Judge Sides With Newmark Brokers Sued By Eastdil For Document Theft

An Orange County, California, court ruled Friday in favor of six brokers being sued by their former employer Eastdil Secured for allegedly stealing proprietary information before joining rival Newmark.

Eastdil brought a lawsuit against former West Coast multifamily team members Geoff Boler, Blake Matsuda, Lee Redmond, Eugene Chong, Jonathan Merhaut and Justin Shepherd earlier this month, alleging they stole thousands of pages of company documents and business.

The judge said Eastdil didn’t demonstrate irreparable injury to the company and denied its motions.

“We are disappointed by the court’s decision, especially given most of the defendants admitted they took Eastdil Secured’s documents and information and one defendant admitted to deleting numerous materials on the eve of his departure,” a spokesperson for Eastdil Secured said in a statement emailed to Bisnow.

The brokerage is going to arbitration with its former employees. 

Boler, accused of sending nine “cheat sheets” of key deals intended for internal use to his personal email address, filed an affidavit against Eastdil claiming it told him not to talk to its clients for 45 days without approval, despite it being commonplace for brokers to continue facilitating deals while switching firms, according to The Real Deal.

“Given that Eastdil is a direct competitor, this is a noncompete by any definition,” the brokers' attorneys wrote in court documents.

California's ban on noncompetes went into effect Jan. 1, 2024.

That April, the Federal Trade Commission followed suit and banned employers nationwide from using noncompetes after a year of deliberation. The rule was then struck down by a federal judge in August, citing the FTC’s lack of authority to implement the broad measure. 

According to the complaint, the brokers resigned March 3 and took confidential, proprietary documents with them. The team then headed to Newmark without honoring a mandatory notice period, Eastdil claims. Newmark announced the team’s hiring March 5.

In addition to the complaint, Eastdil moved to file a temporary restraining order to stop the distribution of the information the team allegedly had.

The brokers filed to dismiss the case based on lack of merit in an anti-strategic lawsuits against public participation motion. The team argued the suit and restraining order application were attempts to put an indefinite gag order on the brokers discussing Eastdil’s business and were an unlawful attempt to stifle competition.