Google Inc. v. American Blind & Wallpaper Factory, Inc.

Filing 243

Google Inc. v. American Blind & Wallpaper Factory, Inc.

Doc. 243 Att. 19

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EXHIBIT S

Dockets.Justia.com

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9i

UNITED STATES DISTIUCT COURT FOR THE EASTERN DISTRICT OF MICHIGAN

AMERICAN BLTND AND W ALLP APER FACTORY, INC.,

Case: 2:06-cv-13576

Assignéd To: Cohn, Avern
Referral Judge: Pepe, Steven D Filed: 08-10-2006 At 10:27 AM cmp AMERICAN BLIND AND WALLPAPER FA CTORY, lNC V KATZMAN (TAM)

Plaintiff,
v.

STEVE KATZMAN,
Defendant.

SCOTT A- MACGRlFF (P55864) DICKINSON WRIGHT PLLC Attorneys for Plaintiff 4000 500 Woodward Avenue, Suite Detroit, MI 48226 [phone]
EmaI1: smacgr ff(fdickinsonwrighLcom

AMERICAN BLIND AND WALLPAPER FACTORYlS MOTION :FOR A TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION
Plaintiff, American Blind and Wallpaper Factory, Inc. ("American Bl1ndj'), by and
through its undersigned counseL, upon the accompanying Anldavit of Joel Levine, hereby mOves
this Court, pursuant to Fed. R_ Civ. P. 65, for entry of a temporary restraining order and a

preliminary injunction barring defendant, Steve Katzman ("Katzman" or "Defendant"), and any
persons ading on Defendant's behair or at Defendant's request, from using any of AnierÎeili

Blind's confidential and proprietary property and infonnation, and requiiing Defendant to
immediately return to American Blind all such property and infonl1ition (the "Motion")-

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In support hereof, American Blind fHes and ineorporates, as if fully restated herein, the
attached Brief in Support of its Motion.

BY:

SCOTT A. MACGRTFF (P55864) Attorneys lor Plaintiff 500 Woodward Avenue
Su1te 4000

Detroit, MI 48226 [phone]
Email: smacgrfI~ydickinsonwrightcom

Date: August \ q 2006
DGTROI1' i4:1l(-~ Q~OOi;2vi

2

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..

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN

.,

ElCh, bits l¡ A - 0

AMERICAN BLIND AND W ALLP APER FACTORY, INC.,
Plainti ff,
v.

Case: 2: 06-cy-13576 Assigned Tn: Cohn, Avern Referral Judge: Pepe, Steven D Filed: 08-10~2006 At 10:27 AM cmp AMERICAN BLIND AND WALLPAPER FA CTORY, INC V. KATZMAN (TAM)

STEVE K. TZMAN,
Defendant.

SCOTT A. MACGRIFF (P55864) DICKINSON WRlGHT PLLC Attorneys for Plaintiff 500 Woodward Avenue, Sulte 4000 Detroit, Mr 48226 [phone]
Email: smaegriff(idickinsonwrightcom

AMElUCAN BLIND AND W ALLP APER FACTORY'S BRIEF IN SUPPORT OF MOTION FOR A TEMPORARY RESTRANING ORDER AND PRELIMINARY INJUNCTION

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TABLE OF

CONTENTS
Page

I. INTRODUCTION .................... ......... ..........,... ._.................. ........... .......,........................1
IT. TH.E PARTIES... ....... ............ ..................... ..u...., .......... ......... ..-.............. _................. ......._2

IlL. FACTUAL BACKGROUN ............ ..._........ ....__.............-.............................. ........_......2
TV. ARGUMENT....... ....._ .......,........... .... ........ ........... ...__............. ...... .....--. ........ .........,.. ...._..8

Ä- A Temporary Restraining Order Is Waranted ......_...........--...."...._............_......8
B. Inj unctìve Relief Is Warranted....... .........., ........ ............................... ............... ......9
1. American B1Índ wil

likely succeed on the merits of its claim ...............10

a) Violation ofthe CFAA _... ........... _...... .............." ..--...."......... .....1 0

b) Violation of 18lJ.S.C. § 2701 et seq. ........__......................--....11
c) Violation of

MUTSA ...._............._..... ................ ....-............ .......12

d) Common-law conversion ............. ......... ........ ........- ....... ........... .15
e) Tortious Interference.......-. .......... ,...... ......... ............. _................ .15

1) Breach of Contract......... ........................................" ..................1 Ó
2. American Blind will be irreparably harmed absent immedÜile

injuntive re1Íef............ ...._... ........... _... .......... .......... ........... .....-.......... ...... I 8

3. Granting the injunction will not har anyone ...........__...."....._."..........19
4. The public interest will be served by issuing the injUllction..............,,--20
V. CONCLUSION ....... ........ .............. ........- ........... w. n........... ._............. ... ........ .-............... ..20

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TABLE OF AUTHOIUTIES
Cases

ACS Consultant Co., Inc. v. Willams, No. 06-11301, 2006 WI, 897559, *7 (B.D. Mich.
Apr. 6, 20(6)........".... ........ ........ ......__... ......... ..... ....... ........ ....... ........ ...-- ..... ............. .... 14, 19

American Can Co. v. Mansukhani, 742 F.2d 314,325 (7ifi eir 1984) .....................................--..9

American Parts Co., Inc. v American Arbitration Ass 'n, 154 N.W.2d 5 (Mich. Ct. App. 1967) ....... ..... ........ ........ ........... ........, ....... ..... ......... ...... ............................. ..--.................... 17

BPS Clinical Laboratories v. Blue Cross and Blue Shield 0/ Michigan, 552 N. W.2d 919,
925 (Mieh. Ct. A pp. 1996) ............................. .............. ....................... ...................... ........ 16

CMllnt'l, Inc. v. Intermet Inl 'I Corp., 649 N.W.2d 808,813 (Mich. Ct. App. 2002) ........... 13, 14
Easton Sports, Inc. v. Warrior LaCrosse, Inc., No. 05-CV -72031, 2005 WL 2234559 Mich. Sept. 14, 2005)................ ................................... ......... ................................ 16 (E.D .
Fielder v. Greater Media. Inc., LC No. 04-436195-CZ, 2006 WL 2060404, *4 (Mich. Ct. App. July 25, 2006)........... ...................__ ............... ...... .......--.... ........ ......., ........... ......--..... 16
Foremost lrzs. Co. v. Allstate Ins. Co., 486 N.W.2d 600,606 (1992)........................................_..15

In re DeLorean Motor Co., 755 F.2d 1223, 1228 (6th Cir. 1985)...................--............................. y

In re Eagle-Picher Industries, Inc., 963 F.2d 855, 859 (6th eir. 1992) ......;................................. 9
In re InLzÚt Privacy LitigllfÌon, 138 F. Supp. 2d 1272, 1276 (C.D. CaL. 20(1)............................. 12

International Airport Centers, LL C. v- Citrin, 440 F.3d 418,420 (7th Cir. 2006).................... 11
Kimber~y & European Diamonds, Inc. v. Burbank, 684 F.2d 363 (6th Cir. 1982).....--............... is

