IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN ... · Complaint, no response is required. Payne admits that the Complaint asserts claims for injunctive and legal relief for

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA

ATLANTA DIVISION

VERITIV OPERATING COMPANY,

Plaintiff,

v. F. JASON BERMAN and MELISSA PAYNE,

Defendants.

CASE NO.: 1:18-cv-03005-TCB JURY TRIAL DEMANDED

DEFENDANT MELISSA PAYNE’S ANSWER AND DEFENSES TO

PLAINTIFF’S COMPLAINT FOR INJUNCTIVE RELIEF AND DAMAGES AND COUNTERCLAIMS AGAINST PLAINTIFF

Defendant Melissa Payne (“Payne”) responds to and answers the Complaint

for Injunctive Relief and Damages (“Complaint”) filed by Plaintiff Veritiv

Operating Company (“Veritiv” or “Plaintiff”) with the following Answer and

Affirmative Defenses. Payne also pleads the counterclaims set forth below against

Plaintiff Veritiv.

ANSWER AND AFFIRMATIVE AND OTHER DEFENSES

Payne responds to the numbered paragraphs of Plaintiff’s Complaint as

follows. Except as expressly admitted herein, Payne denies each and every

allegation contained in the Complaint.

Case 1:18-cv-03005-TCB Document 33 Filed 08/06/18 Page 1 of 43

2

1. To the extent Paragraph 1 merely describes the nature of Plaintiff’s

Complaint, no response is required. Payne admits that the Complaint asserts claims

for injunctive and legal relief for misappropriation of trade secrets and breach of

contract. She denies, however, that she has individually or in concert with any

other person misappropriated confidential or trade secret information of Veritiv.

Payne denies that Veritiv is entitled to any of the relief it seeks. Payne denies each

of the remaining allegations contained in Paragraph 1 of the Complaint.

2. The allegations contained in Paragraph 2 are directed at a defendant

other than Payne, and do not require a response from Payne. To the extent a

response is required, she denies that she conspired with Berman to violate any

federal or state laws, and otherwise states that she is without sufficient information

or knowledge to admit or deny the allegations contained in Paragraph 2.

3. Payne denies the allegations contained in Paragraph 3 of the

Complaint.


Complaint. Payne denies that Veritiv has suffered or will suffer any harm as a

result of any action or inaction by Payne, and denies that Veritiv is entitled any of

the relief it seeks in the Complaint.


3

THE PARTIES

5. Payne is without knowledge or information sufficient to form a belief

as to the truth of the allegations contained in Paragraph 5. For purposes of this

action, Payne does not dispute that Veritiv is a Delaware corporation doing

business in Georgia with its principal offices at the address alleged in Paragraph 5.


other than Payne and do not require a response from Payne. To the extent a

response is required, Payne states that she is without sufficient information or

knowledge to admit or deny the allegations contained in Paragraph 6.

7. Payne admits that she resides at 400 West Peachtree Street, N.W.

Atlanta, GA 30308. She admits that Exhibit B to Plaintiff’s Complaint contains a

copy of an agreement signed by Payne on October 31, 2016. Payne states that the

agreement bears no countersignature by Veritiv.

JURISDICTION AND VENUE

8. The allegations in Paragraph 8 contain legal conclusions that do not

require a response from Payne. To the extent a response is required, Payne admits

that the Complaint purports to assert claims under certain federal statutes,

including the Defend Trade Secrets Act (“DTSA”), 18 U.S.C. § 1836, et seq., and

the Computer Fraud and Abuse Act, 18 U.S.C. § 1030, et seq., but denies that the


4

Complaint gives rise to any liability against Payne or that Plaintiff is entitled to any

of the relief it seeks.


require a response from Payne. To the extent a response is required, Payne does

not dispute that this Court may exercise jurisdiction over all claims in Plaintiff’s

Complaint. Payne denies that she has taken any improper or illegal action with

respect to Veritiv, and otherwise denies any implication or inference contained in

Paragraph 9 of the Complaint.

10. The allegations in Paragraph 10 contain legal conclusions and are

directed at a defendant other than Payne. Therefore, the allegations in Paragraph 10

do not require a response from Payne. To the extent a response is required, Payne

denies that she conspired with Berman to violate any federal or state laws, and

otherwise states that she is without sufficient information or knowledge, including

as regards Berman’s activities, to admit or deny the allegations contained in

Paragraph 10 or to form any belief as to the existence of any “nexus between

[Berman] and the State of Georgia.”


require a response from Payne. To the extent a response is required, Payne does

not deny that she is an individual domiciled in Georgia.


