Parexel International LLC v. Signant Health Holding Corp.

UNITED STATES DISTRICT COURT

DISTRICT OF MASSACHUSETTS

____________________________________

)

PAREXEL INTERNATIONAL LLC, )

)

Plaintiff, )

)

) Civil Action No. 1:22-CV-11896-AK

v. )

)

SIGNANT HEALTH HOLDING CORP., )

SIGNANT HEALTH LLC, SIGNANT )

HEALTH GLOBAL LLC, RUBEN )

CEBALLOS, and KATEHERINE )

TRAINOR )

)

Defendants. )

)

MEMORANDUM AND ORDER ON PLAINTIFF’S MOTION FOR PRELIMINARY

INJUNCTION

A.KELLEY, D.J.

Plaintiff Parexel International LLC (“Parexel”) moves for a preliminary injunction

pursuant to Federal Rule of Civil Procedure 65. [Dkt. 13]. Parexel seeks to prevent the

irreparable harm it alleges that Defendants Signant Health Holding Corp., Signant Health LLC,

Signant Health Global LLC, (together “Signant”), Ruben Ceballos, and Katherine Trainor are

causing to their business. [Id.]. Because the Court does not have sufficient information at this

time to find that Parexel has a likelihood of success on the merits, Parexel’s motion for

preliminary injunction [Dkt. 13] is DENIED.

I. BACKGROUND

Parexel is a global clinical research organization (“CRO”) which provides clinical

development capabilities and integrated consulting expertise. [Dkt. 21 at ¶ 2]. When it comes to

clinical research services, Parexel provides services to help its life science and biopharmaceutical

clients in their efforts to create new treatments. [Id. at ¶ 4]. Its services include: (a) early phase

services; (b) study design, planning, and execution; (c) decentralized clinical trials; (d) global

data operation; (e) medical writing; (f) clinical pharmacology; (g) clinical trial supplies and

logistics; (h) genomic medicine services; and (i) clinical adjudication services. [Id.].

Parexel asserts that Signant is also a CRO that competes with it directly by providing a

variety of services to biopharmaceutical and life sciences clients with respect to clinical trials.

[Dkt. 1 (“Compl.”) at ¶ 24]. It states that Signant’s SmartSignals program includes six primary

services including: (a) patient engagement; (b) IP management; (c) site enablement; (d) clinical

outcome assessments; (e) data analytics; and (f) scientific and clinical consulting. [Id. at ¶ 27].

Parexel claims that Signant competes for the same clients in the same market. [Id. at ¶ 28]. It

alternatively claims that customers who purchase Signant’s products and use them have a

reduced need for Parexel’s services. [Dkt. 39-1 at ¶ 3].

This claim is disputed though by Signant. Signant asserts that it is not a CRO, like

Parexel, as it does not provide holistic clinical trial management but that it instead focuses on a

narrow segment of clinical trials wherein digital product management is required. [Dkt. 34 at

¶¶ 15-16]. While it acknowledges that both companies work on clinical trials globally, Signant

instead characterizes itself as an evidence generation company whose focus is on providing

digital products that streamline clinical trials. [Id. at ¶ 4]. They claim any services they provide

are a smaller part of their business and are limited to data quality monitoring, protocol advisory,

and rater training and qualification. [Id. at ¶ 13]. Parexel needs to engage a vendor, like Signant,

to collect patient derived data on devices, and on multiple occasions, the two have worked

together on behalf of the same customer for the same clinical trial. [Id. at ¶ 18].

Ruben Ceballos was hired by Parexel in a project leadership position and was eventually

promoted to Senior Director of Project Leadership. [Compl. at ¶¶ 29-31]. In that role, he had

access to confidential information including but not limited to customer lists and related

information, vendor lists including pricing information, a customer relationship database, and

Parexel-specific pricing models. [Id. at ¶ 35]. Parexel asserts that such information is highly

sensitive and commercially valuable to its competitors. [Id. at ¶ 36].

In order to protect its confidential information and trade secrets, Parexel required

Ceballos to agree to confidentiality and non-disclosure provisions restricting the disclosure of

such information. [Id. at ¶ 41]. This was in addition to a range of other measures to ensure the

security of its information, such as implementing a web application firewall, encrypting its data,

and monitoring threats to its computer systems and networks. [Id. at ¶¶ 39-40].

On or around November 1, 2018, Ceballos signed a key employee agreement (“KEA”).

[Id. at ¶ 55]. That KEA included additional obligations to safeguard confidential information.