Leach v. Ford Motor Co., 299 F. Supp. 2d 763 (E.D. Mich. 2004) ..............--...........--...............16

, Merril Lynch Pierce Fenner & Smith v. Ran, 67 F. Supp. 2d 764, 778 (n.D. Mich. 1999)........ 19
PepsiCo., Tnt. v. Redmond, 54 F.3d 1262, 1269 (7th Cir. 1995)....................--...........--.............. 14
Six Clinics Holding Corp., !lv. Cafcomp Systems, ¡nc., 113 F.3d 393, 402 (6th Cir. 1997) ....... 10
Superior Consultant Co. v. Bailey, No. OO-CV-73439, 2000 WL 1279161, *10 (B.D. Mich. Aug. 22, 2000.). ....... ................ .__".... .................... .............................' ........... ..--..... 14

Superior Consulting Co. v. Wailng, 851 F. Supp. 839,846 (B.D. Mich. 1994)...................... 9, 18
Thomas v. Leja, 468 N.W.2d 58 (Mieh. Ct. App. 1991).....................--............--...................... i 7

u

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United Rentals (North America), Inc. v. Keizer, 355 F.3d 399, 412-13 (6th Cir. 2004) ...........-- 13

Statutes

II

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T. INTRODUCTION
Derendant is the fonner CEO of American Blínd, having resigned voluntarily on May 18,
2006. in connection with his tenure as American Blind's CEO, Defendant signed an

ernployment agreement which contains provisions forbidding him to use confidential or
proprietary infoffiution obtained while at American Blind for his own bene11t, or for the benefit

of anyone other than American Blind (the ..Employment Agreement"). (A copy of the
Employment Agreement is annexed as Exhibit A to the accompanying Affidavit of Joel Levine,

dated August 9, 2006 and fied in conjunction with this Motion. The Employment Agreement is
hereby incorporated by reference,) The Employment Agreement also contains a provìsion

reqiiiring Defendant to immediately return all American Blind property to American Blind upon

his tcrminaiion. These provisions explicitly survive the term of the EmploymentAgreellent and
Defendant's employment at American Blind. They also specifically contemplate injunctive
reHcfupon any breach of

them by Defendant.

When Defendant resigned, American Blind executives immediately discovered that
Defendant had taken with him several confidential items of American Blinds property, violating

the Employment Agreement. Specifically, Defendant took a proprietary spreadsheet containing
detailed information about American Blind's coinpeIÎtors (the "Competitive Matrix"), as well as

the American Blind employee handbook (the "Employee Handbook"). American Blind has
reason to believe that Defendant took with him addilional proprietary documents and infonllation
which American Blind has yet to identify.

American Blind also discovered that following his resignation, Defendant erased
thousands of electronic fies contained on several of American Blind's computers to which

Defcndant had access during his employment.

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American Blind also subsequently learned that Defendant has created a new business to
compete directly with American Blind, called Nationwide Blind and Wallpaper Factory

("Nalionwide"). American Blind has good cause to believe that Defendant culTently is
wrongfully using the Competitive Matrix and the Employee Handbook, violating ongoing
provisions of Defendant's Employment Agreement, in order to help get Nationwide up and
running.

By this action Amercan Blind seeks immediate retum of all confidential and proprietary
documents and information wrongfully taken by Defendant upon his resignation. American
Blind also seeks the immediate cessation of any and all use by Defendant, Nationwide, and

anyone else acting on Defendant's behalf of American Blind's confidential and proprietary

inIòmiation and documents.

II. THE PARTIES

American Blind is a Delaware corporation with its principal place of business at 909
North Sheldon

Road, Plymouth, Michigan.

On ínfomiation and belief: Steve Katzman is a Michigan citiz.en and resident who resides

at 653 i Pembridge Hil, West Bloomfield, Michigan.

ILL. FACTUAL BACKGROUND
American Blind is the largest direct-to-customer retailer of window treatments and wall
coverings in the United

States. American Blind, through its predecessor companies, has been in

the home decorating business for over 50 years.
IT. at ii 4.1)
Defendant was hired as American Blind's CEO in 1998. (Levine A

American
On or about June 5, 2000, as a condition of his continued employment as

References to the accompany Atfdavit or Joel Levine, dated August 9j 2006 and fied 1n
conjunction with this Motion, are to "Levine AIT. at ii _no

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Blind's CEO, Defendant entered into the Employment Agreement with American Blind. (Levine
AlT., Ex. A,2)
On or about September 18, 2003, American Blind and Katzman renewed the

Employment Agreement, extending its term through December 31,2005. (Li;vinc Aft', Ex. R)

The Employment Agreement contains several provisions forbidding Defendant to, inter
alia, take with him or use any American Blind proprietary infonnation or documents following
tennination of

his employment at American Blind. (Levine Aff; Ex. A at ~ il(a), 11(b).) These

provisions explicitly survive the term of the Employment Agreement and n.~main in effect no
matter the circumstances under which Defendant departs American Blind. (Id.)
Sped lícally, subparagraph 11 (a) of the Employment Agrcemelt provides, inter alia:

Proprietary Tnfonnation. Executive (DeiendantJ shall not during the the Employment Term or at any time thereafÌer (irrespective of

circumstances under which Executive's employment by
Corporation (American Blind) terminates), directly or indirectly, use for his own purposc or for the benefit of any person or entily other than Corporation, nor otherWise disclose, any Propridary Information, . . . to any individual or entity, unless such disclosure
has been authorized in writing by the Board or is otherwise

required by law. . . .

(ld. at § l1(a).)
And subparagraph 1 l(b) of

the Employment Agreement provides, inter alia:

Confidentiality and Sun-ender of Records. Executive shall iiot retain, and wil deliver proinptly to Corporation, any ConHdcntial
Rceords following termination of his eniployimmt. "Confidential
Records" shall mean all correspondence, memoranda, mes,

mamials, books, lists, financial, opcrating or markeLing records, magnetic tape or electronic or other media or equipment of any kind which may be in Executive's possession or under his control

or accessible to him which may contain any Proprietary
Information. . . . All Confldcntial Records shall be and remain the sole property of Corporation during the Employment Tenn and
2

"

References to Exhibits to lhe Affidavlt of Joel Levine are to "Levine Aff., Ex.

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thereafter.

On February 14, 2006, Defendant executed an Employee Hardware Loan Agreement

with American Blind, which obligated Defendant to return, upon his deparure from American
Blind, the company laptop computer and related accessories that American Blind had fumishcd
for him, among other things (the "Hardware Agreement"). (Levine All, Ex. B.)
At approximately 4:30 p.m. on May 18, 2006, Defendant participated in a tc1ecoiilcrence

in his ofl1ce along with American Blind's CFO, Gerald Curran, (Levine AfC at ii 11.) At this
time, Mr. Curran observed that various property of American Blind, including files, documents,

records, electronic data, computer fies, and other proprietary infoniiation (the "Compaiy
Property") was located in Defendant's orfce and on two desktop computers in Defendant's

office. (ld.)

Later that evening, at approxiniately 7:33 p.m. on May 18,2006, Derendant tcndered his
resignation to American Blind's board of directors. (Levine Aff., Ex. C.)

