Crom, LLC v. Preload, LLC
Crom, LLC v. Preload, LLC
Opinion of the Court
*1193Plaintiff Crom, LLC ("Crom") filed this suit against its former employee, Phuong Bacon ("Bacon"), to enforce a Non-Compete Agreement and for damages caused by Bacon's alleged breach of the Agreement and breach of her common law duty of loyalty (Counts I and II).
I. Background
Crom builds prestressed concrete tanks ("PCT") to store liquids, most often water or wastewater. According to Stephen Crawford, Crom's Vice President of Engineering, Crom uses standard industry design specifications titled AWWA D110 and ACI 372, and Crom primarily builds what is called an AWWA D110 Type II tank, to which ACI 372 criteria applies.
Preload, the competitor involved in this suit, bids against Crom for PCT design and construction projects in the Southeastern United States.
Bacon worked as an engineer on Crom's PCT design team, most recently under the supervision of Stephen Crawford, from September 2007 through March 2016. Bacon gained all of her experience and specialized knowledge regarding prestressed concrete and PCT design from Crom. At the end of March 2016, she left to work for Preload on its design of LNG tanks using prestressed concrete. Her new boss at Preload, K. Ryan Harvey, had previously worked for Crom as Vice President of Engineering, and was aware of her Non-Compete Agreement with Crom.
Crom filed this suit in June 2016, after Bacon went to work for Preload. Crom alleges that Bacon's employment with Preload violates her Non-Compete Agreement with Crom, which she signed when she began working as an intern; that Bacon misappropriated Crom's trade secrets and other confidential information when she went to Preload; and that Preload encouraged the breach, interfering with Crom's business relations in order to gain an unfair advantage in the PCT market. In defense, Preload asserts that the Non-Compete Agreement is not valid or reasonably related to Crom's legitimate business interests in the PCT industry, that there is no evidence that Bacon misappropriated trade secrets or confidential information, and that there is no evidence Crom was damaged by any perceived unfair advantage in the PCT industry or loss of profits as a result of Bacon's or Preload's actions. The facts relevant to these disputes are set out in greater detail below.
The record reflects that on September 24, 2007, while an engineering student, Bacon accepted a paid internship with Crom in its Gainesville, Florida, office. ECF. No. 59-1. The offer stated that she would be paid an hourly wage and would "work part time as an intern during [the] semester." Id. Within a few weeks of her employment, Bacon signed a Non-Compete Agreement, promising to not disclose Crom's trade secrets or confidential information during or after her employment (¶3), to return all of Crom's documents and records, including her work, upon her termination (¶4), and to not seek employment with a Crom competitor for a period of three years, "commencing with the date of the employee's termination with Crom" (¶5).
Bacon graduated with a Master's in Engineering in May 2010. On April 7, 2010, Crom offered her employment as a full-time Staff Engineer at its Gainesville, Florida, office, beginning May 15, 2010 (the 2010 Offer letter was revised on May 12, 2010).
While employed by Crom, Bacon worked on its PCT design engineering team, and Crawford, her supervisor, testified that she was dependable and hard working. Bacon primarily worked on design projects located in Tennessee, Georgia, North Carolina, Florida, Kentucky, Alabama, Virginia, South Carolina, Mississippi, Louisiana, and Puerto Rico. ECF No. 60-1, at 88-8. As a team member, Bacon prepared designs and drawings for "two-dimensional and three-dimensional structures, one-way and two-way slabs, plate and shell structures, scaffold and shoring formwork, and *1196prestressed elements using single wire and strand."
In 2015, Bacon began searching for a new job. She contacted Harvey, her former boss at Crom and then-CEO of Preload, in December 2015 to ask whether he would serve as a reference for her, and he agreed. In February 2016, Harvey contacted Bacon to ask whether she would be interested in a position at Preload, which he said would be challenging and was not related to her work at Crom. ECF No. 60-4, at 66. In early March 2016, Bacon traveled to New York to interview with Preload. The job would involve designing LNG tanks, and the job description stated that the analysis and design of prestressed concrete tanks would be essential to the job. Bacon testified that during her interview with Preload, however, she learned there would be many other things she would need to learn in order to perform the LNG job. On March 11, 2016, Harvey emailed Bacon an offer for a position designing LNG storage tanks "for projects in the Northeastern United States." ECF No. 59-14.
