Nike v. Dekovic Et Al. Answer and Counterclaims

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IN THE CIRCUIT COURT OF THE STATE OF OREGON

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FOR THE COUNTY OF MULTNOMAH

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NIKE, INC., an Oregon corporation, No. 14CV18876

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Plaintiff,

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vs.

DEFENDANTS’ ANSWER AND COUNTERCLAIMS

DENIS DEKOVIC, an individual; MARC DOLCE, an individual; and MARK MINER, an individual,

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Defendants.

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For its answer to the Complaint filed by Plaintiff Nike (“Nike”), D efendants Denis

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Dekovic, Marc Dolce, and Mark Miner (“Defendants”) admit, deny, and allege as follows:

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I. Introduction

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1.

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Defendants deny the allegations in paragraph 1. Answering further, further, Denis Dekovic,

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Marc Dolce, and Mark Miner (collectively the “Designers”) were three of Nike’s top footwear designers, responsible for some of Nike’s most successful footwear launches over the last several years. years. The Designers independently decided that the Nike corporate culture was stifling their creativity. And they, along with many of their design co-workers, were alarmed about the culture of distrust and intimidation that permeates the relationships between Nike executives and Nike Design creatives. The Designers decided that they wanted to leave Nike to create an independent studio, to be hired by companies to provide artistic direction across product lines. They discussed branching out to many product product types, including furniture, transportation, household items, items, fashion, apparel and sneakers. Nothing

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about their idea for an independent studio relies on any confidential information of Nike’s.

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Unlike Nike’s design “Kitchen,” which is steeped in Nike corporate culture and politics, the

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Designers’ design studio concept is focused on interaction with the consuming public,

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without a stifling bureaucratic overlay. The Designers are not interested interested in and will not use

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old Nike designs or old Nike ideas in their new venture. To the extent that any of the

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Designers have old files or pictures that Nike contends are trade secrets, they do not want to

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keep them and have agreed to permanently delete them. None of the Designers has ever

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passed any trade secret information to adidas or any other competitor, and they will not ever

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do so.

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2.

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Paragraph 2 appears to contain partial quotes taken out of context from a document

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that Nike did not identify or provide to the Designers. Designers. The document, if it exists, speaks for

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itself and until the Designers receive a copy cop y of the quoted document, they the y neither admit nor

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deny this portion of the allegation. To the extent any document was obtained improperly or

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contains privileged communications, the Designers Designers will move to strike. strike. The Designers deny

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the remainder of the allegations allegations in this paragraph. Answering further, and as explained more

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fully in the counterclaims, this lawsuit is based on Nike’s breathtaking breach of the

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Designers’ personal privacy. privacy. Although Nike claims to permit non-business use of the

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electronic communications systems, Nike monitored, read, copied and distributed its

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employees’ personal communications with friends friends and family. Answering further, the

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Designers’ popularity on social media is not measured by b y numbers of followers, but by their

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followers’ participation participation and the vibrancy of their community. By that measure, the

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Designers are among the most popular designers on social media. media. Nike, on the other hand,

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recently had over a quarter-million “fake followers” removed from its Instagram account.

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http://64px.com/instagram/ When the Designers pitched their design studio idea to adidas,

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the parties found that their ideas were closely aligned, and agreed that the Designers could, if

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they decided to leave Nike, create a design studio within adidas that would free them and

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other adidas designers to have influence over brand direction, without strict product-line

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responsibility and with the ability to share ideas with consumers.

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3.

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With respect to paragraph 3, the Designers admit that they signed agreements that

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Nike has identified as non-competition agreements with Nike, the terms of which speak for

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themselves. Paragraph 3 also appears to contain partial quotes taken out of context from a

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document that Nike did not identify or provide to the Designers. The document, if it exists,

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speaks for itself and until the Designers receive a copy of the quoted document, the

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Designers neither admit nor deny this portion of the allegation. To the extent any document

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was obtained improperly or contains privileged communications, the Designers will move to

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strike. Except as expressly admitted, the Designers deny the remainder of the allegations in

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this paragraph.

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4.

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Paragraphs 4-5 appear to contain partial quotes taken out of context from a document

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that Nike did not identify or provide to the Designers. The document, if it exists, speaks for

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itself and until the Designers receive a copy of the quoted document, they neither admit nor

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deny this portion of the allegation. To the extent any document was obtained improperly or

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contains privileged communications, the Designers will move to strike. The Designers deny

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the remainder of the allegations in these paragraphs.

