Jekson USA, Inc. v. White, 2026 NCBC 18.
STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE SUPERIOR COURT DIVISION FRANKLIN COUNTY 25CV001391-340
JEKSON USA, INC.,
Plaintiff,
v. ORDER AND OPINION ON DEFENDANT’S MOTION TO DISMISS JAMES EDWARD WHITE,
Defendant.
THIS MATTER is before the Court on Defendant James Edward White’s
Motion to Dismiss Pursuant to Rule 12(b)(6) of the North Carolina Rules of Civil
Procedure (“Motion to Dismiss” or “Motion,” ECF No. 22). Having considered the
Motion to Dismiss, the parties’ briefs, the arguments of counsel, the applicable law,
and all other appropriate matters of record, the Court concludes that the Motion to
Dismiss should be DENIED for the reasons set forth below.
Nelson Mullins Riley & Scarborough, LLP, by Matthew Joseph Gorga, Nathaniel Pencook, and Phillip J. Strach, for Plaintiff.
Ayers & Haidt, P.A., by Jack Ayers and James M. Ayers, for Defendant.
Davis, Judge.
INTRODUCTION
1. This case requires the Court to once again consider claims by an
employer alleging that its former employee misappropriated its trade secrets to start
a new competing business venture. In the present Motion, the former employee seeks
dismissal of all claims asserted by the employer against him. FACTUAL AND PROCEDURAL BACKGROUND
2. The Court does not make findings of fact on a motion to dismiss under
Rule 12(b)(6) of the North Carolina Rules of Civil Procedure and instead recites those
facts contained in the complaint (and in documents attached to the complaint or
referred to in the complaint) that are relevant to the Court’s determination of the
motion. See Concrete Serv. Corp. v. Inv’rs Grp., Inc., 79 N.C. App. 678, 681 (1986);
Window World of Baton Rouge, LLC v. Window World, Inc., 2017 NCBC LEXIS 60,
at *11 (N.C. Super. Ct. July 12, 2017).
3. Plaintiff Jekson USA, Inc. (“Jekson”), a New Jersey corporation, is
headquartered in Youngsville, North Carolina. (Compl. ¶ 3, ECF No. 3.) Jekson
operates in the “vision inspection and track and trace” industry. (Compl. ¶ 8.) It has
a history of working with customers in regulated fields such as the pharmaceutical
and biopharma industries, and provides those customers with “proprietary
automated systems, custom equipment and other proprietary solutions for inspecting
products, tracking them through the supply chain, and moving them efficiently
during manufacturing.” (Compl. ¶¶ 9, 11.)
4. Defendant James Edward White is a North Carolina citizen who lives
in Youngsville, North Carolina. White began employment for Jekson in 2020 as the
Director of Mechanical Engineering and Plant Manager for its facility in Youngsville.
(Compl. ¶¶ 4, 13.) White “oversaw the design and development of custom automation
systems, managed engineering and production teams, and participated in the creation of proprietary technologies for product inspection, material handling, and
packaging.” (Compl. ¶ 14.)
5. In early 2020, White executed a document titled “Jekson USA
Employment Agreement” (the “Employment Agreement,” Compl., Ex. A).
6. In August 2024, White and another Jekson employee developed the
“mechanical design, feeding assembly, and performance specifications” for a
proprietary ammunition tray loading and inspection system. (Compl. ¶ 30.) The
system was designed to “automatically orient and load 9mm rounds tip-down into
5x10 (50 count) plastic trays, inspect each round for primer defects using a vision
system, and reject trays with defective rounds—all while achieving a high throughput
rate.” (Compl. ¶ 29.)
7. On 20 September 2024, White took a physical rendering of the tray
loading design from Jekson’s facility to a 3D scanning vendor so that he could copy
the design. (Compl. ¶¶ 46, 49.)
8. White resigned from Jekson the following day. (Compl. ¶ 50.)
9. On 23 September 2024, White formed a limited liability company,
Innovative Design Systems, LLC (“IDS”), which is also headquartered in Youngsville.
(Compl. ¶ 53.)
10. Jekson’s Complaint alleges that White violated his Employment
Agreement by failing (after his resignation) to return “all of Jekson’s confidential,
proprietary, and trade secret information[,]” including designs and information
related to the tray loading design. (Compl. ¶ 56.) 11. Jekson asserts that IDS is a direct competitor to Jekson, as its business
focuses on “tray loading, sorting, counting, and inspection systems in the ammunition
and pharmaceutical industries.” (Compl. ¶ 55.) Furthermore, Jekson alleges, IDS’s
website
publicly promotes its capabilities which are demonstrably derived from and only made possible through the unauthorized use of Jekson’s confidential information and trade secrets—including Jekson’s tray loading, sorting, counting, and inspection system. . . .[T]he website broadcasts that IDS provides its “Inspection System”, “Sort & Count”, and “Tray Loading” systems, including what it calls its “IDS TR2U Feed System.”