On March 21, 2016, Bacon personally delivered her letter of resignation to Crawford, giving four weeks' notice. ECF No. 59-17. Bacon disclosed her job offers to Crawford, who advised her that she could not take the Preload offer because of her Non-Compete Agreement with Crom.
When notified of Bacon's decision to take the position at Preload, Crom advanced her final date of employment to March 25, 2016, and dispatched an IT employee, Alex Barrio, to Bacon's residence in South Carolina to retrieve Crom's equipment and to search for Crom-related files on her personal computer. Prior to Barrio's arrival, Bacon had gathered together Crom's property, downloaded and transferred what she thought were her personal files to a flash drive and made copies of Crom's files for a backup on Crom's drives. She allowed Barrio to inspect her personal computer. According to Bacon, she told Barrio that she also had the personal flash drive, in addition to her personal computer, and that he was welcome to search it, but he declined. Barrio did not recall this. See ECF Nos. 60-4, at 130-131; 60-8, at 13-14. Barrio testified by deposition that he found no Crom-related information on Bacon's personal computer and that she was cooperative throughout the collection process.
Crom subsequently hired a forensic consultant to search the equipment that Bacon *1197had used in her work to determine whether she might have taken confidential or proprietary electronically stored information belonging to Crom. The consultant was tasked to identify and restore deleted files and identify and examine the file activity, external devices connected the computer, and emails sent and received between November 2015 and March 25, 2016, which were the final months of Bacon's employment with Crom. The forensic report dated May 23, 2016 ("Report") examined four hard drives and determined that there were well over 100,000 files in each of their directory listings. The Report identified the numbers of times files had been "accessed" during this time period, which was less than 100,000 total, and most (86,491) had been accessed in a MyPassport external hard drive during the month of March 2016.
Shortly before filing suit, Crom's attorney notified Bacon and Preload that Crom believed Bacon was violating her Non-Compete Agreement and that Crom had "discovered forensic evidence confirming Ms. Bacon's misappropriation of Crom's confidential information prior to her resignation," by copying files onto mass storage devices. ECF No. 60-9, at 2. Despite the fact that the Report by Crom's forensic consultant had not identified a link between any of the files "accessed" and the external devices or conclude that any file had been taken, Crom's attorney accused Bacon of having "accessed and transferred" files including Crom's tank list, project history, corporate structure descriptions, and employment files, among others, and requested that Bacon and Preload preserve all documents and electronically stored information that they might possess regarding this litigation.
Bacon then examined her files and discovered that some Crom-related files had been saved with her personal files. She provided three personal storage media devices to her attorney, who had them imaged and indexed by a forensic data consultant *1198before returning them to Crom.
In her deposition in July 2017, Bacon admitted having discovered during this litigation that she had downloaded some Crom-related files before she left Crom, which she found with her personal files. She explained that she was previously unaware of them and must have copied and saved them inadvertently; she denied downloading Crom's confidential programs. ECF No. 60-4, at 59, 131-141, 158-161. Bacon testified that she believed she was transferring personal files but also said that she had transferred some files to create backups for Crom. Id. at 158-59.
Bacon also testified that her work for Preload was limited to research and design of LNG storage tanks using prestressed wire-wound concrete. She said she worked on one LNG tank project in Pennsylvania and one in Alaska. Harvey, Preload's CEO, confirmed that thus far, Bacon's work was limited to these projects. He testified that, although Preload has placed no geographic work restrictions on Bacon's work, she is restricted to the design of LNG storage tanks. Harvey denied instructing Bacon to download or transfer any materials from Crom and stated that, to the contrary, he had instructed her to ensure there were no items brought to Preload. ECF No. 60-6.
During discovery, Crom identified its damages as lost profits from being outbid by Preload on two PCT projects since Bacon's departure on March 25, 2016.
Crom did not present evidence to challenge these affidavits but instead responded to the summary judgment motion by presenting two new damages affidavits. Tallmadge E. Mincey, a Co-President of Crom, stated by affidavit that in the first quarter of 2016, Preload began informing customers it would be driving down the market prices for PCT tanks in the Southeastern United States and that Preload's low bid on the Rainbow City project in April 2016 had the effect of driving down bids by all competitors, which has harmed Crom.
In reply, Defendants presented an affidavit by Harvey, offering additional details to rebut the inference that Preload caused Crom's alleged damages related to the projects identified in Pomeroy's affidavit.
