Motion,Ex Parte: BIO-ENGINEERED SUPPLEMENTS & NUTRITION INC FKA WINCHESTER V MUSCLE ELEMENTS INC DBA MUSCLE ELEMENTS

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                                *** FILED: PALM BEACH COUNTY, FL SHARON R BOCK, CLERK.***

Electronically Filed 10/31/2013 12:08:39 PM ET

IN CIRCUIT COURT OF THE FIFTEENTH JUDICIAL CIRCUIT
IN AND FOR PALM BEACH COUNTY, FLORIDA

BIO-ENGINEERED SUPPLEMENTS &
NUTRITION, INC., f/k/a WINCHESTER,
INC.,
Plaintiff, CIVIL DIVISION: AB

vs. CASE NO.:
50 2013CA013954KXXXMB

MUSCLE ELEMENTS, INC. d/b/a
MUSCLE ELEMENTS, CASEY CRANE,
JAMES TRACY, ERIC TOMKO, KEVIN
RAMOS and MARCUS SMALLS,

Defendants.

DEFENDANTS’ MOTION FOR MODIFICATION
OF THE PRELIMINARY INJUNCTION

Defendants Muscle Elements, Inc. (“MEI”) and Casey Crane respectfully submit this
motion to modify the Preliminary Injunction, dated September 25, 2013 (the “Injunction”) and
entered in favor of plaintiff Bio-Engineered Supplements & Nutrition, Inc., f/k/a Winchester,

Inc. (“BSN”)!
PRELIMINARY STATEMENT

MEI and Crane request that the Injunction be modified to reflect the fact that MEI has
reorganized and is no longer owned by or affiliated with any of the defendants in this action who

are currently enjoined from competing with BSN. The Injunction, as it currently stands, bars

i In addition to this Memorandum of Law, MEI and Crane also submit in support of this motion the

Affidavit of Casey Crane, sworn to on October 28, 2013 (“Crane Aff”), a copy of which is attached
hereto as Attachment No. 1. A true and complete copy of the Injunction is attached hereto as Attachment
No. 2. A proposed order is attached as Attachment No. 3.MEI from launching its website until the noncompete periods pertaining to these other
defendants have expired. Now that MEI is no longer associated with these defendants there is no
factual basis to prevent the launch of the MEI website. In addition, continuation of this provision

of the Injunction violates the First Amendment protection of free speech.
RELEVANT FACTS

The Injunction prohibits MEI from launching its website “for the remaining temporal
terms of the Agreements.” Injunction, at 17. The term “Agreements” refers to the noncompete
agreements in the BSN employment contracts of each of the individual defendants, namely,
Casey Crane, Eric Tomko, James Tracy, Marcus Smalls and Kevin Ramos. It is undisputed the
temporal term of the noncompete pertaining to Crane expired in August of 2012 and he is no
longer subject to any noncompete provision. Crane Aff. 13. See also Injunction, §{ 11-12, 25.

Likewise, ME] is not bound by any noncompetition agreement with BSN (or any other entity).

Following the issuance of the Injunction, MEI was reorganized to dissociate from the
former BSN employees who are currently barred by the Injunction from competing with BSN
(i.e, Tomko, Tracy, Smalls and Ramos). Tracy and Tomko transferred their ownership interest
in MEI to Crane; and both resigned as officers of the company. In addition, MEI terminated its
employment/consulting agreements with Tracy, Tomko, Smalls and Ramos. None of these other
defendants has any role in the operations or management of MEI or any other aspect of MEI
business; in fact, Crane does not communicate with these defendants about MEI business at all
and has restricted his business communications with them solely to matters pertaining to this

lawsuit. Crane Aff. fff 2-7.Continuation of the Injunction as to MEI would be a virtual death sentence for the
company. It threatens to permanently disrupt its relationship with creditors and suppliers and
will likely force the company out of business before it ever had a chance to open. Crane Aff. J

8-10.
ARGUMENT

Given the reorganization of MEI and the change in circumstances, there is no legal basis,
in law or equity, to prevent MEI from launching its website. As noted, neither MEI nor its sole
shareholder is subject to any contractual provision with BSN that could justify such a
comprehensive ban on its website.

Moreover, continuation of the ban is a clear violation of the First Amendment right of
free speech. U.S. Const., Amend. 1. (“Congress shall make no law . . . abridging the freedom of
speech”), The U.S. Supreme Court has made clear long ago that even commercial speech — such
as a business website — is protected. See Virginia State Bd. of Pharmacy v. Virginia Citizens
Consumer Council, 425 U.S. 748, 762 (1976); Central Hudson Gas & Electric Corp. v. Public
Service Comm'n, 447 U.S. 557, 561-66 (1980).

Given this fundamental and jealously guarded right, courts are loath to bar speech in the
context of a preliminary injunction precisely because such an order often runs afoul of the prior
restraint doctrine. See, e.g., New.net, Inc. v. Lavasoft, 356 F. Supp.2d 1071, 1084 (C.D. Cal.
2003) (denying preliminary injunction that would have barred publication of certain statements
on defendant’s website before any final adjudication of plaintiff's claims that the statements are
false). See generally Pittsburgh Press Co. v. Pittsburgh Comm'n on Human Relations, 413 U.S.
376, 390 (1973) (“[t]he special vice of a prior restraint is that communication will be suppressed

. .. before an adequate determination that it is unprotected by the First Amendment”).

3“The danger of a prior restraint, as opposed to [an] ex post . . . action, is precisely that
making predictions ex ante as to what restrictions on speech will ultimately be found permissible
is hazardous and may chill protected speech.” Latino Officers Ass’n, New York, Inc. v. City of
New York, 196 F.3d 458, 465 (2d Cir. 1999). That is why a prior restraint barring speech
“bear[s] a heavy presumption against its constitutional validity.” Bantam Books. Inc. v, Sullivan,
372 U.S. 58, 70 (1963).

