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Smyth Jewelers seeks injunction as former employees’ business prepares launch

The Smyth Jewelers store in Timonium (Maximilian Franz/The Daily Record).

The Smyth Jewelers store in Timonium (Maximilian Franz/The Daily Record).

The owners of Smyth Jewelers are seeking an injunction against their former chief operating officer as part of a lawsuit alleging he violated his employment agreement by launching a competing business and taking Smyth’s trade secrets.

Lawyers for Smyth asked a federal judge last week to prohibit Mark A. Motes from using or disclosing Smyth’s proprietary information, soliciting Smyth’s employees, customers and vendors or performing services for the new business, Meritage Fine Jewelers LLC.

The lawsuit was filed in Baltimore County Circuit Court in February and removed to U.S. District Court in June.

The plaintiffs argue they have met the standard for being granted an injunction and it is “necessary to protect Plaintiffs’ customer base, goodwill and trade secrets which Defendants have commandeered by their wrongful activities.”

Meritage was formed shortly after Motes’ departure from Smyth in November, and another former employee was listed as the organizer of the business, according to the filing. Motes “claims he has no interest or involvement” but allegedly attended a jewelry industry show in Las Vegas in June where he was registered as Meritage’s representative. Meritage has not yet opened but is located near Smyth’s Timonium location.

Motes’ employment agreement with Albert S. Smyth Co. prohibits him from directly competing with the company or soliciting others to leave for two years after termination, according to the lawsuit. But Motes, in a motion to dismiss, countered the plaintiffs were attempting to enforce a restrictive covenant in an expired employment agreement.

The initial complaint filed in state court sought damages for the alleged violation of the agreement but once it was removed to federal court and the parties waited for a scheduling order, the plaintiffs hired a forensic technician to look into possible unauthorized access to Smyth’s computer systems. The plaintiffs then filed an amended complaint in June alleging Motes and additional defendants have maintained access to Dropbox files containing customer information, vendor lists, personnel data and other proprietary information.

John Jackson III, another defendant and former Smyth employee, is alleged to have changed the access information for the Dropbox account to his personal email and refused to return control to Smyth. The injunction request also asks the judge to order the return of the documents and information.

Smyth discovered the alleged misappropriation in June and since has demanded the return of copies of at least 8,000 Smyth files, according to the motion.

“Defendants do not dispute that the files and folders belong to Smyth,” the motion states. “Nor can they claim any right to access, use or possess the information contained in those folders. Yet they have failed and refused to transfer ownership of the files and folders to their rightful owner, all the while planning to open a competitive business within blocks of Smyth’s Timonium location.”

Motes in June opposed the filing of an amended complaint, calling it an attempt to “up the ante” and bully Motes by attacking his family and friends who are involved in the new venture.

The new counts “simply pile on baseless and sensationalized allegations aimed at damaging Mr. Motes’ reputation in the community” and are an improper use of the legal system, according to Motes’ brief opposing the amended complaint.

A ruling on the motion to file an amended complaint had not been made as of Friday.

Smyth is represented by Steven K. Fedder of Fedder & Janofsky LLC in Baltimore. Motes is represented by Columbia solo practitioner Michelle Jeanine Dickinson.

The case is Albert S. Smyth Co., Inc. et al. v. Mark A. Motes et al., 1:17-cv-00677-CCB.

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