Gen. Elec. Co. v. Uptake Techs., Inc., No. 18 C 8267

CourtUnited States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
Writing for the CourtHonorable Thomas M. Durkin, United States District Judge
Citation394 F.Supp.3d 815
Parties GENERAL ELECTRIC COMPANY, General Electric International, Inc., Plaintiffs, v. UPTAKE TECHNOLOGIES, INC., Ganesh Bell, Scott Bolick, Jay Allardyce, Ravi Marwaha, Kelly McGinnis, and Alex Paulsen, Defendants.
Decision Date25 June 2019
Docket NumberNo. 18 C 8267

394 F.Supp.3d 815

GENERAL ELECTRIC COMPANY, General Electric International, Inc., Plaintiffs,
v.
UPTAKE TECHNOLOGIES, INC., Ganesh Bell, Scott Bolick, Jay Allardyce, Ravi Marwaha, Kelly McGinnis, and Alex Paulsen, Defendants.

No. 18 C 8267

United States District Court, N.D. Illinois, Eastern Division.

Signed June 25, 2019


394 F.Supp.3d 821

Justin Kalani Beyer, Robyn Elizabeth Marsh, Michael Dale Wexler, Seyfarth Shaw LLP, Chicago, IL, for Plaintiffs.

Brian E. Cohen, Eric Neal Macey, Monte Loren Mann, Andrew Dylan Campbell, Novack and Macey LLP, Chicago, IL, for Defendants.

MEMORANDUM OPINION AND ORDER

Honorable Thomas M. Durkin, United States District Judge

Plaintiffs General Electric Company and General Electric International (GE) seek injunctive relief and damages against Uptake Technologies and six former high-level GE employees who left GE to work for Uptake. GE alleges claims for breach of contract, trade secret misappropriation, tortious interference, unfair competition, and breach of fiduciary duty. The defendants filed a motion to dismiss for failure to state a claim. For the following reasons, the defendants' motion is granted in part and denied in part.

Legal Standard

A Rule 12(b)(6) motion challenges the "sufficiency of the complaint." Berger v. Nat. Collegiate Athletic Assoc. , 843 F.3d 285, 289 (7th Cir. 2016). A complaint must provide "a short and plain statement of the claim showing that the pleader is entitled to relief," Fed. R. Civ. P. 8(a)(2), sufficient to provide defendant with "fair notice" of the claim and the basis for it. Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). This standard "demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). While "detailed factual allegations" are not required, "labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly , 550 U.S. at 555, 127 S.Ct. 1955. The complaint must "contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 (quoting Twombly , 550 U.S. at 570, 127 S.Ct. 1955 ). " ‘A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.’ " Boucher v. Fin. Sys. of Green Bay, Inc. , 880 F.3d 362, 366 (7th Cir. 2018) (quoting Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 ). In applying

394 F.Supp.3d 822

this standard, the Court accepts all well-pleaded facts as true and draws all reasonable inferences in favor of the non-moving party. Tobey v. Chibucos , 890 F.3d 634, 646 (7th Cir. 2018).

Background

General Electric and the Individual Defendants

In 2011, GE launched a campaign to connect heavy industrial equipment to cloud-based software and analytics. R. 19 ¶ 1. The purpose was to provide customers with a better way to track production efficiency and monitor the health and life of their machinery. Id. After finding initial success, GE formed GE Digital, a GE subsidiary dedicated to providing software for industrial equipment to other GE businesses and outside companies. Id. GE Digital works closely with GE Power, another GE subsidiary, to design software for companies in the power industry. Id. ¶ 40.

Individual defendants Ganesh Bell, Scott Bolick, Jay Allardyce, Ravi Marwaha, Kelly McGinnis, and Alex Paulsen all held high-level positions with either GE Digital or GE Power. Id. ¶¶ 45-50.1 Bell, Allardyce, Marwaha, and McGinnis are domiciled in and citizens of California. Id. ¶¶ 18, 20, 21-22. Bolick is domiciled in and a citizen of Illinois and Paulsen is domiciled in and a citizen of Pennsylvania. Id. ¶¶ 19, 23. The individual defendants were critical to GE's strategic, product development, sales, and marketing efforts, and had access to GE's confidential and proprietary data, including information regarding marketing, pricing, product development, sales, and acquisition strategies. Id. ¶¶ 51, 67. As part of their employment, the individual defendants each signed an Employee Innovation and Proprietary Information Agreement (Confidentiality Agreement). Id. ¶ 66. Through the Confidentiality Agreement, the defendants agreed "not to use, publish or otherwise disclose (except as my Company duties may require), either during or subsequent to my employment, any secret* or confidential* information or data of the Company or its parent, subsidiaries, or affiliates." Id. ¶ 71. The Agreement further provided that GE considers secret or confidential:

any information or data that is not generally known – regardless of whether such information or data is in oral, written, machine readable or other form.... Without limitation, examples of information or data that may be of a secret or confidential nature are: drawings, manuals, notebooks, reports, models, inventions, formulas, processes, machines, compositions, computer programs, accounting methods, business plans, information systems, customer and employee lists and any information and data in electric form.

Id. ¶ 72, Exs. 1-6 at 2. Bell's, Bolick's Allardyce's, and McGinnis's Confidentiality Agreements did not include choice-of-law provisions. See id. Exs. 1-3, 5. Marwaha's and Paulsen's Agreements provided for New York law. See id. Exs. 4, 6.

The individual defendants also each signed an Employee Non-Solicitation Agreement (NSA). Id. ¶ 73. Under the terms of the NSA, they agreed that during their employment and for 12 months afterwards, they would not "directly or indirectly,

394 F.Supp.3d 823

solicit or encourage any person who is a Lead [or Senior] Professional Band or higher employee of the Company (hereinafter ‘Restricted Person’) to terminate his or her employment relationship with the Company or accept any other employment outside of the Company[.]"2 Id. ¶ 74, Exs. 7-12 at 2. Bell's, Bolick's, Allardyce's, and Paulsen's NSAs contained a New York choice-of-law provision. Id. ¶ 76. McGinnis's and Paulsen's NSAs provided for New York law unless they lived and worked in California at the time of the dispute, in which case California law would apply. Id. None of the individual defendants signed non-compete agreements.

Uptake Enters the Market

In 2014, Uptake Technologies, a Chicago-based startup, joined the data analytics market for industrial equipment. Id. ¶¶ 3, 17. Uptake does not manufacture its own industrial equipment, but instead competes with GE to develop software. Id. ¶ 4.

The relevant events all occurred between January and December 2018, when GE filed its first complaint in this case. First, Bell left GE on February 2 and was named president of Uptake just over two weeks later. Id. ¶ 60. Almost immediately, Bell began soliciting Bolick, Allardyce, and Marwaha, all of whom resigned from GE on April 9 to join Uptake. Id. ¶ 85. After their resignations, GE forensically examined their company computers. Id. ¶ 89. The examination revealed that Bell emailed Bolick at least twice after becoming Uptake's president, including sending a link to an article on Uptake's private investments. Id. In addition, the examination showed Marwaha opened a series of articles about Uptake minutes after reading a LinkedIn message, which GE alleges was sent from someone at Uptake at the behest of Bell. Id. ¶ 90. The examination also revealed that all three possessed GE trade secrets. Id. ¶ 98. Further, Bolick, Allardyce, and/or Marwaha performed the following acts prior to their resignations:

• Allardyce and Marwaha scheduled and attended meetings with GE personnel outside the scope of their duties to inquire about GE confidential and trade secret information. Id. ¶¶ 91-92;

• Bolick accessed a series of documents that, while dated for GE, would provide an enormous advantage for a startup company. Id. ¶¶ 93-94;

• All three rendered their GE-issued phones and iPads unreadable by either wiping the devices or refusing to provide GE with the passwords. Id. ¶ 96;

• Marwaha failed to return at least one GE-issued laptop computer. Id.

GE alleges Bolick, Allardyce, and Marwaha coordinated wiping their devices to conceal their misappropriation of GE information and Bell's solicitation. Id. ¶ 97.

