envelope No. 5299837
By: Shailja Dixit
5/15/2015 11:42:26 AM
15-CV-0490
NO.
VERIFIED TRANSACTION SYSTEMS, § IN THE DISTRICT COURT
LLC §
Plaintiff, §
§Galveston County - 56th District Court
V. § ______ JUDICIAL DISTRICT
§
JEFF ADCOCK, DATA PAY §
SOLUTIONS, LLC AND FOCUS §
MERCHANT SERVICES, LLC §
Defendants. § OF GALVESTON COUNTY, TEXAS
APPLICATION FOR TEMPORARY RESTRAINING
ORDER AND TEMPORARY INJUNCTION
PARTIES
1. Plaintiff, VERIFIED TRANSACTION SYSTEMS, LLC d/b/a VERITRANS
MERCHANT SERVICES, is a Limited Liability Company whose address is 1301 Regents Park
Dr., Suite 207, Houston, Texas 77058-2536.
2. VERIFIED TRANSACTION SYSTEMS, LLC d/b/a VERITRANS MERCHANT
SERVICES has not been issued a driver's license. VERIFIED TRANSACTION SYSTEMS,
LLC d/b/a VERITRANS MERCHANT SERVICES has not been issued a social security
number.
3. Defendant JEFF ADCOCK, an Individual who is a resident of Texas, may be
served with process at his home at the following address: 2514 Siskin Trail, League City,
Galveston County, Texas 77573 or any other address he may be found. Service of said
Defendant as described above can be effected by personal delivery.
4. Defendant DATA PAY SOLUTIONS, LLC, a Limited Liability Company based
in Texas, may be served with process by serving the registered agent of said company, JEFF
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ADCOCK, at 2514 Siskin Trail, League City, Galveston County, Texas 77573 or any other
address he may be found, its registered office. Service of said Defendant as described above can
be effected by personal delivery.
5. Defendant FOCUS MERCHANT SERVICES, LLC, a Limited Liability
Company based in Texas, may be served with process by serving the registered agent of said
company, Sanford G. Cohen, at 1400 Summit Tower, Eleven Greenway Plaza, Houston, Harris
County, Texas 77046, its registered office. Service of said Defendant as described above can be
effected by personal delivery.
6. This court has jurisdiction over the parties because Defendants are Texas
residents.
FACTUAL ALLEGATIONS
7. Plaintiff is a nationwide merchant service provider specializing in providing
credit card payment processing services to merchants across the United States. These
services include setting-up and servicing the physical card authorization equipment and software
at the merchant’s location, securing bank authorization for the merchant to accept bank card
payments, and providing settlement services to merchants to ensure prompt payment. It is a
unique industry in that it provides for a future residual income stream to businesses similarly
situated as Plaintiff. Preventing disruption of this residual income is paramount to Plaintiff and,
therefore, Plaintiff has great interest in protecting and maintaining the same, utilizing various
practical and contractual safeguards to do so.
8. Among other electronic resources, Plaintiff uses a comprehensive customer
relationship management (“CRM”) software system and database. The CRM system and other
electronic systems used by Plaintiff allow the company to create and maintain a variety of
2
proprietary and confidential electronic and hard-copy documents in servicing its customers,
including but not limited to: customer lists, customer profiles, pricing structures, cost allocations
and margins, customer discounts, proposals, vendor information, sales agent information, and
proprietary merchant statements.
9. The documents described immediately above in paragraph 8 provide extensive
sales-related information including but not limited to: the identities of current and targeted
customers, sales agents, and contact persons; pricing and sales information; customer discounts
and fee arrangements; and detailed histories of sales efforts with respect to potential customers.
Collectively, all of the items listed in the preceding paragraph and this paragraph shall
hereinafter be referred to as Plaintiff’s “Confidential and Proprietary Information.”
10. In order to protect the secrecy of its Confidential and Proprietary Information,
Plaintiff limits access to such information and requires employees who have access to this
information to maintain confidentiality.
11. In 2000, Plaintiff hired Defendant JEFF W. ADCOCK as an employee of the
company. In this capacity, Defendant JEFF W. ADCOCK was responsible for growing the
client base of Plaintiff. Defendant JEFF W. ADCOCK later became president of Plaintiff and
currently owns 15% of the outstanding stock in Plaintiff.
12. Upon becoming president of Plaintiff, Defendant JEFF W. ADCOCK, had access
to Plaintiff’s Confidential and Proprietary Information, including the CRM software program
and database, employee files, agent files and all other information of Plaintiff. Defendant JEFF
W. ADCOCK could easily access detailed information about Plaintiff’s potential, current, and
former clients and agents, including the entire history of Plaintiff’s sales efforts with respect to
these potential, current, and former clients and agents.
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13. In addition, Defendant JEFF W. ADCOCK had access to highly sensitive
merchant information that can only be accessed via a password protected internet site operated
by Plaintiff’s sponsor bank and processor.
14. While working for Plaintiff, Defendant JEFF W. ADCOCK entered into a Trade
Secret and Non-Solicitation Agreement with Plaintiff, which, in part, prohibits:
a) the removal of documents, notes, files, records, oral information,
computer files or similar materials from Plaintiff’s from Plaintiff premises
without permission from Plaintiff;
b) disclosure of the contents of plaintiff's records or information otherwise
obtained in regard to business to anyone, except where required for
business purpose.
c) disclosure of any confidential information, purposefully or inadvertently
(through casual conversation) to any unauthorized person inside or outside
Plaintiff’s company.
