Fractal Analytics Inc. v. Greg Gomez, individually and in his marital community

[5] 6 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON [7] AT SEATTLE [8] 9 FRACTAL ANALYTICS INC., a New York Case No. C25-733RSM 10 corporation, ORDER DENYING MOTION FOR 11 Plaintiff, PRELIMINARY INJUNCTION AND MOTION FOR EXPEDITED DISCOVERY [12] v. [13] GREG GOMEZ, individually and in his 14 marital community, [15] Defendant. [16] 17 I. INTRODUCTION [18] This matter comes before the Court on Plaintiff Fractal Analytics Inc. (“Fractal”)’s [19] Motion for Preliminary Injunction, Dkt #5. Defendant Greg Gomez opposes. Dkt. #19. [20] Neither party has requested oral argument. After a full review of the briefing and attached [21] 22 documents, the Court now rules that this Motion is DENIED as set forth below, along with the 23 related Motion for Expedited Discovery, Dkt. #6. [24] II. BACKGROUND [25] This is a case to enforce a noncompete agreement. Plaintiff Fractal is a New York [26] 27 corporation that “provides artificial intelligence products to Fortune 500 companies for 28 business intelligence, sustainability, revenue growth management, and sales and customer service uses.” Dkt. #7 (“Bhat Decl.”) at 1. Defendant Gomez is a former employee who now [1] 2 resides in Bothell, Washington. Dkt. #1 at 1. 3 In December 2021, Fractal bought Neal Analytics. Dkt. #7 at 2. Mr. Gomez was one of [4] the “key employees” of this acquired company. Id. Fractal had these new employees sign [5] employment agreements along with noncompetition and nonsolicitation agreements. Id. [6] However, the timing of these agreements was a bit staggered. Defendant Gomez signed an [7] 8 “Employment Agreement” with Fractal on December 28, 2021, but did not sign the 9 noncompetition and nonsolicitation agreements until May 4, 2022. Id. at 2–3. The [10] employment agreement spelled out that these two additional agreements were coming and [11] would be in exchange for stock options. Id.; see also Dkt. #1-2 (“Employment Agreement”) at [12] 13 3 (“Following the Closing, the Company will recommend to the Board of Directors of the 14 Company (the ‘Board’) that [Gomez] be granted an option to purchase shares of Company… [15] provided that such option grant shall only become issuable upon receipt by the Company of a [16] Non-Competition and Non-Solicitation Agreement executed by [Gomez].”). [17] Mr. Gomez states via declaration that there were no attached noncompetition or [18] 19 nonsolicitation agreements when he signed the Employment Agreement in 2021. Dkt. #20 at 2. 20 He says he received the Fractal shares as “part of the of the acquisition of Neal Analytics and [21] represented an exchange of my existing shares of Neal for shares of Fractal when Fractal [22] bought Neal.” Id. at 1–2. This is relatively consistent with Fractal’s argued position. See Dkt. [23] #5 at 2 (“[Gomez was] one of several ‘Key Employees’ who was to receive significant [24] 25 compensation for his ownership interest in Neal.”). 26 Mr. Gomez served Fractal as a Vice President of Sales, Partnerships & Alliance at [27] Fractal until February 21, 2025. Dkt. #1 at 1. [28] On that date, Gomez joined Tiger Analytics (“Tiger”), an alleged “direct competitor.” [1] 2 Dkt. #7 at 4. Fractal’s CFO states via declaration that “Gomez’s role at Tiger appears to be 3 substantially similar, if not identical, to his role at Fractal – to pursue the same business [4] partnership at Microsoft he pursued while at Fractal.” Id. Gomez disputes this [5] characterization, essentially saying that his work with Tiger does not impact Fractal’s [6] relationship with Microsoft. See Dkt. #19 at 14–15; Dkt. #20 at 3–4. [7] 8 Fractal filed this case on April 22, 2025, alleging breach of contract, tortious 9 interference, unfair business practices in violation of RCW 19.86.020, and unjust enrichment. [10] See Dkt. #1. [11] III. LEGAL ANALYSIS [12] 13 Granting a preliminary injunction is “an extraordinary remedy that may only be 14 awarded upon a clear showing that the plaintiff is entitled to such relief.” Winter v. NRDC, [15] Inc., 555 U.S. 7, 22 , 129 S. Ct. 365 , 172 L. Ed. 2d 249 (2008). A party can obtain a [16] preliminary injunction by showing that (1) it is likely to succeed on the merits, (2) it is likely to [17] suffer irreparable harm in the absence of preliminary relief, (3) the balance of equities tips in its [18] 19 favor, and (4) an injunction is in the public interest. Id. at 555 U.S. 20 . A preliminary 20 injunction may also be appropriate if a movant raises “serious questions going to the merits” [21] and the “balance of hardships . . . tips sharply towards” it, as long as the second and third [22] Winter factors are satisfied. All. for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1134-35 (9th [23] Cir. 2011). [24] 25 A. Likelihood of Success on the Merits 26 “To bring a cause of action for breach of contract, [Fractal] must establish the existence [27] of” (1) “a valid and enforceable contract,” (2) “the rights of the plaintiff and obligations of the [28] defendant under the contract,” and (3) “violation of the contract by defendant” causing [1] 2 “damages to the plaintiff.” Citoli v. City of Seattle, 115 Wn. App. 459, 476 (2002). 