Automotive Support Group, LLC v. Dale Hightower

503 F. App'x 411
CourtCourt of Appeals for the Sixth Circuit
DecidedOctober 31, 2012
Docket11-2508, 12-1067
StatusUnpublished
Cited by5 cases

This text of 503 F. App'x 411 (Automotive Support Group, LLC v. Dale Hightower) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Automotive Support Group, LLC v. Dale Hightower, 503 F. App'x 411 (6th Cir. 2012).

Opinion

JANE B. STRANCH, Circuit Judge.

Automotive Support Group, LLC (“ASG”) initiated this action against former employees Dale Hightower and Don Ray McGowan for alleged breach of contract, breach of fiduciary duty, and several related claims. Hightower could not afford an attorney, and the district court entered a default judgment against him. McGowan filed an answer and a counterclaim asserting breach of contract based on ASG’s failure to pay him final wages and severance. McGowan then filed a motion for summary judgment on all pending claims, and the district court granted the motion in two separate orders. ASG appeals, and we now AFFIRM.

I. BACKGROUND

ASG is a professional services firm that specializes in marketing and human resource outsourcing. The company has its principal place of business in Farmington Hills, Michigan, and does business also through a wholly-owned subsidiary, Blue Force Services, LLC. Laurie Bradley is the president of ASG and is responsible for sales and operations in the company’s Human Capital Division, which focuses its efforts on contract staffing services. Under the contract staffing business model, ASG hires technical services employees and provides them on a contract basis to work in house or out of ASG offices for client companies.

*413 Defendant Hightower worked with Bradley before either he or Bradley joined ASG. Bradley was President and Hightower was Vice President of Sales for a company called ThinkPath. Bradley left ThinkPath for ASG first, and in November 2004 she recruited Hightower to join her to help ASG move into government and defense industry contracting. ASG gave Hightower the title of Vice President of Sales, Government Operations and Business Development, and Hightower opened an ASG office in Charleston, South Carolina, with an eye on the defense business in South Carolina and Florida.

In January 2008, Hightower took the first actions that would lead to this lawsuit. He registered an Internet domain name and created a website for an entity called Staff Search & Rescue (“SSR”). At the time, Hightower did not attempt to incorporate SSR, hire any employees, or seek any business for SSR. In fact, Hightower later testified, SSR was never incorporated, never took in any funds, and never provided any financial benefit to anyone. As Hightower described it, the website was simply a placeholder that would allow him to someday think about starting a company.

In late 2008, ASG began to recruit technical writers to work out of the Charleston office for one of its defense industry clients, Force Protection, Inc. (“FPI”). Defendant McGowan was working in Cincinnati as a technical writer for Lockheed Martin at the time. After receiving an unsolicited phone call from ASG, McGowan moved to Charleston to work for Blue Force, ASG’s wholly-owned subsidiary, as a technical writer on the FPI contract. McGowan signed an employment agreement with ASG on November 4, 2008. The agreement contains noncompete language that forms the basis for ASG’s claims against him:

During the Restricted Period, Employee shall not directly or indirectly, on the Employee’s behalf or on behalf of any other company, organization, individual or legal entity, solicit business from or perform services for any Customer or Potential Customer of ASG.

R. 31-7 at Page ID # 435. The Restricted Period is defined as beginning with the date of the agreement and ending one year subsequent to termination or breach of the employment contract. The agreement also contains provisions protecting confidential information and requiring employees to devote their full time and attention to ASG and its clients.

The FPI contract for which ASG had hired McGowan was terminated in early 2009, and McGowan moved into a hybrid position on staff in Charleston, working largely on sales and development with Hightower as his supervisor. During the summer of 2009, Hightower directed McGowan to redesign the website for Blue Force. Satisfied with McGowan’s work, Hightower asked or directed McGowan to redesign the website that Hightower had previously created for SSR. Hightower provided McGowan with all of the content for the website, and McGowan spent several hours over a weekend adding the content and changing the layout and color schemes. In September 2009, Hightower also asked McGowan to create a networking group for SSR on Linkedln, a social networking website, and provided him with the content to do so.

At his deposition Hightower testified that when he asked McGowan for help on the website he told McGowan that SSR was only a placeholder and was not conducting any business. McGowan said that he had never heard of SSR before High-tower asked him to do the work and that he doubted at the time that SSR was a real entity. Hightower testified that he *414 created an SSR email address for McGowan because he wanted McGowan’s help, but there is no evidence in the record that McGowan ever used the email address. In fact, Hightower testified that he had never invited McGowan to be a part of or to be involved with SSR, that he never asked McGowan to do anything more than redesign the website and create the Linkedln account, and that he did not pay McGowan for the assistance he did receive.

After the FPI contract was terminated in early 2009, Bradley hoped that High-tower and his remaining employees could drum up new business for ASG and Blue Force. By October 2010, the new business had not materialized, however, and Bradley had to lay off several employees. McGowan and two other employees were kept on to work for Hightower. Around this time, Bradley began to have an uneasy feeling about the Charleston office. She suspected that when she called the office asking for Hightower she was being transferred to his cell phone, and when she visited the office for meetings she noticed glances between employees that she thought were out of the ordinary. She was perturbed by McGowan’s failure to produce billable product for Raydon, a client company, and she came to the conclusion that the Charleston office had to be closed and the employees terminated because ASG was spending too much money with too little to show for it.

Sometime shortly before the office was closed, an ASG employee found SSR’s Linkedln account from Hightower’s Link-edln profile and brought it to Bradley’s attention. The Linkedln account identified McGowan as the account “owner.” Bradley also testified that someone, though she could not remember who, brought to her attention an advertisement for SSR in the Charleston Business Journal. The telephone number for SSR in the advertisement was associated with High-tower’s home address.

On December 8, 2010, Bradley traveled to Charleston to confront Hightower, and ASG flew McGowan to Michigan under the pretext of a performance review. McGowan was interviewed by ASG’s human resource director, Lisa Speaks, and Vice President Rick Simon. Speaks advised McGowan that the Charleston office was being closed because business had not been as strong as ASG had hoped and that the remaining staff, including both High-tower and McGowan, were to be terminated that day. Simon then asked McGowan what he knew about SSR. McGowan said that he had completed the website at Hightower’s request, but that he did not know anything else.

Speaks then presented McGowan with a severance agreement letter, which he signed.

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503 F. App'x 411, Counsel Stack Legal Research, https://law.counselstack.com/opinion/automotive-support-group-llc-v-dale-hightower-ca6-2012.