Additionally, the Trade Secret and Non-Solicitation Agreement states that an employee will not
(either as an individual for his own enterprise, or as a partner, joint venturer, officer, employee,
agent, salesman, consulting, or five percent or more shareholder of any entity or third party)
during the period of employment with Plaintiff and for a period of four (4) years following any
expiration or termination of employment with Plaintiff for any reason whatsoever:
d) hire or solicit for employment directly or indirectly, any of Plaintiff’s
personnel in any capacity whatsoever (which shall be deemed to include,
without limitation, any existing or perspective employee, consultant or
independent contractor of Plaintiff or any person who has been such an
employee, consultant or independent contractor within one hundred (150)
days prior thereto);
e) attempt, directly or indirectly, to induce any personnel of Plaintiff to leave
the employ of, or discontinue such person’s consultant, contractor or other
business association with Plaintiff; and
f) solicit, directly or indirectly, any vendor, customer, merchant or account,
or prospective vendor, customer, merchant or account of Plaintiff.
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A copy of the Trade Secret and Non-Solicitation Agreement is attached as Exhibit A and
incorporated by reference1.
15. While working for Plaintiff, Defendant JEFF W. ADCOCK was the obligation to
follow the terms of the Employee Manual that Plaintiff had and continues to have in place,
which, in part, provided for the employee’s prohibition of disclosure of Plaintiff’s Confidential
and Proprietary Information after the employment relationship ends in Section 4.10 thereof and
for the return of company issued property at the time of termination in Section 4.28 thereof. A
copy of the Employment Manual is attached as Exhibit B and incorporated by reference2.
16. As part of his employment with Plaintiff, Defendant JEFF W. ADCOCK was
given and/or signed both of the relevant documents referenced above (in fact as president, he
made sure that employees were aware of and adhered to the obligations stated therein). However,
after his departure from Plaintiff, the original signed versions of these agreements and copies
thereof, among other documents, all of which should be in Defendant JEFF W. ADCOCK’s
personnel file with Plaintiff as its property, were discovered by Plaintiff to be missing, are not in
the possession of Plaintiff, and have not been found after a diligent search by Plaintiff.
17. Defendant JEFF W. ADCOCK has engaged in conduct that violates and breaches
the Trade Secret and Non-Solicitation Agreement and Employment Manual, both before his
termination from Plaintiff as president from the company on October 23, 2014 and thereafter.
Upon information it has received, Plaintiff has reason to believe Defendant JEFF W. ADCOCK,
individually or through his company, Defendant DATA PAY SOLUTIONS, LLC, has met with
1 - A blank, unsigned version of the Trade Secret and Non-Solicitation Agreement is attached hereto since the
version signed by Defendant JEFF W. ADCOCK is missing from his personnel file.
2- A redacted version of the Employee Manual is attached hereto since the version signed by Defendant JEFF W.
ADCOCK is missing from his personnel file.
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contracted sales agents, customers, and accounts of Plaintiff on different occasions after the date
of his termination. Such activity has diverted business away from Plaintiff and to competitors
such as Defendant FOCUS MERCHANT SERVICES, LLC. In meeting with those agents,
customers, and accounts, Defendant JEFF W. ADCOCK engaged in conduct that breached the
duties he owed to Plaintiff by disclosing Plaintiff’s Confidential and Proprietary Information to
others and by soliciting the agents, customers, and accounts of Plaintiff.
18. Additionally, Defendant JEFF W. ADCOCK failed to timely return company
property upon his termination which included laptops, cell phones, and a SIM card. During this
time, Defendant JEFF W. ADCOCK had access to several years’ worth of Plaintiff’s emails
which contained valuable information on vendors, sales agents, and clients. Such delay in the
return of said property, after demand by Plaintiff to do so, afforded Defendant JEFF W.
ADCOCK ample opportunity to copy Plaintiff’s Confidential and Proprietary Information
contained on these items.
19. Defendant DATA PAY SOLUTIONS, LLC is a Texas Limited Liability
Company which was formed with the Secretary of State on January 13, 2015, a date
approximately three months after Defendant JEFF W. ADCOCK was terminated from Plaintiff.
According to the Secretary of State records, Defendant JEFF W. ADCOCK is listed as the
organizer, registered agent, and sole managing member of Defendant DATA PAY
SOLUTIONS, LLC. Defendant JEFF W. ADCOCK formed Defendant DATA PAY
SOLUTIONS, LLC for the purpose of directly competing against Plaintiff by utilizing
Confidential and Proprietary Information he obtained during his employment with Plaintiff. In
doing so, Defendant JEFF W. ADCOCK has contacted one or more of Plaintiff’s current sales
agents, asking them to sell for his new company, Defendant DATA PAY SOLUTIONS, LLC,
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instead of for Plaintiff. Further, Defendant JEFF W. ADCOCK has requested these same agents
to move accounts owned by Plaintiff to Defendant DATA PAY SOLUTIONS, LLC, thus costing
Plaintiff the future residual income from these accounts.
20. Defendant DATA PAY SOLUTIONS, LLC was aware of the contract between
Plaintiff and Defendant JEFF W. ADCOCK, and Defendant DATA PAY SOLUTIONS, LLC
engaged in a course of willful conduct with the intent to tortiously interfere with the existing and
prospective business relationships of Plaintiffs.
21. Plaintiff is a customer of Defendant FOCUS MERCHANT SERVICES, LLC.
The two parties have one large account on which commissions earned are split between them.
On one or more occasions, Defendant FOCUS MERCHANT SERVICES, LLC has met with
Defendant JEFF W. ADCOCK and Defendant DATA PAY SOLUTIONS, LLC and discussed
future business relations concerning the same products and services upon which Defendant
FOCUS MERCHANT SERVICES, LLC had previously partnered with Plaintiff. Defendant
FOCUS MERCHANT SERVICES, LLC had knowledge that Defendant JEFF W. ADCOCK had
worked for Plaintiff and thus, was aware of the relationship between Plaintiff and Defendant
JEFF W. ADCOCK. Defendant FOCUS MERCHANT SERVICES, LLC engaged in a course of
willful conduct with the intent to tortiously interfere with the existing and prospective business
relationships of Plaintiffs.
