ShiftKey, LLC v. NurseIO LLC, No. 4:25-cv-00521 (E.D. Tex. Oct. 13, 2026), full opinion (PDF)
A sworn statement that a party holds none of an opponent's data is only as reliable as the search behind it. A federal court in Texas has now sanctioned a competitor whose sworn denial proved false. The sanctions also reach two former employees of the opposing party, both hired by the competitor. In ShiftKey, LLC v. NurseIO LLC, the declarations were filed to oppose the former employer's motion for a temporary restraining order, which the court denied. A forensic examination of the competitor's system later turned up the employer's information. The court found that the competitor acted in bad faith. It concluded that all the defendants should pay the employer's attorney's fees, including those tied to the forensic examination.
What happened
ShiftKey alleged that two former employees took its confidential information to NurseIO, a competitor that hired them. When ShiftKey sought a temporary restraining order, NurseIO and former employee Christian McNamee filed declarations denying that they held any of ShiftKey's information. One stated that "NurseIO is not in possession of any of ShiftKey's Trade Secrets or Proprietary Information". The court denied the motion, noting that ShiftKey offered no direct evidence that NurseIO ever received, reviewed, or used ShiftKey's confidential information.
ShiftKey then paid for a forensic examination of NurseIO's system, with NurseIO's full cooperation. The examination showed that NurseIO held ShiftKey's confidential information. McNamee had used Slack to send NurseIO's co-founders a spreadsheet of ShiftKey's information.
The court's analysis
The court noted that no defendant disputed the falsity of the earlier sworn statements. At a minimum, the court wrote, the defendants and their counsel failed to verify that the declarations were accurate. At worst, the court said, they knowingly filed false statements.
NurseIO argued that its declarations were accurate based on the information known and the searches conducted when they were made. The court found that argument unpersuasive. It relied on testimony from a NurseIO co-founder that there "probably wasn't much of an investigation at all" into whether ShiftKey's information was on NurseIO's system. Another co-founder guessed at his deposition that he may have searched his inbox for the term ShiftKey. He added that "that's really it".
The court weighed that testimony together with newly surfaced evidence of deliberate taking. The evidence included messages about a plan to covertly gather ShiftKey intelligence. It also included a co-founder's admission to NurseIO's board that they had stolen the information, whether or not it was proprietary. On that record, the court found that NurseIO acted in bad faith. NurseIO's later cooperation in discovery was irrelevant, the court added, because NurseIO had already defeated the restraining order with the help of false testimony.
McNamee said he did not remember sending the spreadsheet. He explained that after NurseIO terminated him, he had no access to the Slack history or email archives that might have refreshed his recollection. The court called that excuse too convenient. It also sanctioned the other former employee, who filed no response to the motion.
The court chose a fee award as the sanction under its inherent authority. It left open whether the new evidence would have changed the restraining-order ruling. The court found that ShiftKey was prejudiced. It had spent considerable resources pursuing injunctive relief that was denied on a record the false declarations had tainted.
Why it matters
A declaration that a party holds none of an opponent's information is a statement about that party's ESI. Whether it is true depends on which systems someone searched. Before a client signs one, counsel should confirm that a search reached each declarant's email, Slack or other messaging, and shared files. One custodian's inbox search for the opponent's name will rarely support a sworn denial made for a whole company.
When a declaration names the systems searched, the terms used, and what the search found, it claims no more than the search can support. An unqualified denial invites a forensic examination. If that examination finds the data, a court may read the gap between the denial and the search as a sign of bad faith. That reading is likelier where other evidence points to deliberate taking.
A declarant should swear from a search of the messaging the declarant actually used rather than from recollection. A court may treat a claim of forgetting, offered only after the file surfaces, as too convenient to credit.
A party that wins a motion on a sworn denial should not expect later cooperation in discovery to count as good faith. For a movant that lost a restraining order on sworn denials, a forensic examination can test those denials. When it disproves them, the movant may recover the attorney's fees the examination required.
The full opinion is available as a PDF.
