Race Winning Brands, Inc. v. Crawford

• Decision Date: 04 May 2022
• Docket Number: Case No. 1:21-cv-00725
• Citation: Race Winning Brands, Inc. v. Crawford, 601 F.Supp.3d 279 (N.D. Ohio 2022)
• Parties: RACE WINNING BRANDS, INC., Plaintiff, v. Sean CRAWFORD, et al., Defendants.
• Court: U.S. District Court — Northern District of Ohio

601 F.Supp.3d 279

RACE WINNING BRANDS, INC., Plaintiff,

v.Sean CRAWFORD, et al., Defendants.

Case No. 1:21-cv-00725

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

Signed May 4, 2022

Dale A. Nowak, Stephen H. Jett, Buckingham, Doolittle & Burroughs, Cleveland, OH, for Plaintiff.

Allyson R. Cady, Andrew G. Fiorella, Benesch, Friedlander, Coplan & Aronoff, Cleveland, OH, Jordan B. Leader, Proskauer Rose, New York, NY, Tiffany M. Woo, U.S. Federal Trade Commission, Washington, DC, Todd J. Ohlms, Proskauer Rose, Chicago, IL, for Defendants.

John Doe, Pro Se.

OPINION AND ORDER

J. Philip Calabrese, United States District Judge

Plaintiff Race Winning Brands filed suit against its former employees Sean Crawford, Evan Perkins, and Mark Gearhart, alleging violations of State contract and trade secret laws.According to the complaint, following the termination of their employment, Defendants misappropriated Plaintiff's proprietary confidential and trade secret information and agreed to work for Plaintiff's direct competitor, in breach of their contractual obligations.Defendants move to dismiss the claims against them or, in the alternative, to transfer the claims to federal courts in Delaware and California.For the reasons that follow, the CourtGRANTSDefendants’ motion (ECF No. 15) and DISMISSES all claims against Defendants Crawford, Gearhart, and Perkins.

STATEMENT OF FACTS

Taking the facts alleged in the complaint as true and construing them in Plaintiff's favor, as the Court must on the motion before it, Plaintiff bases its claims on the following facts.

Race Winning Brands manufactures racing and high-performance parts sold in automotive and powersports markets.(ECF No. 1-1, ¶ 2, PageID #11.)Sean Crawford, Mark Gearhart, and Evan Perkins are former employees of Race Winning Brands.(Id. , ¶¶ 3–5, PageID #11.)Mr. Crawford worked for Race Winning Brands in its Mentor, Ohio headquarters, while Mr. Perkins and Mr. Gearhart worked out of home offices from their residences in California.(Id. , ¶¶ 4–6, PageID #11–12.)After leaving Race Winning Brands’ employment, all three Defendants agreed to work for Race Winning Brands’ direct competitor, Holley Performance Parts, Inc.(Id. , ¶¶ 3, 33–35, PageID #11 & #18.)

A.DefendantSean Crawford

In January 2006, Race Winning Brands hired Sean Crawford to work in its Mentor, Ohio office.(Id. , ¶ 27, PageID #16.)In March 2017, while working as the Director of Marketing, Mr. Crawford entered into a written confidentiality agreement with Race Winning Brands.(Id. , ¶ 28, PageID #17.)Later, Mr. Crawford was promoted to President of Race Winning's J.E. Pistons Division.(Id. )Also in March 2017, Mr. Crawford entered into a stock grant agreement that contained confidentiality provisions and restrictions against unfair competition for two years following the termination of his employment.(Id. , ¶ 30, PageID #7.)In reliance on those agreements, Race Winning Brands entrusted Mr. Crawford with proprietary confidential and trade secret information.(Id. , ¶ 31, PageID #17.)

Before Mr. Crawford terminated his employment with Race Winning Brands, Mr. Crawford accessed or copied Race Winning Brands’ monthly sales forecast and J.E. Piston's website updates.(Id. , ¶ 32, PageID #18.)Additionally, Mr. Crawford visited its Google drive throughout April and May 2020.(Id. )To the extent such visits were done for a reason other than the performance of his duties as an employee of Race Winning Brands, the visits were made without Race Winning Brands’ consent.(Id. )Either before leaving Race Winning Brands’ employment or immediately following termination, Mr. Crawford agreed to work for Holley Performance Parts.(Id. , ¶ 34, PageID #18.)

B.DefendantEvan Perkins

In September 2017, Race Winning Brands hired Evan Perkins to work from his home in California as Race Winning Brands’ Manager of Content Marketing.(Id. , ¶ 19, PageID #15.)As part of his employment, Mr. Perkins entered into a written confidentiality agreement with Race Winning Brands and received access to Race Winning Brands’ confidential information and trade secrets.(Id. , ¶¶ 19–20 & 22, PageID #15–16.)

Effective May 5, 2020, Mr. Perkins terminated his employment with Race Winning Brands.(Id. , ¶ 23, PageID #16.)Before leaving Race Winning Brands’ employment, on May 4 and 5, 2020, Mr. Perkins performed a full backup of his Race Winning Brands computer to an external digital hard drive.(Id. , ¶ 24, PageID #16.)Further, Mr. Perkins deleted all emails from his Race Winning Brands computer before returning it.(Id. , ¶ 25, PageID #16.)Either before leaving Race Winning's employment or immediately following termination, Mr. Perkins agreed to work for Holley Performance Parts.(Id. , ¶ 34, PageID #18.)