*1200Harvey stated that as to the Paducah, Kentucky project, which Crom lost, Preload was not the low bidder either; as to the Louisiana project, Crom's bid had been rejected; as to the project in Lexington, Kentucky, Crom's Type II tank won the contract over Preload's bid for a Type III tank; and Preload had not participated in the Tennessee project that Crom won. Crom presented no evidence to rebut Harvey's affidavit on these details.
II. Discussion
Summary judgment is appropriate when "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The moving party bears the burden of establishing on the record that there is no genuine dispute of fact and that the plaintiff has failed to establish an element essential of the claim. See Allen v. Bd. of Pub. Educ. ,
A. Breach of the Non-Compete Agreement
Under Florida law, a breach of contract claim requires proof of (1) a valid contract; (2) a material breach and (3) resulting damages. Beck v. Lazard Freres & Co., LLC ,
In Florida, a non-compete provision is valid provided the contract is "reasonable in time, area, and line of business." See
Bacon argues first that the restrictive covenant is not enforceable because it expired in 2013, three years after the end of her internship, relying on Sanz v. R.T. Aero. ,
Bacon's argument that her Non-Compete Agreement expired in 2013 is premised on the faulty assumption that the three-year restriction was triggered by the termination of her internship, which was part-time, lasted during semesters, and likely ended with her graduation in May 2010. This is belied by the Agreement's terms, which provide that the three-year restriction commences "with the date of the Employee's termination of employment with the Company." ECF No. 59-3 (emphasis added). The term "employment" is not defined in the Agreement or otherwise limited to Bacon's status as an intern, and the facts show that Bacon's employment with Crom in fact did not terminate when her internship ended. Instead, in April 2010 (before the internship ended), Crom offered her a full-time position. The practical impact of Bacon's acceptance was that her status as an intern changed to that of a full-time employee, and as a result, her employment with Crom continued and she moved seamlessly into a new *1202full-time position in May 2010, with full benefits and increased duties.
The fact that Crom could have required Bacon to sign a new Non-Compete Agreement when she started full time, as stated in the 2010 Offer, does not by implication terminate her pre-existing agreement. It was clear that she would be bound by a non-compete agreement as a full-time employee, and there is no language terminating any pre-existing agreement. There was no reason for Bacon or Crom to think that the Non-Compete Agreement on file from 2007 had expired by reason of her decision to continue working with Crom. Thus, on the undisputed facts, although Bacon's internship ended when her status changed to full-time employee, the three-year period during which she was restricted from working for a competitor was triggered by her termination of employment with the company in 2016, not her continued employment in 2010. See Anarkali Boutique ,
Bacon next argues that the Non-Compete Agreement is unenforceable because it is not justified by a legitimate business interest. "Any restrictive covenant not supported by a legitimate business interest is unlawful and is void and unenforceable."
Bacon argues that Crom lacks any legitimate business interest in restricting her from working for Preload in the LNG tank industry because Crom's business does not involve the design or construction of LNG tanks. But Crom undoubtedly has shown a legitimate business interest in restricting employees from "employment with any competitor of [Crom] engaged in the present or anticipated business of [Crom]" under ¶ 5. Crom's business involves PCT design and construction. Despite the fact that Crom does not compete in the LNG industry, the record shows that Preload does competes with Crom in the PCT industry and that Bacon's PCT design knowledge is useful in her LNG design work at Preload. Bacon gained her specialized knowledge related to PCT design at Crom, where she also used and helped develop confidential, proprietary and potentially trade secret computer design programs and business processes. Crom has a legitimate need to protect that PCT design-related information and thus has articulated a prima facie legitimate business interest in restricting Bacon from working for a PCT design and construction competitor.
The burden then shifts to Bacon to establish that the contractually specified restriction is overbroad, overlong, or otherwise not reasonably necessary to protect Crom's established legitimate business interest. If so, the Court must modify the terms of the restriction and "grant only the relief necessary to protect [that] interest."