3 This case involves multiple, apparently valid contracts followed by what appears to be [4] breach and potential damages to the Plaintiff. Defendant Gomez’s main argument against the [5] breach of contract and other claims is that the Noncompetition Agreement is void and [6] unenforceable under specific provisions of Washington State law. [7] 8 The parties appear to agree that RCW 49.62 applies to noncompetition agreements such 9 as the one here. RCW 49.62.020(1) states that a “noncompetition covenant is void and [10] unenforceable: (a)(i) [u]nless the employer discloses the terms of the covenant in writing to the [11] prospective employee no later than the time of the initial oral or written acceptance of the offer [12] 13 of employment and, if the agreement becomes enforceable only at a later date due to changes in 14 the employee’s compensation, the employer specifically discloses that the agreement may be [15] enforceable against the employee in the future; or (ii) [i]f the covenant is entered into after the [16] commencement of employment, unless the employer provides independent consideration for [17] the covenant.” RCW 49.62.005(3) states that “[t]he provisions in this chapter facilitating [18] 19 workforce mobility and protecting employees and independent contractors need to be liberally 20 construed and exceptions narrowly construed.” [21] Gomez first points out that “[b]ecause the Noncompete was not provided at the time [22] Gomez entered into the Employment Agreement, the Employment Agreement cannot serve as [23] the consideration for the Noncompete pursuant to RCW 49.62.020(1)(a)(i).” Dkt. #19 at 9. [24] 25 Gomez then argues that the Noncompetition Agreement must be “supported by independent 26 consideration to be enforceable.” Id. Later, Gomez argues that the stock options in the [28] Employment Agreement were an “illusory” promise because they were at the discretion of the [1] 2 board. Id. at 13. Gomez concludes with: 3 If a court were to allow the terms in the December 2021 Employment Agreement to constitute consideration for the as-yet [4] undisclosed May 2022 Noncompete, it would turn RCW 49.62 on 5 its head and allow employers to trap employees into onerous noncompete restrictions by first getting the employee to agree in 6 advance to consideration in exchange for agreeing to sign a noncompete agreement in the future without knowing what the [7] noncompete terms are – and then later springing an onerous 8 noncompete agreement on the employee and arguing that they have already agreed to sign it in exchange for the previously stated 9 consideration. [10] Id. at 12. [11] Fractal fails to adequately rebut these arguments in its Reply, arguing without new [12] 13 evidence and in a conclusory fashion that the “noncompetes were thus a part of the transaction 14 itself...” See Dkt. #22 at 5. [15] After examining the evidence before the Court right now and the above law, the Court [16] concludes that Fractal has failed to meet its burden for showing a likelihood of success on the [17] merits. The timing and structure of the Employment Agreement and the Noncompetition and [18] 19 Nonsolicitation Agreements could potentially run afoul of RCW 49.62.020(1). The $70,000 20 bonus was most likely received in exchange for signing the 2021 Employment Agreement, not [21] the 2022 Noncompetition Agreement. The Court will not rule on this ultimate issue at this [22] time. Without a valid and enforceable Noncompetition Agreement, Fractal cannot succeed on [23] any of its claims, thus a preliminary injunction cannot be granted. [24] 25 B. Remaining Elements 26 Having found that Fractal has failed to demonstrate a likelihood of success on the [27] merits, the Court need not proceed to analyze the remaining elements for a preliminary [28] injunction motion. The Court does note, however, that it agrees with Gomez that the public [1] 2 interest is most likely served by denying this Motion given the language of RCW 49.62.005. 3 See Dkt. #19 at 16. [4] IV. CONCLUSION [5] Having considered the briefing from the parties and the remainder of the record, the [6] Court hereby finds and ORDERS that Plaintiff Fractal’s Motion for Preliminary Injunction, Dkt [7] 8 #5, is DENIED. Fractal’s related Motion for Expedited Discovery, Dkt. #6 is DENIED. 9 DATED this 13th day of November, 2025. [10] A [12] RICARDO S. MARTINEZ 13 UNITED STATES DISTRICT JUDGE