(Compl. ¶ 61.)
12. Jekson contends that White stole its “IP, including its tray loading,
sorter, counter, and inspection system, and is now using that information to compete
with Jekson, including through his company IDS.” (Compl. ¶ 63.)
13. Jekson further asserts that White is inappropriately using other
confidential, proprietary, and trade secret information, including “customer and
supplier information, pricing, pipeline, and opportunity lists[.]” (Compl. ¶ 64.)
14. Jekson alleges that White “wiped all of the information off of his
company-issued laptop before returning it in attempt [sic] to conceal his efforts to
misappropriate Jekson’s confidential information and trade secrets.” (Compl. ¶ 58.)
15. In addition, Jekson contends that since forming IDS, White has solicited
Jekson’s customers and has hired a former Jekson employee, Dell Ficklin, to work at
IDS. (Compl. ¶¶ 65, 67–68.) 16. On 21 July 2025, Jekson initiated this action by filing its Complaint
(ECF No. 3) in Franklin County Superior Court. The Complaint asserts claims for
(1) breach of contract; (2) violations of the North Carolina Trade Secrets Protection
Act; (3) unfair and deceptive trade practices (“UDTP”); and (4) conversion.
17. This case was designated as a mandatory complex business case on 22
July 2025 and assigned to the undersigned. (ECF Nos. 1–2.)
18. On 8 September 2025, White filed the present Motion to Dismiss.
19. The Court held a hearing on the Motion on 13 November 2025 at which
both parties were represented by counsel.
20. The Motion has been fully briefed and is now ripe for resolution.
LEGAL STANDARD
21. In ruling on a motion to dismiss pursuant to Rule 12(b)(6), the Court
reviews the allegations in the complaint in the light most favorable to the plaintiff.
See Christenbury Eye Ctr., P.A. v. Medflow, Inc., 370 N.C. 1, 5 (2017). The Court’s
inquiry is “whether, as a matter of law, the allegations of the complaint . . . are
sufficient to state a claim upon which relief may be granted under some legal
theory[.]” Harris v. NCNB Nat’l Bank of N.C., 85 N.C. App. 669, 670 (1987). The
Court accepts all well-pled factual allegations in the relevant pleading as true. See
Krawiec v. Manly, 370 N.C. 602, 606 (2018). The Court is therefore not required “to
accept as true allegations that are merely conclusory, unwarranted deductions of fact,
or unreasonable inferences.” Good Hope Hosp., Inc. v. N.C. Dep’t Health and Hum.
Servs., Div. of Facility Servs., 174 N.C. App. 266, 274 (2005) (cleaned up). 22. Furthermore, the Court “can reject allegations that are contradicted by
the documents attached, specifically referred to, or incorporated by reference in the
complaint.” Moch v. A.M. Pappas & Assocs., LLC, 251 N.C. App. 198, 206 (2016)
(cleaned up). The Court may consider these attached or incorporated documents
without converting the Rule 12(b)(6) motion into a motion for summary judgment.
Id. (cleaned up). Moreover, the Court “may properly consider documents which are
the subject of a plaintiff’s complaint and to which the complaint specifically refers
even though they are presented by the defendant.” Oberlin Cap., L.P. v. Slavin, 147
N.C. App. 52, 60 (2001) (cleaned up).
23. Our Supreme Court has held that “dismissal pursuant to Rule 12(b)(6)
is proper when (1) the complaint on its face reveals that no law supports the plaintiff’s
claim; (2) the complaint on its face reveals the absence of facts sufficient to make a
good claim; or (3) the complaint discloses some fact that necessarily defeats the
plaintiff’s claim.” Corwin v. Brit. Am. Tobacco PLC, 371 N.C. 605, 615 (2018) (cleaned
up).
ANALYSIS
24. In his Motion to Dismiss, White seeks dismissal of all claims set forth in
the Complaint. The Court will address White’s arguments in turn in conjunction with
each of the four claims.
I. Breach of Contract
25. “The elements of a claim for breach of contract are (1) existence of a valid
contract and (2) breach of the terms of that contract. The elements of a valid contract are offer, acceptance, consideration, and mutuality of assent to the contract’s
essential terms.” Davis v. Woods, 286 N.C. App. 547, 561 (2022) (cleaned up).