In New.net, the court noted that restrictions on the defendant’s website imposed through a
preliminary injunction ran afoul of the rule against prior restraint precisely because a preliminary
injunction, being merely a device for preserving the status quo, is not an adjudication of whether
a statement is wrongful (and hence enjoinable). New.net, 356 F. Supp.2d at 1084. Here, the
Injunction bars MEI from “launching” its website without any adjudication whether or not the
anticipated commercial speech therein is in any way unlawful or improper or otherwise
enjoinable.

Moreover, court injunctions are struck down as improper infringements on the
fundamental right of free speech where the injunction is broader than is strictly necessary to
enforce a property or other right. See Madsen v. Women's Health Center, 512 U.S. 753, 765
(1994) (standard to be applied is whether the challenged provisions of the injunction burden no
more speech than necessary to serve a significant government interest). See also Crucians in
Focus, Inc. v. VI 4D, LLLP, 57 V.1. 529, 535-39, 2012 V.I. Supreme LEXIS 76 (VI. 2012)
(overturning trial court’s preliminary injunction concerning website as violative of First
Amendment); Rain CII Carbon, LLC v. Kurczy, 2012 U.S. Dist. LEXIS 116865, at * 11-18 (E.D.
La. Aug. 20, 2012) (denying preliminary injunction on First Amendment/prior restraint grounds);

Ford Motor Co. v. Lane, 67 F. Supp.2d 745, 750-54 (E.D. Mich. 1999) (striking downpreliminary injunction on website as violative of First Amendment). Cf DVD Copy Control
Assoe., Inc. yv, Bunner, 31 Cal. 4th 864, 880-81, 75 P.3d 1, 13-14; 4 Cal. Rptr. 3d 69, 83-85 (CA
Sup. Ct. 2003) (upholding injunction pursuant to Madsen test where injunction barred defendant
from posting on its website only the specific computer code that was indisputably a mis-
appropriated trade secret); BUC Int'l Corp. v. Int’! Yacht Council Ltd., Case No., 02-60772, 2002
U.S. Dist. LEXIS 20609, at *5, 13-15 (S.D. Fla. July 5, 2002) (upholding injunction only to bar
defendant from publication of specific proprietary data so as to avoid “completely shutting down
its website”),

Here, the Injunction’s broad sweeping prohibition on the launch of the site in toto is
obviously not narrowly tailored in any respect, and it bears no relation to the protection of any
legitimate right or interest of BSN. In fact, research revealed no precedent in Florida or any
other state where a court banned a company from launching its website in its entirety —
effectively silencing the company — based solely on a noncompetition clause. Such a sweeping
ban on speech certainly cannot be justified where the company is no longer owned or operated
by, or otherwise associated with, individuals subject to such a clause.

Accordingly, the Injunction should be modified so that the penultimate clause of the

Injunction barring the launch of the MEI website is immediately revoked and annulled.

CONCLUSION
For the foregoing reasons, defendants MEI and Crane’s motion for modification of the

Injunction should be granted in its entirety and the Injunction modified accordingly.DATED:

October 31, 2013

Respectfully submitted,

Attorneys for MEI, Casey Crane,
James Tracy, Eric Tomko, Kevin Ramos,
and Marcus Smalls

KASOWITZ, BENSON, TORRES
& FRIEDMAN LLP

Four Seasons Tower, Suite 1420

1441 Brickell Avenue

Miami FL 33131

305-377-1666 (t) / 305-675-2601 (f)

By: s/Rachel M. Jacobson
Michael Paul Bowen
(admitted pro hac vice)
mbowen@kasowitz.com
Rachel M. Jacobson
(FBN: 0091732)
tjacobson@kasowitz.comCERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true and correct copy of the foregoing was served by

scanned email and U.S. mail on October 31, 2013 on the following individuals:

Eric D. Isicoff, Esq.
Isicoff@irlaw.com

Teresa Ragatz, Esq.
Ragatz@irlaw.com
Christopher M. Yannuzzi, Esq.
Yannuzzi@irlaw.com
ISICOFF, RAGATZ &
KOENIGSBERG

1200 Brickell Avenue, Suite
1900

Miami, Florida 33131
Telephone: 305-373-3232
Facsimile: 305-373-3233

Bridget A. Berry, Esq.
berryb@gtlaw.com
GREENBERG TRAURIG LLP
777 South Flagler Drive, Suite
300 East

West Palm Beach, Florida
33401

Telephone: 561-650-7900
Facsimile: 561-655-6222

s/Rachel M. Jacobson

AttorneyATTACHMENT NO. 1IN CIRCUIT COURT OF THE FIFTEENTH JUDICIAL CIRCUIT
IN AND FOR PALM BEACH COUNTY, FLORIDA

BIO-ENGINEERED SUPPLEMENTS &
NUTRITION, INC., f/k/a WINCHESTER,
INC.,
Plaintiff, CIVIL DIVISION: AB

vs. CASE NO.:
50 2013CA013954XXXXMB

MUSCLE ELEMENTS, INC. d/b/a
MUSCLE ELEMENTS, CASEY CRANE,
JAMES TRACY, ERIC TOMKO, KEVIN
RAMOS and MARCUS SMALLS,

Defendants.

AFFIDAVIT OF CASEY CRANE

STATE OF TENNESSEE )
) ss:
COUNTY OF WILLIAMSON )

CASEY CRANE, being duly sworn, deposes and says:

1. I am a named defendant in this action, and am, as I discuss below, the sole owner
of defendant Muscle Elements, Inc. (“MEI”). I submit this affidavit based on my own personal
knowledge in support of my motion to modify the Preliminary Injunction issued by this Court

and dated September 25, 2013 (the “Injunction”).

A. Crane is the Sole Shareholder and Director of MEI
2. At the time the Injunction was issued, MEI was owned by three shareholders: me,

Eric Tomko and James Tracy.3. In issuing the Injunction, this Court determined preliminarily that, until their
respective noncompete terms terminate in April 2014, Tomko and Tracy are likely barred by
their respective noncompete agreements from engaging in certain business activity in
competition with the plaintiff Bio-Engineered Supplements & Nutrition, Inc. (“BSN”).

