A&P Tech., Inc. v. Lariviere
| Decision Date | 27 December 2017 |
| Docket Number | Case No. 1:17-cv-534 |
| Parties | A&P TECHNOLOGY, INC., Plaintiff, v. PHILLIP LARIVIERE, et al., Defendants. |
| Court | U.S. District Court — Southern District of Ohio |
This civil action is before the Court on Plaintiff's motion for a preliminary injunction and expedited discovery (Doc. 2), Defendants' motion for prediscovery identification of trade secrets (Doc. 13), and the parties' responsive memoranda (Docs. 9, 16, 18, 20, 22, and 24).
Plaintiff A&P Technology, Inc. ("A&P") is a corporation with a principal place of business in Cincinnati, Ohio, that specializes in the production of precision braided textiles. (Doc. 2, at 3). These textiles are used by Plaintiff's client corporations for use in various applications and have been utilized in the aerospace, military, and energy markets, among others. (Id.). Plaintiff relies upon proprietary technology in the production of its textiles, including custom braiding equipment that Plaintiff has designed and built over many years. (Id.).
Defendant Phillip Lariviere was employed by Plaintiff as an Application Engineer for eight years prior to his termination on April 27, 2015. (Id.; Doc. 9, at 3). During his time working for Plaintiff, Lariviere was given access to, and training concerning, Plaintiff's confidential information including its braiding processes. (Doc. 2-1, at 7).1 Lariviere was exposed not only to technical information regarding braid manufacturing, but also to market knowledge of Plaintiff's products, sales strategies, and pricing models. (Doc. 2, at 8).
While Lariviere was employed with A&P, he executed agreements stating that he would agree to keep A&P's confidential information secret both during and after his employment, and that he would only use A&P's confidential information as authorized by the company. (Docs. 2-3, 2-4). Upon Lariviere's termination, he executed a release reaffirming his commitment to protect A&P's confidential information in the future, despite his separation from the company. (Doc. 2-5, at 3). In addition to his commitment to protect A&P's confidential information, Lariviere's agreement with A&P also included the following "covenant not to compete":
In the event the Employee's employment with the Company terminates for any reason, either voluntarily or involuntarily, the Employee hereby agrees that, for a period of two (2) years after the termination of employment, the Employee will not directly or indirectly, alone or with others, engage in or have any interest in any person, firm, corporation or business (whether as a shareholder, principal. partner, employee, trustee, officer, director, agent, security holder, creditor. agent security holder, creditor, independent contractor, landlord, consultant or otherwise) that engages in the braidingindustry, or otherwise competes with the operations of [A&P], including but not necessarily limited to, braiding for reinforcement in composites, inflatable structures, safety-related devices, human and animal health-related devices, thermal electrical or mechanical insulators or conductors.
Following his termination, in June 2015 Lariviere began working for non-party General Electric Aviation ("GE") in Cincinnati, where he had worked prior to joining A&P. (Doc. 9, at 3). However, based on a desire to move, Lariviere continued to search for new employment through a third party recruiter. (Id.). Plaintiff ultimately accepted an offer to work for Defendant Highland Industries, Inc. ("Highland") in Statesville, North Carolina as a Senior Project Engineer. (Id. at 3-4; Doc. 1, at 12). Lariviere's noncompete agreement had expired before he began working with Highland on May 15, 2017. (Doc. 9, at 3).
Highland "is primarily in the business of curing and finishing composite structures based on customer specifications, using multiple processing methodologies including braiding, overbraiding, filament winding, lamination, and press molding." (Doc. 9, at 4). Highland is affiliated with A&P's largest competitor, non-party company Eurocarbon. (Doc. 1, at 11). In the past, Highland and A&P have bid against each other for the same third party contracts. (Id. at 11-12). Accordingly, Highland is a competitor to A&P.
A&P filed the complaint in this case on August 11, 2017. (Doc. 1). A&P is claiming that Lariviere is in breach of his contract to protect A&P's confidential information by working for a direct competitor in the braiding industry. The complaint accordingly raises claims of breach of contract against Lariviere, tortious interferencewith contractual relationships against Highland, and tortious interference with business relationships, misappropriation of trade secrets, and unjust enrichment against both defendants. (Id. at 15-25). A&P seeks injunctive relief against both defendants preventing them from continuing to work together. (Id.).