[Id. at ¶¶ 55-60]. It also included a provision that prohibited him from working for a

“Competing Company” for a period of six months following the end of his employment at

Parexel. [Id. at ¶ 61]. It defined competing company as:

any person, entity, or company, including any division, department

or affiliate thereof, which offers products or services in

competition with the Company (including any new products or

services being developed or researched by the Company prior to

and as of the date of Employee’s termination) in connection with

the research, development and/or commercialization of

pharmaceutical products, biotechnology products and/or medical

devices, including, without limitation: clinical research; clinical

trial management; clinical pharmacology; laboratory research; data

collection, management, processing, analysis and/or reporting;

biostatistics; clinical logistics; consulting and regulatory

affairs; commercialization; medical affairs; reimbursement and

market access; staffing and personnel placement; medical

communication; medical imaging; and software, electronic and

technology solutions relating to the above (collectively

defined as “Products or Services”). A “Competing Business” shall

include any person, entity or company that, although not currently

offering Products or Services, plans to develop Products or

Services and/or seeks to engage Employee for the purpose of

developing such Products or Services[.]

[Id.]. In July 2022, Ceballos claims that he saw a publicly posted position with Signant for the

role of Vice President of Global Project Management and applied. [Dkt. 35 at ¶ 8]. He denies

being approached by Katherine Trainor about submitting an application. [Id. at ¶ 9].

Katherine Trainor, a colleague of Ceballos’ at Parexel, entered into a similar KEA. Her

KEA included the below provision.

Employee agrees that while he/she is employed by the Company

and during the twelve (12) months immediately following the

termination of his/her employment for any reason, whether

voluntarily or involuntarily, Employee shall not, directly or

indirectly, solicit, hire, offer employment to, or in any manner

encourage employees of the Company to leave employment with

PAREXEL or otherwise violate their obligations to the Company.

[Compl. at ¶ 48].

An analysis of Trainor’s laptop found a Microsoft Teams message sent by Trainor to

another coworker on January 12, 2022 which stated “I told rubes today – he wants to a) go to you

or b) go with me.” [Dkt. 16 at ¶ 15]. On or around February 2, 2022, Trainor left the company

and joined Signant. [Compl. at ¶ 66]. She was granted a limited-waiver of the non-competition

provision in her KEA. [Id.]. On July 18, 2022, a Teams meeting was held that was titled

“Ruben/Kate – Opportunity Discussion.” [Id. at ¶ 68]. Trainor explains that she was sent the

Teams meeting invitation by Signant’s recruiter, but that she told the recruiter that, per her

agreement with Parexel, she could not participate in the interview process. [Dkt. 34 at ¶ 22]. In

a reply to Signant’s recruiter, Trainor said “I cannot be part of interview. I may have already had

a convo with him on the side, but cannot be part of interview. I would recommend him

100000% know him well. Should consider him at Sr. Dir, maybe even VP level.” [Dkt. 34-1 at

2]. Trainor denies attending any meetings concerning Ruben, participating in any part of his

hiring, or encouraging him to leave Parexel and join Signant in any way. [Dkt. 34 at ¶¶ 23-24].

Her explanation for the conversation she had with Ruben “on the side” is that the two spoke long

before he applied to catch up as friends. [Id. at ¶ 24].

On August 5, 2022, Ceballos informed Shannon Macquarrie, Parexel’s Senior Vice

President for Global Project Leadership, that Signant had extended an offer but that he was not

planning to accept it. [Dkt. 21 at ¶ 14]. In subsequent discussions, Macquarrie reminded

Ceballos that he was still subject to the terms of his KEA unless he was granted a written release.

[Id. at ¶¶ 15, 17]. On August 15, 2022, Ceballos submitted his resignation to Macquarrie. [Id. at

¶ 16]. He had not obtained a release from Parexel at that point and Macquarrie told him that

because Signant is a competitor of Parexel, Parexel would enforce his six-month restriction

prohibiting him from beginning his employment until March 9, 2023. [Id. at ¶ 17]. Macquarrie

learned from a LinkedIn post on September 21, 2022 that Ceballos had started his new position

at Signant. [Id. at ¶ 18].

An audit log for Ceballos’ Parexel owned laptop revealed that prior to his departure,

between August 24, 2022 and September 8, 2022, he previewed, accessed, and/or downloaded a

number of files that he did not need to view for any job-related purpose. [Id. at ¶¶ 12-13]. The

documents downloaded were housed in a single parent folder titled “Documents.” [Dkt. 21-1].

