Austin v. Indus. Oils Unlimited, L.L.C.

• Court: U.S. District Court — Western District of Louisiana
• Writing for the Court: JUDGE S. MAURICE HICKS, JR.
• Decision Date: 30 September 2020
• Docket Number: CIVIL ACTION NO. 17-1625
• Citation: Austin v. Indus. Oils Unlimited, L.L.C., CIVIL ACTION NO. 17-1625 (W.D. La. Sep 30, 2020)
• Parties: CYNTHIA AUSTIN v. INDUSTRIAL OILS UNLIMITED, L.L.C., ET AL.

CYNTHIA AUSTIN v. INDUSTRIAL OILS UNLIMITED, L.L.C., ET AL.

CIVIL ACTION NO. 17-1625

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF LOUISIANA SHREVEPORT DIVISION

September 30, 2020

JUDGE S. MAURICE HICKS, JR.

MAGISTRATE JUDGE HAYES

MEMORANDUM RULING

Before the Court are: (1) a Motion for Summary Judgment filed by Defendants and Counter-claimants Industrial Oils, LLC and KFM Enterprises LLC (collectively "Defendants") (Record Document 45); (2) a Motion for Summary Judgment filed by Plaintiff and Counter-defendant Cynthia Austin ("Plaintiff" or "Austin") (Record Document 52); and (3) Defendants' Motion to Strike the affidavit of Cynthia Austin (Record Document 57). For the following reasons, Defendants' Motion for Summary Judgment is hereby GRANTED, Plaintiff's Motion for Summary Judgment is hereby DENIED, and Defendants' Motion to Strike is hereby DENIED.

FACTUAL AND PROCEDURAL BACKGROUND

This matter centers around the validity of a non-competition/non-solicitation agreement. See Record Document 45-3 at 6; see also Record Document 51 at 13. In January 1999, Austin was hired by Industrial Oils as a sales representative responsible for selling oil products, such as industrial lubricants, hydraulic oil, and motor oil. See Record Document 45-2 at 1. In August 2011, Austin signed a Business Protection, Confidentiality, and Non-Solicitation Agreement (hereinafter the "Agreement"). See Record Document 51-2. The Agreement included a confidentiality provision, a non- solicitation provision, and an assignment provision. See id. The Agreement was never signed by Industrial Oils. See id.

The confidentiality provision provides, in pertinent part:

Non-Disclosure of Confidential Information. Employee recognizes and acknowledges that while employed by the Company, he/she will have access to, be provided with, prepare, and/or create certain confidential and proprietary business information and trade secrets for the Company ("Confidential Information"). Confidential Information include, but is not limited to, any information related to the Company's business; products; services; pricing; designs; bids, bid documents, packages, formulas and processes; the names, lists, and agreements with customers and prospective customers and/or employees and prospective employees; pay and compensation; costs; business structure and organization; suppliers; vendors; pricing books and information; computer programs and software; accounting techniques, records and procedures; operating and other cost data; and other records of the Company identified as confidential and proprietary business information or trade secrets, all of which are of substantial value to the Company and its business. This section applies to records, documents and information of the Company in any form including computer hardware, software, and other electronic media, and tape recordings of any kind.

Employee agrees not to use or disclose the Company's Confidential Information for his/her own benefit, or for the benefit of anyone other than the Company at any time during or after his/her employment with the Company without the Company's express prior written consent. Employee agrees that all written and electronic media, in whatever form whatsoever . . . will at all times belong to and remain the exclusive property of the Company. . . .

See id. at ¶ 3.

The non-solicitation provision of the Agreement provides:

Covenant Not to Solicit Customers. In exchange for the consideration outlined herein, and so as to facilitate the enforcement of Employee's agreement not to use or disclose Confidential Information, Employee agrees as follows:

a. Employee covenants and agrees that he/she will not, directly or indirectly, call upon, contact or communicate with, solicit, contract with, or enter into any agreement with, divert or attract, or attempt to do so, or do or accept business with any current or former customer, client or prospect of theCompany or any of the Company's parent, subsidiary, affiliated, or otherwise related entities.

b. The restrictions of this Paragraph 5 are effective within the specified parishes/counties listed in Exhibit A to this Agreement (which are parishes/counties where the Company actually carries on or performs business, work, or services, and/or solicits clients, customers, prospective clients, or prospective customers) and are effective within each of the specified parishes/counties for a period of two (2) years from the ending of Employee's employment with the Company (for any reason whatsoever) or as long as the Company actually carries on or solicits business in any such parish/county, whichever is shorter.

c. Employee agrees and acknowledges that the covenant not to solicit contained in this Paragraph 5 protects legitimate business interests of the Company. Employee further acknowledges the reasonableness of the covenant not to solicit and the reasonableness of the geographical areas and the duration of time which are part of said covenant. Employee further acknowledges that any hardship imposed on him/her by this covenant is not an undue hardship and is outweighed by the necessity of and the protections provided by the covenant not to solicit.

d. This covenant shall survive the end of Employee's employment with the Company.