26. The provisions of White’s Employment Agreement implicated by his
arguments in support of the Motion to Dismiss state as follows:
1. Position and Duties. During the time this Agreement is in effect, the Company will employ the Employee and the Employee will accept such employment, in such capacities and with such powers and duties as may from time to time be determined by the President of the Company. The Employee will devote substantially all of his time and attention to being the Director Mechanical Engineering/ Plant Manager reporting to the President, and will use his best energies and abilities in the performance of, his duties and responsibilities as prescribed in this Paragraph 1, and will not engage as a director, officer, employee, partner, shareholder, or any other capacity, in any business which competes, conflicts or interferes with the performance of his duties hereunder in any way, or solicit, canvass or accept any business or transaction for any other such competing business.
2. Compensation and Incentives.
A. For all services to be rendered by the Employee pursuant to Paragraph 1 of this Agreement, and in part of the consideration for the other obligations and promises of the Employee as set forth in this Agreement, the Company will compensate the Employee at the annual rate of $150,000 (“Base Compensation”) with it being intended that such Base Compensation shall be reviewed annually hereafter, with the changes in Base Compensation to be determined by the President in his sole discretion from time to time based on the performance of the Employee and the results of the Company. The Base Compensation shall be paid to the Employee in equal installments and shall be subject to applicable income tax withholding deductions required by law and other deductions authorized by the Employee. The Employee will be entitled to four (4) weeks of vacation, eight (8) Holidays and sick leave in accordance with Company policy, car allowance of $400 per month, car maintenance of $1,200 per year and family coverage under health plan.
B. In addition to his Base Compensation, the Employee will be entitled to the following performance incentives during the time he is employed by the Company: i) A quarterly bonus program not to exceed $5,000 per quarter based on mutually agreed upon milestones. The bonus will be paid after completion of tasks, at the end of each quarter.
3. Term. This Agreement for employment by and between the parties shall be an agreement for employment at-will commencing on the date hereof and extend to 3 years duration based on performance metrics agreed to between the parties as stated in Annex-1. Employee shall be employed at-will, which means the Employee and or the Company may terminate this Agreement at any time with or without notice to the other party.
4. Non-Competition. During the time of his employment by the Company, and for a period of One (1) year thereafter the Employee’s termination [sic] for any reason, the Employee shall not, directly or indirectly, acting alone or in conjunction with others:
A. Request any existing customers who was [sic] first introduced to Employee by Company, with whom Employee has worked in the twelve (12) months prior to the Employee’s termination, at time [sic] of employment, of any business then being conducted by the Company to curtail or cancel their business with the Company;
B. Contact or hold any business relationship (other than in [sic] course of business cooperation between the Company and Employee) with an existing client who was first introduced to Employee by Company, of the Company with which Employee had contact or about which access to Confidential Information during the twelve (12) months of [sic] prior to Employee’s termination.
C. Induce, or attempt to influence, any employee of the Company to terminate employment with the Company or otherwise interfere with the relationship between the Company and its employees.
D. Act or conduct himself in any manner which is contrary to the best interests of the Company.
The Employee recognizes that immediate and irreparable damage will result to the Company if the Employee breaches any of the terms and conditions of this Paragraph 4 and, accordingly, the Employee hereby consents to the entry by any court of competent jurisdiction of an injunction against him to restrain any such breach, in addition to any other remedies or claims for money or damages which the Company may seek with the Company having to show immediate irreparable harm or the posting of a bond. The Employee represents and warrants to the Company his experience and capabilities are such that he can obtain employment in business without breaching the terms and conditions of this Paragraph 4, and that his obligations under the provisions of this Paragraph 4 (and the enforcement thereof by injunction or otherwise) will not prevent him from earning a livelihood. The Employee agrees to pay any and all reasonable attorney fees sustained by the Company in connection with any breach of this Agreement.
5. Trade Secrets/Confidential Information. The Employee agrees that, except to perform Employee’s duties for the Company, he will not at any time or in any manner divulge, disclose or communicate to any person, firm or corporation any trade, technical or technological secrets; any details of the Company’s organization or business affairs, its manner of operation, its plans, processes, and/or other data; any names of past or present customers of the Company; or any other information relating to the business of the Company (referred to as “Confidential Information”), without regard to whether all of the foregoing matters will be deemed confidential, material, or important. With respect to the foregoing, the Employee hereby stipulates and agrees that the same are confidential, material, and important, and any breach of this Paragraph 5 will adversely affect the business of the Company, its effective and successful management, and its inherent good will.
