PSC Indus., Inc. v. Johnson, 3:19-cv-00362
| Decision Date | 28 April 2021 |
| Docket Number | NO. 3:19-cv-00362,3:19-cv-00362 |
| Parties | PSC INDUSTRIES, INC., Plaintiff, v. DAVID E. JOHNSON, Defendant. |
| Court | U.S. District Court — Middle District of Tennessee |
MEMORANDUM OPINION
Pending before the Court are two motions. Defendant has filed a motion for summary judgment. (Doc. No. 31, "Defendant's Motion"). Plaintiff responded. (Doc. No. 52, "Plaintiff's Primary Brief"). Defendant replied. (Doc. No. 63, "Defendant's Reply"). In addition, Plaintiff filed a cross-motion for partial summary judgment (Doc. No. 51, "Plaintiff's Motion"), supported by arguments in Plaintiff's Primary Brief.1 Defendant responded to Plaintiff's Motion. (Doc. No. 68). Plaintiff replied. (Doc. No. 74). Both Motions are ripe for review.
For the reasons discussed herein, both Motions will be granted in part and denied in part.
Plaintiff produces parts that are used by automobile manufacturers. (Doc. No. 69 at ¶ 1). Its business is awarded through competitive bidding of contracts, for which only qualified bidders can submit a bid. (Id. at ¶ 2). For each prospective job on which it bid, Plaintiff would provide a custom quote. (Id. at ¶ 5). Defendant disputes the exclusivity of this process, as sometimes an unqualified bidder can prevail by bidding multiple times. (Id.). Regardless of the nuances of the process, it seems undisputed that having the status of a "qualified" (as opposed to unqualified) bidder provides advantages in making successful bids in Plaintiff's industry. Plaintiff furtherdefines its sales work as a "relationship business," where knowing whom to talk to could be the key for having business with a particular customer.3 (Id. at ¶ 4).
It is undisputed that Plaintiff would contractually obligate itself to maintain the confidentiality of its customers' information. (Id. at ¶ 6). Defendant disputes that certain information, such as buyer contacts, shipping, supply chain, or third-party information, was within the scope of these confidentiality agreements. (Id.). Specifically, Plaintiff claims that at all times during which it was a qualified bidder for its customer Inergy (a.k.a Plastic Omnium), it was contractually obligated to maintain the utmost confidence of Inergy's business information. (Id. at ¶ 7). Defendant disputes this, arguing that the confidentiality agreements started in October 2016 and did not necessarily encompass all of Inergy's business information. (Id.). Plaintiff further claims that its bids for customer work were confidential business records, but Defendant claims that not all bids for customer work were confidential business records and that outdated, stale bids no longer retained value or confidentiality. (Id. at ¶ 8). Plaintiff believes that maintaining the confidentiality of the contacts it developed, its customer's business information, its key customer contacts, and its own competitive bids gives Plaintiff an advantage in the industry. (Id. at ¶ 9). Defendant disputes this, claiming that key customer contacts are widely known and readily available and that quotes and prices are often widely known and discussed to streamline the bidding process and promote competition. (Id.).
Plaintiff also claims that it obligates its employees not to disclose Plaintiff's business records or Plaintiff's customer information, but Defendant disputes that any confidentialityobligation extended to Plaintiff's customer information or records that are routinely disclosed to third parties. (Id. at ¶ 13). Defendant's access to some business and customer business information undisputedly was by virtue of his employment, but the parties disagree as to which information is considered confidential. (Id. at ¶ 12).
Defendant signed an Employee Agreement and an Employee Handbook (which was updated from time to time). (Id. at ¶ 14). The Employee Agreement provided that:
(Doc. No. 33-5 at 2).4 The Employee Handbook additionally provides that:
Employees must respect the private or proprietary information they acquire in the course of their work and not misuse, discuss or disclose any such information to unauthorized persons. This private and proprietary information includes know-how, formulas, designs, plans, ideas, cost and expense data, production data, financial statements, marketing and customer data, technologies, specifications, techniques, processes, trade secrets, or any other information that is not generally available from published information or public or trade sources, as well as information obtained from working in PSC Industries' Inc.'s plants or offices. Employees must not misuse Company information, property, or services for personal gain. The unauthorized removal of Company materials, records, supplies or equipment is prohibited.