On the same day the complaint was filed, A&P filed a motion for preliminary injunction and expedited discovery. (Doc. 2).2 The motion argues that a preliminary injunction enjoining Lariviere from working in his current role at Highland is necessary because of the risk the status quo poses to A&P's carefully guarded confidential information. (See generally id.). In addition, the motion requests that Defendants be enjoined from soliciting any of A&P's customers and that Defendants also be required to provide a full and independent accounting and relinquishing of all of A&P's confidential information and/or documents in their possession. (Id. at 24-25). Defendants oppose this motion.
On October 11, 2017, Defendants filed a motion for prediscovery identification of trade secrets. (Doc. 13). That motion requests that the Court order Plaintiff to "provide Defendants' counsel—after the entry of an appropriate protective order but before discovery begins—a detailed list with narrative descriptions, for each Defendant, of each trade secret that A&P claims the Defendants have: (1) misappropriated; and (2) threatened misappropriation." (Id. at 10). Plaintiff opposes this motion.
Both Plaintiff's motion for preliminary injunction and expedited discovery and Defendant's motion for prediscovery identification of trade secrets are fully briefed and ripe for review. The Court shall address each in turn.
Federal Rule of Civil Procedure 65(a)-(b) permits a party to seek injunctive relief when the party believes that it will suffer immediate and irreparable injury, loss, or damage. Nevertheless, an "injunction is an extraordinary remedy which should be granted only if the movant carries his or her burden of proving that the circumstances clearly demand it." Overstreet v. Lexington-Fayette Urban County Gov't, 305 F.3d 566, 573 (6th Cir. 2002).
In determining whether to grant injunctive relief, this Court must weigh four factors: (1) whether the moving party has shown a strong likelihood of success on the merits; (2) whether the moving party will suffer irreparable harm if the injunction is not issued; (3) whether the issuance of the injunction would cause substantial harm to others; and (4) whether the public interest would be served by issuing the injunction. NE. OhioCoal. For Homeless & Serv. Emp. Int'l Union, Local 1199 v. Blackwell, 467 F.3d 999, 1099 (6th Cir. 2006). These four considerations are factors to be balanced, not prerequisites that must be met. McPherson v. Michigan High Sch. Athletic Ass'n, Inc., 119 F.3d 453, 459 (6th Cir. 1997). "Although no one factor is controlling, a finding that there is simply no likelihood of success on the merits is usually fatal." Gonzales v. Nat'l Bd. of Med. Exam'rs, 225 F.3d 620, 625 (6th Cir. 2000).
1. Preliminary Injunction Factors
The first factor to consider is "whether the plaintiff has demonstrated a strong likelihood of success on the merits." Certified Restoration Dry Cleaning Network v. Tenke Corp., 511 F.3d 535, 543 (6th Cir. 2007). While a party is not required to prove its entire case to establish success on the merits, a plaintiff must show "more than a mere possibility of success." Id.
All of the claims in Plaintiff's complaint are based on the foundational premise that, by working with Highland, Lariviere is exposing A&P's confidential information to Highland in violation of his agreement to keep that information secret. Therefore, A&P must be able to demonstrate a substantial likelihood of success on the merits of its claims alleging misappropriation of trade secrets in violation of the Uniform Trade Secrets Act to require the imposition of a preliminary injunction. (See Doc. 1, at 19-21 (citing OHIO REV. CODE ANN. §§ 1333.61, et seq. (West 2016))).
A&P does not contend, at this early stage in the case, before any discovery has occurred, that A&P possesses any evidence that Lariviere has divulged any of A&P's confidential information to Highland. However, A&P is requesting injunctive relief under the Ohio Uniform Trade Secrets Act (OUTSA), which allows for injunctive relief to be granted upon a showing of threatened misappropriation of trade secrets. OHIO REV. CODE ANN § 1333.62(A) (West 2016) () (emphasis added).
A&P's motion relies upon the "inevitable disclosure doctrine" to support its claim that Lariviere's employment with Highland is a threatened misappropriation of A&P's confidential information. The inevitable disclosure doctrine states that "a threat of harm warranting injunctive relief can be shown by facts establishing that an employee with detailed and comprehensive knowledge of an employer's trade secrets and...
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