The next moming, at about 8:00 a.ni. on May 19, 2006, Joel Levine, who replaced

Defendant as American Blind's CEO, entered Defendant's office and discovered that the
Company Property was missing from Defendant's o1Tce. (Levine AIr. at ~ 13.)
Also on or about May 19, 2006, Greg Ruppert, AmerícllTl Blind's vice president of
technical operations, inspected the two desktop computers

in Defendant's office at American

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Blind and discovered that all of the electronic documents and emails had been erased from them.
(Levine Aff. at

'I 14.)

Later that day, on May "\9, 2006, American Blind demanded that Katzman return the
Company Property by 5:00 p.m. on May 22, 2006. (Levine Air, Ex. D,) American Blind also
dܡablcd Defendant's access to American Blind's Virliial Private Computer Network ("VPN") on
May 19, 2006. (Levine Afr. at '117.)

On May 19, 2006, Mr. Levine discovered that Katzman had been communieating with
certain vendors and creditors or American Blind and, on infonnation and belief, falsely
indicating or implying to them that American Blind was in financial distress. (!d. at ,118.)
Mr. Levine also discovered on that sanie day that following one such communication

with Defendant, First Data, the company who processed American Blind's corporate credit card,
placed a "hold" on American Blind's eredit in the amount of$750,OOO.00. (lei. at il19.)

As a result of First Data's "hold", American Blind wag forced to secure a loan from
another entity in this amount of $750,000.00, at an unfavorable interest rate. (Jd. at ,120.)

On Jmie 5, 2006, Defendant infom1ed counsel for American Blind that he intended to

send American Blind a diskette containing 4,368 company-related einails. Defendant also
infomJed American Blind's counsel that he was sending a copy of the diskette to his own

personal attorney, in anticipation of a possible "dispute arisling)" involving lhe "integrty of the

information" he was retuDiing. (Levine Aff., Ex. F.) Katzman also slated in his June 5, 2006
einail that he was in the process ofrevicwíng "over 15,000" additional electronic fies, which he
had "archivedll on his home computer, so that he could reniove any of his "personal" items

before sending them back to American Blind. (Id.)
On June 12, 2006, Ira Kline, Amcriean Blind's vice president of human resources,

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resigned. (Id. at ir 25.)

On June 12, 2006, American BUnd received a diskette from Defendant purportedly
containing all of

Defendant's business-rehited emails. (Levine Afr. at ii 26.)

On June 12, 2006, Defendant informed American Blind's counsel that he was stil

working to assemble the electronic fies demanded by American Blind, and that he intended to
return the requested files within a week. (Levíne Aff., Ex. G.) Defendant acknowledged in his
June 12, 2006 email that

he was obligated by paragraph 11 (b) of the Employment Agreement to

do so, and that he intended to comply with paragraph l1(a)'s nondisclosure requirements.

(Levine Aff. at '127, Ex. G.)

On June 14, 2006, Defendant infonncd AmericanBlinds counsel that he was returning

all company electronic fies that were archived on his home computer. (Levine Aff., Ex. H.)
Defendant stated that he had already provided his own personal attorney with a copy of the same,

again anticipating a "dispute aris(ing) where (sic) the integrity of the information becomes
important." (ld.) Defendant also statcd affl1natively that he would not personally retain a copy
of

these fies, nor would anyone acting on his behalf access those fies Ü"ir any purpose forbidden

by the Employment Agreement. (Id.)

On June 21, 2006, American Blind's counsel finally received a disk from Defendant
pL~rportedJy containing the American Blind electronic files which Defendant had archived on his

home computer. (Levine Aff. at '1 30.)

As of June 21, 2006, Defendant still had not returned his company laptop computer and
related accessories. (Levine Aff. at '1 31.) American Blinds counsel therefore again

communicated American Blind's demand that Defendant immcdíately retum the computer.
(Lcvíne All'., Ex. L)

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Defendant then asked ifhe could keep the computer and pay Ainerican Blind "faiT market

value" for it. (Levine Aff., Ex. 1.) Mr. Levine immediately responded in the negative and again
demanded the laptop's return. (Levine Aff., Ex. K.)

Thereafter, Defendant finally retumed the laptop. When American Blind personnel
inspected the laptop, however, they found that its eiitire contents had beei1 erased - just as were
the desktop computers in Defendant's offce. (Levine Aff. at ~136.)

On July 17, 2006, Defendant sent an email message to the American Blind el1ail account

of Irma Kline, who was no longer with the company. Defendant's cmail attached a sprcadsheet

containing detailed information about American Blind's competitors, which spreadsheet had
been developed by and belonged to American Blind (the '"Competitive Matrix"), and requested
that Kline add additional infonnation to the Competitive Matiix. (Levine AlT. at ii 37; Levine
Aff., Ex. L.)
On July 21, 2006, Defendant sent another eniail message to Kline'g American Blind

emaÎl address, this time attaching a red-lined version of American Blínd's employee handbook

(the "Employee Handbook") which contained numerous and substantial edits to the handbook.
(Levii1e Aff. at ii 38; Levine Afr, Ex. M.) Also on July 21) 2006, Defendant again forwarded the
Competitive Matrix to Kline's American Blind eniclil address. (Levine A fL at '139~ Levine Afr.,
Ex. N.)

Immediately after discovering these emaiJ messages from Defendant, American Dl\l1d

conduded a through search of its computer systems in order to determine the extent of

Derendant's attempts to wrongfully accesS AmerIcaii Blind's proprietary information. (Levine
Afl at ir 40.) American Blind detenn¡ned that sinee Defendant's resignation, 22 separate

attempts had been made to log on to Americai1 Blinds VPN from Defendant's Intcmet Protocol

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address C'IP Address"), using Kline's, Rupprecht's, and Defendant's passwords. (Levine Aff. at
,140.)
As a direct result of

Defendant's repeated attempts to improperly access American Blind

proprietary information following his resignation, as wen as Defendanls deletion of substantial
amounts of data from his company laptop and desktop eomputers, Americ311B1ind hus beeD
forced to curr out a number of company-wide security measures, including compre1lensivc1y

evaluating its network integrity and having employees change their passwords. (Levine Aff at '1

43.)

iv. ARGUMENT
A. A Temporary Restraining Order Is Warranted

Inasmuch as it has become clear that Katzman is using American Blinds confidential and
proprietary information in order to star his competing business and there is reason to believe that
Katzman is utiJzing other yet to be identified eonfidential and propriety information to the

detriment of American Blind, American Blind seeks a temporary restraining ordcr pursuant to
Rule 65(h) of the Federal Rules of

Civil Procedure.

