Advantor Systems Corporation v. DRS Technical Services, Inc.

678 F. App'x 839
CourtCourt of Appeals for the Eleventh Circuit
DecidedJanuary 31, 2017
Docket15-14992, 16-11273
StatusUnpublished
Cited by17 cases

This text of 678 F. App'x 839 (Advantor Systems Corporation v. DRS Technical Services, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Advantor Systems Corporation v. DRS Technical Services, Inc., 678 F. App'x 839 (11th Cir. 2017).

Opinion

JULIE CARNES, Circuit Judge:

This consolidated appeal relates to a competitive dispute between Plaintiff-Appellant Advantor Systems and Defendant-Appellee DRS Technical Services, both of which are in the business of managing electronic security systems used bn United States military bases. Advantor claims that, over the course of about two years, DRS executed “a multi-pronged scheme to usurp Advantor’s [preexisting] business” with the United States military. In specific, DRS allegedly misappropriated proprietary information about Advantor systems and used that information to secure a major, consolidated military contract that ultimately replaced Advantor’s longstanding military business. Advantor maintains that this competitive “scheme” deprived Advantor of the profit it would have made through ongoing work with the military.

The district court granted summary judgment in DRS’s favor on each of Ad-vantor’s three substantive claims against DRS. Advantor appeals the court’s grant of summary judgment and three related orders. Upon careful review of the record and with the benefit of oral argument, we affirm in part and reverse in part.

BACKGROUND

I. Facts

Advantor is principally engaged in the design and manufacture of so-called “intrusion detection systems, but it also provides ongoing support—including on-site maintenance and training—for the security systems it has installed. DRS does not manufacture security systems itself; it is primarily involved in operating and maintaining systems manufactured by others. Over the course of a decade, Advantor sold several of its proprietary “intrusion detection systems” (“IDS”) to various United States Air Force bases and provided ongoing maintenance and support for those systems through individual service contracts. Advantor’s support of these systems included training government personnel in installation and maintenance techniques unique to Advantor’s systems. In so doing, Advantor supplied the Air Force with manuals and training materials that allegedly contained detailed data relating to Advantor’s technology.

In mid-2013, the Space and Naval Warfare Systems Command (“SPAWAR”)— the entity responsible for administering Navy and Air Force security contracts— decided to consolidate the maintenance of security systems across military bases through a single, all-encompassing contract rather than individual contracts. In July 2013, it issued a request for bids from eight preexisting prime contractors. DRS was eligible to bid for the consolidated contract; Advantor was not. There was never any question that the consolidated SPAWAR contract would supplant each of Advantor’s preexisting contracts with the Air Force. Thus, the only way Advantor could have retained its military business post-consolidation would have been to subcontract with the entity that won the consolidated project.

*843 A. Subcontract Negotiations

DRS began preparing a bid for the SPA-WAR contract in summer 2018. DRS was aware that several of the military bases that would be covered by the consolidated contract used technology and hardware manufactured by Advantor. Accordingly, DRS began to solicit bids from manufacturers, including Advantor, to subcontract with DRS to perform maintenance services. In the course of negotiations, DRS and Advantor entered into a non-disclosure agreement (the “NDA”) designed to facilitate the exchange of proprietary information.

The NDA contained two sets of provisions relevant to the underlying dispute. The first provision states that information designated as “Proprietary Information” “shall be used solely for the purpose of discussing the [SPAWAR bid].” The second provision is a “no direct hire” clause, which provides that, “during the term of this Agreement and for a one (1) year period thereafter, neither Party shall knowingly or actively seek to hire any employee of the other Party” except through indirect or general solicitation.

The proposal Advantor finally submitted comprised three pieces of information at issue in this case: (1) a lump-sum quote of approximately $4.5M, the amount Advantor would charge DRS to continue providing technical support to the Air Force bases that used Advantor equipment; (2) a document identifying the Air Force bases that already housed Advantor equipment; and (3) a single-page document entitled “Past Performance,” which included six high-level bullet points stating basic information regarding Advantor’s business.

After receiving Advantor’s quote, DRS concluded that it could price its bid for the consolidated contract more competitively if it resolved not to use Advantor as a subcontractor. Thus, DRS decided internally to eliminate Advantor’s involvement in the project. Despite this change in its own plans, DRS continued to identify Ad-vantor as a strategic partner in the text of its bid to SPAWAR. DRS ultimately won the SPAWAR contract at the end of September 2013. As expected, the contract replaced each of Advantor’s individual contracts at the Air Force bases it had previously served, effectively eliminating a large segment of Advantor’s existing business. Advantor alleges that DRS “us[ed] Advantor’s pricing and past performance information without Advantor’s consent”— and allegedly in violation of the NDA—to craft the “low-price bid” that enabled it to win the contract.

B. Hiring of Advantor Employees

DRS began work under the SPAWAR contract in October 2013, taking over security-system management at each of the Air Force bases Advantor had previously maintained. At least one month prior to beginning this work, DRS began to recruit technicians familiar with the systems installed on the relevant bases. To that end, DRS created an online job posting that went live in mid-August 2013. The posting elicited 1,357 applications. DRS ultimately hired fifty applicants, three of whom were existing Advantor employees looking for alternative employment (the “Advantor Employees”). The record reflects that these three employees made contact with DRS on their own initiative after reviewing the job posting or receiving a referral from a friend. The Advantor Employees, however, were bound by employment agreements with Advantor that contained confidentiality and non-compete provisions,

Advantor alleges that DRS knew of these contracts and “intentionally induced” the Advantor Employees to breach both the confidentiality and non-compete provisions thereof by sharing their knowledge *844 and expertise on Advantor system maintenance with DRS. Advantor has already filed separate lawsuits against each of the Advantor Employees to enforce the employment agreements. It now asserts a claim of tortious interference with contract against DRS, in addition to breach of the “no direct hire” clause of the NDA.

C. Use of Advantor Manuals and Drawings

Despite having already hired three former Advantor employees, DRS allegedly experienced “difficulty performing at Ad-' vantor sites due to its lack of expertise with Advantor’s [ ] equipment” in January through March of 2014. To assist in troubleshooting this equipment, DRS personnel acquired and referenced technical manuals Advantor had provided to the Air Force at the time it installed its proprietary systems.

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678 F. App'x 839, Counsel Stack Legal Research, https://law.counselstack.com/opinion/advantor-systems-corporation-v-drs-technical-services-inc-ca11-2017.