GROUNDS
22. Plaintiff will suffer immediate and irreparable injury, loss, or damage if
Defendants' conduct described above is not enjoined. Namely, Plaintiff will suffer harm in the
form of a significant loss of client base, revenues, competitive advantage in the marketplace,
business ability, economies of scale in buying power, confidential information and trade secrets,
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and business reputation; and the significant loss of loyalty in relationships among income-
producing sales agents and their prospective clients.
23. Plaintiff requires injunctive relief to prevent Defendants:
A) by wrongfully appropriating and disclosing Plaintiff’s Confidential and
Proprietary Information;
B) wrongfully soliciting or inducing third parties to act against Plaintiff’s
interests; and
C) intentionally interfering with contractual relationships between Plaintiffs
and its existing and prospective customers.
24. Each day that Defendant JEFF W. ADCOCK continues in breach of his
agreements and covenants with Plaintiff, either through his individual acts or through the acts of
Defendant DATA PAY SOLUTIONS, LLC, and each day that Defendant JEFF W. ADCOCK,
Defendant DATA PAY SOLUTIONS, LLC, and Defendant FOCUS MERCHANT SERVICES,
LLC continue to utilize Plaintiff’s Confidential and Proprietary Information to solicit and obtain
Plaintiff’s business away from Plaintiff brings additional irreparable harm to Plaintiff.
Therefore, unless this Court timely intervenes and immediately restrains and enjoins Defendants
and their respective employees, officers, directors, partners, shareholders, agents, and other
representatives from engaging in the all such actions, Plaintiff will continue to suffer irreparable
harm and damage for which for which there is no adequate remedy at law.
25. Plaintiff has exercised due diligence in prosecuting this claim. The injury to
Plaintiff if Defendants continue the conduct described above would outweigh any injury the
restraining order and injunction might cause Defendants, and issuance of the restraining order
and injunction would not disserve the public interest.
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RELIEF REQUESTED
26. The only adequate, effective, and complete relief to Plaintiff is to restrain the
Defendants from further engaging in certain proscribed activities, as set forth below. Pursuant to
Civil Procedure Rule 680 et seq. and Civil Practice and Remedies Code Section 65.001 et seq.,
and in order to preserve the status quo during the pendency of this action, Plaintiff seeks a
temporary restraining order, and upon hearing, a temporary and permanent injunction, ordering
and immediately restraining Defendant JEFF W. ADCOCK and Defendant DATA PAY
SOLUTIONS, LLC for four (4) years, together with their employees officers, directors,
shareholders, partners, agents, representatives or others acting in concert with them from:
A) Disclosing to any party Plaintiff's Confidential and Proprietary
Information, including but not limited to Plaintiff’s customer relationship
management (“CRM”) database which contains a variety of proprietary
and confidential electronic and hard-copy documents in servicing its
customers, including but not limited to: customer lists, customer profiles,
pricing structures, cost allocations and margins, customer discounts,
proposals, vendor information, sales agent information, and proprietary
merchant statements and proprietary merchant statements;
B) Disclosing to any party Plaintiff's sales-related information including but
not limited to: the identities of current and targeted customers and contact
persons, pricing and sales information, customer discounts and fee
arrangements, and detailed histories of sales efforts with respect to
potential customers;
C) Hiring or soliciting for employment directly or indirectly, any of
Plaintiff’s personnel in any capacity whatsoever (which shall be deemed
to include, without limitation, any existing or perspective employee,
consultant or independent contractor of Plaintiff or any person who has
been such an employee, consultant or independent contractor within one
hundred fifty (150) days prior to October 23, 2014;
D) Attempting, directly or indirectly, to induce any personnel of Plaintiff to
leave the employ of, or discontinue such person’s consultant, contractor or
other business association with Plaintiff; and
E) Soliciting, directly or indirectly, any vendor, customer, merchant or
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account, or prospective vendor, customer, merchant or account of
Plaintiff.
and Plaintiff seeks a temporary restraining order, and upon hearing, a temporary and permanent
injunction ordering and immediately restraining Defendant JEFF W. ADCOCK, Defendant
DATA PAY SOLUTIONS, LLC, and Defendant FOCUS MERCHANT SERVICES, LLC,
together with their employees officers, directors, shareholders, partners, agents, representatives
or others acting in concert with them from:
A) intentionally interfering with contractual relationships between Plaintiffs
and its existing and prospective customers.
PRAYER
Plaintiff prays that-
A. without notice, the Court issue a temporary restraining order restraining
Defendant JEFF W. ADCOCK and Defendant DATA PAY SOLUTIONS, LLC and their
employees officers, directors, shareholders, partners, agents, representatives or others acting in
concert with them from directly or indirectly for four (4) years:
(1) disclosing to any party Plaintiff's Confidential and Proprietary
Information, including but not limited to Plaintiff’s customer relationship
management (“CRM”) database which contains a variety of proprietary
and confidential electronic and hard-copy documents in servicing its
customers, including but not limited to: customer lists, customer profiles,
pricing structures, cost allocations and margins, customer discounts,
proposals, vendor information, sales agent information, and proprietary
merchant statements and proprietary merchant statements;
(2) disclosing to any party Plaintiff's sales-related information including but
not limited to: the identities of current and targeted customers and contact
persons, pricing and sales information, customer discounts and fee
arrangements, and detailed histories of sales efforts with respect to
potential customers;
(3) hiring or soliciting for employment directly or indirectly, any of Plaintiff’s
personnel in any capacity whatsoever (which shall be deemed to include,
without limitation, any existing or perspective employee, consultant or
independent contractor of Plaintiff or any person who has been such an
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employee, consultant or independent contractor within one hundred fifty
(150) days prior to October 23, 2014;
(4) attempting, directly or indirectly, to induce any personnel of Plaintiff to
leave the employ of, or discontinue such person’s consultant, contractor or
other business association with Plaintiff; and
(5) soliciting, directly or indirectly, any vendor, customer, merchant or
account, or prospective vendor, customer, merchant or account of
Plaintiff;
B. without notice, the Court issue a temporary restraining order restraining
Defendant JEFF W. ADCOCK, Defendant DATA PAY SOLUTIONS, LLC, and Defendant
FOCUS MERCHANT SERVICES, LLC, together with their employees officers, directors,
shareholders, partners, agents, representatives or others acting in concert with them directly or
indirectly from:
(1) intentionally interfering with contractual relationships between Plaintiffs
and its existing and prospective customers.
