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Southern Field Maintenance & Fabrication, LLC v. Killough

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

January 29, 2019

SOUTHERN FIELD MAINTENANCE & FABRICATION LLC, Plaintiff,
v.
WALTER ERIC KILLOUGH, and TOTAL MAINTENANCE SERVICES, Defendants.

          MEMORANDUM OPINION AND ORDER

          GRAY M. BORDEN UNITED STATES MAGISTRATE JUDGE

         Pending before the court is the Motion to Dismiss First Amended Complaint filed by Defendants Walter Eric Killough and Total Maintenance Services (“TMS”). Doc. 23. Plaintiff Southern Field Maintenance & Fabrication, LLC (“Southern Field”) filed this lawsuit on June 15, 2018, bringing several state and federal claims arising out of actions by its former employee, Killough, and his new business, 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. This court previously granted in part and denied in part a motion to dismiss the complaint. Doc. 21 at 20. The instant motion is directed to the amended complaint filed by Southern Field with leave of court. Doc. 22. After careful consideration of the parties' submissions and the applicable law, for reasons to be discussed below, the motion to dismiss (Doc. 23) is due to be DENIED.

         I. JURISDICTION AND VENUE

         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.

         II. FACTUAL AND PROCEDURAL BACKGROUND

         The facts as alleged in the amended complaint are as follows:

         Southern Field is an industrial maintenance management and services provider operating in 30 states. Doc. 22 at ¶ 8. Killough was an employee of Southern Field until March 25, 2018. Doc. 22 at ¶9. TMS is an industrial maintenance company formed by Killough to compete with Southern Field. Doc. 22 at ¶ 10.

         Killough began his employment with Southern Field as a fabrication shop foreman and was promoted over time to the position of 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. 22 at ¶ 12.

         Despite his position with Southern Field, Killough began making plans to form an industrial maintenance company to compete with Southern Field. All of Killough's plans were undertaken clandestinely and without the knowledge or consent of Southern Field. Doc. 22 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, with the following protections of those trade secrets, as paraphrased:

a. Southern Field's business plan related to maintenance service project work which is maintained in hard copy and electronic copy formats and is marked with legends indicating it is confidential and/or proprietary. The electronic copy is maintained on a password-protected server and the hard copies are maintained in locked storage. Killough was in the limited group of Southern Field employees who had password access to the server and Southern Field made presentations to and specifically discussed with Killough the need to maintain the confidentiality of the business plan.
b. Southern Field's project estimates, proposals, subcontracts, and purchase orders and Killough's intimate knowledge about Southern Field's proprietary and confidential information contained in them. Killough had many conversations of a confidential nature about how the price was prepared for the proposals. Access to the bid documents is controlled by a pre-approved list of employees with access. The bid documents are stored on a password-protected server or in locked cabinets or locked rooms. Southern Field made presentations to and discussed with Killough the need to maintain confidentiality. The internal documents were marked with legends indicating that they were confidential and/or proprietary.
c. Southern Field's project tracking log, containing information on past, current and future purchase orders on the GP Project. Only authorized personnel are given access to this log. Killough was in a limited group of employees who had password access to the access-limited, password-protected server. Southern Field made presentations and discussed with Killough the need to maintain the confidentiality of the information in the log.
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. The sheets are maintained in hard copy and electronic copy formats. The electronic copies are maintained on an access-limited, password-protected server. The sheets are marked with a confidentiality/proprietary legend. Southern Field made presentations to and discussed with Killough the need to maintain confidentiality of the proprietary information in the rate sheets.
e. Documents and information containing Southern Field's current gross profit, overhead and pretax percentages. These documents were only shared with authorized personnel, including Killough, to analyze profitability and to help prepare future bids. The information was maintained by the Chief Financial Officer on an access-limited, password-protected server. Southern Field made presentations to and discussed with Killough the need to maintain confidentiality.

Doc. 22 at ¶ 19.

         Southern Field also alleges that during his employment Killough received and signed a written acknowledgment within the company handbook that sensitive business information is confidential, the property of the company, and should not be discussed except where explicitly authorized by the company. Doc. 22 at ¶ 21. The amended complaint also alleges that Killough prepared and delivered to GP quotes and proposals for maintenance work that were marked as “CONFIDENTIAL & PROPRIETARY INFORMATION.” ...


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