Bacon's first argument, that the restriction is overbroad because she works only on LNG tanks at Preload and it is undisputed that Crom does not build or design LNG tanks, involves credibility calls that are not appropriate for summary judgment. She testified that her work is confined to LNG design projects in states in the northeast, and she has only worked on LNG projects in Pennsylvania and Alaska, where Crom does no business. But in response, Crawford's testimony indicates that the restriction is necessary to protect Crom's legitimate business interest because the LNG tank designed with prestressed concrete uses PCT design and ACI 372 criteria, "which is what Crom Corporation specializes in,"
Turning to the three-year restriction, Bacon argues it is presumptively unreasonable under Florida law, which presumes that a restriction of more than two years is unreasonably long. See
Bacon also argues that the restriction is nevertheless unreasonably overbroad because it lacks any geographical boundary. Again, this presents a question of fact. The reasonableness in scope of a geographic restriction is a question of fact. See Proudfoot Consulting ,
B. Misappropriation
The remainder of Crom's claims against Bacon and Preload depend at least in part on some proof that Bacon has misappropriated legally protected trade secrets or confidential information.
Bacon and Preload argue they are entitled to summary judgment on all misappropriation claims because Crom has presented only speculation to support its assertion that Bacon took, disclosed, retained, or actually used Crom's confidential or trade secret information to benefit Preload. The Court agrees. Although *1206Crom has identified that Bacon had access to Crom's trade secrets, confidential information, and business processes during her employment, especially the dome form programs, pile floor programs, and C Note programs relating to the design and construction of PCTs, which undoubtedly justified a restriction on their disclosure (¶3), there is no record evidence to support a reasonable inference that Bacon took or used those programs at Preload. Crom relies on its forensic Report of Bacon's work computers, which identified files that had been "accessed" during the last few months of her employment (and thus, which Bacon might have transferred to personal storage devices), and on Crawford's examination of those files. In an interrogatory, Crawford stated that Bacon had "absconded" with broad categories of information, such as "Estimating program and project quotes," "Settlement calculations," "Crom pricing information," "Drafting documents and drawings," "Project quotes," "Project pricing information," "project bid information," and "Tank design and formwork programs," among others. ECF No. 59-24. But he testified that he prepared this list based on file lists attached to the forensic Report. ECF No. 60-1, at 121. As noted above, the forensic Report expressly stated that it did not provide a factual link between any file "accessed" and any file actually downloaded or transferred to a personal device. Instead, the report recommended further analysis to determine whether there was a link, but no further analysis is in the record.
The record shows that Bacon discovered some Crom-related files in her personal devices during this litigation.
*1207The Non-Compete Agreement also required Bacon, on her termination, to return to Crom all records, documents, processes, methods, and sales information in her possession that she used or that pertain to any activities of the company, including her work. See ECF No. 59-2, ¶ 4. While Bacon's failure to return all materials belonging to Crom after her termination violated ¶4 of the Non-Compete Agreement, regardless of whether that information was designated as confidential, trade secret, or proprietary information, the record reflects that Bacon has returned all items that were in her possession. Therefore any request for injunctive relief based on a violation of ¶4 of the Non-Compete Agreement is moot, and any damages claim fails for the reasons stated below.
C. Tortious Interference, Unfair Competition, Civil Conspiracy
To the extent any of Crom's claims survive, all of which are premised on breach of the Non-Compete Agreement, Defendants argue that the claims nonetheless fail due to Crom's inability to show resulting damages.
Crom asserts that the actions of Bacon and Preload with regard to the breach of Bacon's Non-Compete Agreement gave Preload an unfair advantage that caused Crom damages in the form of lost profits. More specifically, Crom argues that, since April 2016 (when Bacon began working with Preload), Preload has reduced its bids, resulting in Crom losing four subcontract bids for prestressed concrete tank projects (Rainbow City, San Antonio, Paducah, and Lake Charles), and losing profits on two other projects that Crom won but nonetheless argues that its profit margin was reduced due to the effect of Preload's reduced bidding in the market. Crom argues that there can be only one reason for Preload's "sudden ability" to reduce its PCT bid prices, namely, that Preload was using confidential information from Bacon. Absolutely no evidence supports this supposition, however.
First, as noted, there is no evidence of misappropriation and only speculation to link Bacon's employment, design experience or knowledge of Crom's programs to Preload's lower bids on PCT projects. Importantly, no evidence suggests that Bacon was involved in Preload's PCT bidding process on these projects, and even assuming her knowledge of Crom's PCT design programs could have been revealed to Preload, no evidence gives rise to a reasonable inference that this knowledge would have reduced Preload's bids or prices. Defendants presented uncontroverted evidence from the general contractors on the Rainbow City and San Antonio projects, showing that Crom was not the second lowest bidder and thus would not have won the bid in Preload's absence. ECF Nos. 59-27, 59-28. Harvey's affidavit of additional facts was also unrebutted, showing that that Preload's bids on the four other projects discussed by Pomeroy were not directly responsible for Crom's losses.
