July 24, 2018 By Nathaly Pesantez
Modern Spaces, the Long Island City-based brokerage, has recently been granted a temporary restraining order against a competitor it accused of stealing confidential data and poaching agents.
The restraining order against Compass, a coast-to-coast competitor, was handed down by a judge last month, and follows a lawsuit Modern Spaces filed against the company and a former Modern Spaces employee earlier this year.
The temporary restraining order, issued by Judge Gerald Lebovits of Manhattan’s Supreme Court, prohibits Compass from “using, disclosing, disseminating, and/or exploiting” Modern Spaces’ proprietary information until a hearing where further evidence is presented is held.
It also prohibits Jessica Meis, a former Modern Spaces employee listed in the lawsuit and who is accused of conspiring with Compass to steal proprietary information, from contacting any client of Modern Spaces “or otherwise seeking to divert such client’s patronage or business”.
In addition, Lebovits ordered Compass to “immediately deliver” all copies on computer disks, hard drives, and other electronic formats of proprietary information to Modern Spaces.
In a statement, Eric Benaim, the CEO of Modern Spaces, said, “We are thankful that the judge ruled in our favor and that the courts agreed to protect Modern Spaces’ proprietary information.”
Compass issued the same statement as it did in February: “Compass has never been found liable by court of committing any of the allegations set forth in Modern Spaces’ complaint.”
The lawsuit, dating back to February, has also escalated beyond State Court, with the case now in federal court thanks to the invocation of the Trade Secrets Act—the first time the law has been used in a real estate case in court, according to a Modern Spaces spokesperson.
Modern Spaces recently filed an amendment to their complaint against Compass where they allege the competitor used proprietary information in interstate or foreign commerce, thereby breaking the Trade Secrets Act.
The February lawsuit claims that Compass lured Meis away from Modern Spaces, and conspired with her to steal proprietary data to gain an unfair advantage in the market.
Modern Spaces further claims that Meis emailed herself dozens of files from the company’s internal system, like customer and listing data. In addition, the lawsuit alleges that Compass provided Meis with “step-by-step instructions on how to encourage property owners to end their sales agreement with Modern Spaces and having them enter into separate agreements with Compass.”
The Long Island City-based company, founded a decade ago, is seeking unspecified damages in the case.