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5.

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With respect to paragraph 6, the Designers deny Nike’s mischaracterizations of their

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actions. Defendant Dekovic admits that on or about September 16, 2014, while he was still

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employed by Nike, an Apple technician copied data from Dekovic’s Nike-issued laptop to an

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external hard drive because his laptop had been damaged for approximately two weeks, and

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Nike was unable to fix his laptop despite Dekovic’s request to Nike for help. Dekovic also

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has since returned his damaged Nike-issued laptop to Nike and has returned an external hard

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drive containing Nike information from his damaged Nike-issued laptop to Nike. In

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addition, Dekovic admits that he has submitted his other electronic devices to an independent

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forensic examiner and intends to return or delete Nike information from those electronic

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devices in accordance with the parties’ agreement.

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Defendant Dolce admits that in September 2014, he deleted primarily his

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confidential, personal, or financial information and photos from his Nike-issued MacBook

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before returning it to Nike. Defendants Dolce and Miner admit that they restored their

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iPhones to factory default settings before returning them to Nike. The Designers’ actions

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were not inconsistent with Nike policy or practice.

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Paragraph 6 also appears to contain a partial quote taken out of context from a

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speaks for itself and until the Designers receive a copy of the quoted document, they neither

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admit nor deny this portion of the allegation. To the extent any document was obtained

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improperly or contains privileged communications, the Designers will move to strike.

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Except as expressly admitted, the Designers deny the remainder of the allegations in this

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paragraph.

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6.

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With respect to paragraph 7, the Designers admit that they posted a message which

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said “GRATEFUL for the past EXCITED for the future 3 brothers 3 dreamers 3 stripes

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#TeamAdidas 2015” with a picture of themselves. The Designers deny Nike’s false

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characterization of this quote. Furthermore, Nike has taken another partial quote out of

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context from a document that Nike did not identify or provide to the Designers, so the

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Designers neither admit nor deny that portion of the allegation. To the extent any document

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strike. Except as expressly admitted, the Designers deny the remainder of the allegations in

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this paragraph.

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7.

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Paragraphs 8-9 appear to contain partial quotes taken out of context from a document

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itself and until the Designers receive a copy of the quoted document, the Designers neither

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improperly or contains privileged communications, the Designers will move to strike. The

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Designers deny the remainder of the allegations in these paragraphs.

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8.

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Defendants deny the allegations in paragraphs 10 and 11.

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II. Jurisdiction and Venue

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Paragraphs 12-13 contain legal conclusions to which no responsive pleading is

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required.

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III. Parties

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10.

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Defendants admit paragraph 14.

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Defendant Dekovic denies paragraph 15.

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Defendant Dolce denies paragraph 16.

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13.

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Defendant Miner denies paragraph 17.

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IV. Factual Background

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14.

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Defendants lack sufficient knowledge or information to form a belief as to the

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allegations in paragraph 18-22, and therefore deny the same. 15.

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Defendant Dekovic admits that he worked as a Senior Designer and as a Design

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Director and Senior Design Director for Nike’s Global Football. Defendant Dekovic admits that he had design and leadership responsibilities at Nike. Except as expressly admitted, the Designers deny the remainder of the allegations in paragraph 23. 16.

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Defendant Dolce admits that he worked as a Senior Designer in Nike’s Active Life

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Division, as Design Director of Nike Sportwear, as Design Collections Lea d for Nike Sportswear, and as a lead product designer. Defendant Dolce admits that he had design and leadership responsibilities at Nike. Except as expressly admitted, the Designers deny the remainder of the allegations in paragraph 24. 17.

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Defendant Miner admits that he worked as a footwear designer in Nike’s Global

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Women’s Training and as a Senior Footwear Designer of Nike Running. Miner admits that he had design responsibilities at Nike. Except as expressly admitted, the Designers deny the remainder of the allegations in paragraph 25. 18.

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Defendants deny the allegations in paragraphs 26 and 27.

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19.

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With respect to paragraphs 28-30, the Designers admit that they entered into non-

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competition agreements with Nike, the terms of which speak for themselves. To the extent

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that paragraphs 28-30 require a responsive pleading, the Designers deny the allegations in

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those paragraphs.

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20.

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With respect to paragraph 31, the Designers admit that they entered into an employee

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invention and secrecy agreement with Nike, the terms of which speak for themselves. To the

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extent that paragraph 31 requires a responsive pleading, the Designers deny the allegations in

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that paragraph.