However, as was also recognized by the Court, I am not bound by any such noncompete
obligation, since, according to the plain terms of my BSN employment agreement, the
noncompete clause with respect to me expired in August 2012.

4. Accordingly, in order to comply with the Injunction and to remove any ground to
contest MEI’s continued operation during the pre-April 2014 period, Tomko and Tracy divested
their ownership interest in MEI. At a board of directors meeting held on September 30, 2013,
Tomko and Tracy transferred their respective ownership interests in MEI to me. Accordingly,
as of that date, I am the 100% shareholder and sole owner of MEI.

5. In addition, both Tracy and Tomko resigned as officers and employees of MEI,
effective as of that same date. Likewise, MEI terminated its consulting arrangements with
defendants Kevin Ramos and Marcus Smalls. Consequently, I am the sole officer and director of
MEL

6. Exhibit A, hereto, is a true and accurate copy of the board minutes, the MEI stock
ledger reflecting the share transfers, and the resignation letters of Tomko, Tracy, Ramos and

Smalls.

B. The Other Defendants Have No Involvement in MEI
7. Accordingly, as of the end of September 2013, the other individual defendants
(i.e., Tomko, Tracy, Kevin Ramos and Marcus Smalls) have no role or affiliation at all with

MEI. None of these other defendants has any ownership interest in, employment or otheroperational role with, or any other affiliation with MEI. Moreover, I do not communicate with
the other defendants about MEI business at all; my communications with them are restricted to
discussions of the legal defense and claims in this action. In that vein, these individuals have not
been present at the MEI offices other than occasional visits to review documents and files in

connection with this lawsuit.

Cc. The Enjoined Launch of the MEI Website

8. The Injunction bars MEI from launching its website for the remaining temporal
terms of the noncompete provisions pertaining to Tomko, Tracy, Ramos and Smalls — that is,
noncompetes pertaining to individuals who no longer have any association with or role in MEI.
Since I am not barred from competing in this market and neither is MEI, which is now owned
and operated solely by me, there is no longer any legal basis to restrict MEI from operating its
own website as part of its normal course business operations.

9. Moreover, MEI has been losing money and will continue to lose money were the
Injunction not modified as requested. If MEI is not permitted to operate its website and carry on
its business, it will likely become insolvent and fail before the expiration of the Injunction,
causing irreparable harm to MEI, to me and my family, and to the company’s creditors.

10. Finally, MEI is supporting all of the defendants in this action in mounting their
legal defense against BSN and in pursuing their affirmative defenses and counterclaims. If MEI
is forced out of business, that would gravely impair the ability of the defendants to pay for legal

counsel and to maintain their defenses and claims in this action.CONCLUSION

11, Accordingly, for the reasons set forth in the Defendants’ Motion for Modificati

of the Preliminary Injunction, and based on the evidence of the change in circumstances hereir
respectfully request that the defendants’ motion be granted in its entirety and the Preliminary

Injunction modified accordingly.

Dated: October 28, 2013

   

Casey Crane

Swo nto and subscribed before me this
TF day of October, 2013 nun.
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Exes Sore tS teryEXHIBIT A
TO
ATTACHMENT No. 1MINUTES OF A MEETING OF THE BOARD OF DIRECTORS
9/30/2013

A meeting of the Board of Directors (the “Boara”) of Muscle Elements, a Delaware corporation (the
“Company’), was held on 9/30/2013 at 1:30pm Eastern Standard Time at the offices of the Company.

Directors Present:

Eric Tomko, James Tracy, Casey Crane (via telephone)
Also Present Were:

Kevin Ramos, Marcus Smalls, Tiffany Trout

Directors Absent:

No directors absent

Counsel Present:

No counsel absent *

Call to Order

Eric Tomko called the meeting to order at 1:30 pm EST and Tiffany Trout recorded the minutes. A quorum of
directors was present, and the meeting, having been duly convened, was ready to proceed with business.

CEO Report

Eric Tomko reviewed the agenda and welcomed everyone to the meeting. Next, Eric Tomko discussed the
current status of the company and the resignation of Kevin Ramos, Director of Business Development,
Marcus Smalls, R&D/QC Manager, James Tracy Vice President and himself, Eric Tomko as CEO effective
September 30, 2013.

Financial Review

Eric Tomko next provided an update on the company’s 1500 shares of which 36% or 540 belong to himself
and 32% or 480 belong to James Tracy. All shares belonging to Eric Tomko and James Tracy will be
transferred to the company's President, Casey Crane making him shareholder of 100% of Muscle Elements
shares.

Adjournment

There being no further business to come before the meeting, the meeting was adjourned at 2:00pm Eastern
Standard Time.

Respectfully submitted,STOCK TRANSFER LEDGER

 

 

 

 

  

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SURRENDERED
7 FROM WHOM SHARES DATE OF

TIME RES | AMOUNT
NAME OF STOCKHOLDER || PLACE OF RESIDENCE | BECAME ee RED

OWNER ]] CERTIF. NO. uch) = THEREON | spares CERTIF | NO.

NOS. | SHARES NOS | SHARES

ERIC Tomko fod 2A 6/shi3 | 2 s4o OkIG AL S40 [9/30/13 | CASEY CLARE 1 sY¥o
DAMES TRACY FeotiA  |eisiiz | 2 | 490 OLIGIWAL WFO |o/so/i3_| CASEY Cea 2 [40
CASEY CLAN Tamtsseé  els/is | 3 4g OFLG IMAL9-30-13

Casey Crane
President,
Muscle Elements Inc.

Dear Mr. Crane, after the court order given on September 25", 2013
regarding the temporary injunction from the lawsuit from BSN Inc. enforcing me to
recognize a non-compete in the sale and marketing a direct competitors products, I
hereby announce effective immediately my resignation as Vice President of Muscle
Elements. All shares of personal company ownership will be transferred directly to
you.

James Tracy
1091 Delray Lakes Drive
Delray Beach, Fl 33444

ee Build a Better You With a9-30-13

Casey Crane
President,
Muscle Elements Inc.

