Amphenol Corp. v. Paul

• Decision Date: 24 January 2014
• Docket Number: Civil No. 3:12cv00543(AVC).
• Citation: 993 F.Supp.2d 100
• Court: U.S. District Court — District of Connecticut
• Parties: AMPHENOL CORPORATION, Plaintiff, v. Richard PAUL and TE Connectivity, Defendant.

993 F.Supp.2d 100

AMPHENOL CORPORATION, Plaintiff,

v.Richard PAUL and TE Connectivity, Defendant.

Civil No. 3:12cv00543(AVC).

United States District Court, D. Connecticut.

Jan. 24, 2014.

Anthony L. Gallia, James Beausoleil, James J. Halligan, Duane Morris, Philadelphia, PA, James F. Walsh, Miller, Garrell & Walsh, LLC, Michael C. Jankovsky, Quatrella & Rizio, Fairfield, CT, for Plaintiff.

Ian T. Clarke–Fisher, Robinson & Cole, LLP, Nuala E. Droney, Stephen W. Aronson, Robinson & Cole, LLP, Hartford, CT, John B. Flood, Ogletree, Deakins, Nash, Smoak & Stewart, Washington, DC, John Gerard Stretton, Joshua J. Sarner, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., Stamford, CT, for Defendant.

RULING ON THE DEFENDANT, PAUL'S, MOTION FOR SUMMARY JUDGMENT

ALFRED V. COVELLO, District Judge.

This is an action for damages and equitable relief in which the plaintiff, Amphenol Corporation (hereinafter “Amphenol”), claims that the defendant, Richard Paul, breached a non-competition agreement. It is brought pursuant to 18 U.S.C. §§ 1030 et seq., along with tenets concerning breach of contract, misappropriation of trade secrets, breach of fiduciary duties, and unfair competition. Paul has moved for summary judgment on all counts, arguing that he is entitled to judgment on all the plaintiff's causes of action. For the reasons set forth below, the defendant's motion for summary judgment is GRANTED.

FACTS

Examination of the complaint, pleadings, local rule 56 statements, the exhibits accompanying the motion for summary judgment, and the responses thereto, discloses the following, undisputed, material facts:

Amphenol is a leader in the design, manufacture, and supply of high-performance interconnect systems for the military and aerospace markets. Amphenol designs, manufactures, and markets electrical, electronic, and fiber optic connectors, coaxial and flat-ribbon cable, and interconnect systems.

From 1996 until March 9, 2012, Paul was employed by the plaintiff, Amphenol. When he resigned on March 9, 2012, Paul held the title of Business Unit Director of the High Speed Interconnect Unit at Amphenol's military aerospace operations. Amphenol gave Paul access to its confidential, proprietary, and trade secret information. Pursuant to the Intellectual Property Agreement (hereinafter the “IPA”), this access was to be “solely for performing the duties of [his] employment by Amphenol.”

As an employee of Amphenol, Paul was required to enter into the IPA.¹ Paul also entered into two Management Stockholder's Agreements through the receipt of Amphenol's stock option awards.² As alleged in the complaint, the IPA required all employees to “agree, inter alia, not to disclose any of Amphenol's confidential information or trade secrets, and not to divert any of Amphenol's customers, suppliers, and/or distributors.” Further, the IPA stated “that in the event of any such breach, Amphenol shall be entitled, in addition to any other remedies and damages, to an injunction restraining further violations of such restrictions by [Paul] and by any other person for whom [he] may be acting or who is acting for [him] or in concert with [him].” Also of relevance, the IPA stated, and Paul agreed that, “[i]f [his] employment with Amphenol is involuntarily terminated for Cause or is voluntarily terminated without Good Reason, [he] will not, without the prior written consent of Amphenol, for a period of one year following said termination, directly or indirectly, engage in the production, development, sale or distribution of any product produced, sold or distributed by Amphenol or which was in development by Amphenol at the time of [his] termination.” ³

On February 26, 2013, Paul downloaded personal files along with his work files. The personal information Paul downloaded included tax return information, personal financial data, family pictures, personal emails, and private account passwords. Paul stated he “had stuff strung all over the place” and “wanted to grab it all” to be on the safe-side and delete what he did not need at a later time. Amphenol, however, states that “[t]he manner in which Paul targeted Amphenol's specific work-related files clearly and irrefutably demonstrate that Paul intentionally copied and removed Amphenol's confidential information and trade secrets in violation of his legal and contractual obligations.” ⁴

On March 9, 2012, Paul left Amphenol to begin employment with TE Connectivity, Ltd. (hereinafter “TE”). That day, during his resignation meeting, Paul returned to Amphenol his laptop, cell phone, employee badge, corporate American Express card, and keys to the Amphenol facility. On April 30, 2012, Paul returned a second laptop computer to Amphenol. On August 3, 2012, Paul provided Amphenol with a second Seagate external hard drive. Paul testified that he has returned all of Amphenol's documents, electronic or hardcopy, which were in his possession following his resignation and has not disclosed any of these documents to anyone.

