KIM BODINE, Plaintiff, v. SALESFORCE.COM, INC., and JOHN DOES 1-5, Defendants CV 19-4-BU-BMM-KLD United States District Court, D. Montana Filed November 26, 2019 Counsel For Kim Bodine, John Does 1-5, Plaintiffs: Bridget W. leFeber, LEAD ATTORNEY, BERG LILLY, PC, Bozeman, MT. For Salesforce.com, Inc., Defendant: Bradley T. Cave, LEAD ATTORNEY, PRO HAC VICE, HOLLAND & HART - CHEYENNE, Cheyenne, WY; Brianne C. McClafferty, LEAD ATTORNEY, HOLLAND & HART - BILLINGS, Billings, MT. DeSoto, Kathleen L., United States Magistrate Judge ORDER *1 Plaintiff Kim Bodine brought this action against salesforce.com, Inc. (“Salesforce” or “Defendant”) alleging wrongful discharge from employment, and unlawful discrimination and retaliation under federal and state law. (Doc. 12.) Plaintiff’s claims arise from the allegedly discriminatory treatment she was subject to as an employee of Salesforce. (Doc. 12.) Presently before the Court are Salesforce’s Motion for Leave to Amend Answer (Doc. 26) and Motion for Protective Order (Doc. 28). Having considered the parties’ submissions, the Court finds Salesforce’s Motion for Leave to Amend Answer should be GRANTED, and its Motion for Protected Order should be GRANTED IN PART AND DENIED IN PART. I. FACTUAL BACKGROUND Plaintiff was employed as an Account Executive for Salesforce until her resignation on November 14, 2018. During her employment, Plaintiff complained of workplace conduct inconsistent with Salesforce’s policies. (Doc. 17 at 2.) Thereafter, Plaintiff experienced negative changes in the conditions of her employment. Plaintiff alleges these changes functioned as improper demotions and attempts to marginalize her. (Doc. 18 at 3.) Unable to continue performing her job in such an adverse environment, Plaintiff resigned and filed this action alleging claims of wrongful discharge, discrimination, and retaliation. This action was initially filed in state court and was timely removed to federal court on January 17, 2019. The Court held a preliminary pretrial conference on March 26, 2019 to develop a plan for discovery and a schedule for disposition of the case. Since that time, the parties have engaged in discovery. No dispositive motions have been filed, and discovery does not close until January 15, 2020. II. DEFENDANT’S MOTION TO AMEND ANSWER The Court will first address Defendant’s Motion for Leave to Amend Answer. Defendant seeks to amend its answer to include the defense of after-acquired evidence. Plaintiff opposes the motion, arguing Salesforce was not diligent in moving to amend, and allowing Salesforce to amend its answer would be prejudicial to Plaintiff. (Doc. 40.) On March 26, 2019, the Court issued a Scheduling Order setting the deadline to amend pleadings for April 26, 2019. (Doc. 21.) Salesforce filed the instant motion seeking leave to amend on September 16, 2019. (Doc. 26.) A. Legal Standards Federal Rule of Civil Procedure 15(a) allows a party to amend its complaint “once as a matter of course at any time before a responsive pleading is served.” Fed.R.Civ.P. 15(a). In situations where the deadline for amendments to pleadings has passed, a party must meet the more stringent requirement of Rule 16(b), which requires a showing of good cause for amending the scheduling order to allow the filing of an amended pleading. Fed.R.Civ.P. 16(b)(4) (“[a] schedule may only be modified for good cause and with the judge’s consent”); Coleman v. Quaker Oats Co., 232 F.3d 1271, 1294 (9th Cir. 2000). In Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 609 (9th Cir. 1992), the Ninth Circuit explained that “[u]nlike Rule 15(a)’s liberal amendment policy which focuses on the bad faith of the party seeking to interpose an amendment and the prejudice to the opposing party, Rule 16(b)’s ‘good cause’ standard primarily considers the diligence of the party seeking the amendment.” Good cause to modify the scheduling order exists if the pretrial deadlines “cannot reasonably be met despite the diligence of the party seeking the extension.” Johnson, 975 F.2d. at 609 (quoting Fed.R.Civ.P. 16 Advisory Committee’s Notes (1983 Amendment)). *2 Prejudice to the opposing party may provide an additional reason to deny a motion to amend, but “the focus of the inquiry is upon the moving party’s reasons for seeking modification.” Johnson, 975 F.2d. at 609. “If that party was not diligent, the inquiry should end.” Johnson, 975 F.2d. at 609; see also In re Western States Wholesale Natural Gas Antitrust Litigation, 715 F.3d 716, 737 (9th Cir. 2013) (upholding denial of motion to amend where “the party seeking to modify the scheduling order has been aware of the facts and theories supporting amendment since the inception of the action.”). If good cause exists for seeking amendment after the scheduling order’s deadline, the Court then turns to Rule 15(a) to determine whether amendment should be allowed. The Ninth Circuit has liberally applied Rule 15’s instruction that leave to amend “shall be freely given when justice so requires.” Ascon Properties, Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 (9th Cir. 1989) (quoting Fed.R.Civ.P. 15(a)). Nevertheless, “the liberality in granting leave to amend is subject to several limitations.” Ascon, 866 F.2d at 1160. Under Rule 15(a), the Ninth Circuit instructs courts to consider the following five factors in assessing whether to grant leave to amend: “(1) bad faith, (2) undue delay, (3) prejudice to the opposing party, (4) futility of amendment; and (5) whether plaintiff has previously amended his complaint.” Ascon, 866 F.2d at 1160. These factors do not merit equal weight. “[I]t is the consideration of prejudice to the opposing party that carries the greatest weight.” Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003). B. Good Cause Under Rule 16 As noted above, Defendant seeks to amend its Answer to include the additional defense of after-acquired evidence. The Court finds good cause supports Defendant’s request, and the proposed amendment would not unduly prejudice Plaintiff. Although the motion to amend was filed five months after the Court’s deadline to amend pleadings, Defendant has demonstrated good cause for its late amendment. First, Salesforce’s discovery of the facts leading to its motion were not uncovered until mid-August. Discovery in this matter is ongoing and has included the extensive review of electronically stored information. (Doc. 27 at 3.) Defendant has combed through approximately 94,000 emails Plaintiff sent or received during her employ with Salesforce. (Doc. 27-1.) Of these, Defendant identified 1,800 emails that Plaintiff forwarded from her Salesforce email account to her personal email accounts. (Doc. 27-1.) Defendant reviewed the 1,800 emails to identify whether they included client-specific and proprietary information. (Doc. 27-1.) Upon determining 951 of the emails included such information, Salesforce immediately notified Plaintiff that her conduct of sending emails with sensitive information to her personal email accounts constituted a violation of company policy. (Doc. 27-3.) Approximately one month after discovering Plaintiff’s violations, Defendant filed this motion. Next, Defendant’s discovery efforts cannot be considered careless for failing to uncover Plaintiff’s improper email conduct before the deadline to amend pleadings. This case involves claims for discrimination, retaliation, and constructive discharge based on a hostile work environment. It is not apparent from these claims that Salesforce should have reviewed Plaintiff’s email habits for violations of company policy. Although it would be expected for Salesforce to review Plaintiff’s emails for information concerning the claims alleged, it is less certain Salesforce would promptly search Plaintiff’s emails for incidents of misuse. *3 The Court acknowledges Plaintiff’s argument that Salesforce possessed Plaintiff’s emails after she resigned on November 14, 2018, yet waited until discovery in this case to examine her emails. The Court agrees that Salesforce could have discovered Plaintiff’s email misuse sooner had it known to look for it. But as explained, Salesforce cannot be faulted for failing to search for extraneous content. This is not a case where Defendant “has been aware of the facts and theories supporting [an after-acquired evidence defense] since the inception of the action.” In re Western States Wholesale Natural Gas Antitrust Litigation, 715 F.3d at 737. The Court additionally finds that Salesforce has acted diligently in pursing discovery.[1] To be certain, Salesforce was aware that Plaintiff forwarded some of her work emails to her personal email accounts at the time of the deadline to amend pleadings. (Doc. 42 at 7.) However, not all of those emails included confidential information. It was not until Salesforce was able to search through and review most of Plaintiff’s 94,000 emails that it discovered she had sent volumes of emails containing confidential information to her personal accounts. (Doc. 42 at 7.) Considering the high volume of emails Salesforce had to sift through, and the fact that Salesforce was otherwise actively engaged in discovery,[2] the Court cannot find Salesforce was inattentive to the discovery demands in this matter. Additionally, Salesforce promptly notified Plaintiff upon discovering her email misuse, and filed the instant motion shortly thereafter. These actions further support the Court’s finding that the good cause requirement of Rule 16 is satisfied. See e.g. UDAP Industries, Inc. v. Bushwacker Backpack & Supply Co., 2017 WL 1653260, *4 (D. Mont. May 2, 2017) (short time frame between learning of new facts and filing motion to amend is sufficient for purposes of establishing diligence). The Court additionally finds that the evidences of good cause present in this matter are dissimilar to those found insufficient in the cases cited by Plaintiff. In Russo-Wood v. Yellowstone Cty., 2019 WL 1102680, *5 (D. Mont. Mar. 7, 2019), the court denied Plaintiff’s motion to amend the