Dear Mr. Crane this letter is to serve as notice of my resignation as CEO of
Muscle Elements effective Sept 30", 2013. I have transferred 100% of my shares of
Muscle Elements in your name.

Eric Tomko
8558 Briar Rose Pt
Boynton Beach, FL 33473

 

Ce Build a Better You With|Marcus Smalls

9907 Westwood Drive
Tamarac, FL 33321
843-810-5840

Smallsm! |@yahoo.com

 

9/30/2013

Casey Crane

President

Muscle Elements

6500 West Rogers Circle St. 5000
Boca Raton, FL 33347

Dear Mr. Crane;

I would like to inform you that I am resigning from my position as R&D/QC Manager for
Muscle Elements, effective September 30th.

Thank you for the opportunities for professional and personal development that you have
provided me during my tenure with the company.

Sincerely,
A

 

Marcus Smallses,

Cre |

 

 

9-30-13

Casey Crane
President,
Muscle Elements Inc.

Dear Mr. Crane this letter is to serve as notice of my resignation as Director
of Business Development of Muscle Elements eftective Sept 30", 2013.

  

Kevin Ramos
511 SE 5" Ave

Apt 2219

Ft. Lauderdale, FL 33301ATTACHMENT NO. 2IN THE CIRCUIT COURT OF THE FIFTEENTH JUDICIAL CIRCUIT
IN AND FOR PALM BEACH COUNTY, FLORIDA

BIO-ENGINEERED SUPPLEMENTS & CASE NO.: 502013CA013954XXXXMB
NUTRITION, INC. f/k/a WINCHESTER, CIVIL DIVISION: AB
INC,,

Plaintiff,
VS.

MUSCLE ELEMENTS’ INC. d/b/a
MUSCLE ELEMENTS, CASEY CRANE,
JAMES TRACY, ERIC TOMKO, KEVIN
RAMOS and MARCUS SMALLS,

Defendants.
/

PRELIMINARY INJUNCTION

THIS MATTER came before the Court for hearing on September 20 and 24, 2013, upon
an Emergency Motion for Preliminary Injunction [hereinafter, “motion”] by Bio-engineered
Supplements & Nutirtion, Inc., f/k/a/ Winchester, Inc. [hereinafter, “BSN”]. The Court, having
reviewed the motion and the submissions of the parties; having heard live witness testimony;
having carefully observed the demeanor and determined the credibility of the witnesses; having
heard arguments of counsel; having considered the evidence and applicable legal authority and
being otherwise fully advised in the matter, finds that the motion should be granted and this
preliminary injunction issued. In support of this determination, the Court sets forth these facts
and law conclusions, the former which it finds by a preponderance of the evidence.!

Fact Findings
L. BSN is engaged in the business of producing and marketing sports nutrition
products.
2. Defendants, Casey Crane [hereinafter, “Crane”], James Tracy [hereinafter,

“Tracy”], Eric Tomko [hereinafter, “Tomko”], Kevin Ramos [hereinafter, “Ramos”] and Marcus

Ordinarily, in order to draft an order involving the abundance of evidence received in approximately eighteen
hours during two hearing days, the Court would insist on having a transcript in its possession. Unfortunately, given
the emergent circumstances, that was not possible in this case.Smalls [hereinafter, “Smalls”] were all formerly employed by BSN. Collectively, these
gentlemen are referred to as “defendants.”

3. In 2003, BSN hired Tracy as its Director of Marketing. As the Director of
Marketing, Tracy was responsible for all of BSN’s marketing efforts, and had access to BSN’s
trade secrets and other confidential and proprietary information, including but not limited to
product-launch plans, marketing strategies, compensation data, budgets and cost information and
preferred-vendor lists.

4, On or about January 24, 2011, Tracy executed an agreement with BSN
(hereinafter, “Tracy Agreement”]. Pursuant to the Tracy Agreement, [Plaintiffs Exhibit 3]
during and for one year after his employment with BSN, Tracy agreed that he would not (i)

9 &e

“divulge, furnish or make accessible to anyone” “any confidential or secret knowledge of [BSN]
that [Tracy] has acquired” during his employment with BSN; (ii) directly or indirectly “divert,
solicit, or accept business from any customer or potential customer of BSN” or “interfere, or
attempt to interfere, with [BSN’s] relationships with any of its actual or potential vendors or
suppliers”; and/or (iii) directly or indirectly “hire, engage, or solicit any person who was an
employee of [BSN]” at the time of his termination or whose employment with BSN terminated
one year prior to his termination.

5. In 2003, BSN hired Tomko as a regional sales manager. After several years at
BSN, Tomko was promoted to Vice President of Sales. As the Vice President of Sales, Tomko
was responsible for all of BSN’s sales functions, and he had access to BSN’s trade secrets and
other confidential and proprietary information including, but not limited to, customer lists,
pricing, cost of goods sold and profit margins.

6. On or about January 18, 2011, Tomko executed an Employment Agreement with
BSN [hereinafter, “Tomko Agreement”]. Pursuant to the Tomko Agreement, [Plaintiff's Exhibit
4] during and for one year after his employment with BSN, Tomko agreed that he would not (i)
“divulge, furnish or make accessible to anyone” “any confidential or secret knowledge of [BSN]
that [Tomko] has acquired” during his employment with BSN; (ii) directly or indirectly “invest
in, own, manage, operate, finance, control, advise, render services (including consulting services
or providing product endorsements) to or guarantee obligations of” any person or business
engaged in any business engaged in by BSN; (iii) directly or indirectly “divert, solicit, or accept

business from any customer or potential customer of BSN” or “interfere, or attempt to interfere,with [BSN’s] relationships with any of its actual or potential vendors or suppliers”; and/or (iv)
directly or indirectly “hire, engage, or solicit any person who was an employee of [BSN]” at the
time of his termination or whose employment with BSN terminated one year prior to his
termination.

71 Tn 2004, BSN hired Ramos as an International Account Executive. As an
International Account Executive, Ramos was responsible for managing all of BSN’s
international sales, and he had access to BSN’s trade secrets and other confidential and
proprietary information.