5


require a response from Payne. To the extent a response is required, Payne admits

that venue is proper in this District and Division for Plaintiff’s claims against her.

FACTUAL ALLEGATIONS

A. Veritiv’s Business, Trade Secrets, and Confidential Information1

13. Payne admits that Veritiv markets, sells, and distributes packaging,

facility solutions, print and publishing products and services, and logistics and

supply chain management solutions throughout North America. Payne denies any

remaining allegations contained in Paragraph 13 of the Complaint.

14. To the extent the allegations in Paragraph 14 pertain to industries

other than packaging, Payne is without sufficient knowledge on which to form a

belief as to the truth of the allegations. Payne denies that Veritiv’s viability in the

packaging industry depends on trade secrets, confidential information, or

proprietary systems, and states that the information she used in the ordinary course

of her job was well-known in the packaging and/or corrugated box industry. Payne

denies the remaining allegations contained in Paragraph 14 of the Complaint.

15. Payne admits that she worked with customers to develop products and

1 Payne denies any allegations or characterizations contained in the headings or

sub-headings of Veritiv’s Complaint. Payne denies that any information alleged in the Complaint constituted confidential or trade secret information of Veritiv.


6

provide operational support. Payne is without sufficient knowledge of the steps

Veritiv took to develop its packaging business to form a belief as to the truth of the

allegations in the second sentence of Paragraph 15. Payne denies the remaining

allegations contained in Paragraph 15 of the Complaint.

16. Payne admits that she had access to certain information about

Veritiv’s customers during the ordinary course of her employment at Veritiv, but

states that Veritiv’s customers made such information generally known and denies

that any such information was proprietary to Veritiv. Payne denies the remaining

allegations in Paragraph 16 of the Complaint.

17. Payne is without sufficient knowledge to form a belief as to the truth

of the allegations in the first clause of Paragraph 17. Payne denies that any of the

general categories of information alleged in Paragraph 17 constitute confidential or

trade secret information of Veritiv, and states that such information was either

publicly shared by Veritiv or already well-known in the packaging and/or

corrugated box industry.

18. Payne denies that Paragraph 18 identifies or describes any specific

confidential information or trade secrets of Veritiv. Payne denies that Veritiv

protected the alleged secrecy of work product she created for Veritiv, and states

that Veritiv voluntarily shared or released that information to third parties. Payne is


7

without sufficient knowledge to form a belief as to the truth of the remaining



Complaint.

20. Payne admits that Veritiv’s business contains a service component

and that she provided attention and service to certain customers, but denies that

such attention or service constitutes the protectable property or trade secrets of

Veritiv, and denies that the identity of any customer or customer representative

with whom she worked while employed at Veritiv was confidential, proprietary, or

trade secret information of Veritiv. Payne is without sufficient knowledge to form

a belief as to the amount of time or money Veritiv spent in cultivating customer

relationships, how customers perceived Veritiv or its brand, or to what extent

Veritiv depends on repeat business with established customers. To the extent not

specifically admitted herein, Payne denies the allegations contained in

Paragraph 20.

21. Payne admits that any new or customized products that she designed,

created, or prototyped during her employment with Veritiv were developed “to

meet [Veritiv’s] customer’s particular specifications,” and denies that any such

designs, products, or prototypes were confidential, proprietary, or trade secret


8

information of Veritiv. Except as specifically admitted or denied herein, Payne is

without sufficient knowledge to form a belief as to the truth of the remaining


22. Payne denies that the Complaint identifies or describes any

confidential or trade secret information belonging to Veritiv, and denies that she

misappropriated any confidential or trade secret information related to pricing

plans or strategies. Payne is without sufficient knowledge to form a belief as to the

truth of the remaining allegations contained in Paragraph 22 of the Complaint.


Complaint.

B. Berman’s Employment and Agreement

24. The allegations in Paragraph 24 are directed at a defendant other than

Payne, and therefore do not require a response from Payne. To the extent a

response is required, Payne admits that Veritiv terminated Mr. Berman’s

employment on June 4, 2018, but states that she is without sufficient information

or knowledge to admit or deny the remaining allegations contained in Paragraph

24.




9









response is required, Payne admits that the contract attached to the Complaint as

Exhibit A contains the referenced provisions, but is without sufficient information


27.






28.

29. The allegations in Paragraph 29 contain legal conclusions and are


10

directed at a defendant other than Payne, and therefore do not require a response

from Payne. To the extent a response is required, Payne states that she is without

sufficient information or knowledge to admit or deny the allegations contained in

Paragraph 29, except that Payne denies that the Complaint identifies any

confidential or trade secret information.