complaint to add a claim because Plaintiff did not specify the discovery which produced previously unknown facts, or when that discovery was received. The court additionally noted that the deposition relevant to the proposed claim occurred more than four months prior to filing the motion to amend. Russo-Wood, 2019 WL 1102680 at *5. Here, Salesforce has identified the electronic discovery that produced the previously unknown facts, when it first possessed the discovery, and how the facts were discovered. (Docs. 27 & 27-1.) The Court also notes that no depositions had occurred when Salesforce filed its motion. This matter is also dissimilar to Caraway v. Town of Columbus, 2018 WL 1582550 (D. Mont. Mar. 30, 2018). In that case, the court denied the plaintiff’s motion to amend because he had “amended his complaint on two previous occasions, and did not deem it appropriate on either occasion to include [the instant claim]”. Caraway, 2018 WL 1582250, at *11. Additionally, the motion to amend was filed “seven months after the Court’s deadline to amend pleadings, after the deadline established for completion of discovery, and after the Defendants had moved for summary judgment.” Caraway, 2018 WL 1582250, at *11. The court finally found the plaintiff’s argument that he did not possess information to include the additional claim to be unpersuasive as the plaintiff “was in a unique position” to know such information. Caraway, 2018 WL 1582250, at *11. Here, Salesforce has not previously filed a motion to amend, discovery has not closed, and no dispositive motions have been filed. Finally, unlike the Plaintiff in Caraway who had first-hand knowledge of the claim he sought to add since the inception of the action, Salesforce was ignorant to Plaintiff’s email misuse until discovering it through traditional means of discovery. *4 Based on the foregoing, the Court finds Salesforce diligently pursued discovery in this matter and has demonstrated good cause as to why it had not previously discovered the facts leading to its motion to amend. C. Amendment Under Rule 15 Having determined Salesforce demonstrated good cause under Rule 16 to amend the Scheduling Order, the Court must now determine whether the motion should be granted under Rule 15. Plaintiff does not challenge Defendant’s motion under each Rule 15 factor. Rather, Plaintiff argues Defendant’s motion should be denied because of the undue delay and prejudice Plaintiff will sustain if the motion is granted. The Court finds Plaintiff would not be prejudiced by granting Salesforce’s motion. First, the parties are not at a late stage in litigation — the discovery deadline has not passed, no dispositive motions have been filed, and depositions have only recently been taken. Further, although Salesforce waited approximately one month to file its motion to amend, it notified Plaintiff almost immediately upon discovering the facts comprising the motion. Additionally, a one-month delay in filing a motion to amend is not automatically deemed “undue”. See UDAP Industries, Inc., 2017 WL 1653260, at *4 (waiting one month to file motion to amend after learning of facts giving rise to counterclaim did not constitute an undue delay). The Court may find late amendments seeking to assert new theories to be prejudicial “when the facts and the theory have been known to the party seeking amendment since the inception of the cause of action.” Roybal Ins. Co. of Am. v. Southwest Marine, 194 F.3d 1009, 1016-17 (9th Cir. 2009). But, as discussed above, Salesforce did not know the facts leading to this motion until mid-August. Although it possessed Plaintiff’s emails upon her resignation, the legal theories asserted in the complaint would not have triggered Salesforce to review the emails for Plaintiff’s violations of company policy. Finally, the Court acknowledges that although Plaintiff may have to undergo additional discovery, and experience some delay, she has not established that allowing the motion to amend will result in prejudice substantial enough to overcome Rule 15’s liberal policy of allowing amendments. Based on the foregoing, Defendant’s Motion for Leave to Amend is GRANTED. III. DEFENDANT’S MOTION FOR PROTECTIVE ORDER Defendant requests a protective order to govern the disclosure, use, and handling of confidential sales information identified as “pipeline data,” “closed opportunity reports and PBU sales reports,” “documents relating to Lauren Collett’s compensation that reflect commissions earned for particular customer transactions,” “customer-specific quotations and requirements information,” and “documents showing PBU’s annual sales quotas for Wisconsin and Minnesota for fiscal years 2012 through present.” (Doc. 29.) For the following reasons, the motion is GRANTED IN PART AND DENIED IN PART. A court may, “for good cause, issue an order to protect a party from annoyance, embarrassment, oppression, or undue burden or expense,” including “requiring that a trade secret or other confidential research, development, or