Believe’s TuneCore is suing CD Baby for allegedly stolen trade secrets, and as part of the previously little-discussed litigation, a federal judge has “temporarily enjoined” the defendant company “from knowingly disseminating and/or using any of TuneCore’s confidential information.”
While the high-stakes distributor dispute has only recently gained national attention, TuneCore filed the underlying lawsuit in late November in a New York federal court, naming CD Baby and Faryal Khan-Thompson as defendants.
According to her LinkedIn page, Khan-Thompson worked as TuneCore’s VP of International from October 2020 to April 2023 before joining CD Baby as SVP of Marketing and Community Engagement from June 2023 to February of this year.
According to the November lawsuit, “after being terminated from” her employment at TuneCore and commencing with CD Baby, Khan-Thompson reportedly “repeatedly hacked into TuneCore’s secured cloud server to access and download confidential documents and information.”
(The distributor’s December 2022 split from TuneCore was expedited after the company “discovered certain outside business activities by Khan-Thompson that constituted a material breach of TuneCore policies,” according to the November 2023 complaint and a December 2023 amended action.)
According to the legal text, the alleged improper access to confidential information occurred “during the waning days” of Khan-Thompson’s employment at TuneCore, when she, “knowing that her termination was imminent,” allegedly created “a second set of credentials” using a personal email address.
Of course, this claimed “backdoor entrance” provided the HitLab advisory board member with “unauthorized access [to] TuneCore’s confidential documents after her employment ended” and her main credentials were disabled, according to the plaintiff.
Khan-Thompson allegedly used the personal-email credentials to access “TuneCore’s secured cloud network” between May and October of last year, viewing and/or downloading more than 50 “confidential and proprietary documents in at least 103 separate instances,” the Believe subsidiary claimed in the original lawsuit.
During those instances, the former executive allegedly accessed a PowerPoint presentation titled “‘2023-2024 Product Strategy Road Map,'” an Excel spreadsheet “containing multiple tabs for 11 different countries and global regions listing the most promising TuneCore clients,” and a plethora of other information that TuneCore believes should be kept out of competitors’ hands.
Finally, TuneCore alleges that Khan-Thompson’s activities violated a pre-employment “proprietary information agreement,” its employee handbook, and the conditions of her separation agreement. She and CD Baby are accused of violating both the Defend Trade Secrets Act and the Computer Fraud and Abuse Act, in addition to misappropriating trade secrets under common law.
CD Baby has been accused of unfair competition and tortious interference with contract, and TuneCore has sought, among other things, a preliminary injunction prohibiting both defendants from accessing its network or using any of its confidential information.
As previously stated, after some back and forth between the litigants, Judge Ann Donnelly has blocked CD Baby from “knowingly disseminating and/or using any of TuneCore’s confidential information” until May 1st.
In addition, the judge has issued a quite broad injunction affecting Khan-Thompson that will last until the beginning of May. The executive is now strictly barred from accessing TuneCore’s network or accounts or disclosing any of the company’s proprietary information.
Furthermore, the order states that Khan-Thompson is unable to access, edit, or delete Google Workspace user-account information (surprisingly, the appropriate email address is “[email protected]”) or contact any of the individuals identified on the aforementioned Excel spreadsheet. Meanwhile, “a forensic examination of electronic accounts and devices” has already begun.
Finally, in terms of the ugly confrontation, the judge has ordered CD Baby and TuneCore to continue working toward the resolution of unresolved hang-ups, including the latter’s push for relief, “an accounting” of any confidential TuneCore information on CD Baby’s network, a “forensic examination” of this network, and “the return or forensic removal of any confidential information” discovered during said examination.
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