30.






31.

C. Payne’s Employment and Agreement

32. Payne admits that she was employed by Veritiv as a Customer


11

Program Manager II from 2013 through and including June 8, 2018. Payne admits

that Veritiv assigned her to work on several accounts generated and managed by

Berman. Payne denies any remaining allegations contained in Paragraph 32 of the

Complaint.

33. Payne admits that during the course of her employment she may have

had access to information constituting confidential or trade secret information of

Veritiv. Payne denies that the Complaint identifies or describes any specific

confidential or trade secret information of Veritiv, and denies that she has

misappropriated any confidential or trade secret information.

34. Payne admits that she executed an agreement with Veritiv on

October 31, 2016, and that the agreement purports to contain restrictive covenants

and non-disclosure obligations.

35. The allegations in Paragraph 35 of the Complaint refer to a document

attached to the Complaint. Payne admits that the Payne Agreement contains

language similar (but not identical) to the quoted language, but denies that the

language defines any cognizable geographic area.


attached to the Complaint. Payne admits that the Payne Agreement contains the

quoted language.


12



quoted language.



quoted language. Payne denies that Veritiv has identified or described any

confidential or trade secret information that she failed to return following her

termination on June 8, 2018.


attached to the Complaint. Payne admits that the Payne Agreement contains

language similar (but not identical) to the quoted language, but states that the quote

contained in Paragraph 39 of the Complaint is incomplete. Payne denies that

Veritiv is entitled to injunctive relief, costs, or expenses. Payne denies any

remaining allegations contained in Paragraph 39 of the Complaint.

D. Berman and Payne’s Separation from Veritiv and Wrongful Conduct2


other than Payne and do not require a response from Payne. To the extent any

response is required, Payne admits that Veritiv terminated Berman on June 4,

2 Payne denies wrongful conduct.


13

2018.


Complaint.


Complaint.


Complaint.

44. Payne admits that Berman asked to be patched into a customer call,

but denies that that occurred. Payne denies the remaining allegations contained in


45. Payne admits that she spoke with Berman at some point after the

customer call, but denies that she disclosed any confidential or trade secret

information related to Veritiv or its customers.

46. Payne denies the allegations in Paragraph 46, except Payne admits

that she sent telephone numbers and email addresses from her Outlook contacts list

for certain customer representatives to Berman. Payne denies that she obtained the

information from any source created or maintained by Veritiv and denies that the

information she sent to Berman was confidential, proprietary, or a trade secret of

Veritiv.


14

47. Payne denies the allegations in Paragraph 47, except Payne admits

that she forwarded a Veritiv email to Berman, but denies that the email contained

any confidential, proprietary, or trade secret information.



response is required, Payne denies having knowledge of any efforts by Berman to

solicit Veritiv employees.

49. Payne admits that Veritiv terminated her on June 8, 2018. Payne

denies the remaining allegations contained in Paragraph 49 of the Complaint.


Complaint.

51. Payne denies that Veritiv has suffered or stands to suffer any harm as

a result of any action or inaction by Payne. Payne denies the remaining allegations

contained in Paragraph 51 of the Complaint.

FIRST CAUSE OF ACTION

(Breach of Contract)

(Against Berman)

52. Payne incorporates her responses to the allegations contained in

Paragraphs 1 through 51 of the Complaint by reference as if fully set forth herein.


15



response is required, Payne denies the allegations contained in Paragraph 53 of the

Complaint.




Complaint.




Complaint.




Complaint.





16

Complaint.

SECOND CAUSE OF ACTION

(Breach of Contract)

(Against Payne)



59. Payne admits that she executed an agreement with Veritiv on

October 31, 2016. The allegations as to the enforceability of the agreement are

legal conclusions, and to the extent any response is required, they are denied.

Payne denies that the covenants contained in the agreement, the terms of which are

vague and ambiguous, are reasonable or necessary to protect any interest of

Veritiv.


Complaint.


Complaint.


Complaint.



17

Complaint, including that Veritiv has suffered any harm as a result of any action or

inaction by Payne.


Complaint, including that Veritiv has suffered any harm or stands to suffer any

harm, irreparable or otherwise, as a result of any action or inaction by Payne.

THIRD CAUSE OF ACTION

(Breach of Fiduciary Duty/Duty of Loyalty)

(Against Payne)




Complaint.


Complaint.


Complaint.