These files contained client pricing and intelligence information, information about other Parexel

employees, and training and project management information. [Dkt. 21 at ¶ 12]. They included

documents related to Pfizer, which is a client of Parexel but not one whose account Ceballos was

assigned to. [Id. at ¶ 13]. The same day he viewed Pfizer files, a preliminary forensic analysis

showed that Ceballos attached two USB drives to his laptop. [Id.]. Ceballos’ explanation for

this is that he wanted to take his personal files with him, such as photos, passwords, and personal

notes which were saved on his “Documents” folder. [Dkt. 35 at ¶ 5]. He says on August 25,

2022, that he downloaded those files on to his personal Microsoft OneDrive account and that he

“absentmindedly” copied over his entire Documents folder instead of spending time to sift

through the files. [Id.]. He denies revisiting the folder’s contents since leaving the Parexel,

denies being asked to download anything, and denies providing any confidential information,

from that download or otherwise, to Signant. [Id. at ¶¶ 5-7].

Parexel filed their Complaint on November 11, 2022 asserting claims against Ceballos,

Trainor, and Signant for breach of contract, violations of the DTSA and MUTSA, breach of

fiduciary duty, tortious interference, and unfair and deceptive trade practices. [Compl. at ¶¶ 102-

88]. Prior to the filing of Plaintiff’s motion for preliminary injunction, the parties met to see if

they could reach a resolution of their issues. [Dkt. 36 at ¶ 3]. Parexel sought to prevent Ceballos

from running clinical trials for Signant clients and from supervising, managing, mentoring,

recruiting, or training other employees who are running clinical trials for Signant clients.

[Id. at ¶ 5]. Signant retorted that this would prohibit Ceballos entirely from performing the job

that he was hired to do. [Id.].

On December 21, 2022, Plaintiff filed their motion for preliminary injunction alongside a

motion for leave to take immediate and limited expedited discovery. [Dkt. 13; Dkt. 22]. The

Court granted the latter motion in part and denied it in part and required the forensic analysis of

Ceballos’ OneDrive to proceed in an expedited fashion. [Dkt. 53]. The Court adopted the

parties joint proposed schedule thereafter. [Dkt. 56].

II. LEGAL STANDARD

“A preliminary injunction is ‘an extraordinary and drastic remedy’ that is never awarded

as of right.” Voice of the Arab World, Inc. v. MDTV Med. News Now, Inc., 645 F.3d 26, 32

(1st Cir. 2011) (quoting Munaf v. Geren, 553 U.S. 674, 689–90 (2008)) (citations omitted). A

Plaintiff seeking a preliminary injunction must establish that they are: (1) likely to succeed on

the merits; (2) that they are likely to suffer irreparable harm in the absence of preliminary relief;

(3)that the balance of equities tips in their favor; (4) and that an injunction is in the public

interest. Id. (quoting Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7 (2008)). If a plaintiff

is unable to meet one out of the four elements, the motion for injunctive relief will be denied.

EchoMail, Inc. v. Am. Exp. Co., 378 F. Supp. 2d 1, 2 (D. Mass. 2005). The most important of

the four elements is the likelihood of success on the merits which is considered the “sine qua

non” of the inquiry. Ryan v. ICE, 974 F.3d 9, 18 (1st Cir. 2020) (quoting New Comm Wireless

Servs., Inc. v. SprintCom, Inc., 287 F.3d 1, 9 (1st Cir. 2002)).

The evaluating court need not conclusively determine the merits of the movant’s claim

but should evaluate the likelihood or not that the movant will prevail on the merits. Id. When

there is a close factual dispute which could go either way at trial, a court should be reluctant to

grant injunctive relief. A-Copy, Inc. v. Michaelson, 599 F.2d 450, 451 (1st Cir. 1978). The

Court may accept as true well-pleaded allegations in the complaint and uncontroverted affidavits.

Rohm & Haas Elec. Materials, LLC v. Elec. Circuits, 759 F. Supp. 2d 110, 114, n.2 (D. Mass.

2010) (quoting Elrod v. Burns, 427 U.S. 347, 350 n.1 (1976)). The Court may also rely upon

otherwise inadmissible evidence, including hearsay, in deciding a motion for preliminary

injunction. Howe v. U.S. Bank Natl. Assn. as Tr. for RMAC Tr. Series 2016-CTT, 440 F. Supp.

3d 99, 102 (D. Mass. 2020) (citing Asseo v. Pan American Grain Co., Inc., 805 F.2d 23, 26 (1st

Cir. 1986)).