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21.

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Defendants deny the allegations in paragraphs 32-33.

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22.

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Paragraph 34 appears to refer to a statement taken out of context from a document

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that Nike did not identify or provide to the Designers. Until the Designers receive a copy of

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the document, the Designers neither admit nor deny this portion of the allegation. To the

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extent any document was obtained improperly or contains privileged communications, the

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Designers will move to strike. Defendants deny the remainder of the allegations in this

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paragraph.

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23.

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Defendants deny the remainder of the allegations in this paragraph.

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24.

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25.

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Defendants deny the allegations in paragraph 40.

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26.

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Paragraphs 41-45 appear to contain partial quotes taken out of context from a

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strike. Defendants deny the remainder of the allegations in these paragraphs.

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27.

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28.

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strike. With respect to paragraph 49, defendant Dekovic admits that he met with his friend

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Brian Foresta many times over many years, including in June 2014. Except as expressly

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admitted, the Designers deny the remainder of the allegations in these paragraphs.

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29.

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With respect to paragraph 52, the Designers admit that they consulted with legal

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counsel. Defendants neither admit nor deny portions of the allegations protected by the

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attorney-client privilege, specifically any information exchanged between the Designers and

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legal counsel or between the Designers regarding the legal advice of counsel. Furthermore,

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paragraph 52 appears to contain partial quotes taken out of context from a document that

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Nike did not identify or provide to the Designers. The document, if it exists, speaks for itself

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and until the Designers receive a copy of the quoted document, the Designers neither admit

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nor deny this portion of the allegation. To the extent any document was obtained improperly

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or contains privileged communications, the Designers will move to strike. Defendants deny

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the remainder of the allegations in this paragraph.

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30.

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strike. Defendants admit that they met with Brian Foresta, Eric Liedtke, and Paul Gaudio.

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Except as expressly admitted, the Designers deny the remainder of the allegations in these

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paragraphs.

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31.

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32.

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33.

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34.

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Paragraph 59 appears to contain a partial quote taken out of context from a document

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35.

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36.

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37.

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The allegations in paragraphs 64-65 contain some half-truths and distortions.

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Defendant Dekovic admits that his Nike laptop was damage and that Nike was unwilling to

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assist him to repair it or restore or retrieve the data. Dekovic further admits that a purported

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copy was made, but denies the balance of paragraphs 64-65.

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38.

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39.

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40.

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41.

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42.

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With respect to paragraph 75, Defendants admit that they have posted a message which said “GRATEFUL for the past EXCITED for the future 3 brothers 3 dreamers 3

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stripes #TeamAdidas 2015” with a picture of themselves. Defendants deny the remainder of

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the allegations in paragraph 75.

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43.

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44.

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45.

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46.

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47.

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CLAIMS FOR RELIEF

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FIRST CLAIM FOR RELIEF

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48.

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Defendants incorporate their answers to paragraphs 1 through 84.

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49.

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With respect to paragraphs 86-117, the Designers admit that they signed

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noncompetition agreements and employee invention and secrecy agreements with Nike, the

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terms of which speak for themselves. Defendants also admit that Nike has paid them each 50

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percent of their Nike salaries during the applicable non-compete period. Defendants deny

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the remaining allegations in paragraphs 86-117.

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SECOND CLAIM FOR RELIEF

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50.

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51.

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With respect to paragraph 119, the Designers admit that they signed noncompetition

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agreements and employee invention and secrecy agreements with Nike, the terms of which

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speak for themselves. To the extent this paragraph states a legal conclusion, no response is

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necessary. To the extent a response is necessary, the Designers deny the allegations in

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paragraph 119.

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52.

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THIRD CLAIM FOR RELIEF

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53.

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54.

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To the extent that paragraph 126 states a legal conclusion, no response is necessary.

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To the extent a response is necessary, the Designers deny the allegations in paragraph 126.

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55.

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Defendants deny the allegations in paragraphs 127-131. ///

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FOURTH CLAIM FOR RELIEF

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56.

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57.

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To the extent that paragraphs 133 - 135 state legal conclusions, no response is

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necessary. To the extent a response is necessary, the Designers deny the allegations in

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paragraphs 133-135.

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58.

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FIFTH CLAIM FOR RELIEF

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59.

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60.

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61.

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SIXTH CLAIM FOR RELIEF

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62.

