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Southern Field Maintenance and Fabrication, LLC v. Killough

United States District Court, M.D. Alabama, Eastern Division

October 1, 2018




         Now before the court is a motion to dismiss filed by Defendants Walter Eric Killough and Total Maintenance Services. Doc. 13. Plaintiff Southern Field Maintenance & Fabrication, LLC (“Southern Field”) filed this lawsuit on June 15, 2018, alleging several state and federal claims arising out of actions by its former employee, Walter Eric Killough, and his new business, Total Maintenance Services (“TMS”). Doc. 1. Pursuant to 28 U.S.C. § 636(c) and Federal Rule of Civil Procedure 73, the parties have consented to the jurisdiction of the undersigned United States Magistrate Judge. Docs. 19 & 20. After careful consideration of the parties' submissions and the applicable law, for reasons to be discussed below, the motion to dismiss (Doc. 13) is due to be GRANTED in part and DENIED in part.


         The court has subject-matter jurisdiction over the claims in this action pursuant to 28 U.S.C. § 1331 and § 1367. The parties do not contest personal jurisdiction or venue, and the court finds adequate allegations to support both.


         The facts as alleged in the complaint are as follows:

         Southern Field is an industrial maintenance management and services provider operating in 30 states. Doc. 1 at ¶ 8. Killough was an employee of Southern Field until March 25, 2018. Doc. 1 at ¶ 9. TMS is an industrial maintenance company formed by Killough to compete with Southern Field. Doc. 1 at ¶ 10. Killough began his employment with Southern Field in October 2007 and by March 25, 2018 he was the superintendent of Southern Field's contract maintenance crew assigned to supervise and manage Southern Field's maintenance service work for Georgia-Pacific Corporation (“GP”). Doc. 1 at ¶ 12.

         On March 26, 2018, Killough and TMS began work as the maintenance service contractor on the GP project, immediately after Killough separated from his employment with Southern Field. Doc. 1 at ¶ 24. Southern Field alleges that Killough made plans and took actions to form TMS while he was an employee of Southern Field, and that these actions were taken clandestinely and without the knowledge and consent of Southern Field. Doc. 1 at ¶ 15. As part of this process, Southern Field alleges, Killough misappropriated confidential, proprietary, and trade secret business information belonging to Southern Field. The trade secret information is alleged to include the following:

a. Southern Field's business plan related to maintenance service project work;
b. Southern Field's project estimates, proposals, subcontracts, and purchase orders and his intimate knowledge about Southern Field's proprietary and confidential information contained in them;
c. Southern Field's project tracking log, containing information on past, current and future purchase orders on the GP Project;
d. Southern Field's proprietary and confidential time and materials rates used to prepare bids and quotes for industrial maintenance contracts and jobs, including on the GP Project; and
e. Documents and information containing Southern Field's current gross profit, overhead and pretax percentages.

Doc. 1 at ¶ 19.

         The complaint further alleges that Killough recruited to TMS the Southern Field crew that he supervised on the GP project, and that he caused GP to replace Southern Field as the maintenance contractor on the GP project outside of the usual bid process. Doc. 1 at ¶ 17. Southern Field also alleges that during his employment Killough received and signed a written acknowledgment within the employee handbook agreeing that sensitive business information is confidential, the property of the company, and should not be discussed except when explicitly authorized by the company. Doc. 1 at ¶ 21. The complaint also alleges that Killough prepared and delivered to GP quotes and proposals for maintenance work that were marked as “confidential and proprietary information.” Doc. 1 at ¶ 22. There is no allegation that Killough signed an independent confidentiality, non-compete, or non-solicitation agreement.

         Southern Field alleges that much of the information misappropriated was current when Killough took it, could easily be used to Southern Field's great competitive detriment, had great economic value to Southern Field, and was the subject of reasonable efforts by Southern Field to protect its secrecy. Doc. 1 at ¶ 23.


         In considering a motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, the court must “take the factual allegations in the complaint as true and construe them in the light most favorable to the plaintiff.” Pielage v. McConnell, 516 F.3d 1282, 1284 (11th Cir. 2008). To survive a motion to dismiss, a complaint must include “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is “plausible on its face” if “the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The complaint “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555. Factual allegations need not be detailed, but “must be enough to raise a right to relief above the speculative level, ” id., and “unadorned, the-defendant-unlawfully-harmed-me accusation[s]” will not suffice. Iqbal, 556 U.S. at 678.


         A. Trade Secrets Claims

         Southern Field states claims for violations of the federal Defend Trade Secrets Act (“DTSA”) and the Alabama Trade Secrets Act (“ATSA”) in Counts I and II of the complaint.

         The DTSA creates a private cause of action for an “owner of a trade secret that is misappropriated . . . if the trade secret is related to a product or service used in, or intended for use in, interstate or foreign commerce.” 18 U.S.C. § 1836(b)(1). In order to plead a violation of the DTSA, a plaintiff must allege that it (i) “possessed information of independent economic value” that (a) “was lawfully owned by” the plaintiff, (b) for which the plaintiff “took reasonable measures to keep secret, ” and (ii) the defendant “used and/or disclosed that information” despite (iii) “a duty to maintain its secrecy.” Trinity Graphic, USA, Inc. v. Tervis Tumbler Co., 320 F.Supp.3d 1285 (M.D. Fla. 2018). The Act defines trade secrets as

all forms and types of financial, business, scientific, technical, economic, or engineering information, including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes, whether tangible or intangible, and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing if- (A) the owner thereof has taken reasonable measures to keep such information secret.

18 U.S.C. § 1839(3). This information must also “derive[ ] independent economic value . . . from not being generally known.” 18 U.S.C. § 1839(3). “Pursuant to DTSA, prohibited ‘misappropriation' includes both the acquisition of a trade secret and its ...

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