III. DISCUSSION

Plaintiff asserts that they have a likelihood of success on their claims that (1) Ceballos

and Trainor breached their contracts; (2) that Signant tortiously interfered with Ceballos’ KEA

and Trainor’s KEA; (3) and that Defendants violated the Defend Trade Secrets Act (“DTSA”),

18 U.S.C. § 1836 et seq., and the Massachusetts Uniform Trade Secrets Act (“MUTSA”), Mass.

Gen. Laws ch. 93, § 42 et seq. [Dkt. 14 at 12-18].

A. Breach of contract claims

1.Trainor’s Non-solicit Provision

Trainor’s contract requires that, for the 12 months that follow her termination, she may

not “directly or indirectly, solicit, hire, offer employment to, or in any manner encourage

employees of the Company to leave employment with Parexel or otherwise violate their

obligations to the Company.” [Dkt. 15-2 at 3]. Parexel argues that Trainor violated her

agreement by inducing Ceballos to leave Parexel and join Signant. [Dkt. 14 at 6-7, 11]. As

evidence for this, they highlight a July 18, 2022 Microsoft Teams opportunity discussion which

both Ceballos and Trainor were invited to, an earlier message in January of 2022 on Teams in

which Trainor told a colleague “I told rubes today – he wants to a) go to you or b) go with me.

[Dkt. 16 at ¶ 13, 15.]. They further argue that Trainor’s own declaration indicates that she took

actions, directly or indirectly, to solicit Ceballos. [Dkt. 39 at 2]. They highlight an email in

which Trainor said that while she could not be part of Ceballos’ interview, she “may have

already had a convo with him on the side” and she recommended that they hire Ceballos

“100000%” including for a senior level position. [Dkt. 34-1 at 2].

Trainor retorts in her declaration that she did not play any role in recruiting Ceballos,

that she did not attend the Teams meeting in question in order to comply with her KEA, that she

informed Signant’s recruiter that she could not be involved in his hiring process, that any

conversation she had with Ceballos “on the side” was only a conversation between friends, and

that she never asked Ruben to apply or suggested he leave Parexel. [Dkt. 34 at ¶¶ 21-24].

Plaintiff has not met its burden establishing a likelihood of success on the merits for their

breach of contract claim against Trainor. The sum total of facts available to the Court does not,

as of yet, demonstrate that Trainor violated the non-solicitation provision of her employment

agreement.

Trainor’s declaration instead indicates that she was aware of her obligations under her

KEA and was attempting to abide by them. [See id.]. Ceballos also attests in his declaration that

he applied to the job after seeing it publicly posted. [Dkt. 35 at ¶ 8]. He claims Trainor did not

approach him about the position or in any way convince him to apply. [Id. at ¶ 9]. There may be

some circumstantial evidence contradicting their stories, such as Trainor’s comments about

having had a conversation with Ruben or her Teams message about “Rubes” but this, without

more facts providing context, is insufficient to deem it likely that Trainor violated her obligations

under her KEA. The fact that an employee planning to work for a competitor has a conversation

with another employee about whether they were considering a job with that same competitor,

and that employee also later joins the competitor, is not sufficient to demonstrate a violation of a

non-solicitation clause in an employment contract. Reasonable limits—Non-solicitation of

employees, 3 Callmann on Unfair Comp., Tr. & Mono. § 16:44 (4th ed.) (citing Cintas Corp. v.

Perry, 517 F.3d 459, 468 (7th Cir. 2008)).

Additionally, the available facts do not show that Trainor indirectly violated her

obligation not to solicit, hire, offer employment to, or encourage Ceballos to leave employment

with Parexel or otherwise violate his obligations to the Company. Trainor did recommend

Ceballos as a candidate in a message sent to the recruiter at Signant, but this message was

directed only internally within Signant and not towards Ceballos. [Dkt. 34-1 at 2]. The facts do

not yet demonstrate that she encouraged him, directly or indirectly, to leave Parexel or to come

to Signant. Ceballos may not have been aware of her recommendation at all. This does not

establish Ceballos was induced to leave his position at Parexel as a result of the recommendation.

This, combined with the fact that she likely played no role in the hiring process, suggests

that she played no role in offering Ceballos employment or encouraging him to leave Parexel.

Thus, the available facts indicate that she had the separation necessary to abide by her non-

solicitation agreement.

2.Ruben Ceballos’ Non-compete Provision

Part of Ceballos’ KEA prohibited him from working for any “Competing Company” for a

six-month period following the end of his employment at Parexel. [Compl. at ¶ 61]. Parexel

asserts that Ceballos violated his KEA’s non-competition provision by joining Signant within

days of him leaving Parexel. [Dkt. 14 at 11-12]. Ceballos argues that the restrictive covenant in

the agreement is an overbroad extension that is therefore unenforceable. [Dkt. 33 at 8-9].