A temporary restraining order is intended to preserve the status quo until there is an
opp0l1unIty to hold a hearng on the application for a preliminary injunction and may be issued
with or without notice to thc adverse party. Wright, Miller and Kane, Federal Practice and

Procedure, 2nd Ed. 1995, § 2951 p. 253 (footnotes omitted). Furthermore, Rule 6S(b) provides

that
(al temporary TestrainI11g order may be granted without written or oral notice to

the adverse pary or that party's altorney only if (1) it clearly appears from
specilic facts shown by affdavit or by the verified complaint that immediatù and irreparable iIiury, loss, or damage wì1 result to the applicant before the adverse
party or that party's attorney can be heard in opposition, and (2) die applicant's

attorney certifies to the court in writing the efforts, if any, which have been mude to give the notice and the reasons supporting the claim that notice should not be
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1. American Blind wil likely succeed on the merits

of its claim

For purposes of a preliminary injunction, and to demonstrate the likelihood 0 t success on

the merils, "it is ordinarily suffcient if the plaintiff has raised questions going to the merits so
serious, substantial, diffcult, and doubtful as to make them a rair ground for litìgation and thus
for more deliberate investigation." Six Clinics Holding Corp., II v. Cafcomp Sy8lems, TIlC., 113

F.3d 393, 402 (6th Cir. 1997).

American Blind asserts nine substantive causes or action against Defendant two for
violation of 18 U.S.C. § 1030(a) et sec¡. (the Computcr Fraud and Abuse Aet, or "CFAA")~ one

for violation of 18 U.S.C. § 2701 (the "Electronic Communications Privacy Act"); two for
violation ofM.CL. § 445.1901 et seq. (the Michigan Uniform Trade Secrets Act, or "MUTSA");

one for coin1non-law conversion; one for tortious interference; and two for brcach of contract.
American Blind has shown that it will prevail on each cause of action.
a) Violation of the CFAA
There are several routes for civil claimants to establishing a violation of the CF AA.

Under 18 U.S.c. § l030(a)(4), a plaintiff must show that the defelidant (1) knowingly and with

intent to defraud; (2) accessed a protected computer without authorization, or (by exceeding)
aulhorized access; (3) and thereby furthers the intended Fraud or obtains something worth more

thaii $5,000.00. 18 U.S.c. § 1030(a)( 4). And under subscctìon 1030(a)(S)(A)(i), a plaiiiti IT must

show that the defendant (1) know1ngly caused the transmission of a program, infoniation, code,
or command; (2) to a protected computer; (3) thereby intentionally causing dainage without
authorizatìon in an amount exceeding $5,000.00.

18 U.S,c. ~§ l030(a)(5)(A)(i);

1030(a)(5)(B)(i).

American Blind has established its right to recover on both routes under the CFAA. The

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American Blind computers Defendant accessed (both Defendant's laptop and the two desktop

computers in Defendant's office) were "protected eomputers" under the CFAA because thcy
were "used in interstate or foreign commerce (and) communication." 18 U.S.C. § io30(e)(2)(B).

Defendant intentionally accessed those computers in order to both (a) knowingly and
intentionally defraud American Blind by obtaining proprietary infonnation (i.e., the Competitive

Matrix, the Employee Handbook, and likely other records); and to (b) knowingly transmit a
program or command suffcient to "erase" the i;ntire contents of those computers. Levine AIr. at

'1'1 15, 34-40; see International Airport Centers, L.L.C v. Citrin, 440 F.3d 418, 420 (7th Cir.
2006) (running a progrmn to erase contents ora computer without authorization violates CFAA).

The damages incurred by American Blind as a result or Defendant's conduct are alrcady well in

excess of $5,000.00 and continue to climb. Levine Aff. at ~ 43. And the economic value of the

Competitive Matrix and the Employee Handbook are themselves substantially more than
$5,000.00. Levine Aff. at ~ 41. In short, what Dcfendant has done is prceisely thc kind of
conduct proscribed by the CF AA, and preliminary injunctive relief is therefore proper.
b) Violation of 18 U.S.c. § 2701 et set¡.

Section 2707 of the Electronic Communications Privacy Act allows for a private action

by an entity aggrieved by a violation of Section 2701. 18 U.S.c. ~ 2707. Section 2701 is
violated when a person (1) intentionally accesses without authorization a facility through which
aii electronic eommunication serviec is provided; or (2) intentionally exceeds an authoiization to

access that fac11ty; and thcre obtains, alters, or prevents authorized access to wire or electronic
communication while it is in electronic storage in such systen1. 18 U.S.C. § 2701.

Here, Katzman accessed his laptop and two desktop computers following his resignation

from American Blind and (i) took electroniç lilcs anù documents for which he nO longer had

access and (2) destroyed stored communications and electronic fies hy erasing them from the
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computers. Moreover, Katzman made repeated attempts to hack into American Blind's VPN
from his IP address following his resignation. Although American Blind's VPN log indicates
that those attempts failed, if any of those attcmpts did succeed, such hacking would constitute a
direct violation of Section 2701As noted by the court in In re Intuit Privacy Litigation, 138 F. SLLPP. 2d 1272, 1276 (C.D.

CaL. 2001), "(t)he primary act requircd for violation of Section 2701 is thß act 0 r accessÎng

electronically stored data. For example a hypothetical 'hacker' who accesses data in a computer
without the owner's knowledge would be guilty of violating Seetion 2701 ...." Kutzmaiilias

exhibited the type of conduct prohibited under this federal statute. Accordingly, American
Blinds is likely to succeed on the merits of its claim under the Electronic CommunicatÎons

Privacy Act.

c) Violation of MUTSA

As with the CFAAj there is more than one way for a civÍl claimant to establish a violation
that statute, a plaintiff of the MUTSA. Under the "acquisition" prong or

must show that (1) the

defendant acquired a trade secret; (2) the trade secret belonged to the plaintiff; and (3) the
defendant acquired the trade secret with knowledge or reason to know that the acquisiton was by
improper means. M.C. L. § 445. I 902(b )(i).

Under the "disclosure or use" prong, a plainti rl establishes a right to recover by showing

that (1) the defendimt disclosed or used a trade secret; (2) the trade secret belonged to the
plaintiff; (3) the defendant disclosed or used the trade secret without the plaintifrs consent; and

(4) that either (a) the defendant used improper means to acquire the trade secret; or (b) thc

defendant knew or had reason to know that he or she acquired the traùe secret under
eircumstances giving rise to a duty to maintain its secrecy or limit its use. M.C.L. §
445 .1902(b )(ii). Cours can enjoi n both actual and threatened misappropriation under the

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M UTSA, and they can order any affmiative conduct they deem necessary to protect trade
secrets. eMf 1nt'l, Inc. v. Intermet lItt'l Corp.. 649 N.W.2d 808, 813 (Mich. Ct. App. 2002).

American Blind has shown that 1t wil succeed under both the "acquisition" and
"'disclosure or use" prongs of the MUTSA. The Competitive Matrix and the Employee
Handbooks are certainly ~'trade sccrets" undcrthe MUTSA because they constitute "infoffiationj

. . . compilation(s), program(s); device(s), mcthod(s), tcchique(s), or proecss(esl" that derive
independent economic value both by not being generally known or available by proper means by

others who might stand to benefit from knowing them, and being subject to reasonable efforts to
maintain their secrecy. M.C.L. § 445. I

902(d); see also, e.g., United Rf;nlals (North America).

Inc. v. Keiier, 355 F.3d 399, 412-13 (6th Cir. 2(04)

(customer list is a trade secret under

MUTSA);3 Levine All at,r 39. It is also indisputable that both the Competitive Matrix and the
Employee Handbook were created by American Blind personnel for American Blind's exclusive
use, and belong to Ameiican Blind. See Levine ArC at ,141.