Accordingly:
1. Defendants' Motion for Summary Judgment, ECF No. 59, is GRANTED in part and DENIED in part as follows: DENIED as to the breach of ¶ 5 of the *1209Non-Compete Agreement to the extent equitable relief may be available and GRANTED as to all other claims.
2. The parties are directed to confer and file a notice within fourteen (14) days, advising the Court on their positions as to (a) whether an injunction hearing should be scheduled, and what, if any, equitable relief would be available at this time due to the alleged breach and the passage of three years, and (b) whether the remaining issue is moot by the passing of three years during which Crom did not request a temporary restraining order or preliminary injunction to preclude Bacon from working for Preload.
3. Defendants' Motion to Strike, ECF No. 65, is DENIED , and consequently no sanctions will be ordered.
DONE AND ORDERED this 31st day of March 2019.
Diversity jurisdiction is satisfied. See
Crom requests oral argument, but on review of the file, the Court has determined that the motions can be resolved without oral argument. The summary judgment motion had already been pending for over ten months when the case was reassigned to the undersigned. The matter is fully briefed and submitted, and the Court finds no reason to hear oral argument.
Industry standards developed by two governing bodies, the American Concrete Institute ("ACI") and American Water Works Association ("AWWA"), whose members are competitors in the industry, guide the design of PCTs.
The record reflects that "Preload was the inventor of the prestressed concrete tank," and "J.M. Crom was one of the developers." ECF No. 60-6, at 159-60.
Harvey left Crom on November 10, 2011, to work for Caldwell Tanks, Inc. Crom sued Harvey and another former Crom employee in 2012 for breach of their noncompete agreements with Crom because Caldwell was a competitor. See Crom Corp. v. Harvey , No. 1:12cv141SPMGRJ,
More particularly, the terms at issue in this suit required the following:
3. The Employee shall not, during his/her employment with [Crom] or thereafter at any time, disclose to others or use for his/her own benefit any trade secrets or confidential information of any technical, commercial or other nature, pertaining to any of the present or future business of [Crom], knowledge of which was acquired by or became known to the Employee during the period of his/her employment with the Company ....
4. Upon termination of the Employee's employment with [Crom], the Employee shall turn over to [Crom] all notes, memoranda, notebooks, records and any other documents and reproductions thereof kept by the Employee or in the possession of the Employee ... used or pertaining to any activities of the Company (including but limited to the work done by the Employee during the course of his/her employment) ....
5. The Employee shall not seek to obtain employment with any competitor of [Crom] engaged in the present or anticipated business of [Crom] ... for a period of three (3) years commencing with the date of the Employee's termination with [Crom].
ECF No. 59-2. The agreement also includes a severability clause, stating if any portion is found to be unenforceable, the remaining paragraphs are unaffected and must be interpreted on their own merit.
The 2010 Offer letter further stated, "upon acceptance of our offer you would begin with our company as a Staff Engineer." ECF No. 59-3. Crom stated it appreciated Bacon's work as an intern and, based on her work, it was offering her a "contingent offer of employment as a Staff Engineer in our firm." ECF No. 59-3. The letter advised her of the starting salary and that benefits would begin to accrue as of her "first day of employment."
Crom characterizes Bacon's new full-time Staff Engineer position as a "promotion" or "continuation of employment." Bacon's employee ID number, 1341A, remained the same, and she was "promoted" to a full-time salary and benefits. Megan Marquis-Torres, HR Supervisor at Crom, acknowledged in her deposition that she had received "a request to add [health] coverage for a new full-time employee to be effective 7/1/2010," referencing Bacon, but Marquis-Torres corrected her deposition to reflect that Bacon was "promoted" and "was not a new employee. It was a continuation of employment." ECF No. 59-5, at 5.
Crawford testified that Bacon was not the engineer of record for any design, was not involved in marketing or sales, and did not prepare bid estimates or negotiate contracts with customers. ECF No. 160-4, at 79-81.
Bacon also had been offered a position on March 18, 2016, from Savannah River Remediation, an affiliate of AECOM, which is not a Crom competitor.