There is a close factual dispute as to whether Signant and Parexel can fairly be described

as competitors. This therefore precludes injunctive relief on this question. Michaelson, 599 F.2d

at 451. The KEA defined a “Competing Company” broadly as “any person, entity, or company .

.. which offers products or services in competition with the Company . . . in connection with the

research, development and/or commercialization of pharmaceutical products, biotechnology

products and/or medical devices.” [Compl. at ¶ 61]. This includes companies working on

“software, electronic and technology solutions” related to Parexel’s clinical research work. [Id.].

It is unclear whether Signant falls into that definition given that its primary work touches on a

different aspect of clinical trials.

With how broadly the term is defined in the KEA though, it is likely Signant would fall

into the KEA’s definition of a competing company. [See Dkt. 34 at ¶¶ 14-15]. However, given

how much the focuses of the two companies appear to diverge, extending the restrictive covenant

to Ceballos’ work at Signant may render the restrictive covenant broader than necessary. The

likelihood of Parexel’s success on the merits turns on whether the restrictive covenant is

enforceable as to his work with Signant. Parexel is not able to establish at this time that it is.

Although “a business may protect its legitimate business interests, a covenant not to

compete must be no more restrictive than necessary.” Boulanger v. Dunkin' Donuts Inc., 815

N.E.2d 572, 579 (Mass. 2004); see also Sodexo Operations, LLC. v. Abbe, 382 F. Supp. 3d 162,

165 (D. Mass. 2019) (“Massachusetts only enforces non-compete agreements that are tailored to

protect a legitimate business interest”). Under Mass. Gen. Laws. ch. 149, Section 24L(b)(iii),

such an agreement must be “no broader than necessary to protect one or more of the following

legitimate business interests of the employer: (A) the employer’s trade secrets; (B) the

employer’s confidential information that otherwise would not qualify as a trade secret; or (C) the

employer’s goodwill.” An unreasonable noncompete covenant would not be invalidated

completely but will be enforced to the extent that it is reasonable. Ferrofluidics Corp. v.

Advanced Vacuum Components, Inc., 968 F.2d 1463, 1469 (1st Cir. 1992) (quoting L.G. Balfour

Co. v. McGinnis, 759 F. Supp. 840, 845 (D.D.C. 1991)).

Defendants argue that the restriction on Ceballos’ ability to work at Signant is necessary

to protect its legitimate business interests including for preserving the “good will” it has built

with its customers. [Dkt. 14 at 12-13]. See Kroeger v. Stop & Shop Companies, Inc., 432

N.E.2d 566, 570 (Mass. App. 1982); IKON Off. Sols., Inc. v. Belanger, 59 F. Supp. 2d 125, 128-

29 (D. Mass. 1999) (Describing the positive reputation a business may have amongst its

customers and potential customers as a form of good will).

Since Parexel is a CRO and Signant is not, they do not compete with each other for the

same contracts on clinical trials and therefore cannot fairly be said to be competing for the same

customers. The two companies appear to focus on different aspects of the same industry.

Parexel does not provide any of Signant’s four primary digital products and needs to use a

vendor to collect the type of data that Signant provides. [Dkt. 34 at ¶¶ 15]. Notably, the two

have worked together on behalf of the same customers on multiple occasions. [Id. at ¶ 18]. This

undermines Parexel’s claim that Signant can be characterized as a competitor because customers

are not required to choose between purchasing Signant’s products or Parexel’s services. [Dkt.

39-1 at ¶ 3]. Based on these available facts, an employee going from Parexel to Signant would

therefore have no measurable impact on the goodwill Parexel enjoys amongst its clients.1

Signant may provide some services in addition to its products, but it is unclear whether

those services are in competition with Parexel’s work and whether Ceballos’ work for Signant

involves rendering those services. Signant’s attorney characterized a proposal to allow Ceballos

1 The restrictive covenant as to non-recruitment is justified by the legitimate business reason of maintaining

goodwill among employees. Seniorlink Inc. v. Landry, 19-CV-11248-DJC, 2021 WL 3932309, at *8 (D. Mass.