Yet Defendant's July 17-21, 2006 emails reveal that Defendant was using them for his

own purposes, without American Blind's consent. Levine ArC at iiii 37-39. hideed, barely a
month before his July 2006 emails, Ddendant affirmatively promised not to keep or use such
AmerÎcan Blind property in that manner. Li;wÎnc Aff. at iiii 28-30. It would therefore defy all

logic and reason to conclude that Defendant obtained the Competitive Matrx by anything but
improper means, or that he used them with Amcrican Blind's consent. Moreover, given
3

In, United Rentals, the Sixth Circuit affirmed denial of a preliminary injunetion on the

plaintiff ronner employer's MUTSA claim, but only because there was affrmative evidence that the people to whom its romier president disclosed the customer list (the former employer in United Rentals pursued its MUTSA claim against a competing eompany, but not the fonner president) decided not to use the list. 355 F.2d at 412-13.
Here; by contrast, Defendant's own email messages reveal that he is actively using American Blind's customer list in conjunction with starting his new company. Levine Aff. at iiir 35-37.

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Defendant's ongoing promises (as evidenced by the July 2006 emails, the Hardware Agreement,

and the Employment Agreement), it is beyond dispute that DefeiidaiÜ knew the circumstances
uii.dcr which he obtained the Competitive Matrix and Employee Hanùbook oblígated him to keep
them secret and limit their use.4 Based on the foregoing, American Blind wil

likely succeed on

the merits of

its claims under MUTSA. See, e,g., ACS Consultant Co.. Inc. v. Wiliams, No. 06-

11301,2006 WL 897559, *7 (E.D, Mich. Apr. 6,2006) (preliminary injunction granted against
former employees who "absconded with client and employee information and would continue to

violate the temis of (their) employment agreements, as it appear( ed) they intended to us.e this
infonuatIon at clients/competitors'); Superior Consultant Co. v. Railey, No. OO-CY -73439, 2000

WL 1279161, * 10 (E.n. Mich. Aug. 22, 2000) (preliminary injunction granted against former employee on former employer's breach of employment agreement and MUTSA claims where

there was "strong circumstantial evidence" that fomi.ef employee accessed "confidential
information about (former employer) that would

be of economic value to third party competitors,

. . . (such as) business plans (and) pitched work"); PepsiCo., Inc. v. Redmond, 54 F.3d 1262,

1269 (7th Cir. 1995) (affinning issuance of preliminary injunction against former employee on

MUTSA claim for threatened misappropriation where employee demonstrated a lack or
truslworthiness); cf CMllnll, inc., 649 N.W.2d at 813 (înevitable disclosure doctrine applies

where ex~employer shows more than just "the exÎstcnce of generalized trade secrets" and
knowledge orthosc trade secrets on the part olnew employer; doetrine 110t applicable ifthere is

"no cvidence of (fonner employee's) duplicity" or a "specific trade secret (ex-employec was)
likely to misappropriate").

4

Defendant's lack of candor and eagemess 10 use American Blinds property evcn as he promises not to is troubling, to say the least.

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d) Common-law conversion

the
To succeed on a claim for common-law conversion, a plaintiff must show that

defcndanl "wrongfully exerled" "any distinct act of domain . . . over lplaintiff'sl personal
property in denial of or inconsistent with the ldefendant'sJ rights (in that property)." Foremost
Ins. Co. v. Allstate Ins. Co., 486 N.W.ld 600,606 (1992);

As explained above, the Competitive Malrix and the Employee Handbook are American
Blind's property. Lcvine All at ~ 39. Upon his re!jignation, pursuant to the Employment

Agreement, any 'rights Defendant may have had with respect to them ceased. Following

Derendant's resignation, American Blind and Aillerican Blind's counsel repeatedly infonned
Defend¡:mt of this fact in numerou!' emails. S'ee genetal~v Levine All Defendant even
acknowledged that he had no ongoing rights in any such American Blind properly, at least t\ice.
Levine ArC at'~ 27-29. Yel despite these acknowledgements, it is clear thal Defendant has been

utilizing the Competitive Matrix and the Employee Handbook, altering them, and - more to the
poinl- adapting them for use in a new company Defendant is starting to compete with American

Blind. American Blind wil doubtless succeed. on the merits of its claim for common-law

conversion, and preliminary injundive relief is proper. See, Kg., Kimherly & European
Die/monds, Inc. v. Burbank, 684 F.2d 363 (6th Cir. 1982) (preliminary injunclion gnmled on
diamond wholesaler's conversion claim against lendcr\

e) Tortious Interference

The elements of lortious inlerference with a business expectancy are (1) the existence of a
valid bU$lliCSS relationship or expectancy; (2) knowledge of

part of

the defendant; (3) an intentional interference by the defendanl; (4) inducement or causing

5

The Sixth Circuit's decision in Kimberly applied Kentucky law, not Michigan law, hut
the elements of common-law conversion are nearly identical in cach state. See Kimberly,

-.
15

the relationship or expectancy on the

684 F.2d at 365-66; For~most Ins. Co., 486 N.W.2d at 606.

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of a breach or termination or the relationship or expectancy by the detèndant; and (5) damages
resulting to the plaitiff BPS Clinical Laboratories v. Blue Cross and Blue Shield ofMichigaii,

552 N. W.2d 919, 925 (Mich. Ct. App. 1996). A plaintiff can establish a tortiou~ interferenee by

showing that it has been defamed by the detcndant. Fielder v. Greater Media, Inc., LC No. 04436 1

95-CZ. 2006 WL 2060404, *4 (1ich. Ct. App. July 25) 2006).

As American Blind's CEO, Defendant had first-hand knowledge of the business i
rdationships and expectancies of A.nerican Blind. Defendant ahused this knowledge by
communicating to several of American Blind's customers, vendors, and creditors anù implying

that American Blind was in financial distress, Levine Aft'. at ir 18. Spccifically, Defendant
falsely indicated to First Data that American Blind was in financial distress. Id. As a result,

First Data witl1(lrew a significant amount of American Blind's credit, forcing American Blind to

seek a line of credit elsewhere, at an unfavorable interest rate. Id at '1'1 19-20. In short,

Defendant intentionally interfered with American Blind's expectancy of its continued credit

relationship with First Data. That credit relationship was tenninated and American Blind
suffered financially as a direct result of D~fendant's conduct. Preliminary injunctive reliel is
proper to prevent any further wrongful111tcrfcrence by Defendant. Leach v. Ford Motor Co., 299

F. Supp. 2d 763 (B.D. Mich. 2004) (prelimil1ary injunction granted against fonner employer
where former executive sucd employer tor toitioiiS interference); see also Haston Sports. inc. v.