C. the Court set a date and time for a hearing on this application for a temporary
injunction;
D. Defendants be cited to appear and answer;
E. after hearing, the Court issue a temporary injunction enjoining Defendants and
their officers, agents, servants, and employees from directly or indirectly conduct to be
restrained during the pendency of this action;
F. Plaintiff be granted reasonable expenses incurred in obtaining the restraining
order and injunction; and
G. Plaintiff be granted all further relief to which Plaintiff may be entitled.
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Respectfully submitted,
JOSEPH P. MONTALBANO, P.C.
By:
Joseph P. Montalbano
Texas Bar No. 14279700
Email: jpm913@gmail.com
2525 Bay Area Blvd., Suite 310
Houston, Texas 77058-1558
Tel. (281) 488-1656
Fax. (281) 488-5884
Attorney for Plaintiff
VERIFIED TRANSACTION SYSTEMS,
LLC
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TRADE SECRET AND NON-SOLICITATION AGREEMENT
Confidential Nature of Work
All Verified Transactions Systems, LLC (“Veritrans”) records and information relating to
Veritrans or its customers are confidential and contracted workers must, therefore, treat all
matters accordingly. No Veritrans or Veritrans-related information, including without limitation,
documents, notes, files, records, oral information, computer files or similar materials (except in
the ordinary course of performing duties on behalf of Veritrans) may be removed from
Veritrans’s premises without permission from Veritrans. Additionally, the contents of Veritrans’s
records or information otherwise obtained in regard to business may not be disclosed to anyone,
except where required for a business purpose. Contracted workers must not disclose any
confidential information, purposefully or inadvertently (through casual conversation), to any
unauthorized person inside or outside the company. Contracted workers who are unsure about
the confidential nature of specific information must ask their supervisor for clarification. During
the term of this his/her contract, contracted worker shall exclusively represent Veritrans and shall
not enter into any agreement to solicit merchants for the merchant-acquiring program of any
bank, company, ISO or financial institution other than Veritrans.
Non-Solicitation
All Veritrans contracted workers must adhere by the policies set forth herein. An contracted
workers will not (either as an individual for my own enterprise, or as a partner, joint venturer,
officer, employee, agent, salesman, consultant, or 5% or more shareholder of any entity or third
party) during the period of a contract with Veritrans and for a period of four (4) years following
any expiration or termination of contract with Veritrans for any reason whatsoever:
1. hire or solicit for employment, directly or indirectly, any Veritrans personnel in any
capacity whatsoever (which shall be deemed to include, without limitation, any
existing or prospective employee, consultant or independent contractor of Veritrans
or any person who has been such an employee, consultant or independent contractor
within one hundred fifty (150) days prior thereto);
2. attempt, directly or indirectly, to induce any such Veritrans personnel to leave the
employ of, or discontinue such person’s consultant, contractor or other business
association with Veritrans;
3. solicit, directly or indirectly, any vendor, customer, merchant or account or
prospective vendor, customer, merchant or account of Veritrans;
4. solicit, either directly or indirectly, Veritrans’s lead sources including those
prospective lead sources.
If, at the time of enforcement of the covenants above (the “Protective Covenants”), a
court shall hold that the duration, scope or area restrictions stated herein are unreasonable under
circumstances then existing, contracted worker hereto agrees that the maximum duration, scope
or area reasonable under such circumstances shall be substituted for the stated duration, scope or
area and that the court shall be allowed to revise the Protective Covenants to cover the maximum
duration, scope and area permitted by law. Employee agrees that the Protective Covenants are
reasonable in terms of duration, scope and area restrictions and are necessary to protect the
1 EXHIBIT A
goodwill of the Veritrans’s businesses and the confidential information and agrees not to
challenge the validity or enforceability of the Protective Covenants.
If contracted worker breaches, or threatens to commit a breach of, any of the Protective
Covenants, Veritrans and its subsidiaries shall have the following rights and remedies, each of
which rights and remedies shall be independent of the others and severally enforceable, and each
of which is in addition to, and not in lieu of, any other rights and remedies available to Veritrans
or its subsidiaries at law or in equity:
(i) the right and remedy to have the Protective Covenants specifically
enforced by any court of competent jurisdiction, it being agreed that any breach or threatened
breach of the Protective Covenants would cause irreparable injury to Veritrans and its
subsidiaries and that money damages would not provide an adequate remedy to Veritrans or its
subsidiaries; and
(ii) the right and remedy to require contracted worker to account for and pay
over to the Company or its subsidiaries any profits, monies or other benefits derived or received
by contracted worker as the result of any transactions constituting a breach of the Protective
Covenants.
No Residuals after termination of Contract:
If your contract is terminated for any reason or no reason at all, by either party, Veritrans
shall have no further obligations for payment of any residuals to you. Any residual discrepancies
must be brought to Veritrans’s attention within 30 days and will be resolved the next commission
payment. Any discrepancy filed after 30 days will be rejected.
AGREEMENT TO TERMS BY CONTRACTED WORKER
Nothing in this letter serves to modify the at-will status of your employment. By signing
below, you understand and agree that your contract with Veritrans is at will, which means that
either Veritrans or you can terminate your contract at any time, with or without cause, simply by
notifying the other party that the contract is terminated. You also understand and agree that
Veritrans retains the right to modify, add, or eliminate any of its general contracted worker
policies and practices at any time, with or without cause. You further understand and agree that
any modification of your at will status can be made only by a written agreement signed on behalf
of Veritrans by an authorized officer. You will be subject to appropriate disciplinary action, up
to and including dismissal, for violating any of the terms and conditions as set forth above.