69. Payne denies that Veritiv has suffered any harm as a result of any

action or inaction by Payne. Payne denies the remaining allegations contained in



18

70. Payne denies that Veritiv is entitled to recover exemplary or punitive

damages against her. Payne denies any remaining allegations contained in


FOURTH CAUSE OF ACTION

(Aiding and Abetting Breach of Fiduciary Duty/Duty of Loyalty)

(Against Berman)




Complaint.




Complaint.




Complaint.



19


response is required, Payne denies that she breached any fiduciary duty to Veritiv.

Payne denies the remaining allegations contained in Paragraph 75 of the

Complaint.

76. Payne denies that she breached any fiduciary duty to Veritiv and

denies that Veritiv has suffered any harm as a result of any action or inaction by

Payne. Payne denies the remaining allegations contained in Paragraph 76 of the

Complaint.




FIFTH CAUSE OF ACTION

(Defend Trade Secrets Act, 18 U.S.C. § 1832)



79. Paragraph 79 of the Complaint purports to describe an Act of

Congress and as such requires no response from Payne. To the extent any response

is required, Payne admits that the allegations in Paragraph 79 describe a federal

law.


20


Complaint.


Complaint.


Complaint.


Complaint.


Complaint.


Complaint.


Complaint.

87. Payne denies that the Complaint identifies or describes any

information meeting the characteristics alleged in Paragraph 87 of the Complaint.

Payne denies the remaining allegations contained in Paragraph 87.


Complaint.


21


Complaint.


Complaint.

91. Payne denies that the Complaint identifies or describes any specific

trade secrets or confidential information belonging to Veritiv. Payne denies that

Veritiv has suffered any harm or stands to suffer any harm, irreparable or

otherwise, as a result of any action or action by Payne. Payne denies that Veritiv is

entitled to recover preliminary or permanent injunctive relief against her. Payne

denies the remaining allegations contained in Paragraph 91.

92. Payne denies that Veritiv is entitled to recovery any of the relief

alleged in Paragraph 92 of the Complaint. Payne denies any remaining allegations

contained in Paragraph 92 of the Complaint.

93. The allegations in Paragraph 93 of the Complaint refer to documents

attached to the Complaint. Payne admits that Paragraph 9 of the Payne Agreement

purports to contain a “Notice of Immunity under the Defend Trade Secrets Act,”

but is without knowledge sufficient to admit or deny the sufficiency of that Notice.

94. Payne denies that Veritiv has suffered any harm or stands to suffer

any harm, irreparable or otherwise, as a result of any action or inaction by Payne.


22

Payne denies any remaining allegations contained in Paragraph 94 of the

Complaint.




Complaint.

SIXTH CAUSE OF ACTION

(Georgia Trade Secrets Act, O.C.G.A. § 10-1-760)



97. Paragraph 97 of the Complaint purports to describe an Act of the

General Assembly and as such requires no response from Payne. To the extent any

response is required, Payne admits that the allegations in Paragraph 97 describe a

Georgia law.

98. Paragraph 98 of the Complaint purports to describe an Act of the

General Assembly and as such requires no response from Payne. To the extent any

response is required, Payne admits that the allegations in Paragraph 98 describe a

Georgia law.



23

Complaint.


Complaint.


Complaint.




Complaint.


any harm, irreparable or otherwise, as a result of any action or action by Payne.

Payne denies that Veritiv is entitled to recover preliminary or permanent injunctive

relief against her. Payne denies any remaining allegations contained in Paragraph

103 of the Complaint.

SEVENTH CAUSE OF ACTION

(Tortious Interference with Contractual Relations)



105. The allegations in Paragraph 105 of the Complaint refer to documents


24

attached to the Complaint. Payne admits that the Payne Agreement certain terms

regarding her use or disclosure of Veritiv trade secrets and confidential information

and the solicitation of Veritiv employees, but denies any wrongdoing or violation

of those terms.


Complaint. Payne is without sufficient knowledge or information to form a belief

as to Berman’s knowledge of the Payne Agreement or as to the specifics of

Berman’s contract with Veritiv.



response is required, Payne denies the allegations contained in Paragraph 107 of

the Complaint.


Complaint.


Complaint.


any harm, irreparable or otherwise, as a result of any action or action by Payne.



25

Complaint.



Payne denies that Veritiv is entitled to recover preliminary or permanent injunctive

relief against her. Payne denies any remaining allegations contained in Paragraph

111 of the Complaint.




EIGHTH CAUSE OF ACTION

(18 U.S.C. § 1030)



114. Paragraph 114 of the Complaint states a legal conclusion that does not

require a response from Payne. To the extent any response is required, Payne

denies the allegations contained in Paragraph 114 of the Complaint.