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Defendant Dekovic incorporates his answers to paragraphs 1 through 145.

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63.

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Defendant Dekovic denies the allegations in paragraphs 147-150.

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SEVENTH CLAIM FOR RELIEF

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64.

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Defendants incorporate their answers to paragraphs 1 through 150. ///

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65.

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66.

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EIGHTH CLAIM FOR RELIEF

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67.

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68.

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69.

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With respect to paragraph 167, the Designers deny that its claims meet the standards required to plead punitive damages.

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70.

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Defendants deny each and every allegation in the Complaint except as specifically alleged above.

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I. Defenses

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By way of defense or avoidance, and as a precautionary matter and without assuming

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the burden or pleading or proof, which burden Defendants assert is on the Plaintiff, Defendants allege as follows: FIRST DEFENSE

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(Failure to State a Claim)

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71.

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As a separate and independent affirmative defense, Defendants allege that the

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Complaint and each and every cause of action within it fails to state ultimate facts sufficient

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to constitute a claim upon which relief may be granted.

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SECOND DEFENSE

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(Preemption by the Oregon Trade Secrets Act)

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72.

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As a separate and independent affirmative defense, Defendants allege that Plaintiff’s

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seventh claim for relief is preempted by the Oregon Trade Secrets Act, ORS 646.461-

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646.475.

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THIRD DEFENSE

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(Contractual Invalidity)

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73.

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As a separate and independent affirmative defense, Defendants allege that each

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Covenant Not to Compete and Non-Disclosure Agreement and each Employee Invention and

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Secrecy Agreement relied on by Plaintiff constitutes an invalid and improper restraint on

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trade at common law and pursuant to ORS 653.295.

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FOURTH DEFENSE

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(Estoppel/Waiver/Permission/Ratification)

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74.

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Any alleged wrongful conduct by the Designers, if true, was legally permitted on the grounds of estoppel, waiver, permission and/or ratification. In particular, Plaintiff:

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A.

contribution to the outside Moonwalker project;

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Knew, approved, did not object, and/or encouraged Defendant Dekovic’s

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Encouraged and/or directed Defendants to broadly publish their drawings and

designs;

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C.

Engaged in a pattern of aggressive recruitment of designers from competitors,

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encouraging and establishing a culture of disloyalty and mobility in the design community,

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including requiring Defendants to participate;

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D.

Failed to enforce, as it now seeks to enforce against Defendants, terms of its

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noncompetition and confidentiality agreements against other departed or departing

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employees;

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E.

Failed to provide support and assistance to Defendants to identify and remove

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from Defendants’ electronic devices that which plaintiff now claims to be protected

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proprietary information and/or trade secrets; and

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F.

Released or leaked to the public information it now contends Defendants

unlawfully possess.

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FIFTH DEFENSE

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(Unclean Hands / In Pari Delicto)

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75.

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Plaintiff’s claims are barred in whole or in party by the doctrines of unclean hands

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and in pari delicto. In particular, and as alleged herein on information and belief, Plaintiff’s

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claims rely on records it obtained unlawfully, and it cannot therefore obtain the equitable or

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legal relief it seeks.

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I. Counterclaims

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FIRST COUNTERCLAIM

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(Violation of Stored Communications Act)

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76.

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The Stored Communications Act, 18 U.S.C. § 2701, imposes liability upon any

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person who “intentionally accesses without authorization a facility through which an electronic communication service is provided; or intentionally exceeds an authorization to access that facility; and there by obtains, alters, or prevents authorized access to a wire or electronic communication while it is in electronic storage in such system.” 18 U.S.C. § 2701(a). 18 U.S.C. § 2707 authorizes civil actions for violations of the Act.

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77.

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On information and belief, Plaintiff intentionally accessed one or more facilities,

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through which an electronic communication service is provided in its efforts to obtain private

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information formerly stored on Defendants’ laptops and smart phones. These facilities

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include, but are not limited to, the facilities, servers, and networks used by iCloud,

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WhatsApp, Twitter, Facebook, and Gmail.

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78.

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In doing so, Plaintiff obtained certain of Defendants’ electronic communications, including but not limited to the numerous personal communications quoted and attached to Plaintiff’s complaint and motion for temporary restraining order.

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79.

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Plaintiff’s access was obtained without Defendants’ authorization and in excess of the scope of any authorization associated with Defendants’ employment by Plaintiff.

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80.