As a condition of your contract, I herby acknowledge that I have read this document and agree to
all the terms and conditions above agree to abide by the terms and conditions as set forth above.
By: _______________________________________ Date: __________________
Contract Worker Name: _______________________
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EXHIBIT B
Preview
Filed: 5/15/2015 11:12:35 AM JOHN D. KINARD - District Clerk Galveston County, Texas Envelope No. 5299837 By: Shailja Dixit 5/15/2015 11:42:26 AM 15-CV-0490 NO. VERIFIED TRANSACTION SYSTEMS, § IN THE DISTRICT COURT LLC § Plaintiff, § §Galveston County - 56th District Court V. § ______ JUDICIAL DISTRICT § JEFF ADCOCK, DATA PAY § SOLUTIONS, LLC AND FOCUS § MERCHANT SERVICES, LLC § Defendants. § OF GALVESTON COUNTY, TEXAS APPLICATION FOR TEMPORARY RESTRAINING ORDER AND TEMPORARY INJUNCTION PARTIES 1. Plaintiff, VERIFIED TRANSACTION SYSTEMS, LLC d/b/a VERITRANS MERCHANT SERVICES, is a Limited Liability Company whose address is 1301 Regents Park Dr., Suite 207, Houston, Texas 77058-2536. 2. VERIFIED TRANSACTION SYSTEMS, LLC d/b/a VERITRANS MERCHANT SERVICES has not been issued a driver's license. VERIFIED TRANSACTION SYSTEMS, LLC d/b/a VERITRANS MERCHANT SERVICES has not been issued a social security number. 3. Defendant JEFF ADCOCK, an Individual who is a resident of Texas, may be served with process at his home at the following address: 2514 Siskin Trail, League City, Galveston County, Texas 77573 or any other address he may be found. Service of said Defendant as described above can be effected by personal delivery. 4. Defendant DATA PAY SOLUTIONS, LLC, a Limited Liability Company based in Texas, may be served with process by serving the registered agent of said company, JEFF 1 ADCOCK, at 2514 Siskin Trail, League City, Galveston County, Texas 77573 or any other address he may be found, its registered office. Service of said Defendant as described above can be effected by personal delivery. 5. Defendant FOCUS MERCHANT SERVICES, LLC, a Limited Liability Company based in Texas, may be served with process by serving the registered agent of said company, Sanford G. Cohen, at 1400 Summit Tower, Eleven Greenway Plaza, Houston, Harris County, Texas 77046, its registered office. Service of said Defendant as described above can be effected by personal delivery. 6. This court has jurisdiction over the parties because Defendants are Texas residents. FACTUAL ALLEGATIONS 7. Plaintiff is a nationwide merchant service provider specializing in providing credit card payment processing services to merchants across the United States. These services include setting-up and servicing the physical card authorization equipment and software at the merchant’s location, securing bank authorization for the merchant to accept bank card payments, and providing settlement services to merchants to ensure prompt payment. It is a unique industry in that it provides for a future residual income stream to businesses similarly situated as Plaintiff. Preventing disruption of this residual income is paramount to Plaintiff and, therefore, Plaintiff has great interest in protecting and maintaining the same, utilizing various practical and contractual safeguards to do so. 8. Among other electronic resources, Plaintiff uses a comprehensive customer relationship management (“CRM”) software system and database. The CRM system and other electronic systems used by Plaintiff allow the company to create and maintain a variety of 2 proprietary and confidential electronic and hard-copy documents in servicing its customers, including but not limited to: customer lists, customer profiles, pricing structures, cost allocations and margins, customer discounts, proposals, vendor information, sales agent information, and proprietary merchant statements. 9. The documents described immediately above in paragraph 8 provide extensive sales-related information including but not limited to: the identities of current and targeted customers, sales agents, and contact persons; pricing and sales information; customer discounts and fee arrangements; and detailed histories of sales efforts with respect to potential customers. Collectively, all of the items listed in the preceding paragraph and this paragraph shall hereinafter be referred to as Plaintiff’s “Confidential and Proprietary Information.” 10. In order to protect the secrecy of its Confidential and Proprietary Information, Plaintiff limits access to such information and requires employees who have access to this information to maintain confidentiality. 11. In 2000, Plaintiff hired Defendant JEFF W. ADCOCK as an employee of the company. In this capacity, Defendant JEFF W. ADCOCK was responsible for growing the client base of Plaintiff. Defendant JEFF W. ADCOCK later became president of Plaintiff and currently owns 15% of the outstanding stock in Plaintiff. 12. Upon becoming president of Plaintiff, Defendant JEFF W. ADCOCK, had access to Plaintiff’s Confidential and Proprietary Information, including the CRM software program and database, employee files, agent files and all other information of Plaintiff. Defendant JEFF W. ADCOCK could easily access detailed information about Plaintiff’s potential, current, and former clients and agents, including the entire history of Plaintiff’s sales efforts with respect to these potential, current, and former clients and agents. 3 13. In addition, Defendant JEFF W. ADCOCK had access to highly sensitive merchant information that can only be accessed via a password protected internet site operated by Plaintiff’s sponsor bank and processor. 14. While working for Plaintiff, Defendant JEFF W. ADCOCK entered into a Trade Secret and Non-Solicitation Agreement with Plaintiff, which, in part, prohibits: a) the removal of documents, notes, files, records, oral information, computer files or similar materials from Plaintiff’s from Plaintiff premises without permission from Plaintiff; b) disclosure of the contents of plaintiff's records or information otherwise obtained in regard to business to anyone, except where required for business purpose. c) disclosure of any confidential information, purposefully or inadvertently (through casual conversation) to any unauthorized person inside or outside Plaintiff’s company. Additionally, the Trade Secret and Non-Solicitation Agreement states that an employee will not (either as an individual for his own enterprise, or as a partner, joint venturer, officer, employee, agent, salesman, consulting, or five percent or more shareholder of any entity or third party) during the period of employment with Plaintiff and for a period of four (4) years following any expiration or termination of employment with Plaintiff for any reason whatsoever: d) hire or solicit for employment directly or indirectly, any of Plaintiff’s personnel in any capacity whatsoever (which shall be deemed to include, without limitation, any existing or perspective employee, consultant or independent contractor of Plaintiff or any person who has been such an employee, consultant or independent contractor within one hundred (150) days prior thereto); e) attempt, directly or indirectly, to induce any personnel of Plaintiff to leave the employ of, or discontinue such person’s consultant, contractor or other business association with Plaintiff; and f) solicit, directly or indirectly, any vendor, customer, merchant or account, or prospective vendor, customer, merchant or account of Plaintiff. 