Burbank Grease Services, LLC v. Sokolowski
| Decision Date | 13 July 2006 |
| Docket Number | No. 2004AP468.,2004AP468. |
| Parties | BURBANK GREASE SERVICES, LLC, Plaintiff-Appellant-Petitioner, v. Larry SOKOLOWSKI and United Grease LLC and United Liquid Waste Recycling, Inc., Defendants-Respondents. |
| Court | Wisconsin Supreme Court |
For the plaintiff-appellant-petitioner there were briefs by Michael L. Hermes and Metzler and Hager, S.C., Green Bay, and oral argument by David J. Sisson.
For the defendant-respondent Larry Sokolowski there was a brief by Stephen J. Eisenberg, Pam M. Baumgartner, and Eisenberg Law Offices, S.C., Madison, and oral argument by Stephen J. Eisenberg.
For the defendants-respondents United Grease LLC and United Liquid Waste Recycling, Inc., there was a brief by David E. McFarlane, Mark H.T. Fuhrman, Sheila M. Sullivan, and Bell, Gierhart & Moore, S.C., Madison, and oral argument by Mark H.T. Fuhrman.
This case requires us to determine whether the trade secret statute, Wis. Stat. § 134.90 (2003-04),1 precludes all civil law remedies based on the misappropriation of confidential information that falls outside of the statutory definition of a trade secret. We also determine whether Wis. Stat. § 943.70(2) criminalizes the subsequent misappropriation of confidential information when the information was lawfully obtained. We conclude that § 134.90(6)(a) does not preclude all other civil remedies based on the misappropriation of confidential information, if the information does not meet the statutory definition of a trade secret under § 134.90(1)(c). Accordingly, in the case before us, § 134.90(6)(b)2 permits civil tort remedies based on the misappropriation of confidential information. Therefore, because the plaintiff's complaint stated other common law claims and because material facts relevant to those claims are disputed, it was error to dismiss the complaint. However, we also conclude that § 943.70(2) does not apply when an individual lawfully obtains computer-stored confidential information, but later misappropriates it. Accordingly, the plaintiff's § 943.70(2) claim was properly dismissed on summary judgment. Accordingly, we affirm in part; reverse in part and remand to the circuit court for further proceedings.
¶ 2 Burbank Grease Services, LLC (Burbank) is engaged in the business of collecting and processing used restaurant fry grease, trap grease, and industrial grease. In 2001, Burbank had approximately 11,250 customers in Wisconsin and 3,200 in surrounding states. About 65% of Burbank's customers were restaurants; the rest were grease trap and industrial customers.
¶ 3 Larry Sokolowski (Sokolowski) was employed by Burbank in various management positions from November 1997 to April 2001. When he resigned from Burbank, Sokolowski was territory manager. His duties in that position included the oversight of sales people, the management of customer relations with industrial clients and the preparation of spreadsheets and billings for Burbank's accountant.
¶ 4 Burbank distributed a code of conduct in regard to confidential information that it required all managers to acknowledge and to follow. The code provided that "[n]o . . . employee shall disclose any confidential or privileged information to any person within the Company who does not have a need to know or to any outside individual or organization except as required in the normal course of business." Sokolowski was aware of this provision.
¶ 5 All Burbank employees received an employee handbook that contained a provision requiring non-disclosure of trade secret and confidential business information. The handbook provided that disclosure could result in disciplinary action, including termination. The handbook provision also stated that employees might be required to sign a non-disclosure agreement as a condition of employment. Sokolowski acknowledged in writing that he received and understood this provision.3
¶ 6 On April 15, 2001, Sokolowski signed an employment agreement with United Liquid Waste Recycling, Inc. (United Liquid), and on April 20, 2001, he resigned from Burbank. Prior to resigning, he obtained confidential information from Burbank's computer system. He took the following information with him when he left: (1) a hardcopy of a list of Burbank's grease trap customers, containing about 2,400 names, phone numbers and addresses, contact persons, total gallons for each grease trap, and pricing Burbank had applied to each customer; (2) a spreadsheet of Burbank's industrial clients that showed the amount of grease collected from each customer times the market rate less a processing fee, which determined what Burbank would pay the customer for the material collected;4 and (3) a computerized spreadsheet showing the amount of collections and revenues per customer for certain drivers, organized by the driver's route. Sokolowski took the information with him when he left Burbank's employ, without Burbank's permission and with the knowledge that Burbank considered all of this information confidential.