Complaint.



26

Complaint.


Complaint. Payne specifically denies that she is liable to Veritiv in any amount and

denies that Veritiv is entitled to recover any fees or costs from her.


Complaint.

PRAYER FOR RELIEF

In response to the Complaint’s Prayer for Relief, Payne denies that Veritiv is

entitled to any of the relief sought or any other relief in this action. Payne denies all

factual allegations, if any, contained in the Prayer for Relief and denies any

wrongdoing.

JURY DEMAND

Defendant Payne demands a jury trial on all claims so triable.

* * *


27

PAYNE’S AFFIRMATIVE AND OTHER DEFENSES

Without shifting the burden of proof where it otherwise rests with Veritiv,

Payne asserts the following Affirmative and Other Defenses:

FIRST DEFENSE

Veritiv’s Complaint fails to state claims against Payne upon which relief can

be granted with respect to some or all of the claims in the Complaint.

SECOND DEFENSE

Veritiv’s claims against Payne fail, in whole or in part, because Payne

possesses no property belonging to Veritiv.

THIRD DEFENSE

Veritiv’s claims against Payne based on alleged misappropriation of trade

secrets fail because Veritiv has failed to identify any specific legally protected

trade secrets or confidential information.

FOURTH DEFENSE

Veritiv’s claims against Payne fail, in whole or in part, because any

information accessed, viewed, used, or transferred by her contained no

confidential, proprietary, or trade secret information belonging to Veritiv.


28

FIFTH DEFENSE

Veritiv’s claims against Payne fail, in whole or in part, because any

information accessed, viewed, used, or transferred by her was well known in the

packaging and/or corrugated box industry.

SIXTH DEFENSE

Veritiv’s claims against Payne fail, in whole or in party, because Veritiv has

not exercised reasonable or sufficient efforts to maintain the secrecy of any

information alleged in the Complaint.

SEVENTH DEFENSE

Veritiv’s tort claims against Payne fail because they are preempted by the

Georgia Trade Secrets Act.

EIGHTH DEFENSE

Veritiv’s claims against Payne are barred or subject to reduction to the

extent that Veritiv has failed or in the future fails to satisfy its duty to mitigate its

alleged damages.

NINTH DEFENSE

Some or all of Veritiv’s claims against Payne are barred because the

contractual provisions at issue are unenforceable or subject to limitation by the

Court. Specifically, certain of the restrictive covenants at issue contain vague and


29

ambiguous terms, are overbroad, and fail to reasonably define the geographical

scope of the restriction, and therefore improperly restrain Payne’s right and ability

to work and conduct business. In addition, Veritiv has failed to plead and prove the

existence of a legitimate business interest as required by O.C.G.A. § 13-8-55. The

restrictive covenants are also unreasonable given the undue hardship they impose

on Payne in that they improperly restrain Payne’s right and ability to work in

violation of Georgia law and public policy. See O.C.G.A. § 13-8-58(d).

TENTH DEFENSE

Veritiv is not entitled to damages, costs, or attorneys’ fees.

ELEVENTH DEFENSE

Veritiv’s claims against Payne are barred, in whole or part, because any

conduct by Payne is privileged competition, and the Complaint constitutes an

improper effort to restrain competition and employee mobility in violation of

Georgia public policy.

TWELFTH DEFENSE

Veritiv’s claims against Payne are barred because Veritiv has suffered no

harm, irreparable or otherwise, and because Veritiv cannot establish any damages.


30

THIRTEENTH DEFENSE

Veritiv’s claim request for injunctive relief against Payne is barred because

Veritiv has not demonstrated a need or met the legal criteria for injunctive relief,

including a likelihood of success on the merits, a risk of irreparable harm, or that

the interests of justice or balance of harms favor injunctive relief.

FOURTEENTH DEFENSE

Veritiv’s requests for injunctive relief against Payne are barred based on the

existence of an adequate remedy at law.

FIFTEENTH DEFENSE

To the extent Veritiv’s claims are based on the "inevitable disclosure

doctrine," such claims fail because that doctrine is not legally cognizable or

applicable.

SIXTEENTH DEFENSE

Veritiv’s claims against Payne are barred by the doctrines of in pari delicto,

unclean hands, waiver, laches, and estoppel.

SEVENTEENTH DEFENSE

Some or all of Veritiv’s claims against Payne have been mooted following

the return to Veritiv of all documents, drives, and/or information relating in any

way to Payne’s substantive work for Veritiv.