4 A copy of the Trade Secret and Non-Solicitation Agreement is attached as Exhibit A and incorporated by reference1. 15. While working for Plaintiff, Defendant JEFF W. ADCOCK was the obligation to follow the terms of the Employee Manual that Plaintiff had and continues to have in place, which, in part, provided for the employee’s prohibition of disclosure of Plaintiff’s Confidential and Proprietary Information after the employment relationship ends in Section 4.10 thereof and for the return of company issued property at the time of termination in Section 4.28 thereof. A copy of the Employment Manual is attached as Exhibit B and incorporated by reference2. 16. As part of his employment with Plaintiff, Defendant JEFF W. ADCOCK was given and/or signed both of the relevant documents referenced above (in fact as president, he made sure that employees were aware of and adhered to the obligations stated therein). However, after his departure from Plaintiff, the original signed versions of these agreements and copies thereof, among other documents, all of which should be in Defendant JEFF W. ADCOCK’s personnel file with Plaintiff as its property, were discovered by Plaintiff to be missing, are not in the possession of Plaintiff, and have not been found after a diligent search by Plaintiff. 17. Defendant JEFF W. ADCOCK has engaged in conduct that violates and breaches the Trade Secret and Non-Solicitation Agreement and Employment Manual, both before his termination from Plaintiff as president from the company on October 23, 2014 and thereafter. Upon information it has received, Plaintiff has reason to believe Defendant JEFF W. ADCOCK, individually or through his company, Defendant DATA PAY SOLUTIONS, LLC, has met with 1 - A blank, unsigned version of the Trade Secret and Non-Solicitation Agreement is attached hereto since the version signed by Defendant JEFF W. ADCOCK is missing from his personnel file. 2- A redacted version of the Employee Manual is attached hereto since the version signed by Defendant JEFF W. ADCOCK is missing from his personnel file. 5 contracted sales agents, customers, and accounts of Plaintiff on different occasions after the date of his termination. Such activity has diverted business away from Plaintiff and to competitors such as Defendant FOCUS MERCHANT SERVICES, LLC. In meeting with those agents, customers, and accounts, Defendant JEFF W. ADCOCK engaged in conduct that breached the duties he owed to Plaintiff by disclosing Plaintiff’s Confidential and Proprietary Information to others and by soliciting the agents, customers, and accounts of Plaintiff. 18. Additionally, Defendant JEFF W. ADCOCK failed to timely return company property upon his termination which included laptops, cell phones, and a SIM card. During this time, Defendant JEFF W. ADCOCK had access to several years’ worth of Plaintiff’s emails which contained valuable information on vendors, sales agents, and clients. Such delay in the return of said property, after demand by Plaintiff to do so, afforded Defendant JEFF W. ADCOCK ample opportunity to copy Plaintiff’s Confidential and Proprietary Information contained on these items. 19. Defendant DATA PAY SOLUTIONS, LLC is a Texas Limited Liability Company which was formed with the Secretary of State on January 13, 2015, a date approximately three months after Defendant JEFF W. ADCOCK was terminated from Plaintiff. According to the Secretary of State records, Defendant JEFF W. ADCOCK is listed as the organizer, registered agent, and sole managing member of Defendant DATA PAY SOLUTIONS, LLC. Defendant JEFF W. ADCOCK formed Defendant DATA PAY SOLUTIONS, LLC for the purpose of directly competing against Plaintiff by utilizing Confidential and Proprietary Information he obtained during his employment with Plaintiff. In doing so, Defendant JEFF W. ADCOCK has contacted one or more of Plaintiff’s current sales agents, asking them to sell for his new company, Defendant DATA PAY SOLUTIONS, LLC, 6 instead of for Plaintiff. Further, Defendant JEFF W. ADCOCK has requested these same agents to move accounts owned by Plaintiff to Defendant DATA PAY SOLUTIONS, LLC, thus costing Plaintiff the future residual income from these accounts. 20. Defendant DATA PAY SOLUTIONS, LLC was aware of the contract between Plaintiff and Defendant JEFF W. ADCOCK, and Defendant DATA PAY SOLUTIONS, LLC engaged in a course of willful conduct with the intent to tortiously interfere with the existing and prospective business relationships of Plaintiffs. 21. Plaintiff is a customer of Defendant FOCUS MERCHANT SERVICES, LLC. The two parties have one large account on which commissions earned are split between them. On one or more occasions, Defendant FOCUS MERCHANT SERVICES, LLC has met with Defendant JEFF W. ADCOCK and Defendant DATA PAY SOLUTIONS, LLC and discussed future business relations concerning the same products and services upon which Defendant FOCUS MERCHANT SERVICES, LLC had previously partnered with Plaintiff. Defendant FOCUS MERCHANT SERVICES, LLC had knowledge that Defendant JEFF W. ADCOCK had worked for Plaintiff and thus, was aware of the relationship between Plaintiff and Defendant JEFF W. ADCOCK. Defendant FOCUS MERCHANT SERVICES, LLC engaged in a course of willful conduct with the intent to tortiously interfere with the existing and prospective business relationships of Plaintiffs. GROUNDS 22. Plaintiff will suffer immediate and irreparable injury, loss, or damage if Defendants' conduct described above is not enjoined. Namely, Plaintiff will suffer harm in the form of a significant loss of client base, revenues, competitive advantage in the marketplace, business ability, economies of scale in buying power, confidential information and trade secrets, 7 and business reputation; and the significant loss of loyalty in relationships among income- producing sales agents and their prospective clients. 23. Plaintiff requires injunctive relief to prevent Defendants: A) by wrongfully appropriating and disclosing Plaintiff’s Confidential and Proprietary Information; B) wrongfully soliciting or inducing third parties to act against Plaintiff’s interests; and C) intentionally interfering with contractual relationships between Plaintiffs and its existing and prospective customers. 