The Court has not been given the benefit of an expert affidavit or deposition testimony to explain Crom's forensic Report, which examined the equipment Bacon turned in when she left. Throughout Crom's argument in response to the motion for summary judgment and when counsel questioned witnesses in depositions, Crom's counsel made statements that Bacon "accessed and downloaded" or even that she "absconded with" "hundreds of thousands" of files from November 2015 through March 2016, but this assertion is not substantiated by the Report itself or any other evidence. The Report noted that several hundreds of thousands of files existed on the hard drive directories examined, that many of them were "accessed" during the relevant period while she was an employee, and that three external devices (a USB, a printer, and a phone) had been connected to her work computers. It did not express an opinion that any files in fact were downloaded or transferred to the external drives but instead recommended further analysis. ECF No. 60-7, at 10.
The Report also generally recommended that Crom's IT should install tracking software and file audit software to allow its IT Department to track documents that are accessed, modified, printed or deleted. Apparently, Crom did not use any such tracking software.
The Court does not have the benefit of this forensic report or index.
Counsel also informed Crom that a list of the personal data files that were deleted was available, if needed. ECF No. 60-10. Crom accuses Preload of deleting potentially confidential Crom-related information.
Crom has possession of Bacon's personal data storage devices and these files but has provided no affidavit or deposition testimony to confirm that any particular file she transferred to a personal device in fact was confidential or a trade secret. Instead, there is only questioning by Crom's attorney, asking Bacon at her July 2017 deposition whether she would be surprised to know that "over 108,000" files that she downloaded were "exact matches with confidential information located on Crom hard drives." ECF No. 60-4, at 135-136. This is not evidence.
In ruling on a motion to compel, the Magistrate Judge noted, consistent with this understanding, that "Crom is not claiming damages related to a change in the financial condition of the company but instead is simply claiming loss of profits from the jobs for which it would have won the bid, but for Defendants conduct." ECF No. 51, at 13. Crom was directed to provide a list of all jobs it contends it lost as a result of the activities alleged in this case as well as an estimate of its resulting damages. The Magistrate Judge's Order further directed that Crom would be permitted to supplement this list as the case proceeded in the event additional projects were discovered relevant to the damages calculation.
Mincey also stated that draft meeting minutes from an ACI 372R Tank Committee meeting in Milwaukee, Wisconsin, showed that Bacon attended an April 19, 2016, meeting, shortly after her employment with Preload and close in time to the bidding on the Rainbow City project. Presumably, this is offered to rebut evidence that she was in Japan at that time. In reply, Defendants submitted evidence of her plane ticket and passport showing she was in Japan. The Court concludes that this dispute of fact is not material because, regardless of whether Bacon was at a meeting in Wisconsin or with her family in Japan when the Alabama bid occurred, nothing but speculation connects Bacon to Preload's PCT bidding process for that or any PCT project.
Defendants also move to strike these new affidavits, arguing that Mincey's affidavit shows a lack of personal knowledge and relies on hearsay and that Pomeroy's affidavit amounts to an untimely disclosed new damages theory, asserting for the first time that Preload has driven down the market for all competitors. The Court has considered the affidavits and finds it unnecessary to strike them because, as discussed infra , the evidence does not show a causal link aside from speculation between Bacon's employment with Preload and Crom's alleged lost profits.
"It is well established law that when a court is interpreting a contract, clear and unambiguous terms should be given their plain meaning." Steritech Grp., Inc. v. MacKenzie ,
Crom's characterization of this as a "promotion" is not entirely accurate but it is not far from the mark. Bacon technically was a "new hire" as a staff engineer, as she contends, but the effect of this change on her status as an employee was the same as a promotion-she was still employed by Crom. This is confirmed by the unrebutted testimony of Marquis-Torrez.
Certainly the standard design specifications of ACI 372 and design aspects printed in Crom's promotional business brochures are not confidential. See Colucci v. Kar Kare Auto. Grp., Inc. ,
Crawford provided an affidavit with a list showing that from June 27, 2013 through June 27, 2016, Crom's business had a world-wide geographic span, including 27 states across the continental United States and several countries in North and South America, as well as Asia and Africa. See ECF No. 60-2. In a follow-up video deposition, however, Crawford admitted that these were locations where Crom had "pursued business opportunities," ECF No. 60-3 (Video Depo. Nov. 20, 2017), but he was unable to say whether, since 2013, Crom had built tanks in every location listed, whether Crom was licensed in every location listed, or even whether Crom had bid on a project in every location listed in his affidavit.