31

EIGHTEENTH DEFENSE

Payne acted in good faith and did not directly or indirectly perform any acts

that would constitute a violation of any rights of Veritiv or any duty owed to

Veritiv.

NINETEENTH DEFENSE

Payne reserves the right to plead other affirmative defenses as they become

known.

WHEREFORE, Payne prays that:

(a) Veritiv’s Complaint be dismissed with prejudice and judgment on all

of Veritiv’s claims be entered in favor of Payne and against Veritiv;

(b) Payne be awarded against Veritiv her attorneys’ fees and costs in

defending this action, including under 18 U.S.C. § 1836(b)(3)(D) and

O.C.G.A. § 10-1-764; and

(c) Payne receive such other and further relief as is just and proper.

* * * *

COUNTERCLAIMS

Melissa Payne asserts the following counterclaims against Veritiv for

attorneys’ fees due to Veritiv’s unjustified and bad-faith assertion of trade secret

misappropriation claims against Payne, without evidence of misappropriation, and


32

merely as a means to disgrace Payne in the packaging design community, destroy

her good reputation, and preclude her from obtaining any gainful employment,

thereby unfairly restricting competition in violation of Georgia public policy.

THE PARTIES

1. Payne is an individual and a resident of Fulton County, Georgia.

2. As alleged in Veritiv’s Complaint, Veritiv is a Delaware corporation

with its principal office located in Atlanta, Georgia. Veritiv is a party to this action.

JURISDICTION AND VENUE

3. This Court has subject matter jurisdiction over these counterclaims

pursuant to 28 U.S.C. §§ 1331 and 1367.

4. Veritiv has submitted to the Court’s jurisdiction by initiating and

continuing to prosecute this action and by virtue of the facts and circumstances set

forth herein.

5. Veritiv has submitted to venue in this Court with regards to these

counterclaims by initiating and continuing to prosecute this action, including its

unsupported trade secret misappropriation claims.

GENERAL ALLEGATIONS

6. Prior to working for Veritiv, Payne received a Bachelor’s of Science

degree in Industrial Design from the Georgia Institute of Technology.


33

7. After receiving her undergraduate degree, Payne worked as a full-time

packaging designer for MeadWestVaco in Richmond, Virginia, where she

specialized in designing and prototyping custom, sustainable packaging solutions

based on customers’ initial concepts.

8. Payne began working for Veritiv in May 2013 as a Packaging Design

Engineer. She developed particular expertise in designing custom packaging

solutions in the telecommunications industry. Veritiv later assigned her to

telecommunications customer accounts managed by Jason Berman.

9. In her work for Veritiv’s customers, Payne created technical drawings

to allow for prototyping of new packaging concepts.

10. The technical drawings, designs, and prototypes belonged to Veritiv’s

customers, and not to Veritiv.

11. Veritiv’s customers sometimes exercised their right to take the

designs created by Payne to Veritiv’s competitors to obtain competing bids on the

fabrication of the final packaging product.

12. Veritiv does not manufacture the packaging solutions created by its

design team. Instead, in her work for Veritiv’s customers, Payne requested quotes

from third-party vendors on the customer’s behalf. Veritiv did not generate, create,

or control the quotes submitted by third-party manufacturers.


34

13. Veritiv customers made their pricing preferences well known, not

only to Veritiv, but to third-party manufacturers. Payne had little involvement in

calculating or establishing financial margins for customer accounts.

A. Payne used a Lexar USB drive in connection with her work for Veritiv.

14. In order to create technical drawings, Payne used a software that saves

CAD manufacturing and design data as a .ACM file type. The .ACM file format

can only be read, viewed, or otherwise understood by the Kongsberg CAD cutting

machine (a “CAD table”).

15. Designers at Veritiv were generally able to upload .ACM design files

directly from their Veritiv-issued laptops to Veritiv’s CAD table to perform their

work. For the majority of Payne’s tenure at Veritiv, however, her Veritiv-issued

laptop was unable to connect to the CAD table as necessary to upload design files.

Rather, she was forced to upload .ACM files to an external drive, and load the files

from the external drive to the CAD table in order to perform her work. Uploading

.ACM files to the CAD table was an ordinary and necessary function of her job.

16. From June 4, 2018, through June 8, 2018, Payne used a Lexar USB

Thumb Drive to transfer .ACM files to Veritiv’s CAD table.