8. On or about June 1, 2004, Ramos executed an Employee Non Compete / Non
Disclosure Agreement with BSN [hereinafter, “2004 Ramos Agreement”]. Pursuant to the 2004
Ramos Agreement, [Plaintiff's Exhibit 5] Ramos agreed that, during and for one year after his
employment with BSN, (i) Ramos would not directly or indirectly compete with the business of
BSN; and (ii) Ramos would maintain all of BSN’s “trade secrets, customer information, vendor
information, or any other ‘confidential information,’ and good will” as confidential.

9. On or about January 24, 2011, Ramos executed an Agreement with BSN
(hereinafter, “2011 Ramos Agreement”]. Pursuant to the 2011 Ramos Agreement, [Plaintiff's
Exhibit 6] during and for one year after his employment with BSN, Ramos agreed that he would

not (i) “divulge, furnish or make accessible to anyone” “any confidential or secret knowledge of
[BSN] that [Ramos] has acquired” during his employment with BSN; (ii) directly or indirectly
“divert, solicit, or accept business from any customer or potential customer of BSN” or
“interfere, or attempt to interfere, with [BSN’s] relationships with any of its actual or potential
vendors or suppliers”; and/or (iii) directly or indirectly “hire, engage, or solicit any person who
was an employee of [BSN]” at the time of his termination or whose employment with BSN
terminated one year prior to his termination.

10. In 2005, BSN hired Crane as its Director of Purchasing. As the Director of
Purchasing, Crane was responsible for purchasing functions and supplier relations at BSN. As
part of his job, Crane had access to BSN’s trade secrets and other confidential and proprietary
information including, but not limited to, product formulas and specifications, raw material costs,
raw material vendor lists, and pricing.

11. On or about February 25, 2005, Crane executed an Employee Non Compete / Non
Disclosure Agreement with BSN [hereinafter, “2005 Crane Agreement”). Pursuant to the 2005Crane Agreement, [Plaintiff's Exhibit 7] Crane agreed that, during and for one year after his
employment with BSN, (i) Crane would not directly or indirectly compete with the business of
BSN; and (ii) Crane would maintain all of BSN’s “trade secrets, customer information, vendor
information, or any other ‘confidential information,’ and good will” as confidential.

12. On or about January 24, 2011, Crane executed an Agreement with BSN
[hereinafter, “2011 Crane Agreement”]. Pursuant to the 2011 Crane Agreement, [Plaintiff's
Exhibit 8] during and for one year after his employment with BSN, Crane agreed that he would

not (i) “divulge, furnish or make accessible to anyone” “any confidential or secret knowledge of
[BSN] that [Crane] has acquired” during his employment with BSN; (ii) directly or indirectly
“divert, solicit, or accept business from any customer or potential customer of BSN” or
“interfere, or attempt to interfere, with [BSN’s] relationships with any of its actual or potential
vendors or suppliers”; and/or (iii) directly or indirectly “hire, engage, or solicit any person who
was an employee of [BSN]” at the time of his termination or whose employment with BSN
terminated one year prior to his termination.

13. In 2007, BSN hired Smalls as an R&D/QC Formulator. As an R&D/QC
Formulator, Smalls was responsible for aspects of research, development and quality control at
BSN. In that position, Smalls had access to BSN’s trade secrets and other confidential and
proprietary information including, but not limited to, product formulas and specifications, new
product development, raw material ingredients and approved vendors.

14, On or about February 28, 2008, Smalls executed the Terms and Conditions of
Employment and Proprietary Information and Nondisclosure Agreement with BSN [hereinafter,
“2008 Smalls Agreement”]. Pursuant to the 2008 Smalls Agreement, [Plaintiff's Exhibit 11]
during and for two years after his employment with BSN, Smalls agreed that he would not (i)
solicit or utilize any existing manufacturers, vendors, distributors or customers of BSN in any
manner similar to that of BSN; and/or (ii) use any of BSN’s confidential information.

15. On or about January 24, 2011, Smalls executed an Agreement with BSN
[hereinafter, “2011 Smalls Agreement|’. Pursuant to the 2011 Smalls Agreement, [Plaintiff's
Exhibit 12] during and for one year after his employment with BSN, Smalls agreed that he would

not (i) “divulge, furnish or make accessible to anyone” “any confidential or secret knowledge of

: Collectively, the various non-compete/non-solicitation agreements between the BSN

Employees and BSN will be referred to herein, collectively, as the “Agreements.”[BSN] that [Smalls] has acquired” during his employment with BSN; (ii) directly or indirectly
“divert, solicit, or accept business from any customer or potential customer of [BSN]” or
“interfere, or attempt to interfere, with [BSN’s] relationships with any of its actual or potential
vendors or suppliers”; and/or (iii) directly or indirectly “hire, engage, or solicit any person who
was an employee of [BSN]” at the time of his termination or whose employment with BSN
terminated one year prior to his termination.

16. Separate from and in addition to the aforementioned Agreements, during the
course of the defendants’ employment with BSN, BSN had an Employee Handbook [Plaintiff's
Exhibit 1] that set forth the various rights and responsibilities of its employees, including
provisions regarding the protection of BSN’s trade secrets and other confidential and proprietary
information.

17. Pursuant to the Employee Handbook, all BSN employees, including defendants,
were required to “refrain from discussing confidential or proprietary [BSN] business and
information . . . with anyone who does not have a legitimate reason to know the information.”
Further, it is “vital to the interests and success of BSN” that its employees protect BSN’s
“confidential information and trade secrets.” At section 2-107, the Employee Handbook also
includes a list of examples of confidential materials, which includes, but is expressly not limited
to, customer lists, marketing strategies, research-and-development materials and financial
information.

18. At all times relevant to this action, all BSN employees, including defendants,
were required to acknowledge, in writing, that they would abide by BSN’s policies and
procedures set forth in the Employee Handbook.

