Danaher Corporation v. Gardner Denver Inc

CourtDistrict Court, E.D. Wisconsin
DecidedMay 20, 2020
Docket2:19-cv-01794
StatusUnknown

This text of Danaher Corporation v. Gardner Denver Inc (Danaher Corporation v. Gardner Denver Inc) is published on Counsel Stack Legal Research, covering District Court, E.D. Wisconsin primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Danaher Corporation v. Gardner Denver Inc, (E.D. Wis. 2020).

Opinion

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WISCONSIN

DANAHER CORPORATION,

Plaintiff, Case No. 19-CV-1794-JPS v.

GARDNER DENVER, INC. and ORDER MICHAEL WEATHERRED,

Defendants.

On December 6, 2019, Plaintiff Danaher Corporation, a science and technology conglomerate, filed a complaint alleging unlawful use of its confidential information and trade secrets by Michael Weatherred (“Weatherred”), a former Danaher executive, and Gardner Denver, Inc. (“Gardner Denver”), Weatherred’s current employer. (Docket #1). Gardner Denver is a large industrial manufacturing company that produces flow control and compression equipment including compressors, pumps, vacuums, and blower products. (Docket #7 at 10). A week after filing the complaint, Plaintiff filed a motion for preliminary injunction. (Docket #6). The following month, Weatherred and Gardner Denver (collectively, “Defendants”) filed a motion to dismiss. (Docket #29). The motions for preliminary injunction and to dismiss the complaint are now fully briefed. For the reasons explained below, the motion for preliminary injunction will be denied and the motion to dismiss will be granted in part and denied in part. The motions to seal documents (Docket #5, #36) will be granted, and the motion to expedite discovery relating to the preliminary injunction (Docket #11) will be denied as moot. 1. RELEVANT ALLEGATIONS Weatherred worked at Danaher for 16 years, from 2002 to 2018. Starting in 2013, Weatherred served as the Vice President of Growth in the Danaher Business System (“DBS”) Office. The DBS is an internal system used throughout Danaher to ensure increased productivity and uniformity in process across companies within Danaher. One component of the DBS is called a “Growth Room,” which is a “war room” that is used for the systematic improvement of sales, marketing, and general productivity. Weatherred and others helped develop certain components of Danaher’s Growth Room, including the teaching template that is the subject of this lawsuit. In 2017, Weatherred and another Danaher employee developed a template to help implement the Growth Rooms (the “Growth Room Template”). This template describes how to conduct a growth-focused meeting. It recommends recording and disseminating the following information: (1) the meeting’s schedule and topic; (2) a progress map of yearly goals; (2) the overall status of growth; (4) the meeting’s attendees; (5) a timeframe and discussion guide for the meeting; (6) any follow-up agenda items from the previous week; (7) a list of substantive agenda items regarding sales, marketing, and key initiatives; (8) a discussion about next week’s follow-ups; (9) the identification of areas which require further assistance; (10) a post-meeting audit form for each team participating; and (11) a specific format and flow for the preceding information. (Docket #7-1 at 2). The Growth Room Template does not contain any substantive information specifically regarding growth initiatives. For example, it does not contain a discussion guide; it does not counsel what the agenda items regarding sales, marketing, and key initiatives should consist of; it does not advise how goals should be developed; and it does not describe what key initiatives should be considered. The Growth Room Template was marked as an example that could be used to train Danaher employees on how to implement their own Growth Rooms within their teams in order to maximize productivity and profitability. Danaher alleges that the Growth Room Template derives “independent economic value from not being generally known to other unauthorized persons.” (Docket #1 ¶ 68). The Growth Room Template and other DBS materials were circulated throughout Danaher’s companies, and were available on the companies’ internal servers, which was accessible only to employees. Danaher protected information regarding the Growth Room Template, and all information related to the DBS, with electronic security measures that included password protections and restricted network access. Danaher also required associates who worked on developing DBS materials, including the Growth Rooms, to sign nondisclosure agreements. As a DBS executive, Weatherred was subject to a nondisclosure and a noncompete agreement designed to protect various trade secrets to which he became privy during the course of his work. Weatherred entered into the agreement underlying the lawsuit on August 26, 2009. The “Proprietary Interest Agreement” or “PIA” provides, in pertinent part: At all times during and after the termination of my employment or relationship with the Company, I will not, without the Company’s prior written permission, directly or indirectly for any purpose other than performance of my duties for the Company, utilize or disclose to anyone outside of the Company any Confidential Information, or any information received by the Company in confidence from or about third parties, as long as such matters remain trade secrets or confidential. (Docket #1-1 at 3). The agreement broadly defines confidential information to include “information regarding all or any portion of the Danaher Business System.” Id. at 2–3. There are no temporal, geographic, or subject matter limits to the allegedly confidential information that the agreement covered. Id. The agreement further provided that upon termination of employment, Weatherred would not retain, copy, or remove any material or information belonging to Danaher, and would not furnish any such material or information to any competitor without written permission from Danaher. Id. at 3. Weatherred agreed to provide the agreement to any future employers for a period of five years following his departure from Danaher, and that a breach of the agreement would cause irreparable injury to Danaher. Id. at 7. When Weatherred moved to his new position with Gardner Denver, he took with him years of marketing experience and knowledge that he developed at Danaher. Shortly after Weatherred’s move to Gardner Denver, Danaher wrote to him and to Gardner Denver’s CEO, who had also previously worked for Danaher and was subject to a PIA, and warned them of their obligations under the PIA. A lawyer for Weatherred and Gardner Denver responded to the letter by denying any misappropriation. Although Danaher and Gardner Denver are engaged in different commercial spheres, they are both interested in capturing investors. To this end, there is an arm of each company that focuses on maximizing “growth.” “Growth” is never defined and could include any number of aspects of the companies together or in isolation across a range of industries: products, subsidiaries, customer bases, market shares, geographic presence, assets, profits, and so forth. The concept of growth suggests success which, in turn, suggests returns for investors. Therefore, the parties tout their growth capabilities in order to attract and maintain investment. The “trade,” then, is less about quotidian commerce and more about securing investor confidence. Once he moved to Gardner Denver, Weatherred allegedly replicated a Growth Room for Gardner Denver’s benefit. Indeed, Gardner Denver boasted of its capabilities publicly, including at a March 2019 Investor Presentation and on its Investor Relations website. Danaher alleges that a portion of Weatherred’s Investor Presentation slideshow is an exact copy of the Growth Room Template that Danaher used internally to implement the Growth Room—indeed, it is titled “Growth Room and Policy Deployment Framework Overview.” (Docket #7-2 at 2). Danaher had never publicly released this teaching template before. In his presentation of the Growth Room Template, which is also available online, Weatherred described how the Growth Room functions, thereby confirming that it was a “replica” of the Growth Room that he created at Danaher.

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Danaher Corporation v. Gardner Denver Inc, Counsel Stack Legal Research, https://law.counselstack.com/opinion/danaher-corporation-v-gardner-denver-inc-wied-2020.