Sept. 2, 2021) (“Employers . . . clearly have a legitimate business interest in preserving the talent and goodwill of

their employees, which includes keeping current employees and ensuring they are not influenced to leave by former

employees” (quoting Advanced Micro Devices, Inc. v. Feldstein, No. 13-cv-40007-TSH, 2013 WL 10944934, at

*11 (D. Mass. May 15, 2013)) (internal quotations omitted). As discussed above, the facts are not fully clear at this

time regarding Trainor’s recruitment of Ceballos. Given that the parties did not address the impact on the goodwill

Parexel enjoys amongst its own employees in regards to Ceballos’ alleged violation of his KEA, the Court declines

to address that justification for Ceballos’ restrictive covenant any further.

to work at Signant without managing clinical trials for Signant’s clients as preventing him

“entirely from performing his job.” [Dkt. 36 at ¶ 5]. While this information may be relevant, the

Court is not persuaded that it establishes that Ceballos’ work at Signant is the same as his work at

Parexel, and therefore it does not prove that the two parties are in competition with one another.

Those statements appear to be more of a reflection of the parties’ negotiating positions rather

than substantive evidence. Additionally, Ceballos’ work on managing clinical trials could refer

to managing the use of Signant products when they are employed in clinical trials rather, than

managing clinical trials themselves.

The difference in industry focus also reduces the likelihood that Ceballos’ new position,

despite the similarities Parexel argues it has to his old one, would put at risk trade secrets and

confidential information that otherwise would not qualify as a trade secret. Ceballos is entitled

to draw on his project management skills he learned at Parexel in his new role. Dynamics

Research Corp. v. Analytic Scis. Corp., 400 N.E.2d 1274, 1282 (Mass. App. Ct. 1980) (“an

employee upon terminating his employment may carry away and use the general skill or

knowledge acquired during the course of the employment.” (quoting Junker v. Plummer, 320

Mass. 76, 79 (1946)). The need for Parexel to protect itself from Ceballos sharing such

information is unclear. It is notable that Trainor, a more senior executive, who joined Signant

from Parexel did not have noncompete provisions enforced against them. [Dkt. 34 at ¶ 21].2

Even if Ceballos did have access to confidential information about Parexel he learned over the

course of his work there, [Dkt. 21 at ¶ 10], it is uncertain whether such information would benefit

Signant in any way or harm Parexel, given the apparent lack of competition between the two.

2 In addition to waiving the noncompete against Trainor, Defendants assert that Parexel waived the noncompete for

Jason Martin as well whom Signant hired to be their Chief Operating Officer. [Dkt. 33 at 5]. Parexel does not

contest this allegation. However, the authority Signant cites is the declaration of Dunia Ammar [Dkt. 37] which

contains no such reference to Martin.

Since Ceballos’ noncompete provision may be more expansive than is necessary, it cannot be

said to be tailored to protect a legitimate business interest. See Abbe, 382 F. Supp. 3d at 165.

Parexel has therefore not established a likelihood of success on their breach of contract claims

against either Ceballos or Trainor.3

B. Tortious Interference

Parexel also asserts that Defendants Signant and Trainor tortiously interfered with

Ceballos and Trainor’s KEA’s by allowing Trainor to recruit Ceballos to a competitor, in

violation of both of their KEA’s. [Compl. at ¶¶ 166-80; Dkt. 14 at 18]. To establish a tortious

interference claim, “the plaintiff must prove that (1) he had a contract with a third party; (2) the

defendant knowingly interfered with that contract; (3) the defendant’s interference, in addition to

being intentional, was improper in motive or means; and (4) the plaintiff was harmed by the

defendant’s actions.” Harrison v. NetCentric Corp., 744 N.E.2d 622, 632 (Mass. 2001).

Here Parexel fails to establish a likelihood of success on the merits for many of the same

reasons that it failed to show a likelihood of success on its breach of contract claims. As to

Signant interfering with Trainor’s non-solicit provision, the information available outlines a

factual dispute and it is thus inappropriate to grant injunctive relief. Similarly, if it is unclear

whether Ceballos violated his non-compete agreement, then Signant cannot be said to have

knowingly induced Ceballos to breach his contractual obligations to Parexel.

3 The parties submitted briefing on the issue of whether equitable tolling should allow the restrictive period to be

tolled so that the restrictive period could begin again on the date that injunctive relief is granted. [Dkt. 50; Dkt. 51].

Ceballos and Trainor’s contract included a tolling provision that would extend the restrictive period if a breach

occurs “until such a breach is duly cured.” [Dkt. 15-1 at 9; Dkt. 15-2 at 9]. Defendant also argues that because the

applicable time period for Ceballos’ restrictive covenant has expired, any equitable relief is barred and Parexel’s

relief is limited to money damages. [Dkt. 50 at 2-3]. When the restrictive period has expired, even if the delay was

because of time lost litigating the case, specific relief is inappropriate. EMC Corp. v. Arturi, 655 F.3d 75, 77 (1st

Cir. 2011). The text of the agreement did not contain language tolling the term of restriction during litigation or

after preliminary finding of breach which would enable the time on the restrictive covenant to be extended. See id.