19. Defendants all signed acknowledgments that they received the Employee
Handbook and agreed to abide by its terms.

20. Additionally, during the course of the defendants’ employment with BSN, BSN
had an Information Systems Use and Security Policy. [Plaintiff's Exhibit 16] Among other
things, the Information Systems Use and Security Policy provided that (i) all marketing,
manufacturing and sales information contained on BSN’s systems was confidential and
proprietary; (ii) all information is stored on the central file servers for data integrity and security
and that the storing of data on personal systems is strictly prohibited; (iii) and “Under no

circumstances is proprietary information or any portion of proprietary information allowed to beremoved from the building, either physically or electronically, unless approved by the Legal
Department.”

21. Asacondition of their employment, defendants were required to agree, in writing,
that they received a copy of BSN’s Information Systems Use and Security Policy and that they
would abide by its terms. The defendants all signed such acknowledgments,

22. BSN provided qualified employees, who wanted to work remotely, with a
Webmail application to access their BSN e-mail accounts. In certain instances, BSN provided
qualified employees with a BSN-approved laptop computer and Virtual Private Network
(“VPN”) access. For example, BSN provided Tomko with Webmail access and a BSN laptop
computer with VPN access.

23. During their employment with BSN, the defendants had access to BSN’s trade
secrets and other confidential and proprietary information including, but not limited to, customer
lists, distributor lists, vendor lists, vendor contracts, pricing lists, product costs, profit margins,
purchase patterns, marketing strategies, product profiles, product mixes, quality control
procedures, compensation data and employee rosters, [hereinafter, collectively, “Confidential
Information”]

24. But for their employment with BSN, the defendants would not have had access to
BSN’s Confidential Information. Furthermore, it is unlikely that but for their employment with
BSN some of the defendants would not likely have had ready access to high-level decision
makers in BSN’s customers, vendors and suppliers.

25. | Onor about August 19, 2011, Crane resigned from his position at BSN.

26. On or about February 1, 2013, Smalls’ employment was terminated by BSN.

27. Onor about April 9, 2013, Tracy abandoned his position at BSN. Tracy’s
resignation was made effective as of April 18, 2013.

28.  Onor about April 30, 2013, Tomko resigned from his position at BSN.

29. On or about June 19, 2013, Ramos resigned from his position at BSN.

30. | BSN has compensated the BSN Employees pursuant to established policy. BSN
has not withheld any compensation from the BSN Employees to which they are entitled.

* Although there was ample testimony proving that this policy was not uniformly enforced, the policy is reasonable
and serves a legitimate purpose to protect BSN’s interests. Therefore, violation of the policy by several of the
defendants, given the timing and totality of the circumstances is evidence of a scheme to violate the Agreements.31. On or about March 19, 2013, Defendant, Muscle Elements Inc. d/b/a Muscle
Elements (hereinafter, “Muscle Elements”], was incorporated under Florida law. On or about
June 5, 2013, Muscle Elements was incorporated under Delaware law. On or about June 6, 2013,
Muscle Elements was dissolved as a Florida corporation. On or about July 26, 2013, Muscle
Elements registered its fictitious name “Muscle Elements” with the Florida Secretary of State.

32. Crane is the President and Co-Founder of Muscle Elements. Tomko is the CEO
and Co-Founder of Muscle Elements. Tracy is the Vice President and Co-Founder of Muscle
Elements.

33. It is undisputed that the defendants now are working for and/or affiliated with
Muscle Elements,*

34. Muscle Elements operates in the same industry as BSN and plans to be a direct
competitor of BSN.

35. | Onor about March 19, 2013, Crane registered the internet domain name “Muscle-
Elements.com” with Go-Daddy, an internet domain registrar. Significantly, this was shortly
before Tomko, Tracy and Ramos left BSN.

36. Between April and June 2013, Muscle Elements registered seven stylized
trademarks of its corporate name and product names with the United States Patent and
Trademark Office.

37. | Muscle Elements has developed four products, which were manufactured by
BSN’s largest contract manufacturer (Valentine Enterprises, Inc.) and which are being marketed
and sold to BSN’s long-standing customers and distributors.

38. During the months preceding his resignation from BSN (June to August 2011),
Crane sent several e-mails from his BSN e-mail address to his personal e-mail address with
attachments containing BSN’s Confidential Information, including formulas and specifications,
raw material costs and approved raw material vendors for some of BSN’s best-selling products.
{Plaintiff's Exhibits 9 and 10]

39. In March 2013 (approximately one month prior to his separation from BSN),
Tracy forwarded BSN’s Confidential Information from his BSN e-mail address to his personal e-

* During the second day of hearing on the motion, testimony revealed that very recently Tiffany Trout left BSN to
go to work for Muscle Elements. That testimony was the first time the person who had supervised Ms. Trout at
BSN knew of her hiring by Muscle Elements.mail address, including a confidential BSN marketing execution plan for the first quarter of
2013, all of the contacts in his BSN-provided Microsoft Outlook program, a confidential BSN
marketing research spreadsheet analyzing BSN’s competition’s visibility in print media during
2012 and 2013, and a confidential BSN file reflecting 2013 salaries for all personnel in the
marketing department. [Plaintiffs Exhibits 32, 33 and 34]

40. | Onor about March 14, 2013 (approximately six weeks before resigning from
BSN and a few days prior to Muscle Elements’ incorporation), Tomko sent an e-mail from his
BSN e-mail address to his personal e-mail address, describing in detail the marketing and
branding strategy for Muscle Elements and making clear that Muscle Elements will be directly
competing with BSN. [Plaintiff's Exhibit 19]

41. Throughout the month of April 2013 (the month during which he resigned from
BSN), Tomko forwarded from his BSN e-mail address to his personal e-mail address BSN’s
Confidential Information, including a Microsoft Excel file that contained BSN’s confidential
2013 budget, a Microsoft Excel file that contained BSN’s confidential 2011 and 2012 budgets, a
Microsoft Excel file that contained BSN’s confidential year-over-year sales comparisons and
forecasts, broken down by customer, a Microsoft Excel file that contained BSN’s confidential
product pricing and costs breakdown, a Microsoft Excel file that contained all of his contacts
developed on behalf of BSN, and a confidential BSN April 2013 sales report that contains
confidential information regarding BSN’s sales, broken down by customer and product, for
2013. [Plaintiff's Exhibits 21, 22, 23, 24, 25, and 26]

42. Tomko testified about other contacts he had with high-ranking individuals of BSN
vendors shortly before he left BSN. The timing of those contacts causes this Court to conclude
they were part of the scheme.