17. Veritiv was aware that Payne’s work computer could not connect to

the CAD table. Veritiv was also aware that uploading .ACM files was a normal


35

part of her job and necessary to accomplish her duties and responsibilities. Veritiv

was aware that she used an external drive to transfer .ACM files to the CAD table.

B. Veritiv inexplicably fired Payne’s new partner, Jason Berman.

18. In or around April 2018, Veritiv offered Payne a lateral promotion

from Packaging Design Engineer to Customer Program Manager II, which was

more commonly known to customers as a Packaging Design Specialist. In the later

capacity, Veritiv expected that Payne would provide both design and sales services

and would grow into a partnership with Berman.

19. On June 4, 2018, however, Veritiv terminated Berman’s employment.

On that day, during a pre-arranged meeting on a different topic, Vice President of

Sales Kim Seeberg suddenly disclosed to Payne that Veritiv had fired Berman.

Seeberg refused to explain the reason for the termination.

20. Following her meeting with Seeberg, Berman called Payne from his

work phone to let her know that he had just been fired. Payne and Berman

thereafter discussed the topic of his termination in several phone calls.

21. Veritiv’s sudden termination of Berman disrupted Payne’s path for

growth at Veritiv, since her position was dependent on a partnership with Berman.

C. Veritiv fired Payne when she refused to sign a two-year commitment.

22. Also on June 4, 2018, Veritiv presented Payne with a two-year


36

retention agreement, whereby Veritiv agreed to provide a bonus to Payne if Payne

agreed to commit to Veritiv for two years. Particularly following Veritiv’s loss of

Berman’s institutional knowledge, Veritiv seemed eager to retain Payne to service

his old accounts.

23. Veritiv did not condition Payne’s continued employment upon her

execution of the retention bonus agreement. Veritiv indicated, however, that she

should sign or not sign by Wednesday, June 6, 2018.

24. Payne ultimately decided not to execute the retention agreement due

to mixed messages from Veritiv, including from Seeberg, as to Veritiv’s

willingness to invest in her growth with the company.

25. On Friday, June 8, 2018, Veritiv fired Payne. Veritiv gave no

explanation, except that she had failed to execute the retention bonus agreement.

26. Upon her termination, Payne returned her Veritiv-issued laptop,

Veritiv-issued iPhone, Veritiv-issued USB drive, and all hard copies of documents

related to her substantive work for Veritiv.

D. Veritiv filed baseless claims for misappropriation of trade secrets and use of confidential information.

27. On June 20, 2018, Veritiv filed this lawsuit in the Northern District of

Georgia alleging misappropriation of trade secrets and/or confidential information

allegedly belonging to Veritiv.


37

28. The lawsuit does not describe what trade secrets or confidential

information that it contends Payne has used, disclosed, or otherwise

misappropriated.

29. The lawsuit claims trade secret protection in packaging designs that

Payne created for Veritiv’s customers, when Veritiv is aware that Payne’s work-

product was often distributed to third parties and not maintained in secrecy.

30. The lawsuit claims that Payne misappropriated information regarding

customer pricing, pricing strategies, discounts, and sales and margin data, when

Veritiv is aware that strategic pricing and financial decisions were outside Payne’s

duties and responsibilities.

31. The lawsuit uses false and inflammatory language, theorizing the

Payne served as a “spy” for Berman and that Berman, through Payne, listened in

on customer conference calls.

32. On July 6, 2018, Payne returned the Lexar USB Thumb Drive, which

Veritiv knew Payne had used in the course of her work for Veritiv. Payne also

returned a My Passport device, which contained certain files related to her Veritiv

work, but which she had not used or accessed since her termination.

33. Payne has explained under oath that she has not improperly used or

disclosed any Veritiv information since June 4, 2018.


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34. Payne has explained under oath that Berman at no point listened in to

a customer conference call while Payne remained employed with Veritiv.

35. Payne has explained under oath that she did not send confidential

Veritiv customer strategy information to Berman following his termination from

Veritiv.

36. Veritiv continues to pursue its baseless misappropriation theories

against Payne.

E. Veritiv’s lawsuit is wrongfully impeding Payne from finding new employment.

37. Payne, who is thirty years old, must find gainful employment

following her departure from Veritiv.

38. Upon information and belief, Veritiv is using this lawsuit to restrict

Payne’s employability.

39. Upon information and belief, Veritiv believes that the presence of the

lawsuit will deter its customers from hiring Payne directly, although Payne is under

no obligation to forego employment with entities, like Veritiv’s customers, that do

not compete with Veritiv.

40. The presence of the lawsuit and Veritiv’s inflammatory allegations

serves only to demean and disgrace Payne in the public eye and to restrict her

employability, and are, in fact, doing so.


