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AUA Private Equity Partners, LLC v. Soto

United States District Court, S.D. New York

April 5, 2018

ASTRID SOTO, Defendant.


          GREGORY H. WOODS, United States District Judge:

         Sensing that her employment with Plaintiff AUA Private Equity Partners, LLC (“AUA”) was nearing its end, Ms. Astrid Soto uploaded AUA trade secrets from her work laptop to her personal Google Drive account. She wiped the laptop clean of any work-related files and cleared her browsing history. When Ms. Soto returned to the office the next business day, her premonition proved well-founded-she was terminated effective immediately. Nonetheless, Ms. Soto continued to represent herself as an AUA employee and refused to return AUA trade secrets in her possession. AUA brought this action, asserting claims against Ms. Soto under the Defend Trade Secrets Act (“DTSA”), 18 U.S.C. § 1836(b), and under New York state law for breach of contract and misappropriation. Ms. Soto has moved to dismiss the complaint in its entirety. Because the complaint plausibly alleges that Ms. Soto misappropriated AUA's trade secrets by acquiring them through improper means, her motion to dismiss is DENIED.

         I. BACKGROUND

         A. Factual Background[1]

         AUA, a Delaware limited liability company with its principal place of business in Manhattan, is a registered private equity firm that specializes in leveraged and management buyouts, growth equity investments, recapitalizations, and buy-and-build/roll-up investments in operationally focused lower-middle-market companies. Complaint, ECF No. 1 (“Compl.”) ¶¶ 3, 7. In March 2014, AUA hired Ms. Soto as the company's Vice President of Business Development and Investor Relations. Id. ¶ 8 & Ex. A.

         In connection with her employment, Ms. Soto agreed to abide by various confidentiality policies in place at AUA. Compl. ¶¶ 11-15. First, Ms. Soto agreed to the confidentiality provisions contained in her offer of employment. Id. ¶ 11. In signing that letter, Ms. Soto specifically agreed to the following:

By accepting employment with AUA, you understand and agree that you will be privy to certain confidential and proprietary information regarding transactions, investors and other valuable financial and other information regarding the Firm and its employees. In consideration of your employment and access to such confidential information, you agree that you will not during or after your employment with AUA use such information for any reason other than to further the business of AUA and its affiliates.

Compl. ¶ 11 & Ex. A at 2. Ms. Soto also executed an “Employee Acknowledgement of Receipt” of the AUA Supervisory Procedures and Compliance Manual (the “Compliance Manual”), acknowledging that she understood the Compliance Manual's content and “agree[d] to the policies and procedures set forth therein.” Compl. ¶ 12 & Ex. B at 40. Among the provisions of the Compliance Manual by which Ms. Soto agreed to abide was AUA's email policy. As set forth in the Compliance Manual, that policy reads:

8.2 Email Retention Policy. AUA has implemented an “Email Retention Policy” whereby AUA will attempt to retain all emails and instant messages through the use of Global Relay, a third-party email archiving system. The Firm's Email Retention Policy is comprised of several factors:
. The [Chief Compliance Officer] is responsible for supervision of the policy;
. Employees must refrain from conducting business through any communications network not maintained by the investment adviser (e.g., outside email, instant messaging, or text messaging not provided by the Firm to the Employee or which cannot be captured under the email retention system);
. All electronic communications that fall within the applicable record keeping requirements are identified and preserved in the appropriate manner;
. The disposal of emails must be carried out in a way that protects confidentiality; and
. Training on the Email Retention Policy must be given upon employment and annually thereafter.

Compl. ¶ 13. Ms. Soto further agreed that she would not “engage in any activity that would increase the likelihood that AUA or the Clients of the Firm would be at risk for a cybersecurity event. Id. ¶ 14.

         In addition to the Compliance Manual, Ms. Soto also agreed to “maintain the confidentiality of any information concerning the Firm . . . in a manner consistent with the confidentiality obligations detailed in” AUAs Employee Policies and Procedures Handbook (“Policies and Procedures”). Id. ¶ 14 & Ex. C at 43. The Policies and Procedures prohibited “[disclosure of the Firm's confidential information to anyone outside the Firm and use of the Firm's intellectual property for matters unrelated to the Firm's business.” Compl. ¶ 15 & Ex. C at 35. The Policies and Procedures also forbid employees from “commingl[ing] personal property with Firm property, ” from “downloading] or transferring] work product or sensitive business content to [the employee's] device, ” and from “back[ing] up [the employee's] device locally or to cloud-based storage or services without the Firm's consent.” Compl., Ex. C. at 27, 34-35.

         During the course of Ms. Soto's employment with AUA, she was given access to “high level” confidential information, AUA trade secrets, and other proprietary information, including confidential internal strategic information, confidential investor information, and other confidential information related to AUA's business. Compl. ¶ 9. That information, if improperly disseminated, was capable of harming AUA's business, including by depriving the company of its competitive advantage and by damaging AUA's “position and credibility in the marketplace.” Id. ¶ 17.

         At some point during her employment, Ms. Soto forwarded emails from her AUA email account to her personal email address. Id. ¶ 20. Some of those emails included copies to Karen Kulaga, a former AUA employee now employed by a competitor. Id. ¶ 21.

         On Friday, September 8, 2017, seemingly in anticipation of her termination, Ms. Soto accessed her Google Drive account for what AUA alleges on information and belief to be the purpose of uploading proprietary AUA files from Ms. Soto's laptop to her personal Google account. Id. ¶¶ 29-30. Ms. Soto then deleted all local files contained on her laptop computer, as well as her browser history prior to September 7, 2017. Id. ¶ 29.[2]

         On the following Monday, September 11, 2017, AUA terminated Ms. Soto's employment. Id. ¶ 18. On the same date, AUA ended Ms. Soto's access to her AUA email account and instructed her to return all AUA property, including her building pass and office and restroom keys. Id. Ms. Soto, however, did not return all of her AUA property and ...

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