43, In recent months, the defendants and Muscle Elements have marketed Muscle
Elements through Facebook, a social-networking site. In one such Facebook post, a BSN
marketing presentation is located on a desk in front of a laptop computer, surrounded by the
defendants. [Plaintiffs Exhibit 14]

44, In recent months, representatives of Muscle Elements have contacted Lone Star
Distribution (“Lone Star”), one of America’s leading wholesale distributors for sports and fitness
supplements and one of BSN’s largest customers, with which BSN has conducted business with

for several years.45. On August 16 and 17, 2013, Tomko, Ramos and other representatives of Muscle
Elements attended the Europa “Get Fit & Sport Expo” in Dallas, Texas. At that Expo, Tomko,
Ramos and other representatives of Muscle Elements met with representatives of Lone Star and
of Europa, one of BSN’s largest customers with which BSN has conducted business for several
years,

46. | Muscle Elements intends to attend and participate in the Olympia Fitness and
Performance Expo, the nation’s largest bodybuilding competition and trade show in Las Vegas,
Nevada, from September 26 through September 29, 2013.

Law Conclusions

47. Under Florida law, a party seeking a temporary injunction must establish four
elements: “(1) irreparable harm will result if the temporary injunction is not entered; (2) an
adequate remedy at law is unavailable; (3) there is a substantial likelihood of success on the
merits; and (4) entry of the temporary injunction will serve the public interest.” Anarkali
Boutique, Inc. v. Ortiz, 104 So. 3d 1202, 1204 (Fla. 4th DCA 2012) (quoting Univ. Med. Clinics,
Inc, v. Quality Health Plans, Inc., 51 So. 3d 1191, 1195 (Fla. 4th DCA 2011)).

48. — Under Florida law, “[t]he purpose of a temporary or preliminary injunction is not
to resolve disputes, but rather to prevent irreparable harm by maintaining status quo until a final
hearing can occur when full relief may be given.” Michele Pommier Models, Inc. v. Diel, 886 So.
2d 993, 995-96 (Fla. 3d DCA 2004) (citing Grant v. Robert Half Int'l., Inc., 597 So. 2d 801 (Fla.
3d DCA 1992)).

49. Each of the agreements executed by the defendants in 2011 contains a provision
expressly saying it “will be governed by, and interpreted in accordance with, the laws of the
State of Illinois.”

50. Significantly, defendants’ counsel directed this Court’s attention to only one area
of Illinois substantive law which would arguably have required a slightly-different analysis from
that required under Florida substantive law. Generally, Illinois law requires a balancing of the
equities in considering injunctive enforcement of post-employment restrictive covenants.
Consistent with that position, the individual defendants adduced evidence calculated to show that
BSN had dealt with them in bad faith, disrespected them, abandoned its product integrity and
improperly deprived the individual defendants from enjoying careers in their chosen industry.51. Defendants have not argued that in any other respect relevant Illinois law differs
from Florida law and this Court’s review of Illinois cases and Florida cases leads this Court to
believe that the balancing of the equities requirement in Illinois law is the only material
difference. Accordingly, this order does refer to substantive provisions of Florida law where
relevant and apparently not inconsistent with Illinois law’ as represented to the Court orally and
in writing by defendants’ counsel and in accordance with the Court’s research. Unfortunately,
because of the emergent nature of the matter, that research was not so thorough as this Court
normally conducts.©

52. A “trade secret” is “information, including a formula, pattern, compilation,
program, device, method, technique, or process that: (a) [derives independent economic value,
actual or potential, from not being generally known to, and not being readily ascertainable by
proper means by, other persons who can obtain economic value from its disclosure or use; and
(b) [i]s the subject of efforts that are reasonable under the circumstances to maintain its secrecy.”
Fla. Stat. § 688.002(4).

53. In light of both the great lengths taken by BSN to protect its Confidential
Information and the actual and potential economic value derived from the Confidential
Information not being known by people outside of BSN, BSN’s Confidential Information
constitutes trade secrets.

54. The defendants have misappropriated BSN’s Confidential Information by
disclosing the Confidential Information to Muscle Elements, and, in all likelihood, other third
parties, without the express or implied consent of BSN. Fla. Stat. § 688.002(2).’

55. Muscle Elements has misappropriated BSN’s Confidential Information because it
acquired the Confidential Information under circumstances pursuant to which Muscle Elements
through its founders and others of the defendants knew or should have known were improper.
Fla. Stat. § 688.002(2).

5 The parties do not dispute the reasonableness of the one-year duration, the geographic scope, the consideration
paid or the applicability to involuntarily-terminated employees of the post-employment no-competition and
confidential-and-other-interests protective covenants.

® Curiously, defendants’ cite as many Florida cases as they do Illinois cases. In any event, this Court found most
enlightening Medline Industries, Inc, v. H. Royal Grubb, 670 F. Supp. 831 (U.S.D,C.E.D. Ill, 1987) and Reliable
Fire Equipment Company v.Arredondo, 965 N.E, 24 393 (Ill. 2011).

7 While the defendants argue the lack of evidence of divulgence of information to third parties, sending it even to
themselves while they were creating an admitted competitor to BSN is sufficient. Furthermore, Smalls’ obvious
memorization of at least one trade-secret formula is clear-and-convincing evidence that BSN’s confidential
information is being misappropriated in violation of the Agreements.

1056. The party seeking enforcement of a restrictive covenant must plead and prove the
existence of one or more legitimate business interests justifying the restrictive covenant. Fla.
Stat. § 542.335(1)(b). The term “legitimate business interest” includes, but is not limited to, trade
secrets, other valuable confidential business or professional information that otherwise does not
qualify as trade secrets and/or substantial relationships with specific prospective or existing
customers, vendors or suppliers. Jd.