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41. Veritiv has failed to allege or identify any harm that it has incurred or

expects to incur as a result of allegations contained in the Complaint

COUNT I

(Attorneys’ Fees under 18 U.S.C. § 1836(b)(3)(D))

42. Payne repeats and re-alleges each and every allegation contained in

Paragraphs 1 through 41 of the Counterclaim Complaint as if fully set forth herein.

43. The DTSA provides that if a claim of misappropriation thereunder is

made in bad faith, the court may award reasonable attorneys’ fees to the prevailing

party. Bad faith may be established by circumstantial evidence.

44. Veritiv’s Complaint asserts a claim against Payne for

misappropriation of trade secrets under the DTSA.

45. Based on the facts and circumstances outlined above, Veritiv’s

misappropriation claim has been brought in bad faith.

46. Payne has incurred and continues to incur attorneys’ fees in

responding to the lawsuit.

47. Payne is entitled to recover an award of attorneys’ fees under the

DTSA due to Veritiv’s bad-faith misappropriation claim against her.


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COUNT II

(Attorneys’ Fees under O.C.G.A. § 10-1-764)

48. Payne repeats and re-alleges each and every allegation contained in

Paragraphs 1 through 47 of the Counterclaim Complaint as if fully set forth herein.

49. The GTSA provides that if a claim of misappropriation thereunder is

made in bad faith, the court may award reasonable attorneys’ fees to the prevailing

party.

50. Veritiv’s Complaint asserts a claim against Payne for

misappropriation of trade secrets under the GTSA.

51. Based on the facts and circumstances outlined above, Veritiv’s

misappropriation claim has been brought in bad faith.

52. Payne has incurred and continues to incur attorneys’ fees in

responding to the lawsuit.

53. Payne is entitled to recover an award of attorneys’ fees under the

GTSA due to Veritiv’s bad-faith misappropriation claim against her.

WHEREFORE, Counterclaim Plaintiff Payne requests the following relief in

connection with Counts I and II, above:

(a) that the Court award Payne her reasonable attorney’s fees under the

DSTA in an amount to be proven, because Veritiv has asserted misappropriation


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claim against Payne in bad faith;

(b) that the Court award Payne her attorneys’ fees under the GTSA in an

amount to be proven, because Veritiv has asserted misappropriation claim against

Payne in bad faith;

(c) that the Court otherwise award Payne her reasonable attorneys’ fees

and expenses of litigation; and

(d) that the Court award any such other and further relief in law or equity

that the Court deems just and proper.

JURY TRIAL DEMAND

Pursuant to Federal Rule of Civil Procedure 38(b), Payne demands a jury

trial for any counterclaims or fact disputes as to which it is entitled to a jury trial.

Respectfully submitted this 6th day of August, 2018.

PARKER, HUDSON, RAINER & DOBBS LLP

/s/ Anne Horn Baroody Ronald T. Coleman, Jr. Georgia Bar No. 177655 Jared C. Miller Georgia Bar No. 142219 Anne Horn Baroody

303 Peachtree Street, NE Georgia Bar No. 475569 Suite 3600 Atlanta, Georgia 30308 Telephone: 404-523-5300 E-mail: [email protected] E-mail: [email protected]


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E-mail: [email protected] Attorneys for Defendant Melissa Payne


CERTIFICATE OF SERVICE

I hereby certify that on this 6th of August, 2018, I filed a copy of the foregoing DEFENDANT MELISSA PAYNE’S ANSWER AND DEFENSES TO PLAINTIFF’S COMPLAINT FOR INJUNCTIVE RELIEF AND DAMAGES AND COUNTERCLAIMS AGAINST PLAINTIFF with the Clerk of Court using the CM/ECF system, which automatically sent e-mail notification of such filing to the following counsel of record, who are registered participants in the Court's electronic notice and filing system:

Robert C. Stevens, Esq. Eric F. Barton, Esq. Alex C. Meier, Esq. Seyfarth Shaw LLP 1075 Peachtree Street, N.E. Suite 2500 Atlanta, GA 30309-3962 Matthew W. Clarke, Esq. William F. Long, III, Esq. Sasha N. Greenberg, Esq. Smith, Gambrell & Russell, LLP 1230 Peachtree Street, NE Suite 3100 – Promenade II Atlanta, Georgia 30309-3592

/s/ Anne Horn Baroody


Documents

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN ... · Complaint, no response is required. Payne admits that the Complaint asserts claims for injunctive and legal relief for