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As a direct and proximate result of Plaintiff’s breach, the full extent of which is still

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unknown, Defendants have suffered actual damages in an amount to be proven at trial, but

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not less than the sum of $1,000, as provided by statute. 18 U.S.C. § 2707.

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81.

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Plaintiff’s manifestly unauthorized access involved substantial expense, time, and

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diligence and was willful and intentional. Accordingly, Defendants are entitled to punitive

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damages and intend to move pursuant to ORS 31.725 and 18 U.S.C. § 2707(c) to add a claim

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for punitive damages against Plaintiff for its willful and intentional violation of the Stored

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Communications Act.

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SECOND COUNTERCLAIM

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(Violation of Social Media Privacy Act, ORS 659A.330)

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82.

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Oregon law makes it an unlawful employment practice for an employer to “[r]equire

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or request an employee * * * to disclose or to provide access through the employee’s * * *

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user name and password, password or other means of authentication that provides access to a

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personal social media account.” ORS 659A.330(1)(a). An employer is not liable for access

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to social media accounts received inadvertently, but the employer “may not use the

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information to access the personal social media account[s] of the employee.”

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ORS 659A.330(6).

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83.

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Plaintiff’s Electronic Communications Policy, as quoted at footnote 2 of the

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complaint, unlawfully requires employees to grant Plaintiff access to their social med ia

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accounts, by reserving to Plaintiff “the right to access the electronic communication systems

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and monitor data and messages within them, and to read, reject or remove any message,

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including attachments, composed, sent or received, at any time for any reason.”

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84.

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The foregoing, if construed as pleaded by Plaintiff, would improperly permit Plaintiff

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to access personal email and social media accounts, all of which satisfy the statutory

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definition of “social media account” found at ORS 659A.330(7).

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85.

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On information and belief, Plaintiff accessed Defendants’ social media acc ounts by

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using the account authentication data stored and/or programmed on Defendants’ electronic

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devices, in spite of reasonable measures taken by Defendants to protect said personal social

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media account data.

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86.

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To the extent Plaintiff purports to have accessed the accounts by inadvertence, rather

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than by compulsion, Plaintiff nevertheless violated its statutory obligation not to use the

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personal social media account data accessed through Defendants’ devices by repeatedly

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employing that material to support the allegations contained in Plaintiff’s complaint.

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87.

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As a direct and proximate result of Plaintiff’s compulsory, improper, and

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unauthorized access to Defendants’ social media accounts, the full extent of which remains

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undiscovered, Defendants have suffered damages in an amount to be proven at trial.

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THIRD COUNTERCLAIM

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(Invasion of Privacy - Intrusion upon Seclusion)

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88.

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Defendants’ social media accounts, including email applications, n etworking

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platforms, and messaging applications, pertained to Defendants’ private affairs and concerns.

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89.

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Defendants protected their social media accounts with passwords and authentication methods sufficient to establish a reasonable expectation of privac y in those accounts.

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90.

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By obtaining unauthorized and wide-ranging access to these accounts, Plaintiff

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intentionally intruded upon Defendants’ private affairs.

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91.

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Plaintiff’s intrusion would be highly offensive to a reasonable person.

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92.

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As a direct and proximate result of Plaintiff’s intrusion upon Defendants’ private

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affairs, Defendants have suffered offense and anguish, resulting in damages in an amount to

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be proven at trial.

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FOURTH COUNTERCLAIM

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(Bad Faith/Attorney’s Fees, ORS 646.467(1) & ORS 20.105.)

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93.

4 Plaintiff’s trade secrets claims are meritless and have been made entirely without any

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basis in fact or law. Plaintiff knows, or should reasonably know, that the Defendants have not disclosed and do not intend to disclose or misappropriate any of Plaintiff’s trade secrets. The Complaint fails to allege a single instance of disclosure or misappropriation of a protected trade secret or any expression of intent to do so. 94.

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Plaintiff’s trade secret claims also have an improper purpose. The Complaint was

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filed as part of a publicity stunt, the purpose of which was to disrupt Defendants and their future employer and to chill other Nike employees from considering leaving Nike, lest they too be sued. 95.

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Due to Plaintiff’s bad faith in filing and maintaining trade secrets claims, Defendants

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are entitled to reasonable attorney fees pursuant to either or both ORS 646.467(1) and ORS 20.105. FIFTH COUNTERCLAIM

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96.

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Nike’s Covenant Not to Compete agreements with the Designers are unenforceable

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because they are overreaching and do not protect any legitimate interest of Nike. 97.