57, The party seeking enforcement of a restrictive covenant must plead and prove that
the contractually specified restraint is reasonably necessary to protect the legitimate business
interest or interests justifying the restriction. Fla. Stat. § 542.335(1)(c).

58. | BSN has a legitimate business interest in protecting its Confidential Information
because such information constitutes trade secrets and other valuable confidential business or
professional information,

59. BSN has a legitimate business interest in protecting its substantial relationships
with specific prospective or existing customers or vendors.

60. The Agreements between BSN and the defendants are reasonably necessary to
protect BSN’s legitimate business interests, and the restrictive covenants are reasonable in time
and scope.

61. Defendants argue that BSN breached certain of the Agreements first and that this
antecedent breach excused Defendants performance under the Agreements. The Court finds,
however, that BSN has fulfilled its obligations to the Defendants - - including its compensation
obligations - - such that there was no antecedent breach. See Charles Schwab & Co., Inc. v.
McMurry, No. 208-CV-534-FTM-29SPC, 2008 WL 5381922, at *2 (M.D, Fla. Dec, 23, 2008)
(holding that a delay in payment, which is the result of established policy permitting delayed
payments while errors are corrected and adjustments are made, is not an antecedent breach).

62. While defendants adduced during the hearing a great deal of information
concerning the hardship an injunction will cause them and that they felt disrespected by BSN and
that BSN had engaged in “pixie dusting,” the Court is not persuaded that those factors are
sufficient to outweigh the necessity to protect BSN’s interests. For example, there is no proof
that BSN treated any of the defendants less favorably than any other BSN employees in
compensation matters. Indeed, Tomko testified that he’d been instructed to trim a half million

dollars from his labor budget. Also, none of the defendants who professed concern about alleged

Il“pixie dusting” took any steps to rectify or challenge the issue before leaving BSN’s employ
though they’d known of the “rumors” for nearly a year prior to their departures. Only Smalls
took any steps whatsoever to mitigate the losses when his BSN employment terminated. This
not only serves to negate the defendants’ hardship claims but also constitutes evidence that
they’d intended for some time to challenge BSN in the marketplace.

63. In short, a balancing of the equities does not favor the defendants.

64. — Irreparable harm is presumed in cases involving the misappropriation of trade
secrets and/or tortious interference. Dotolo v. Schouten, 426 So. 2d 1013, 1015 (Fla. 2d DCA
1983) (citing Silvers v. Dis-Com Securities, Inc., 403 So. 2d 1133 (Fla. 4th DCA 1981)); Unistar
Corp. v. Child, 415 So, 2d 733, 735 (Fla. 3d DCA 1982) (“such irreparable harm could be
presumed and need not be alleged or proved in a case involving wrongful interference with a
business relationship”) (citing Sentry Insurance v. Dunn, 411 So, 2d 336 (Fla. Sth DCA 1982));
see also Fla, Stat. § 688.003(1) (“Actual or threatened misappropriation [of a trade secret] may
be enjoined.”

65. Harm also is irreparable where it is not capable of being quantified. Hatfield v,
AutoNation, Inc., 939 So. 2d 155, 157 (Fla. 4th DCA 2006) (“[A]n injury is irreparable where the
damage is estimable only by conjecture, and not by any accurate standard.”) (quoting JonJuan
Salon, Inc. v. Acosta, 922 So. 2d 1081, 1083 (Fla. 4th DCA 2006), in turn quoting Sun Elastic
Corp. v. O.B. Indus., 603 So. 2d 516, 517 n.3 (Fla. 3d DCA 1992)).

66. Here, not only has BSN asserted claims of, inter alia, breach of non-compete
agreements, misappropriation of trade secrets and tortious interference such that irreparable harm
to BSN presumed, BSN has established by the greater weight of the evidence that it has suffered
and will continue to suffer irreparable harm if the defendants’ wrongful conduct is not enjoined.
In just a few months, the defendants have formed and/or gained employment with a competing
business and have used BSN’s Confidential Information to aid that business to BSN’s detriment.
The defendants have begun developing products and have solicited BSN’s long-standing,
established clients and vendors to purchase those products. Further, the defendants have solicited
remaining BSN employees. The precise damage caused to BSN as a result of defendants’
conduct is unquantifiable and, thus, irreparable.

67. It is well-established that the concepts of “irreparable injury” and “no adequate
remedy at law” are “indistinguishable.” Special Purpose Accounts Receivable Co-op Corp. v.

12Prime One Capital Co., 125 F. Supp. 2d 1093, 1105-06 (S.D. Fla. 2000) (citing Lewis v. S.S.
Baune, 534 F.2d 1115, 1124 (Sth Cir. 1976); Morris Commun. Corp. v. PGA Tour, Inc., 117 F.
Supp. 2d 1322, 1330 (M.D. Fla. 2000)).

68. Here, BSN does not have an adequate remedy at law because money damages
alone would be insufficient to remedy the defendants’ unlawful conduct in light of the
irreparable injury discussed above,

69. Courts within this district routinely enter temporary and/or permanent injunctions
to protect employers from former employees’ breaches of their confidentiality/non-compete/non-
solicitation agreements. See, e.g., Univ. Med. Clinics, Inc. v. Quality Health Plans, Inc.,51 So.
3d 1191, 1195 (Fla. 4th DCA 2011)) (affirming entry of temporary injunction to prevent
violation of employment agreement); Salamon v. Anesthesia Pain Care Consultants, Inc., 10 So.
3d 1112, 1113 (Fla. 4th DCA 2009) (upholding injunction against former employee because
employee, in violation of his non-compete agreement, treated former employer’s patients and
used former employer’s confidential and proprietary information in his subsequent practice);
4UOrtho, LLC v. Practice Partners, Inc., 18 So. 3d 41, 42 (Fla. 4th DCA 2009) (affirming trial
court’s entry of temporary injunction because of former employer’s violation of non-compete
agreement); Fulford vy. Drawdy Bros. Const, II, Inc., 903 So. 2d 1007 (Fla. 4th DCA 2005)
(upholding injunction against former employee to protect former employer’s legitimate busin