24. Each day that Defendant JEFF W. ADCOCK continues in breach of his agreements and covenants with Plaintiff, either through his individual acts or through the acts of Defendant DATA PAY SOLUTIONS, LLC, and each day that Defendant JEFF W. ADCOCK, Defendant DATA PAY SOLUTIONS, LLC, and Defendant FOCUS MERCHANT SERVICES, LLC continue to utilize Plaintiff’s Confidential and Proprietary Information to solicit and obtain Plaintiff’s business away from Plaintiff brings additional irreparable harm to Plaintiff. Therefore, unless this Court timely intervenes and immediately restrains and enjoins Defendants and their respective employees, officers, directors, partners, shareholders, agents, and other representatives from engaging in the all such actions, Plaintiff will continue to suffer irreparable harm and damage for which for which there is no adequate remedy at law. 25. Plaintiff has exercised due diligence in prosecuting this claim. The injury to Plaintiff if Defendants continue the conduct described above would outweigh any injury the restraining order and injunction might cause Defendants, and issuance of the restraining order and injunction would not disserve the public interest. 8 RELIEF REQUESTED 26. The only adequate, effective, and complete relief to Plaintiff is to restrain the Defendants from further engaging in certain proscribed activities, as set forth below. Pursuant to Civil Procedure Rule 680 et seq. and Civil Practice and Remedies Code Section 65.001 et seq., and in order to preserve the status quo during the pendency of this action, Plaintiff seeks a temporary restraining order, and upon hearing, a temporary and permanent injunction, ordering and immediately restraining Defendant JEFF W. ADCOCK and Defendant DATA PAY SOLUTIONS, LLC for four (4) years, together with their employees officers, directors, shareholders, partners, agents, representatives or others acting in concert with them from: A) Disclosing to any party Plaintiff's Confidential and Proprietary Information, including but not limited to Plaintiff’s customer relationship management (“CRM”) database which contains a variety of proprietary and confidential electronic and hard-copy documents in servicing its customers, including but not limited to: customer lists, customer profiles, pricing structures, cost allocations and margins, customer discounts, proposals, vendor information, sales agent information, and proprietary merchant statements and proprietary merchant statements; B) Disclosing to any party Plaintiff's sales-related information including but not limited to: the identities of current and targeted customers and contact persons, pricing and sales information, customer discounts and fee arrangements, and detailed histories of sales efforts with respect to potential customers; C) Hiring or soliciting for employment directly or indirectly, any of Plaintiff’s personnel in any capacity whatsoever (which shall be deemed to include, without limitation, any existing or perspective employee, consultant or independent contractor of Plaintiff or any person who has been such an employee, consultant or independent contractor within one hundred fifty (150) days prior to October 23, 2014; D) Attempting, directly or indirectly, to induce any personnel of Plaintiff to leave the employ of, or discontinue such person’s consultant, contractor or other business association with Plaintiff; and E) Soliciting, directly or indirectly, any vendor, customer, merchant or 9 account, or prospective vendor, customer, merchant or account of Plaintiff. and Plaintiff seeks a temporary restraining order, and upon hearing, a temporary and permanent injunction ordering and immediately restraining Defendant JEFF W. ADCOCK, Defendant DATA PAY SOLUTIONS, LLC, and Defendant FOCUS MERCHANT SERVICES, LLC, together with their employees officers, directors, shareholders, partners, agents, representatives or others acting in concert with them from: A) intentionally interfering with contractual relationships between Plaintiffs and its existing and prospective customers. PRAYER Plaintiff prays that- A. without notice, the Court issue a temporary restraining order restraining Defendant JEFF W. ADCOCK and Defendant DATA PAY SOLUTIONS, LLC and their employees officers, directors, shareholders, partners, agents, representatives or others acting in concert with them from directly or indirectly for four (4) years: (1) disclosing to any party Plaintiff's Confidential and Proprietary Information, including but not limited to Plaintiff’s customer relationship management (“CRM”) database which contains a variety of proprietary and confidential electronic and hard-copy documents in servicing its customers, including but not limited to: customer lists, customer profiles, pricing structures, cost allocations and margins, customer discounts, proposals, vendor information, sales agent information, and proprietary merchant statements and proprietary merchant statements; (2) disclosing to any party Plaintiff's sales-related information including but not limited to: the identities of current and targeted customers and contact persons, pricing and sales information, customer discounts and fee arrangements, and detailed histories of sales efforts with respect to potential customers; (3) hiring or soliciting for employment directly or indirectly, any of Plaintiff’s personnel in any capacity whatsoever (which shall be deemed to include, without limitation, any existing or perspective employee, consultant or independent contractor of Plaintiff or any person who has been such an 10 employee, consultant or independent contractor within one hundred fifty (150) days prior to October 23, 2014; (4) attempting, directly or indirectly, to induce any personnel of Plaintiff to leave the employ of, or discontinue such person’s consultant, contractor or other business association with Plaintiff; and (5) soliciting, directly or indirectly, any vendor, customer, merchant or account, or prospective vendor, customer, merchant or account of Plaintiff; B. without notice, the Court issue a temporary restraining order restraining Defendant JEFF W. ADCOCK, Defendant DATA PAY SOLUTIONS, LLC, and Defendant FOCUS MERCHANT SERVICES, LLC, together with their employees officers, directors, shareholders, partners, agents, representatives or others acting in concert with them directly or indirectly from: (1) intentionally interfering with contractual relationships between Plaintiffs and its existing and prospective customers. C. the Court set a date and time for a hearing on this application for a temporary injunction; D. Defendants be cited to appear and answer; E. after hearing, the Court issue a temporary injunction enjoining Defendants and their officers, agents, servants, and employees from directly or indirectly conduct to be restrained during the pendency of this action; F. Plaintiff be granted reasonable expenses incurred in obtaining the restraining order and injunction; and G. Plaintiff be granted all further relief to which Plaintiff may be entitled. 