commercial information not be revealed or be revealed only in a specified way[.]” Fed.R.Civ.P. 26(c)(1)(G). The party seeking a protective order under Rule 26(c) “bears the burden of showing specific prejudice or harm will result if no protective order is granted.” Continental Resources, Inc. v. Mont. Oil Properties, Inc., 2006 WL 8435789 at *2 (D. Mont. Feb. 2, 2006) (quoting Phillips v. General Motors Corp., 307 F.3d 1206, 1210-11 (9th Cir. 2002)). The Court has broad discretion in determining what constitutes good cause, whether it exists, and what protection is appropriate. Seattle Times Co. v. Rhinehart, 467 U.S. 20, 36 (1984). *5 Here, Defendant argues the specified documents requiring protection fall outside the permissible scope of discovery because they are not relevant to Plaintiff’s claims or “proportional to the needs of the case.” Fed.R.Civ.P. 26(b)(1). Alternatively, Defendant requests the Court apply an Attorney Eyes Only (“AEO”) provision to a protective order to limit disclosure of the identified documents. (Doc. 29 at 17.) In response, Plaintiff argues the documents should not be subject to a protective order at all, let alone an AEO provision. To the extent the Court finds a protective order necessary, Plaintiff requests the order not impose an AEO designation on the specified documents. (Doc. 39.) First, the Court finds the confidential sales information is relevant. Pursuant to Fed.R.Civ.P. 26(b)(1), “[p]arties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case ... [.]” “The purpose of discovery is to allow a broad search for facts, the names of witnesses, or any other matters which may aid a party in the preparation or presentation of his case.” Fed.R.Civ.P. 26(b)(1) Advisory Committee’s Notes (1946 Amendment). Plaintiff seeks to recover damages for lost compensation under each of her asserted claims. The documents Plaintiff seeks to discover appear reasonably calculated to lead to the discovery of facts supporting her request for those damages. Plaintiff intends to use the documents to evaluate what her earnings could have been had she not been demoted. She also intends to use the documents in support of her claim that she was demoted to an underperforming territory. The facts contained in the documents would aid Plaintiff in demonstrating the territory’s unprofitability and support the preparation of her claim for constructive discharge. (Doc. 29 at 13.) The Court therefore finds the sales documents are relevant to Plaintiff’s claims and proportional to the needs of the case. Regarding the protective order, Defendant argues the risk of disclosing its confidential sales information outweighs Plaintiff’s interest in discovering it. In determining whether protective orders for trade secrets or other confidential information are appropriate, the Court is required to balance the respective interests of both parties. Brown Bag Software v. Symantec Corp., 960 F.2d 1465, 1470 (9th Cir. 1992). Here, the Court must weigh the potential risk to Salesforce of disclosure of its confidential sales information to competitors against the risk to Plaintiff that protection of Salesforce’s confidential information would “impair[ ] prosecution of [her] claims.” Brown Bag Software, 960 F.2d at 1470. Salesforce’s chief concern with disclosing its confidential information to Plaintiff is that the information could end up in the hands of its direct competitor, Oracle. Salesforce’s concern is justified by the fact that Plaintiff is now employed by Oracle and holds a position equivalent to the one she held with Salesforce. The documents Salesforce requests protection for include current and prospective customer lists, information about customer needs and customers’ partners, and sales strategies tailored to each customer. (Doc. 29-3.) Salesforce frequently supplements this data with updated developments in its customer relationships, including changes in the status of its efforts to persuade customers to purchase Salesforce products. (Doc. 29-3.) Salesforce considers the data to be extremely valuable in the competitive customer relationship management market. Indeed, Salesforce and its direct competitors, Microsoft and Oracle, own ninety percent of the market. (Doc. 29-3.) If one of its competitors became privy to the information at issue, Salesforce argues the competitor could use the information to interfere with Salesforce’s sales strategies, customer relationships, and pricing decisions. (Doc. 29-3.) *6 Apart from alleging harm will result if it discloses confidential information to Plaintiff, Salesforce also argues some of the documents should be protected because they contain trade secrets. Customer lists and other customer information may be considered a trade secret if it is not readily ascertainable. Sierra Club v. BNSF Ry. Co., 2014 WL 5471987, *3 (W.D. Wash. Oct. 29, 2014) (granting request for protective order as to defendant’s pricing and customer lists because they were “vigorously guarded and difficult to