See id. at ¶ 5.

The assignment provision states:

Related Entities & Assignment. Employee expressly acknowledges that the restrictive covenants contained herein operate to protect [Industrial Oils] as well as any parent, subsidiary, affiliated, or otherwise related entity including, but not limited to, Oils Unlimited, Industrial Oils Unlimited, and Adjuvants Unlimited. Employee expressly acknowledges that the restrictive covenants contained herein are made for the benefit of and may be enforced by any such related entity. The Company may assign its rights under this Agreement at any time.

See id. at ¶ 6.

Finally, the Agreement provides a provision for attorney's fees and costs, which states, in pertinent part:

Injunctive Relief, Reformation, Severability & General Provisions. Employee acknowledges that the remedy at law for moneydamages for any breach by him/her of this Agreement will be inadequate, and that the Company shall also be entitled to injunctive relief (without a showing of irreparable harm), as well as reimbursement of expenses, including attorney's fees, incurred in either enforcing this Agreement or pursuing a remedy for Employee's breach of this Agreement. . .

See id. at ¶ 7.

In January 2016, Industrial Oils became a wholly owned subsidiary of KFM Enterprises, LLC ("KFM"). See Record Document 45-2 at 5. Under KFM, Austin was designated first as a Business Development Representative and then as an Account Representative. See Record Document 45-5 (Austin's Deposition) at 9-10. The parties dispute whether Austin's responsibilities changed following this transition. See id. at 11-12; see also Record Document 51-1 at 2. Defendants assert Austin's responsibilities did not change. See Record Document 45-2 at 5. However, Austin contends her job description and pay structure did change. See Record Document 51-1 at 2.

Following the transition to KFM, Austin signed an Employee Acknowledgement Form in which she acknowledged that although she became an employee of KFM, she would "remain bound by all policies and procedures of [her] previous employer, [Industrial Oils], which [were] adopted in full by" KFM. Record Document 51-3. In December 2016 Austin was terminated from her position by KFM and offered a severance package which she did not accept. See Record Document 51-4; see also Record Document 45-2 at 10.

Following her termination, Austin was employed by Tulstar Products, Inc. ("Tulstar"). See Record Document 45-2 at 10; see also Record Document 51-5. At Tulstar, Austin was charged with bringing in new business and customers. See Record Document 45-2 at 10. On March 16, 2017, KFM sent Austin a cease and desist letter asserting she was in violation of the Agreement. See Record Document 51-7; see also RecordDocument 45-2 at 15-16. Following receipt and notification of this letter, Tulstar terminated Austin's employment. See Record Document 51-6.

Austin filed this suit against Industrial Oils and KFM on November 9, 2017, in the First Judicial District Court, Caddo Parish, Louisiana. See Document 1-2 (Complaint); see also Record Document 18 (Amended Complaint). The complaint sought to invalidate the Agreement. See id. On December 14, 2017, Defendants removed the case to this Court. See Record Document 1. Following removal, Industrial Oils and KFM filed a counterclaim asserting that Austin's actions violated the Agreement. See Record Document 5.

In August 2019, Defendants filed the instant motion for summary judgment seeking the Court to declare the Agreement valid and enforceable. See Record Document 45. Further, Defendants moved for partial summary judgment finding that Austin breached the Agreement and that Defendants are owed costs and attorney's fees. See id. Austin filed an opposition. See Record Document 51. Defendants filed a reply. See Record Document 56.

In September 2019, Austin filed the instant cross-motion for summary judgment seeking the Court to declare the Agreement null and void. See Record Document 52. In support of this motion, Austin refers the Court to her opposition to Defendants' motion for summary judgment. See Record Document 52-1. Further, Defendants' opposition incorporates its motion for summary judgment. See Record Document 59. As both motions for summary judgment seek to determine the validity of the Agreement, this Court will analyze these motions together.

Defendants also filed the instant motion to strike Austin's affidavit, which was used extensively in Austin's opposition to Defendants' motion for summary judgment. SeeRecord Document 57. Defendants assert statements made in the affidavit either fail to create a genuine issue of material fact or are inadmissible as improper summary judgment evidence. Se...