Bacon presented evidence that other non-compete agreements signed during the period from May 2010 through January 2016 included narrower restrictive covenants, limited to two years and a 100 mile geographic scope. Also, Harvey's 2006 non-compete agreement with Crom restricted him from competition for two years and in specific states of Florida, Georgia, South Carolina, North Carolina, Virginia, Maryland, Alabama, Mississippi, Louisiana, Kentucky, Tennessee, West Virginia, Arkansas, and the District of Columbia. Even considering that these could be reasonable restrictions, determining whether Bacon is in violation will depend on whether there is a danger that Preload could apply her knowledge and PCT design experience to its competition for PCT projects in those areas.
Count I, breach of the Non-Compete Agreement, alleges misappropriation and failure to return materials as bases for the breach, in addition to the 3-year employment restriction, and Count II alleges Bacon breached her duty of loyalty by misappropriating and conspiring to misappropriate Crom's confidential and trade secret information. Similarly, Count III, asserting tortious interference, and Counts IV and V, alleging civil conspiracy and unfair competition against Preload and Bacon, all include allegations of misappropriation. And Crom's claim for damages is premised on Bacon having misappropriated trade secrets, confidential information, or proprietary information, and given it to Preload to harm Crom's business interests.
At Crawford's deposition taken on March 20, 2017, he testified only to his review of the list of files that were attached to the forensic Report (that list is not attached to the Report in evidence). Defense counsel provided Bacon's personal storage devices to Crom on March 24, 2017. See ECF No. 60-10.
By way of explanation, Bacon testified that saving any such materials was inadvertent. The Court acknowledges that whether it was intentional or inadvertent is a question of fact and credibility cannot be resolved on summary judgment.
Crom provides only argument in opposition to the motion, not evidence. For instance, Crom argues that Bacon "accessed 113,141 Crom files in the hours before Mr. Barrio arrived at her house [on March 25, 2016] to retrieve Crom's property from her." ECF No. 60 at 8. As support for this assertion, Crom cites page nine of the forensic report, but the report does not support the assertion. To the contrary, the only timed event noted in the report is found on page six, and identifies one file being "accessed" thirty minutes before the computer was secured by Barrio. ECF No. 60-7 at 6. Crom argues that "Bacon accessed and downloaded hundreds of thousands of Crom's confidential files at a steadily-increasing pace until just minutes before Crom's representative arrived at her residence to retrieve Crom's property." ECF No. 60, at 31. No evidence is cited to support this; the forensic Report does show that directory listings of filenames on the hard drives of the Crom computer contained hundreds of thousands of files but does not show that Bacon "downloaded" or transferred them to a personal device, although the Report suggests this could have occurred. Crom also argues that Bacon "admitted in her deposition that she had retained Crom's confidential files" but cites nothing in the record to support the assertion. Similarly, during Bacon's deposition, Crom's attorney repeatedly referenced the information as confidential but Bacon did not speak to the content of the files other than to admit the files were included Crom-related information. The manner in which Crom's attorney characterizes the files is not evidence. It is undisputed that Bacon retained some Crom files, which have been returned, but the nature of those files has not been established by evidence. Moreover, "[j]udges are not like pigs, hunting for truffles buried in briefs," United States v. Dunkel ,
As noted above, there is a question of fact on the claim of breach of the Non-Compete Agreement's employment restriction.
To prove tortious interference with a business relationship, there must be evidence of: (1) the existence of a business relationship, under which the plaintiff has legal rights; (2) knowledge of the relationship by the defendant; (3) intentional and unjustified interference with that relationship by the defendant; and (4) resulting damage to the plaintiff. Palm Beach County Health Care Dist. v. Professional Med. Educ., Inc. ,
Because the Court has considered the affidavits of Mincey and Pomeroy and finds that they add nothing to establish a causal link between Bacon's employment and Preload's bids, the Motion to Strike will be denied.
The allegations of the complaint also assert that Preload encouraged other Crom employees to breach their Non-Compete Agreements and duties of loyalty, conspired to do so, and interfered with Crom's business relationship with Bacon. These claims all fail for Crom's failure to put forward evidence of damages resulting from these acts.
Reference
- Full Case Name
- CROM, LLC v. PRELOAD, LLC and Phuong Bacon
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- Published