Since the Court has not made a determination that a breach of contract occurred though, preliminarily or otherwise,

it need not reach the issue of tolling.

C. DTSA and MUTSA

Whether Ceballos and Signant misappropriated Parexel’s trade secrets is a separate

question though. The DTSA and MUTSA are nearly equivalent. Allscripts Healthcare, LLC v.

DR/Decision Res., LLC, 386 F. Supp. 3d 89, 94 (D. Mass. 2019). The DTSA defines

“misappropriation” as the “acquisition of a trade secret of another by a person who knows or has

reason to know that the trade secret was acquired by improper means” or “disclosure or use of a

trade secret of another without express or implied consent by a person who . . . used improper

means to acquire knowledge of the trade secret”. 18 U.S.C. § 1839(5).

To establish a claim for misappropriation of a trade secret under either statute, the

plaintiff must show (1) the existence of a trade secret; (2) that the plaintiff took reasonable steps

to secure the confidentiality of that trade secret; and (3) the defendant “used improper means, in

breach of a confidential relationship, to acquire and use the trade secret.” T.H. Glennon Co., Inc.

v. Monday, No. CV 18-30120-WGY, 2020 WL 1270970, at *13 (D. Mass. Mar. 17, 2020). The

DTSA defines “misappropriation” as the “acquisition of a trade secret of another by a person

who knows or has reason to know that the trade secret was acquired by improper means” or

“disclosure or use of a trade secret of another without express or implied consent by a person

who . . . used improper means to acquire knowledge of the trade secret.” 18 U.S.C. § 1839(5).

1) Existence of Trade Secrets

A trade secret is a specified piece of information that at the time of the misappropriation

provided an actual or potential economic advantage to its holder from not being known or readily

ascertainable. 18 U.S.C. § 1839(3); Mass. Gen. Laws ch. 93, § 42(4). It may include “a formula,

pattern, compilation, program, device, method, technique, process, business strategy, customer

list, invention, or scientific, technical, financial or customer data.” Mass. Gen. Laws ch. 93 §

42(4). The subject matter of a trade secret must be secret and cannot include matters of public

knowledge or general knowledge within an industry. J.T. Healy & Son, Inc. v. James A. Murphy

& Son, Inc., 260 N.E.2d 723 (Mass. 1970) (quoting Restatement (First) Torts § 757 comment

(b)).

Defendant argues that Parexel identifies no specific trade secrets in the files that would

give Ceballos or Signant any type of competitive advantage. [Dkt. 33 at 11]. The Court

disagrees. Parexel lays out the following types of documents it asserts that Ceballos

misappropriated: (1) customer lists and related information; (2) operational structures of clinical

trials conducted by Parexel for its customers; (3) account strategies regarding Parexel’s

customers; and (4) internal assessments regarding ongoing projects. [Dkt. 14 at 16]. These

documents included information on client pricing and intelligence, including but not limited to

Parexel’s client Pfizer, information about other Parexel employees, and training and project

management information. [Dkt. 21 at ¶ 12-13]. Parexel additionally asserts that this information

represented highly-guarded commercially valuable trade secrets which they invested substantial

resources into developing and which would be useful to Signant. [Id. at ¶ 11].

The files accessed bear the names of Parexel clients and allegedly included pricing

information and other intelligence about them. [Id. at ¶ 12]. This financial and customer data

falls neatly into the definition of a trade secret under Massachusetts law. See Mass. Gen. Laws

ch. 93, § 42(4). Such information is likely valuable to Parexel for maintaining those

relationships. Therefore, the information can be fairly characterized as giving its holder an

advantage over all its competitors in its industry that work with, or seek to work with, those

clients. See Optos, Inc. v. Topcon Med. Sys., Inc., 777 F. Supp. 2d 217, 239 (D. Mass. 2011)

(finding that customer list featuring contact information, fees, and records was a trade secret

because the information therein of each customer’s needs gave the company a competitive

advantage).

The fact that it is unclear at this juncture whether Signant is a direct competitor with

Parexel does not alter that conclusion. The information could be of value to Signant, even if

used for purposes other than poaching clients. As such, the Court finds that Parexel has

established a likelihood that such files contained trade secrets.