Warrior LaCrosse, inc., No. 05-CV-n031, 2005 WL 2234559 (E.D. Mich. Sept. 14, 2005)
(denying defendant's motion to dismiss tortious interference claim iii advance of hearing on
plaintiff's motion for temporary restraining order and preliminary injunction).
f) Breach of Contract

The elements of breach of contract under Miehigan law arc (1) the existence of a valid
contract between the paries and (2) breach of a contractual ten-no American Parts Co., Inc. v
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(Defendant) agrees that the covenants contained in Section 11 of this Agreement relate to matters which are of a speciaL, unique and

extraordinary character and that (American Blind) cannot be
reasonably or adequately compensated in damages in an action at
law in the event (Defendant) breaches any of these covenants or

undertakings. Therefore, ¡Defendant) agrees that (Amerlcan

Blind) shall be cntitled, as a matter of course, without the need to prove irreparable injury, to an injwiction, restraining order or other

equitable relief from any court of competcnt jurisdiction,
restraining any violation or threatened violation or any such tenris
by e;iecutÌve.

Levine Aff., Ex. A at § 11 (f)(ii). 11ms, not only is American Blind entitled to injunctive reliel
under Miehigan Law, but Defendant has already agreed, in writing, to that relieC
2. American Blind wil he irreparably harmed

absent immediate inj undve relief
Defendant CIlleiitly possesses proprietary records belonging to Amei1can Blind that are

critical to American Blind's competitive prospects, including, in particular, American Blinds
COlupetitíve Matrix. Defendant also currently possesses other American Blind documents,

including the Employee Handbook) which was creatcd at considerable expense by and tor Amcrican Blind's personneL. Despite signing, and acknowledging, contractual provisions
speci ficaUy barrng him from doing so, Deiendant is using these records to the detriment of

Amcrican Blind. Each day that passes with tbese records in Defcndant's possession brings
Încreased dangers that American Blind's business will suffer, a.nd its competitive position
compromised. These dangers are also precisely the type of irreparable han from which courts
routinely deliver plaintiffs with preliminary injunetive relict~ See, e.g., Superior Consulting Co.
v. Wallng, 851 F. Supp. 839, 847-48 (E.D. Mich. 1994) (11aml emanating from loss of

proprietary infomiation, which efleets the loss of fair competÎIol1i puts plaintifr at a competitive
disadvantage, and is both immeasurable and irreparable).

As set fort above, and as set forth in the accompanying Affidavit or .Joel Levine, the

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tradc secrets or confidential infomiation, . . , (or) used that information to unfairly compete

against (American Blind). Superzor Consultant Co., 2000 WL 1279161 at *12. Given that
Defendant "voluntarily entered into his EmploYTl1ent Agreement and agreed to the limitations
that (American Blind) now seeks to enforce," Defendant simply cannot complain about any hami
that may, in fact. befall him. ACS Consultant Co., lltc., 2006 WL 897559 at *R.
4. The public jnterest wil be served by issuing the

injunction
"Michigan law provides that the public interest is promoted in protecting confidential

information and enforcing valid employment agreements:' ld. at *8, citing M.C.L. § 445.774a.
On the other hand, there lS no public interest that excuses Defendant's breaehes of thc

Employment Agreement, his intentional and wrongful acquisition, use, and disclosure of
American Blind's confidential and proprietary infonmÜion, or his intentional and fraudulent acts

in erasing American Blind coniputers and attempting to "hack" into the Amercan Blind
computer network. American Blind's Motion must therefore he granted.

v. CONCLUSION
Defendant has violated various statutes and ongoing provisions or his Employment

Agreement gincc his regignation as American Blind's CEO. He has done so by unlawfully
destroying American Blind proprietary property, hy takng with him and using for his own

purposes trade secret and confidential American B111îd fies, and by interlering with American

Blind's existing relationships with its custoniers, vendors, and creditors. Every passing day
Defendant possesses and uses American Blind's Competitive Matrix and Eniployee Handbook

works continued and increasing hami on American Blinds goodwil with its customers and its
business prospects with both existing and potential

customers. Unless Defendant is ordered to

immediately retum all American Blind confidential and proprietary infonnation in his

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possession, and unless Defendant is ordered to immediately stop .using American Blind property

he wrongfully took with him when he departed, Amercan Blind wil be irreparably hanned.
There is no adequate remedy at law that can compensate American Blind for this harm.
WHEREFORE, Plaintiff. Amenean Blind, respecU'ul1y rcquests that this Court enter a

temporary restraining order and preliminary injunction that:
(a) Enjoins Defendant from using any American Blind proprietary docuients, fies,

programs, or other information; including, but not limited to, the Competitive Matrix and the
Employee Handbook; tor any purpose;
(b) Requires Defendant to immediately return to American Blind all copies; including

original copies, in whatever form, of any American Blind documents, files, programs, or othcr
information in Defendant's possession, whether modified or in original tonn;
eating with any American
(c) Requires Defendant to immediately cease communi

Blind customers, creditors, or vendors any false, defamatory, or otherwise negative statements
concerning American Blind~
. (d) Requires Defendant to immediately comply fulIy and completely with
Defendant's ongoing obligations under paragraphs l1(a) and 11

(b) ol the Employment

Agrecment;
(e) Requires Defendant to immediately provide a list or every document; fie, and

program, and all data. which Defendant erased or caLised to be erased from the two dcsktop
computers in Defendant's former offce at American Bl1nd and the laptop computer whieh

Amerìcan Blind provided for Defendant's use while employed at AmerÍcan Blind; and

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(I) Awards to American Blind all other, lìirthcr, and different relief that this Com1
dccms just and proper.

BY:

SCOT A. MACGRTFF (P55864)

Attomeys for PlaItìff
500 Woodward Avenue

Date: August L, 2006
¡',TROIT 24336..1 ~jW02yl

. 10

Suite 4000 Detroiti Ml 48226 [phone] Emai1: smacgrff(ÐdickinsonwrighLcom

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UNITED STATES J)ISTRICT COURT FOR THE EASTERN DISTRlCT OF MICHIGAN
AMERICAN BLIND AND WALLPAPER FACTORY, INe.,
Case No.

Plaintiff,
v.

Hon.

STEVE KATZMAN,

JUY TRIL DEMANDED
Defendant.

Scott A. Mac

Griff

DICKIN"SON WRIGHT PLLC
500 Woodwa.rd Avenue, Suite 4000

Detroit, MI 48226 Tel: [phone]
Fax: [phone]
..ßuorne,vs for Plaintiff ___

AFFIDAVIT OF JOEL P. LEV1NE IN SUPPORT OF AMERICAN BLIND'S MOTION FOR A TEMPORARY R~§..RANING ORDER AND PRELIMINARY INJUNCTION

STATE OF MICHIGAN )
COUNTY OF

WAYNE )

) sS.:

The undersigned, Joel P. Levine, having been duly swom on oath, docs depose
and states as fbllows:

1. My name is Joel P. Levine. 1 currently reside at 660 Hermi.tage Circle,
Palm Beach Gardens, Florida 33410.
2. I was bom on January i 1, 1948.
3. I am the Chief

Executive Offcer of American Blind and Wallpaper

Factory, Inc. ("American Blind").

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4. In 1998, Steve Katzman ("Katzman") became American Blind and
Wallpaper Factory, Inc.'s Chief

Executive Offcer.