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The Designers’ noncompetition agreements include “Competition Restriction”

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clauses which state: “During EMPLOYEE’s employment by NIKE, under the terms of any

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employment contract or otherwise, and for 1 year thereafter, (the “Restriction Period”),

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EMPLOYEE will not directly or indirectly, own, manage, control, or participate in the

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ownership, management or control of, or be employed by, consult for, or be connected in any

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manner with, any business engaged anywhere in the world in the athletic footwear, athletic

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apparel or sports equipment, sport electronics/technology and sports accessories business, or

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any other business which directly competes with NIKE * * * .”

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98.

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The Designers signed additional employee invention and secrecy agreements, and their noncompetition agreements contained clauses including “Return o f Protected

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Information,” “Unauthorized Use,” and “Non-Solicitation/Non-Recruitment.” These other

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provisions provide more than adequate protection of any legitimate interests. The

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“Competition Restriction” clauses in the noncompetition agreements serve no purpose, save

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for unlawfully stifling fair competition and crippling the Designers’ ability to obtain

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employment elsewhere.

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99.

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Neither thwarting competition nor hamstringing a former employee’s ability to work or seek new employment is a legitimate interest of an employer.

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100.

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Nike’s assertion that “Competition Restriction” clauses protect against the

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misappropriation of trade secrets is not a legitimate interest or concern here. Design skills,

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concepts, visions, and creative ability are not “trade secrets.” The more technical

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confidential information alleged as trade secrets is actually already prevale nt in the industry,

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so it is not a trade secret and replication by a competitor would be unnecessary. Furthermore,

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in the Designers’ industry, competitors do not benefit from the use of another’s alleged

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“trade secrets.” The use of a competitor’s “trade secrets” in this industry would be the

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antithesis of a designer’s creative mission to develop new, fresh, innovative concepts. The

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Designers and adidas would not benefit from cop ying Nike’s product lines, product launches,

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or related information. Nike cannot allege or prove that the Designers inevitably used or will

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use Nike’s trade secrets in their work.

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101.

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The overbroad scope and vagueness render the “Competition Restriction” clauses

6

unenforceable. In particular, the “Competition Restriction” clauses state that former

7

employees cannot “be connected in any manner with, any business engaged anywhere in the

8

world in the athletic footwear, athletic apparel or sports equipment, sport

9

electronics/technology and sports accessories business.” This provision far exceeds any

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legitimate restrictive covenant permissible in Oregon and if enforced literally would produce

11

oppressive results, including making it virtually impossible for a Nike employee to seek

12

future employment with a competitor. This violates both the public interest and specifically

13

the Designers’ interest in earning a living.

14

102.

15

The practical effect of this clause is to handcuff employees to Nike, preventing them

16

from working in the athletic industry. Nike is seeking to apply it to the Designers to punish

17

them for seeking future employment from adidas, even beyond the noncompetition period.

18

103.

19

The “Extension of Time” clauses in the Covenants Not to Compete are also

20

unreasonable, void, and unenforceable. Extension of time restrictions in noncompetition

21

agreements are not authorized by Oregon law. And, any alleged trade secrets which Nike

22

claims the Designers maintain in their possession have short shelf life. These alleged trade

23

secrets will soon be disclosed or already have been disclosed by Nike. In the fast-moving,

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trendy world of design, the information will be stale and outdated in a year; thus, a time

25

extension is not warranted.

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1

104.

2

Pursuant to ORS 28.020-28.030; ORS 28.080; and ORS 653.295, the Designers

3

hereby seek a declaration from this Court that their Covenants Not to Compete are invalid

4

and unenforceable. The Court should deem void unreasonable agreements such as these

5

because it discourages employers like Nike from drafting overreaching noncompetition

6

agreements and then later relying on a court to strike the most offensive provisions.

7

105.

8 9

In the alternative, the Designers request that the Court modify the Covenants Not to Compete to strike the “Competition Restriction” and “Extension of Time” provisions.

10

106.

11

Defendant Miner’s noncompetition agreement should be deemed void under ORS

12

653.295 because his promotion to Senior Footwear Designer did not constitute bona fide

13

advancement.

14

107.

15

There is a justiciable controversy between the parties that would result in specific

16

relief to the Designers through the binding decree of court granting the above requested

17

declaratory relief.

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Nike v. Dekovic Et Al. Answer and Counterclaims

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