ascertain.”). The data included in the documents Plaintiff seeks to discover is largely customer specific and subject to confidentiality measures. (Doc. 29 at 20; Doc. 29-3.) For example, Salesforce employees are required to execute an agreement affirming they will keep certain information strictly confidential and undisclosed. The agreement identifies information Salesforce seeks to keep confidential and includes customer lists, customer contracts, marketing information, compensation plans, pricing, and other financial information. (Doc. 29-4.) Salesforce also guards its sensitive data by limiting who can access it, both internally and externally. The information is limited internally, for example, based on assigned accounts and sales territories. (Doc. 29-5.) Access to the information is also protected by network access restrictions and policies. (Doc. 29-6.) Salesforce has clearly taken steps to protect its customer information from inadvertent disclosure. Plaintiff argues that some of the documents she seeks to discover contain public information and are subject to open records acts. (Doc. 39 at 19-20.) Because this information is available to the public, Plaintiff argues it cannot be considered “trade secret” and should not be subject to a protective order. It is true that information readily ascertainable by the public is generally not considered a trade secret, even if it is expensive or time consuming to acquire. See Nat’l City Bank, N.A. v. Prime Lending, Inc., 737 F.Supp. 2d 1257, 1266 (E.D. Wash. July 20, 2010). It does not follow, however, that the information cannot be protected. Simply because it is possible to obtain confidential information through public records requests does not mean Salesforce’s competitors will engage in such an effort, or that the information is unworthy of protection. As Salesforce explains, sending public record requests to potential customers “would deteriorate or harm the relationship with that potential customer rather than improve the likelihood of a sale.” (Doc. 29 at n.1.) Thus, ordering Salesforce to disclose the information without protection could create an avenue for Salesforce’s competitors to obtain the confidential commercial information without risking customer dissatisfaction. The Court agrees with Salesforce that the documents Plaintiff requests contain confidential commercial information that could cause Salesforce harm if it fell into the hands of its competitors. The Court finds Salesforce has demonstrated that disclosure of the information would be harmful to its interests in keeping its customer information and sales strategies confidential. However, the Court is not persuaded that designating the information as AEO is necessary to ensure its protection. “[P]laintiff should not be put in a position where [she is] essentially kept in the dark about the important facts of the case.” Defazio v. Hollister, Inc., 2007 WL 2580633, *2 (E.D. Cal. Sept. 5, 2007.) The documents are directly related to Plaintiff’s ability to prove her damages in this case. She should be able to participate in her own case and offer “meaningful input to make into tactical decisions[.]” Defazio, 2007 WL 2580633 at *2. Additionally, Plaintiff’s counsel specifically requests her client’s assistance interpreting the requested documents. The Court therefore finds the identified confidential information can be adequately protection through the imposition of restrictions other than an AEO designation. As such, Plaintiff is permitted to view the documents with her counsel present. Plaintiff shall not memorialize, or actually/constructively possess a recorded memorialization of any part of what she has viewed. Plaintiff shall not verbally share any repetition or characterization of the protected material she views. Any violations of these restrictions may lead to dismissal of Plaintiff’s case or the imposition of other sanctions. *7 Upon conferring with Plaintiff and reaching an agreement as to additional provisions necessary to govern the protection of its confidential proprietary information, and/or commercial information, Defendant shall submit a proposed protective order to the Court within 15 days of this Order. The protective order shall expressly include the above restrictions. IV. CONCLUSION For the foregoing reasons, IT IS HEREBY ORDERED that: 1. Defendant’s Motion to for Leave to Amend Answer (Doc. 26) is GRANTED; 2. Defendant’s Motion for Protective Order (Doc. 28) is GRANTED IN PART AND DENIED IN PART. DATED this 26th day of November, 2019. Footnotes [1] Salesforce has produced over 10,000 pages of discovery in this case. It produced over 3,000 pages of documents in April 2019, approximately 5,300 pages on July 25, 2019, and 1,300 pages in September 2019. (Doc. 42 at 8.) [2] Beyond producing an extensive number of documents in this case, Salesforce also twice supplemented its initial disclosures at Plaintiff’s request. Salesforce’s actions throughout discovery cannot reasonably be considered undiligent.