5. On June 5, 2000, American Blind and Wallpaper Factory, Inc. ("American

Blind") and Katzman entered into an Aimmdt:d and Restated Employment Agreement,
under which Katzman was to serve as CEO for an additional

three years (the

"Employment Agreement"). (A copy Qfthe Employment Agreement is annexed herto
as Exhibit A ànd is hereby incorporated by reference.)
6. Paragraph 11 (a) of

the Employment Agreement contains a provisiun

forbidding Katzman from using American Blind proprietary information for his own

personal benefit or for the benefit of anyone other than American Blind without
American Blind's consent following termination of Katzman's em.ployment at American

Blind, and forbidding him to do so while employed at American Blind absent his good-

faith belíefthat doing so is necessary or desirable to fulfill his duties as CEO, (Se~
Exhibít A at p. 9.)
7. P31agraph 1 I (b) of the Employment Agreement contains a provision

forbidding Katzman from retaining any confidential American Blind records upon his
teninatlon from American Blind, and requiring him to promptly return to American
Blind such rccòrds upon his termination. (See Exhibit A at p. 9.)
8. On September 18,2003, American Blind and Katzman renewed the

Employment Agreement and extended the tenn of his tenure as Cf.:O through December

31,2005.

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9. Beginning on January 1,2006, pursuant to agreement with American

BEnd, Katzman continued to serve as American Blinds CEO on a month-to-month basis,
receiving the same salary and beneí1ts as set forth in the Employment Agreement.
10. On February 14,2006, Katzman executed an Employee Hardware Loan

Agreement with American Blind which obligated Katzman to retlmi, upon his deparure

from Amercan Blind, the company laptop computer and re1ab::d accessories that

American Blind fumish~d for him for business use and communications, among other
things (the ¡'Hardware Agreement"). (A copy of the Hardware Agreement is 3lcxed
hereto as Exhibit B and is hereby incorporated

by reference.)

i 1. I was advised that by American Blínds CFO, Gerald Curran, that at

approximately 4:30 p.m.,;

on May 18,2006, he anù Katzman paiticipated in a telephone

conference from Katzman's offce at American Blind. Gerald CUlTan further advised me

that at that time, various property of American Blind, includìng tïles, documents, records,
electronic data, computer fies, and other proprietary information was located in

Katzman's offce and on the two desktop computers also in his offce (the "Company
Property").
i 2. Later that evening on May 18, 2006, Katzman voluntarily resigned from

American Blind. (A copy ofthe Katzman's tesígnation letter is annexed hereto as
Exhibit C.)

13. At approximately 8:00 u.m. on the mornng of May 19,2006, I entered

Katzman's fonner offce at American BHnd and discovered that the Company Property
that was present only the evening before was missing from Katzman's office.

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14. On or about May 19, 2006, Greg Rupprecht, American Blind's Vice

President of

Technical Operations, inspected the two desktop computers that were in

Katzman's offce at American Blind and were providtid for and used by Katzman for

business communication and other pulloses.
15. Mr. Rupprecht advised me that all of

the electronic documents and emails

had been erased from the desktop computers.

16. On May 19,2006, American BJjnd demanded that Katzman return the
Company Property by 5:00 p.m. on May 22, 2006. (A copy ofS. Greem;pon's May 19,

2006 correspondence is aiini;xed hereto as Exhibit D.)

i 7. On May 19,2006, Kalzman's access to the American Blind's Virtual
Private Computer Network ("VPN") was discontinued.
18. On May 19,2006, I learned that Katzman had been communicating with
cerain vendors and creditors of American Blind, including, but not limited to, First Data,
Woodland Blinds, and Prestige Manufacturing following Katzman's fetììgnation from

American Blind. I believe that Katzman falsely indicated or implied to these entities that
American Blìnd was in financial distress.
19. On May 19,2006, I was also advised that following Katzman's

communication with First Data, an entity that processed American Blind's credit card
transactions, that FÍrst Data had

put a "hold" on $750,000.00 of American Blind's

transaction receipts, leaving it with H cash shortfall.

20. As a result of

First Data's "hold", Ameiican Blind was fOrced to increase
$750,000.00 and thereupon pay

is borrowings from ìts lender in this same amount of

interest ìn order to borrow its own money.

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21. On May 19, 2006, counsel for American Blind sent Katzman a letter

demanding that he cease and desist his communications with the vendors and creditors of

Amercan Blind, (A copy of S. Greenspon's May 19~ 2006 correspondence is annexed
hereto as Exhibit E.)
22. OJ) June 5, 2006, Katzman informed counsel for American Blind that he

was going to send a disk to American Blind containing 4,368 company-related e-mails. (A copy ofKatzman~s June 5, 2006 e-mail is. aiuiexed hereto as Exhibit F.) Katzman also
informed American Blind's counsd that he was forwarding to his attorney a copy of

the

disk for safekeeping, "in the event a dispute arises where (sic) the integrity of

the

information becomes important." (See Exhibit F.)

23. Katzman further stated in his June 5, 2006 correspondence that he was in
the process of

reviewing Over 15,000 electronic files and documents so that he could

remove any "personal" items before sending them to Alnerican Blind. (See Exhibit F.)

24. Katzman also stated in his June 5, 2006 cOlTesp~mdence that as soon as he
completed his review of

the fies and documents, he would forward to American Blind a

disk containing all corporate records that he had archived. (See Exhibit F.)
25. On June 12,2006, Ira Kline, Amtlrican Blind's Vice PresidenL olHuman

Resources, resìgncd from American Blind.
26. On June 12,2006, Amercan Blind received a disk from Katzman, which

purortedly contained all of the company-relatedemui Is.
27. By email dated June 12,2006, Katzman advised counsel for Amercan

Blind that he was still working to assemble the electronic fies and documents demanded
by American Blind, and that he intended to send the remaining files in his possession that

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week. (A copy of

Katzman's June 12,2006 e-mail is annexed hereto as Exhibit G.)

Katzman acknowledged in this a-mail that he was required, pursuant to paragraph 11(b)
of the Employment Agreement, to return to American Blind all documents and records in

his possession containing proprietary information. (See Exhibit G.)
28. Katz,man also stated in his June 12,2006 email that he would maintain the

integrty of

the American Blind proprietar information in his possession, and that he

intended to comply with the nondisclosure requirements set forth in paragraph 11 (a) ùf

the Employment Agreement. (See Exhibit G.)
29. By email on June 14,2006, Katzman advised counsel for American Blind

that he was returning all company emails and dociiments that were archived on his home

computer. (A copy of KatzmaiÙ June 14,2006 e-mail is annexed hereto as Exhibit H.)
Katzman further stated that he had already provided a copy of all such fies to his
attorney for safekeeping, "in the event a dispute arises where the integrity of

the

information becomes important." (See Exhibit H.) Katzman also stated that he would

not personally retain a copy ofthcse fies, nor would he or anyone acting on his behalf
access infonnation contained in those fies for any purpose forbidden by the Employment
Agreement. (Id.)