2) Reasonable Efforts to Maintain Secrecy

In evaluating whether a company took reasonable efforts to protect the trade secrets at

issue, the Court may consider some of the following factors: (1) the presence or lack thereof of a

confidentiality agreement; (2) the nature and extent of security precautions; (3) the circumstances

in which the information was disclosed; and (4) the degree to which the information is already in

the public domain or readily ascertainable. See Id. at 239-40 (quoting TouchPoint Solutions, Inc.

v. Eastman Kodak Co., 345 F.Supp.2d 23, 29 (D. Mass. 2004)).

Parexel employs a range of measures to protect its confidential information including

requiring employees, like Ceballos, who had access to confidential information to sign

confidentiality agreements and non-disclosure provisions. [Dkt. 18 at ¶ 3-4; Dkt. 1-3]. This

makes it likely that the efforts they took to protect their trade secrets were reasonable.

3) Improper Means

Lastly, Parexel must demonstrate that the trade secrets at issue were obtained through

improper means in breach of a confidential relationship. TouchPoint Solutions, Inc., 345

F.Supp.2d at 31. Improper means includes “theft, bribery, misrepresentation, unreasonable

intrusion into private . . . electronic space, or breach or inducement of a breach of a confidential

relationship.” Mass. Gen. Laws ch. 93, § 42 (1). A third party who knowingly benefits from a

trade secret obtained in violation of a confidential relationship is also liable for the

misappropriation of that trade secret. Data Gen. Corp. v. Grumman Sys. Support Corp., 795 F.

Supp. 501, 507 (D. Mass. 1992). The holder of a trade secret may be harmed “merely by the

disclosure of his secret to others as well as by the use of his secret in competition with him.”

Restatement (First) of Torts § 757 comment (c) (1939). If an actor acquires a trade secret by

mistake, he is obliged to not disclose or use the secret. Id. at (d).

While the facts here raise questions about Ceballos’ conduct, they do not show that

Defendants acquired the trade secrets by improper means as it is unclear yet if Defendants have

acquired those trade secrets at all. The available forensic analysis shows that, shortly before

leaving Parexel, Ceballos previewed, accessed, and/or downloaded files related to Parexel’s

clients that he did not have a work purpose to view, including some that contained information

about Parexel’s clients. [Dkt. 21 at ¶¶ 12-13]. He did so, in at least one instance, on the same

day that he inserted two USB drives into his laptop. [Id. at ¶ 13]. What is on those USB drives

and Ceballos’ OneDrive is unclear as is whether Signant has come into possession of any

information contained therein. Signant for its part asserts that it has not seen any of this

information and that it did not even learn of the download until this litigation began. [Dkt. 33 at

5]. Ceballos asserts that he was not asked by anyone at Signant to download that information

and that he has not provided that information to Signant. [Dkt. 35 at ¶¶ 6-7, 14]. Ceballos’

explanation, that he dropped his entire Documents folder into his personal OneDrive account out

of laziness, either reflects innocuous carelessness or duplicity. His explanation of carelessness

though is supported by the fact that all the downloaded files were located in a single parent

folder titled “Documents.” [Id. at ¶ 5; Dkt. 21-1].

Where, as here, the Court does not have sufficient information to conclude that

Defendants have obtained or used the trade secrets at issue, the Plaintiff has not met their burden

to establish the improper means element. See In re Document Techs. Litig., 275 F. Supp. 3d

454, 463 (S.D.N.Y. 2017) (finding that the plaintiff had failed to show likelihood of success on

merits because digital forensic analysis failed to show information at issue was ever inserted into

the defendants computers and the defendants provided credible innocuous explanations for their

conduct); Midwest Sign & Screen Printing Supply Co. v. Dalpe, 386 F. Supp. 3d 1037, 1052-53

(D. Minn. 2019) (Finding no misappropriation because no evidence showed that the defendant

received emails from former employee containing trade secrets); Smart Mortg. Centers, Inc. v.

Noe, No. 21-CV-3606, 2022 WL 832663, at *7 (N.D. Ill. Mar. 21, 2022) (Dismissing DTSA

claim because there were no allegations that the confidential information was uploaded to

defendant’s servers or that defendants ever used or disclosed the information).

This Court has already ordered that the OneDrive be produced for forensic analysis on an

expedited basis. [Dkt. 53]. The outcome of that, and any additional information that would

demonstrate that Signant ever gained access to the trade secrets, could alter this conclusion.

Absent that however, the Court cannot conclude that Defendants employed improper means to

acquire Parexel’s trade secrets.

IV. CONCLUSION

For the foregoing reasons, the Court DENIES Parexel’s Motion for Preliminary

Injunction. [Dkt. 13].

SO ORDERED.

Dated: April 13, 2023 /s/ Angel Kelley

Hon. Angel Kelley

United States District Judge