In late April 2018, GE sent letters to Bolick, Allardyce, and Marwaha to remind them of their ongoing obligations to GE and to demand that they return GE's confidential and trade secret information. Id. ¶ 99. Following these letters, Uptake's counsel admitted that Marwaha had a significant number of GE files stored on a cloud-based repository, and that Bolick and Allardyce had photographs of GE whiteboards that contained confidential and trade secret information. Id. ¶ 101. GE and Uptake agreed on a forensic protocol through which these items were allegedly

394 F.Supp.3d 824

deleted. Id. ¶ 104. Bolick, Allardyce, and Marwaha denied that they had any other GE information. Id. ¶ 102.

At around the same time, Uptake hired Kelly McGinnis. Id. ¶ 105. Prior to...

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14 practice notes
  • Understanding and Litigating Trade Secrets: An Outline for Analyzing the Statutory and Common Law of Trade Secrets In Illinois
    • United States
    • JD Supra United States
    • February 17, 2022
    ...alleged unfair conduct did not rely upon the occurrence of trade secret misappropriation. Gen. Electric Co. v. Uptake Techs., Inc., 394 F. Supp. 3d 815, 835 (N.D. Ill. 2019). The court allowed the unfair compe tition claim to survive a motion to dismiss when it was unable to determine which......
  • ABC Acquisition Co. v. AIP Prods. Corp., No. 18 CV 8420
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
    • August 11, 2020
    ...that went beyond simple trade secret misappropriation. See Hecny Transp., Inc., 430 F.3d at 405; Gen. Elec. Co. v. Uptake Techs., Inc., 394 F.Supp.3d 815, 834 (N.D. Ill. 2019) ("Where a claim would survive regardless of whether the information at issue was non-confidential ... that cla......
  • Pactiv LLC v. Perez, No. 20 CV 01296
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
    • December 4, 2020
    ...determine the enforceability of the Agreements underPage 6 Illinois and California law. See Gen. Elec. Co. v. Uptake Techs., Inc., 394 F. Supp. 3d 815 (N.D. Ill. 2019). 1. Enforceability under California law The parties agree that the enforceability of the Employment Agreement and the Separ......
  • Vendavo, Inc. v. Long, Case No. 19-cv-1725
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
    • August 30, 2019
    ...provision applies to related tort claims, Illinois courts apply a two-part analysis. See Gen. Elec. Co. v. Uptake Techs., Inc. , 394 F.Supp.3d 815, 830–32, 2019 WL 2601351, at *8 (N.D. Ill. June 25, 2019). First, the court must examine the breadth and language of the choice-of-law provision......
  • Request a trial to view additional results
13 cases
  • ABC Acquisition Co. v. AIP Prods. Corp., No. 18 CV 8420
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
    • August 11, 2020
    ...that went beyond simple trade secret misappropriation. See Hecny Transp., Inc., 430 F.3d at 405; Gen. Elec. Co. v. Uptake Techs., Inc., 394 F.Supp.3d 815, 834 (N.D. Ill. 2019) ("Where a claim would survive regardless of whether the information at issue was non-confidential ... that claim is......
  • Pactiv LLC v. Perez, No. 20 CV 01296
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
    • December 4, 2020
    ...determine the enforceability of the Agreements underPage 6 Illinois and California law. See Gen. Elec. Co. v. Uptake Techs., Inc., 394 F. Supp. 3d 815 (N.D. Ill. 2019). 1. Enforceability under California law The parties agree that the enforceability of the Employment Agreement and the Separ......
  • Vendavo, Inc. v. Long, Case No. 19-cv-1725
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
    • August 30, 2019
    ...provision applies to related tort claims, Illinois courts apply a two-part analysis. See Gen. Elec. Co. v. Uptake Techs., Inc. , 394 F.Supp.3d 815, 830–32, 2019 WL 2601351, at *8 (N.D. Ill. June 25, 2019). First, the court must examine the breadth and language of the choice-of-law provision......
  • Inventus Power, Inc. v. Shenzhen Ace Battery Co., Case No. 20-cv-3375
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
    • July 13, 2020
    ...Motor & Coil Corp. v. Nidec Motor Corp., 2017 WL 1954531 (N.D. Ill. May 11, 2017); cf. General Electric Co. v. Uptake Techs., Inc., 394 F. Supp. 3d 815, 834 (N.D. Ill. 2019) ("Consistent with other courts in this district, this Court finds that a DTSA claim based on inevitable disclosure ma......
  • Request a trial to view additional results
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