6. Return of Company Documents. Employee agrees that, upon any termination of his/her employment with the Company immediately or upon the Company’s demand, he/she will return all Confidential Information in his/her possession, directly or indirectly, that is in written or other tangible form (together with all duplicates thereof) and that he/she will not retain or furnish any such Confidential Information to any third party, either by sample, facsimile, film, audio or video cassette, electronic data, verbal communication or any other means of communication.
(Employment Agreement, §§ 1–6.)
27. White makes four arguments in support of his Motion to Dismiss
Jekson’s breach of contract claim.
28. First, he contends that the non-competition provision in Section 4 (the
“Non-Compete”) is unenforceable due to lack of consideration on the theory that the Employment Agreement was executed fourteen days after he began working for
Jekson.
29. White points to two sections in the Employment Agreement as the basis
for this assertion. First, the language at the end of the Employment Agreement in
the section immediately above the signature block reads:
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written above [sic] for employment which started on January 27, 2020.
(Employment Agreement, at 2. (emphasis added).)
30. However, the first paragraph of the Employment Agreement states:
THIS EMPLOYMENT AGREEMENT (the “Agreement”) made and entered into on February 10, 2020, by and between Jim White (the “Employee”), an individual residing at 212 Woodcrest Dr., Youngsville, North Carolina 27596 and Jekson USA, Inc., a New Jersey corporation having offices at 41 Bryce Road, Berlin, NJ 08009.
(Employment Agreement, at 1. (emphasis added).)
31. White argues that because his employment with Jekson began on 27
January 2020, the provision of new consideration was required to make the 10
February 2020 Employment Agreement a legally effective contract.
32. It is true that new consideration is necessary to make a non-competition
agreement enforceable when it is signed after employment has begun. See Clifford
v. River Bend Plantation, Inc., 312 N.C. 460, 466 (1984) (“[A]n agreement to modify
the terms of a contract must be based on new consideration.”); see also Elior, Inc. v.
Thomas, 2024 NCBC LEXIS 61, at *49 (N.C. Super. Ct. Apr. 22, 2024). 33. However, our courts have held that no new consideration is required
where the parties agreed to the non-competition restriction at the time the
employment relationship started, even though the agreement was not reduced to
writing until later. Battleground Veterinary Hosp., P.C. v. McGeough, 2007 NCBC
LEXIS 33, at *15 (N.C. Super. Ct. Oct. 19, 2007) (“It is immaterial that the written
contract is executed after the employee starts to work, so long as the terms
incorporated therein were agreed upon at the time of employment.”).
34. The Employment Agreement contains consideration flowing from
Jekson to White in Section 2, and it is unclear based on the present limited record
whether the compensation terms contained therein were fully agreed to by the parties
at the time White first began work.
35. In its response brief (ECF No. 29), Jekson contends that the parties
agreed to the Non-Compete at the time White’s employment first began—even though
it was not reduced to writing until two weeks later. Although Jekson will be required
to prove this assertion through admissible evidence at a later stage of this litigation,
it would be premature to dismiss this claim at the pleadings stage without giving
Jekson the opportunity to do so. See Addison Whitney, LLC v. Cashion, 2017 NCBC
LEXIS 51, at *9 (N.C. Super. Ct. June 9, 2017) (“To prevail on its claim, [plaintiff]
will need to demonstrate that the Confidentiality Agreements memorialize an
agreement made at the time of the new employment relationship, but it does not need
to prove its case at this stage.”). 1
1 White also makes an argument that the compensation provisions in Section 2 are illusory
because of the language contained therein purporting to give Jekson unilateral discretion to 36. Furthermore, although White also makes the same “no new
consideration” argument with regard to the Confidentiality Provision of the
Employment Agreement, this Court has held that “a confidentiality agreement need
not be supported by additional consideration if the agreement does not constitute a
restraint of trade.” See Amerigas Propane, L.P. v. Coffey, 2015 NCBC LEXIS 98, at
*38 (N.C. Super. Ct. Oct. 15, 2015). 2
37. Second, White argues that the Non-Compete has expired because
Section 3 of the Employment Agreement only provided for a three-year term of
employment, meaning that the Non-Compete ended once White had worked for
Jekson for those three years.
38. Section 3 appears to be ambiguous as it contains, on the one hand,
language suggesting a three-year term of employment, and, on the other hand,
language stating that the employment is merely at-will.
