Ikon Office Solutions, Inc. v. American Office Products, Inc.

178 F. Supp. 2d 1154, 2001 U.S. Dist. LEXIS 9349, 2001 WL 1673799
CourtDistrict Court, D. Oregon
DecidedApril 26, 2001
Docket00-64-JE
StatusPublished
Cited by17 cases

This text of 178 F. Supp. 2d 1154 (Ikon Office Solutions, Inc. v. American Office Products, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ikon Office Solutions, Inc. v. American Office Products, Inc., 178 F. Supp. 2d 1154, 2001 U.S. Dist. LEXIS 9349, 2001 WL 1673799 (D. Or. 2001).

Opinion

OPINION AND ORDER

JELDERKS, United States Magistrate Judge.

Plaintiff Ikon Office Solutions, Inc. (Ikon) brings this action against defendants American Office Products, Inc. dba Associated Business Systems, Inc. (ABS), and three-former employees of Ikon who now work for ABS: Larry Bradley, Lesa Bergey, and Craig Knouf. Plaintiff Ikon alleges that defendants Bradley and Ber-gey breached non-competition and confidentiality agreements with Ikon, that all defendants breached one or more fiduciary duties to Ikon, misappropriated Ikon’s trade secrets, converted Ikon’s documents and databases, and tortiously interfered with Ikon’s contracts and economic relations. Ikon has moved for partial summary judgment, and defendants have filed a cross-motion for summary judgment against Ikon on all claims. For the reasons that follow, I deny plaintiffs motion, and grant defendants’ cross-motion for summary judgment on all claims.

BACKGROUND

Plaintiff Ikon 1 sells, leases, and services office machines, such as copiers, in a number of states including Oregon. Defendant ABS presently competes with Ikon in parts of Oregon. The President of ABS, defendant Knouf, is a former IKON employee. 2

Ikon had hired Knouf away from a competitor in 1985. In December 1989, Knouf — then sales manager of Ikon’s Eugene branch. — hired defendants Bradley and Bergey away from their respective employers to work for Ikon. Bergey’s for *1159 mer employer, Savin Corp. (Savin), sued Ikon and Bergey for violating a non-competition agreement, which action was later settled.

By 1999, Bradley was a very highly regarded sales representative in Ikon’s Eugene branch, and Bergey was the sales manager for the Eugene branch. Bradley resigned from Ikon on July 29, 1999, and Bergey left on September 7, 1999. After a brief interval, each was hired by ABS, though both deny any pre-arranged agreement to come to work for ABS. Ikon contends that, after joining ABS, Bradley and Bergey induced many of Ikon’s best customers and employees to defect to ABS. Ikon asserts that Bradley and Bergey accomplished that result by improperly using the relationships they cultivated with customers while employed at Ikon, in violation of non-competition agreements, and by using stolen trade secrets in violation of confidentiality agreements. Ikon also alleges that Bergey, while still employed at Ikon, failed to take appropriate steps to prevent the loss of these customer accounts to ABS. Ikon seeks over twenty million dollars in compensatory and punitive damages from defendants, plus injunctive relief and attorney fees.

STANDARDS

The court should grant summary judgment if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Fed R Civ P 56(c). If the moving party shows that there are no genuine issues of material fact, the nonmoving party must go beyond the pleadings and designate facts showing an issue for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A scintilla of evidence, or evidence that is merely color-able or not significantly probative, does not present a genuine issue of material fact. United Steelworkers of Am. v. Phelps Dodge Corp., 865 F.2d 1539, 1542 (9th Cir.), cert denied, 493 U.S. 809, 110 S.Ct. 51, 107 L.Ed.2d 20 (1989).

The substantive law governing a claim determines whether a fact is material. T.W. Elec. Serv. v. Pacific Elec. Contractors Ass’n, 809 F.2d 626, 630 (9th Cir.1987). The court should resolve reasonable doubts about the existence of a material factual issue against the moving party. Id. at 631. The court should view inferences drawn from the facts in the light most favorable to the nonmoving party. Id. at 630-31.

DISCUSSION

A. Validity of Bergey and Bradley’s Non-Competition Agreements

For purposes of defendants’ motion for summary judgment, I must assume that Bergey and Bradley did sign the non-competition agreements as Ikon alleges, and that those documents were signed on the dates that appear on the face of the respective agreements. 3 For purposes of this motion, defendants further assume that the scope and duration of the non-competition agreements are reasonable. The dispositive question is whether the non-competition agreements comply with ORS 653.295(1), which provides that:

A noncompetition agreement entered into between an employer and employee is void and shall not be enforced by any *1160 court in this state unless the agreement is entered into upon the:
(a) Initial employment of the employee with the employer; or
(b) Subsequent bona fide advancement of the employee with the employer.

Defendant Bergey argues that her non-competition agreement is void because she began working for IKON on December 1, 1989, but did not sign a non-competition agreement until December 18, 1989. I agree. The term “initial employment” in ORS 653.295 “means when the employee starts work.” Olsten Corp. v. Sommers, 534 F.Supp. 395, 398 (D.Or.1982). Cf. Perthou v. Stewart, 243 F.Supp. 655, 659 (D.Or.1965) (agreement void where employment commenced on June 1 but the non-competition agreement was not signed until June 7); 4 Pacific Veterinary Hospital, PC v. White, 72 Or.App. 533, 696 P.2d 570 (1985) (agreement signed after employment commenced was void).

The parties have cited no published Oregon case enforcing a non-competition agreement signed more than three days after the employee commenced work or was promoted. See Bouska v. Wright, 49 Or.App. 763, 621 P.2d 69 (1980). If 17 days after is timely, as Ikon contends, then why not 20 or 30 or even 60 days? I decline Ikon’s invitation to embark on that path, particularly when the Oregon Legislature has declared that a noncompetition agreement is void unless it complies with the statutory requirements. Under Oregon law, the right not to be subjected to a non-competition agreement, except as authorized by ORS 653.295, is an “important employment-related statutory right.” Dymock v. Norwest Safety Protective Equip. for Oregon Industry, Inc., 172 Or.App. 399, 405-06, 19 P.3d 934 (2001). 5

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Bluebook (online)
178 F. Supp. 2d 1154, 2001 U.S. Dist. LEXIS 9349, 2001 WL 1673799, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ikon-office-solutions-inc-v-american-office-products-inc-ord-2001.