11 Respectfully submitted, JOSEPH P. MONTALBANO, P.C. By: Joseph P. Montalbano Texas Bar No. 14279700 Email: jpm913@gmail.com 2525 Bay Area Blvd., Suite 310 Houston, Texas 77058-1558 Tel. (281) 488-1656 Fax. (281) 488-5884 Attorney for Plaintiff VERIFIED TRANSACTION SYSTEMS, LLC 12 TRADE SECRET AND NON-SOLICITATION AGREEMENT Confidential Nature of Work All Verified Transactions Systems, LLC (“Veritrans”) records and information relating to Veritrans or its customers are confidential and contracted workers must, therefore, treat all matters accordingly. No Veritrans or Veritrans-related information, including without limitation, documents, notes, files, records, oral information, computer files or similar materials (except in the ordinary course of performing duties on behalf of Veritrans) may be removed from Veritrans’s premises without permission from Veritrans. Additionally, the contents of Veritrans’s records or information otherwise obtained in regard to business may not be disclosed to anyone, except where required for a business purpose. Contracted workers must not disclose any confidential information, purposefully or inadvertently (through casual conversation), to any unauthorized person inside or outside the company. Contracted workers who are unsure about the confidential nature of specific information must ask their supervisor for clarification. During the term of this his/her contract, contracted worker shall exclusively represent Veritrans and shall not enter into any agreement to solicit merchants for the merchant-acquiring program of any bank, company, ISO or financial institution other than Veritrans. Non-Solicitation All Veritrans contracted workers must adhere by the policies set forth herein. An contracted workers will not (either as an individual for my own enterprise, or as a partner, joint venturer, officer, employee, agent, salesman, consultant, or 5% or more shareholder of any entity or third party) during the period of a contract with Veritrans and for a period of four (4) years following any expiration or termination of contract with Veritrans for any reason whatsoever: 1. hire or solicit for employment, directly or indirectly, any Veritrans personnel in any capacity whatsoever (which shall be deemed to include, without limitation, any existing or prospective employee, consultant or independent contractor of Veritrans or any person who has been such an employee, consultant or independent contractor within one hundred fifty (150) days prior thereto); 2. attempt, directly or indirectly, to induce any such Veritrans personnel to leave the employ of, or discontinue such person’s consultant, contractor or other business association with Veritrans; 3. solicit, directly or indirectly, any vendor, customer, merchant or account or prospective vendor, customer, merchant or account of Veritrans; 4. solicit, either directly or indirectly, Veritrans’s lead sources including those prospective lead sources. If, at the time of enforcement of the covenants above (the “Protective Covenants”), a court shall hold that the duration, scope or area restrictions stated herein are unreasonable under circumstances then existing, contracted worker hereto agrees that the maximum duration, scope or area reasonable under such circumstances shall be substituted for the stated duration, scope or area and that the court shall be allowed to revise the Protective Covenants to cover the maximum duration, scope and area permitted by law. Employee agrees that the Protective Covenants are reasonable in terms of duration, scope and area restrictions and are necessary to protect the 1 EXHIBIT A goodwill of the Veritrans’s businesses and the confidential information and agrees not to challenge the validity or enforceability of the Protective Covenants. If contracted worker breaches, or threatens to commit a breach of, any of the Protective Covenants, Veritrans and its subsidiaries shall have the following rights and remedies, each of which rights and remedies shall be independent of the others and severally enforceable, and each of which is in addition to, and not in lieu of, any other rights and remedies available to Veritrans or its subsidiaries at law or in equity: (i) the right and remedy to have the Protective Covenants specifically enforced by any court of competent jurisdiction, it being agreed that any breach or threatened breach of the Protective Covenants would cause irreparable injury to Veritrans and its subsidiaries and that money damages would not provide an adequate remedy to Veritrans or its subsidiaries; and (ii) the right and remedy to require contracted worker to account for and pay over to the Company or its subsidiaries any profits, monies or other benefits derived or received by contracted worker as the result of any transactions constituting a breach of the Protective Covenants. No Residuals after termination of Contract: If your contract is terminated for any reason or no reason at all, by either party, Veritrans shall have no further obligations for payment of any residuals to you. Any residual discrepancies must be brought to Veritrans’s attention within 30 days and will be resolved the next commission payment. Any discrepancy filed after 30 days will be rejected. AGREEMENT TO TERMS BY CONTRACTED WORKER Nothing in this letter serves to modify the at-will status of your employment. By signing below, you understand and agree that your contract with Veritrans is at will, which means that either Veritrans or you can terminate your contract at any time, with or without cause, simply by notifying the other party that the contract is terminated. You also understand and agree that Veritrans retains the right to modify, add, or eliminate any of its general contracted worker policies and practices at any time, with or without cause. You further understand and agree that any modification of your at will status can be made only by a written agreement signed on behalf of Veritrans by an authorized officer. You will be subject to appropriate disciplinary action, up to and including dismissal, for violating any of the terms and conditions as set forth above. As a condition of your contract, I herby acknowledge that I have read this document and agree to all the terms and conditions above agree to abide by the terms and conditions as set forth above. By: _______________________________________ Date: __________________ Contract Worker Name: _______________________ 2 EXHIBIT B