30. On June 21, 2006, counsel fOT American Blind receiveù a ùisk fronl

Katzman purportedly containing American BEnd's electronic files and doctunents.
31. Also on June 21, 2006, cOlUisel for American BHnd demanded that

Katzman retUrn the American Blind company laptop coniputer and related accessories,

which Katzman was required to do under the Hardware Agteement. American Blind's

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counsel demanded the return of

the computer by 5:00 p.m. on Jwie 22,2006. (A copy of

S. Greenspon's June 21, 2006 correspondence is annexed hereto as Exhibit I.)
32. On June 22, 2006, Katzman then inquired whether American Blind would

"sell" him the lapiop so that he would not have to return it. (A copy of Katzmail s June
22,2006 e-maîl is annexed hereto as Exhibit 1.)
33. I immediately rejected Katzman's request and demanded the laptop's

return. (A copy afmy June 22,2006 c-mail is annexed hereto as Exhibit K)
34. Thercaílcr, Katzman returned his laptop computer to American Blind.

35. Following its retur, Mr. Rupprecht inspected the laptop.
36, Following his inspection, Mr. Rupprecht advised me that the entíre

contents of

the laptop - including all electronic data, .documents, and files - had been

erased from it.

37. On July 17,2006, Katzman sent an e-mail message to the American .Blind
e-mail address oflrma Kline attaching a spreadsheet containing detailed information

about American Blinds competitors, which spreadsheet had been developed by and
belonged to American Blind (the "Competitive Matrix"), and requesting that Kline add
additional information to the Competitive Matrix. (A copy of

Katzman's July 17,2006 e-

mail is annexed hereto as Exhibit L.)
38. On July 21, 2006j Katz.nian sent another e~mciil message to Kline's
American Blind email address, attaching a red.

lined version of Amencan Blind's

employee handbook (the "Employee Handbook") which contains numerous edits to the
handbook and details the emergence of

Katzman's new company (called "Nationwide

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the company upon temiination of employment. Both the Competitive Matrix and the
Employee Handbook would be immensely valuable to

any person or entity who wishes to

compete with American Blind, and they are not available through any legitimate charllels
to any such person or entity
42. It is my beliefthat Katzman acquired the Competitive Matrix and the

Employee Handbook from the company laptop computer and desktop computers he used
while employed at American Blind. It is also my belief

that, prior and subsequent to his

resignation, Katzman has been using the Competitive Matrx and the Employee
Handbook in order to help him create a new business to compete with American Blind,
called "Natíonwide Blinds and Wallpaper Factory". Katzman's efforts to found

Nationwide are detailed in the first page of the red-lined Employee Handbook, which

Katzman has adapted for use in his new company. It is also my beliefthat Katzman may
possess addìtional American Blind proprietary records and may be using them to help

create his competing business. Each day that Katzman possesses and uses Anierican
Blind confidential and proprietary infoffiation brings increasing danger

that American

Blind wil

lose market share and the goodwil of its customers,
43. AfÜ.."t discoveríng Katzman's repeated attempts to log on to American

Blind's VPN, American Blind personnel spent considerable hours evaluating its network
and having each and every American Blind employee go through the process of changing

their passwords. These procedures haw distracLed Ameiican Blindsbw;iness and
sapped the productivity of

key employees, American Blind estimates that Katzman's.

conduct has already cost the company more than $5,000.00 in lost time and other
resources.

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SWORN to before me
this llh day of August 2006.

ú
. -" " .-"

c.~

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,."

AMENDED AND RESTATED EMPLOYMENT AGREEMENT
~ 1~is Amended and Restaled Employmant Agreement .made I~is ~ of v_ ~. 2000, between DECOM TETODAY.CQM1 INC. a Delaware corporation.

With its principal offce at 909 N. Sheldon Road, Plymouth, Michigan. (the üCorporation").
and STEVEN B. KATZMAN, residing at 10755 Oxbow Lake Shore Dnve, White Lake, MI 48386, (the "Executive").

WliNESSETH
Agreement ("CEO") of 14, WHEREAS, Executive is currently the chief executive offcerdated August the
corporation pursuantto the terms ofthat certain Empioyment

1998. by and betNeen the Executive and the Corporation (the "Original Empioyment

Agreement";
WHEREAS. the Corporation desires to secure the continued services of ExecutiVe, and Executive desires to continue to furnish services to the Corporation. on the temis and

conditions hereinafter set forth: and .

VVEREAS, cøncurrently with th~ execution of this Agreement. the Corporation is entering into that certain Stock Purchase Agreementwith Primus Capital Fund IV limited
PartnershiP. Primus Executive Fund Limited Partnership and certain other co-Investors, for the purchase of ClaSS A shares of the Corporation (the "lnve$tment~); and
WHEREAS, it is a term and condition of the Investment that the Executive enter into Agreement upon the terms and conditions herein
this Amended and Restated Employment

. contained.

NOW. THEREFORE. in consideration ofthe premises and the mutual agreements hereinafter contained. the parties hereto hereby agree as followS:
1. i;ploymenl The Corporation shall employ E)(ecutive, and Executive shall

serve the Corporation upon the terms and conditions hereinafter set fort.

2. TM. Subject to the terms and conditions hereinafter set fort, the term of
Executlve's employment hereunder shall commence on the date hereof, (the "Effectve Date"). and shall continue unti the third anniversary of the Effective Date. unless earlier terminated pursuant to Sections 8, 9 or 10 herein (the "Initial EmploymantTerm't)". Unless

earlier terminated pursuant to Sections 8, 9 or 10 the Inital Empioyment Term (and each
one-year extension thereof pursuant to this sentence (each, an HExtended Empioyment

Term")) may be extended upon the same terms and conditions as set fort herein for
additional one year terms by mutual agreement of the Executive and the Corporation. no later than the ninety (90) days prior to the expiration of the Initial Employment Term (or

Extended Employment Term, as applicable). The Initial Employment Term andge 1 all Pa
K:\EA\SJO'ii~mtlTlagmkIiJJn-2~.wp

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Extended Employment Terms (ìf any) are hereinafter collectively referred to as the
"Employment TermR.
3. tLutles and Extent of Servii:. During the Employment Term, Executive

shall serve as CEO of the corporation, and shall devote substantially all of his business

time, energy and skil to such employment. The Executive shall be vested with the dutíes and authority that are customarily delegated to a chief executive offcer of a corporation of
similar size but which are in no event materially less than the responsibilties, duties and authority that Executive has as of the Effective Date. The Executive shall report only to,
and be subject to the direction, of the Board of Directors of the corporation (the ~BoardR).

The Executive shall also perform such other specific duties and services ofa senior executive nature commensurate with his position as the Board shall request, including, without limitation. serving as a senior offcer and/or director of any of the Corporation's subsidiaries.
4; Base Salary. Effective as ofthe commencement ofthe Corporation's current

fiscal year and dLinng the Employment Term, the Corporation shall pay Executive a base

salary rBase salaiy") øt a rate of Three Hundred Eighty-Five Thousand United States
Dollars (U.S. $385,000) per annum, payabie in equal bi-weekly installments. Commencing as of January 1, 2001 and at the beginning of each calendar year thereafter during the Employment Term, the Base Salary shall automatically increase by Five Percent (6%) of

the Base Salary then in effect The parties hereto hereby agree that the Executive's Base Salary shall be reviewed and may be modified by the corporation's Compensation Committee, on not less than an annual basis commencing as of January 1,2001: provided.

however that in no event shall the Executive's Base Salary be reduced from the
Executive's Base Salary as ofthe Effective Date