¶ 7 On April 25, 2001, Sokolowski began working for United Liquid as a sales and customer service representative. United Liquid provided waste and cake sludge hauling and glass, metal, and plastic recycling services to industrial, municipal, and commercial clients throughout Wisconsin. Sokolowski and United Liquid later formed United Grease, LLC (United Grease), which began collecting fry grease, trap grease and industrial grease in direct competition with Burbank.
¶ 8 Sokolowski had Burbank's confidential information entered into United Liquid's computer system. Sokolowski used this confidential information to solicit customers for United Grease.
¶ 9 Subsequently, United Grease acquired about 80 fry grease customers, which were mostly former Burbank customers, and 157 grease trap customers, the majority of which were former Burbank customers. United Grease also managed to acquire one or two of Burbank's former industrial customers.
¶ 10 When Burbank became aware that Sokolowski was soliciting its customers, it filed this action alleging that Sokolowski misappropriated Burbank's trade secrets in violation of Wis. Stat. § 134.90; breached his duty of loyalty to Burbank, which he owed as Burbank's agent; intentionally interfered with Burbank's business relationships; and committed computer crimes in violation of Wis. Stat. § 943.70(2). The complaint also alleged that United Grease and United Liquid had aided and abetted Sokolowski in the breach of his duty of loyalty; had conspired to deprive Burbank of its customers; and had intentionally interfered with Burbank's business relationships.
¶ 11 Both parties filed motions for summary judgment. The circuit court granted the defendants' motion and dismissed the complaint. The circuit court5 concluded that Burbank's confidential information was not protected by Wis. Stat. § 134.90(6), the trade secret statute, because the information did not meet the statutory definition of a trade secret. The circuit court also concluded that by enacting § 134.90(6), all common law tort claims based on the misappropriation of confidential information were precluded, except those that involved information that met the statutory definition of a trade secret. And further, the court concluded that there had been no computer crime under Wis. Stat. § 943.70(2) because Sokolowski was authorized to obtain the computer-stored information when he obtained it.
¶ 12 Burbank appealed the circuit court's grant of summary judgment and the court of appeals affirmed. We review that decision.
¶ 13 This case requires us to review summary judgment dismissing Burbank's complaint. When we do so, we independently apply the same methodology as the circuit court. Green Spring Farms v. Kersten, 136 Wis.2d 304, 315-17, 401 N.W.2d 816 (1987). The summary judgment awarded here is driven by the interpretation of Wis. Stat. § 134.90(6) and Wis. Stat. § 943.70. Statutory construction or a statute's application to a set of facts is a question of law that we decide independently, owing no deference to the decisions of other courts. Minuteman, Inc. v. Alexander, 147 Wis.2d 842, 853, 434 N.W.2d 773 (1989).
¶ 14 "[T]he purpose of statutory interpretation is to determine what the statute means so that it may be given its full, proper, and intended effect." State ex rel. Kalal v. Circuit Court for Dane County, 2004 WI 58, ¶ 44, 271 Wis.2d 633, 681 N.W.2d 110. We look first at the plain language of the statute, taking into consideration the context in which the provision under consideration is used. Id., ¶¶ 45-46, 681 N.W.2d 110. "Statutory language is given its common, ordinary, and accepted meaning." Id., ¶ 45, 681 N.W.2d 110. The scope, history and purpose of the statute are also "relevant to a plain-meaning interpretation of an unambiguous statute as long as [they] are ascertainable from the text and structure of the statute itself." Id., ¶ 48, 681 N.W.2d 110. When a word of common usage is not defined in a statute, we may turn to a dictionary to ascertain its meaning. See Garcia v. Mazda Motor of Am., Inc., 2004 WI 93, ¶ 14, 273 Wis.2d 612, 682 N.W.2d 365. If the language of a statute is ambiguous, we may consider extrinsic sources, such as legislative history, to aid in our analysis. Kalal, 271 Wis.2d 633, ¶ 50, 681 N.W.2d 110. However, we may consult extrinsic sources "to confirm or verify a plain-meaning interpretation." Id., ¶ 51, 681 N.W.2d 110.
¶ 15 Wisconsin Stat. § 134.90(1)(c) defines the term "trade secret" and § 134.90(2) prohibits any person from misappropriating a trade secret through a variety of specific acts set forth in the statute. The statute also permits courts to grant injunctions, § 134.90(3), and...
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