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Teledyne Technologies Inc. v. Shekar

United States Court of Appeals, Seventh Circuit

August 5, 2016

Teledyne Technologies Incorporated, a Delaware Corporation, doing business as Teledyne Electronic Manufacturing Services, Plaintiff-Appellee,
v.
Raj Shekar, Defendant-Appellant.

          Argued May 23, 2016

         Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 15 C 1392 - Ronald A. Guzman, Judge.

          Before BAUER, POSNER, and WILLIAMS, Circuit Judges.

          BAUER, Circuit Judge.

         Teledyne Technologies, Inc. ("Tele-dyne") obtained a temporary restraining order and, later, a preliminary injunction against its former employee, Raj Shekar ("Shekar"). Both required Shekar to return Teledyne's equipment and electronic information, which he retained following his termination. Since Shekar refused to comply with either order, Teledyne filed a motion for rule to show cause why Shekar should not be held in contempt. The district court granted the motion and scheduled an evidentiary hearing. Prior to the hearing, Shekar filed a motion to vacate the preliminary injunction.

         Ultimately, the district court issued an order holding Shekar in contempt and denying his motion to vacate the preliminary injunction. Shekar appeals both rulings.

         I. BACKGROUND

         On February 3, 2015, Teledyne terminated Shekar's employment. On February 13, 2015, Teledyne filed a verified complaint for injunctive relief against Shekar in the United States District Court for the Northern District of Illinois.

         According to the verified complaint, as a Teledyne employee, Shekar had access to Teledyne's servers, which contained the company's confidential information. After Teledyne fired Shekar, Shekar "accessed or attempted to access" Teledyne's servers. There was also "a large data transfer between Teledyne EMS's server 20 and Shekar's laptop computer" on the day he was terminated. Further, in the months prior to his termination, Shekar emailed Teledyne's confidential information to his personal email addresses and saved it on his computer's hard drive.

         In addition, Teledyne's verified complaint states that Shekar had worked from home and used equipment provided by Teledyne. This included a "laptop computer, a VPN token, a projector, and a printer/scanner." After his termination, Shekar refused to return any of the equipment.

         Teledyne's verified complaint names several causes of action against Shekar, such as violations of the Computer Fraud and Abuse Act, the Illinois Trade Secrets Act, and the Illinois Uniform Deceptive Trade Practices Act.[1] Teledyne sought injunctive relief that would require Shekar to return all of Teledyne's electronic information and equipment, as well as produce his personal computers and electronic storage devices to be inspected for Teledyne's confidential information. Teledyne also sought damages and other relief.

         On February 17, 2015, the district court issued a temporary restraining order requiring Shekar to return all of Teledyne's electronic information and equipment. It also ordered him to identify in verified interrogatory responses all devices he owned that were capable of storing electronic information. Further, Shekar had to submit a declaration certifying that he had returned all of Teledyne's property, and that he had retained all relevant devices and electronic information without any alterations.

         On March 5, 2015, Teledyne filed an amended motion for a preliminary injunction. On March 10, 2015, the district court held a hearing on the motion, which Shekar did not attend (although the district court found that he had notice). The district court granted Teledyne's motion for the preliminary injunction, noting that Shekar had "failed to comply with any aspect of the [temporary restraining order]." Most of the preliminary injunction's directives mirrored the earlier temporary restraining order. But the preliminary injunction also required Shekar to provide Teledyne with "unrestricted access" to all of his devices that were capable of storing electronic information.

         On March 17, 2015, Teledyne filed a motion for rule to show cause why the court should not hold Shekar in contempt for violating the temporary restraining order and the preliminary injunction. Teledyne argued that Shekar had refused to comply with the preliminary injunction's provisions. The district court granted the motion and scheduled a hearing for April 30, 2015.

         On April 27, 2015, Shekar filed a motion to vacate the preliminary injunction. He claimed that he did not receive notice of either the temporary restraining order or the preliminary injunction until after the orders were entered. Shekar also stated that his lawyer had turned over all of Teledyne's equipment that ...


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