In April of 2012, shortly after Paul began his new employment, TE acquired Deutsch, a leading manufacturer of high-performance solutions for harsh environment application. Paul stated that prior to the Deutsch acquisition, TE “was never really considered in a big way a major competitor of our division.” Amphenol, however, states that it “and TE competed against each other in the sale and distribution of connectors and accessories, among others, prior to TE's acquisition of Deutsch, at least at a design level.”

Paul states that “Deutsch's locations are separate from the TE business unit that Mr. Paul works for, TE's Aerospace, Defense & Marine business unit.” Amphenol, however, states that “[f]or all practical purposes, TE and Deutsch have been integrated as a single operating company since the April, 2012 acquisition.”

In regards to his duties at TE, Paul states that he “is responsible for managing the products and pricing for the following TE products: relays, wire/cable and engineered products (primarily cable accessories).” Amphenol, however, contends that “Paul had far wider responsibilities at TE. Paul had direct responsibility and involvement with products, such as connector adapters and specifically TE's version of the ‘Hexashield’ adapter ...”

In an affidavit, and reaffirmed in a deposition, Paul swore that “[a]t TE, [he is] not, directly or indirectly, engaging in the production, development, sale or distribution of any product produced, sold or distributed by Amphenol or which, to the best of [his] knowledge, was in development at the time [he] left Amphenol.” Amphenol, however, asserts that “Paul routinely sent and/or received information related to connectors while at TE and had involvement in the development, production, and distribution of connector products.” ⁵ Likewise, while Paul states he “had no responsibility or input on Deutsch,” Amphenol states that “Paul routinely sen[t] and/or received information on Deutsch, Deutsch products, and the Deutsch integration.”

Paul testified that he has not diverted any of Amphenol's customers or distributors. Several of Amphenol's employees testified that Amphenol has no evidence of Mr. Paul diverting any customers since his resignation from the company. These employees include Maria Morgan, Amphenol's human resources director,⁶ Mark Ross, Amphenol's director of distribution sales, and Richard Aiken, the general manager for Amphenol's military Aerospace operations. Amphenol, however, states that Paul has had discussions with key TE personnel, such as David Gingerich, concerning Amphenol's distributors while at TE, which may have directly or indirectly led to the diversion of such business from Amphenol.

Paul testified that he has not solicited any of Amphenol's employees to join TE. Maria Morgan testified that Amphenol is not aware of any employees that Mr. Paul has caused to leave Amphenol. Mark Ross and Richard Aiken testified that Amphenol has no evidence of Mr. Paul soliciting or diverting any of the company's employees since resigning. Amphenol is still currently unaware of whether Paul has induced or has attempted to induce any Amphenol employees to leave their employment.

Paul swore under oath that he has not and will not disclose Amphenol's confidential, proprietary, or trade secret information. TE's Senior Information Security Analyst, Arden Wickenheiser, certified that he did not find any copies of Amphenol's confidential or trade secret information on Paul's TE work computer. Richard Aiken and Maria Morgan testified that they were not aware of evidence that Mr. Paul has given any of Amphenol's confidential, proprietary, or trade secret information to TE. Amphenol, however, states that “Paul worked with products at TE that are competitive to products he worked and became familiar with at Amphenol, thereby creating the reasonable inference that ... Paul must have used his knowledge of Amphenol's confidential and proprietary information and trade secrets, in part, to develop, produce, and distribute TE's competitive versions or at least to help TE more effectively compete against Amphenol.” TE assured Amphenol in writing that it has taken precautions to protect Amphenol's confidential information, avoid the diversion of its customers and suppliers, prevent the solicitation of its employees with respect to Paul, and will continue to do so for at least a year.

Amphenol has not designated an expert witness to testify on the issue of damages, instead relying on the “admissible, non-speculative evidence” of Mark Ross, Amphenol's Director of Distribution, to testify as to the proof and amount of damage caused by the defendant. Ross stated that Amphenol generally observed a “lost market share” as a result of TE's acquisition of Deutsch. Amphenol states that it has thus experienced a decline in sales resulting from the TE/Deutsch merger—including a decline in competitive products Paul is known to have had involvement in since...