C.DefendantMark Gearhart

In April 2016, Race Winning Brands hired Mark Gearhart to work from his home in California.(Id. , ¶ 10, PageID #13.)In March 2017, while working as the Manager of Marketing, Mr. Gearhart entered into a written confidentiality agreement with Race Winning Brands.(Id. , ¶ 11, PageID #13.)In addition to protecting Race Winning Brands’ confidential information, the confidentiality agreement contained a non-solicitation clause providing that Mr. Gearhart would not directly or indirectly induce or attempt to induce any Race Winning Brands employee to change his or her employment with Race Winning Brands for one year following termination of his employment.(Id. , ¶¶ 11–12, PageID #13.)In reliance on the confidentiality agreement, Race Winning Brands entrusted Mr. Gearhart with proprietary confidential and trade secret information.(Id. , ¶ 13, PageID #13.)

On March 27, 2020, Race Winning Brands terminated Mr. Gearhart's employment.(Id. , ¶ 14, PageID #14.)After learning of Race Winning Brands’ decision to terminate his employment, Mr. Gearhart announced that he would be taking co-worker Evan Perkins with him to his new employer.(Id. , ¶ 14, PageID #14.)Between March 31, 2020 and May 14, 2020, without Race Winning Brands’ consent, Mr. Gearhart accessed Race Winning Brands’ database and downloaded confidential information and trade secrets on sixteen occasions.(Id. , ¶ 15, PageID #14.)Mr. Gearhart also "scrubbed" one of the Race Winning Brands computers in his possession before returning it to Race Winning Brands, thereby erasing information identifying him as the past user of the computer.(Id. , ¶ 17, PageID #14.)Further, Mr. Gearhart refused to provide Race Winning Brands with the passwords for all computers he used as an employee of the company.(Id.,¶ 18, PageID #14.)Either before leaving Race Winning Brands’ employment or immediately following termination, Mr. Gearhart agreed to work for Holley Performance Parts.(Id. , ¶ 33, PageID #18.)

D. Johnand Jane DoeDefendants

According to the complaint, unknown individuals induced Defendants Crawford, Perkins, and Gearhart to work for Holley Performance Parts in breach of their contractual duties to Race Winning Brands.(Id. , ¶¶ 74, 77, & 80, PageID #25–26.)

STATEMENT OF THE CASE

Plaintiff filed this action in State court, and Defendants removed based on diversity jurisdiction.(ECF No. 1.)Plaintiff asserts seven claims, naming as DefendantsSean Crawford, Evan Perkins, Mark Gearhart, and six John and Jane Does.(ECF No. 1-1, PageID #10.)Against Defendants Crawford, Perkins, and Gearhart, Plaintiff alleges breach of contract; unjust enrichment; tortious interference in contract; unfair competition and misappropriation or threatened misappropriation of trade secrets; civil theft and conversion; and spoliation of evidence.(Id. , PageID #22–24 & #26–29.)Plaintiff also alleges tortious interference with contract against the John and Jane DoeDefendants.(Id. , PageID #24–26.)

Defendants move to dismiss the claims against Mr. Crawford, Mr. Perkins, and Mr. Gearhart under Rule 12(b)(6) pursuant to the forum-selection clauses in the parties’ relevant agreements.(ECF No. 15, PageID #118–19.)Alternatively, under 28 U.S.C. § 1404(a), Defendants move to transfer the claims against Mr. Crawford and Mr. Perkins to the District of Delaware and the claims against Mr. Gearhart to the Central District of California.(Id. )Finally, Defendants move to dismiss all claims under Rule 12(b)(6) for various additional reasons.(Id. , PageID #119.)

ANALYSIS

At the motion to dismiss stage, a complaint must "contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ "Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868(2009)(quotingBell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929(2007) ).In assessing plausibility, the Court construes factual allegations in the complaint in the light most favorable to the plaintiff, accepts the allegations of the complaint as true, and draws all reasonable inferences in the plaintiff's favor.Wilburn v. United States , 616 F. App'x 848, 852(6th Cir.2015).

I.Venue

Based on forum-selection clauses continued in various agreements, Defendants move to dismiss the claims against Crawford, Perkins, and Gearhart.(ECF No. 15, PageID #118–19.)In the alternative, Defendants seek to transfer the claims against Crawford and Perkins to the District of Delaware and the claims against Gearhart to the Central District of California, pursuant to 28 U.S.C. § 1404(a).(Id. )

I.A.Relevant Agreements

Several agreements Race Winning Brands entered into with Mr. Crawford, Mr. Perkins, and Mr. Gearhart bear on the motion before Court.On a motion to dismiss, in addition to the allegations in the complaint, courts"may consider exhibits attached to the complaint, public records, items appearing in the record of the case, and exhibits attached to defendant's motion to dismiss, so long as they are referred to in the complaint and are central to the claims contained therein."DeShetler v. FCA US LLC , No. 3:18 CV 78, 2018 WL 6257377, at *4(N.D. Ohio...