(Doc. No. 33-6 at 46). The Employee Handbook also lists rules of conduct, which include prohibitions of dishonesty; falsification of company records or forms; misuse or removal of company property, employee lists, records, or confidential information; and obtaining money from the company by fraudulent orders or misrepresentations. (Id. at 47-49).
Defendant was employed by Plaintiff for approximately 45 years. (Doc. No. 54 at ¶ 1). Defendant was an at-will employee of Plaintiff. (Id. at ¶ 43). Defendant regularly traveled to Mexico on business for Plaintiff. (Id. at ¶ 3). Plaintiff accuses Defendant of improperly aiding Gary Young, Defendant's former boss at PSC, with a new company called VFM, LLC ("VFM"). (Id. at ¶ 8). Defendant claims that discovery has not shown that he was working on behalf of VFM. (Id. at ¶ 10). Plaintiff disputes this, stating that Defendant has admitted that he obtained Plaintiff's proprietary information on behalf of VFM and conveyed that information to Young, VFM's president. (Id.). Plaintiff also claims that Young's request for the PSC information was linked to Young's efforts to build VFM's sales. (Id.).
Many of the facts regarding VFM and its formation are disputed. Plaintiff and Defendant dispute whether Plaintiff's management was aware that Young was involved in another business (VFM) by 2011 while Young was still employed by Plaintiff. (Id. at ¶ 14). Plaintiff and Defendant dispute whether PSC president Damien Osbourne informed PSC owners in 2014 that Young was involved with VFM. (Id. at ¶ 15). Defendant states that he knew that VFM provided services that Plaintiff did not provide (molding, distribution, and flame lamination), and so he believed VFM did not compete with Plaintiff. (Id. at ¶ 16). Plaintiff disputes this, stating that Defendant's actions, such as concealing his whereabouts during trips to Mexico and emailing PSC company information to his private email address before forwarding it to VFM, show that he knew VFM would be regarded as a competitor by Plaintiff. (Id.).
Plaintiff claims that Defendant's expense reports routinely misrepresented that he was in certain areas of Mexico on PSC business, when in fact he was in Queretaro, Mexico with the president of VFM. (Doc. No. 64 at ¶ 1).5 Defendant's expense reports concededly contained small errors throughout the years, but he objects to the use of the expense reports (which do not show whom he spent time with) to establish that he was misrepresenting his location and was actually spending time with the president of VFM. (Id.). Defendant says that he did not meet with any VFM customers or clients while travelling to Mexico, but Defendant undisputedly visited the site of a VFM facility with Young (the VFM president) while in Mexico.6 (Doc. No. 54 at ¶ 20). Defendant would submit complete versions of his receipts for time he spent near Plaintiff's facilities and customers in Mexico. (Doc. No. 64 at ¶ 2). Plaintiff claims that Defendant would then submit obscured or incomplete receipts for his time in Queretaro with the president of VFM. (Id.). Defendant argues that the photocopies are simply not clear and of poor quality, disputing that the receipts were somehow intentionally incomplete or obscured. (Id.). Defendant claims that each of his expense reports and reimbursement requests were for legitimate PSC business, but Plaintiff claims that they were not, referencing Defendant's trips to Queretaro which occurred a great distance from his PSC business. (Doc. No. 54 at ¶ 21). Defendant also states that his expense reports for his trips to Mexico were approved by several mangers, but Plaintiff responds that they were primarily approved by Young and that any other supervisor reviewing the expense report would have relied on Young's determination. (Id. at ¶ 19).
Also at issue in this case are several forwarded emails sent from Defendant to Young after Young had left his employment with Plaintiff. (Doc. No. 43). Most of these forwarded emails contained customer contact information and client information. (Id.). Additionally, in...
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