39. In any event, it is undisputed that White remained a Jekson employee
for over four and a half years—from January 2020 through September 2024.
Therefore, even assuming arguendo that his employment was originally intended to
last for three years, his status as an employee would have lapsed into an at-will
arrangement after the three years ended.
make prospective adjustments to White’s compensation. However, at least one plausible interpretation of this provision is that White was to be initially paid a base compensation amount of $150,000 per year, with possible annual adjustments to that amount going forward. In any event, the Court cannot say at this early stage of the case that this language renders the entire agreement illusory.
2 At the present juncture, there is no basis for the Court to find that the Confidentiality
Provision in the Employment Agreement functions as a restraint on trade. 40. Moreover, there is no language in the Employment Agreement stating
that the Non-Compete would expire at the end of three years. To the contrary, Section
4 prefaces the Non-Compete terms with the phrase “[d]uring the time of his
employment by the Company, and for a period of One (1) year thereafter, the
Employee’s termination[.]” Thus, the Non-Compete would presumably have
remained in effect for a year after White’s resignation on 21 September 2024. 3
41. Third, White asserts that the Non-Compete would only have been
triggered if his employment had ended via termination by Jekson rather than by his
resignation. This argument is grounded on White’s reading of the prefatory language
in Section 4 of the Employment Agreement, which states in pertinent part: “During
the time of his employment by the Company, and for a period of One (1) year
thereafter the Employee’s termination for any reason[.]” (emphasis added). White
takes the position that because he voluntarily resigned his position with Jekson and
was not terminated by the Company, the noncompetition restrictions set out in
Section 4 were not triggered.
42. However, our Court of Appeals has twice addressed this same argument
based on similar language in employment agreements and each time has held that
any such ambiguity could not be resolved at the pleadings stage. See Battleground
3 To the extent that White is similarly claiming that the Confidentiality Provision expired
upon the end of the three-year period, no expiration date is contained in that section of the Employment Agreement, and as a result the confidentiality terms remained in effect following his resignation. See NFH, Inc. v. Troutman, 2019 NCBC LEXIS 66, at *42 (N.C. Super. Ct. Oct. 29, 2019) (holding that a confidentiality provision in an employment agreement extended after former employee’s resignation where confidentiality provision contained no expiration date). Veterinary Hosp., P.C., 2007 NCBC LEXIS 33, at *136 (finding contract language
regarding “termination of employment” ambiguous and that its interpretation was
properly a question of fact for a jury); Novacare Orthotics & Prosthetics E., Inc. v.
Speelman, 137 N.C. App. 471, 476 (2000) (“From the language alone, we cannot say
that, as a matter of law, the covenant against competition was triggered when
defendant resigned from his employment.”).
43. Fourth, White argues that the Complaint fails to allege how he actually
breached the Employment Agreement.
44. The Court finds Jekson’s allegations on this issue to be sufficient to
survive the Motion to Dismiss. For example, Jekson alleges that White hired Dell
Ficklin, a former Jekson technician, to work for him at his new venture, IDS, in
violation of the restrictions on solicitation contained in Section 4 of the Employment
Agreement. (Compl. ¶¶ 47, 54.) Moreover, Jekson also asserts that White has
solicited a number of Jekson’s customers, as well as some of its suppliers. (Compl. ¶
65.) Additionally, Jekson alleges that White has used its confidential information,
including “customer and supplier information, pricing, and opportunity lists.”
(Compl. ¶ 64.) Finally, the Complaint specifically states that White is using Jekson’s
“IP, including its tray loading, sorter, counter, and inspection system, and is now
using that information to compete with Jekson, including through his company IDS.”
(Compl. ¶ 63.)
45. Therefore, White’s Motion to Dismiss Jekson’s breach of contract claim
is DENIED. II. Misappropriation of Trade Secrets
46. North Carolina’s Trade Secrets Protection Act (“NCTSPA”) provides
that “[t]he owner of a trade secret shall have [a] remedy by civil action for
misappropriation of his trade secret.” N.C.G.S. § 66-153.
47. The NCTSPA defines a “trade secret” as:
[B]usiness or technical information, including but not limited to a formula, pattern, program, device, compilation of information, method, technique, or process that:
a. Derives independent actual or potential commercial value from not being generally known or readily ascertainable through independent development or reverse engineering by persons who can obtain economic value from its disclosure or use; and
b. Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
N.C.G.S. § 66-152(3).
48. The NCTSPA defines “misappropriation” as the “acquisition, disclosure,
or use of a trade secret of another without express or implied authority or consent,
unless such trade secret was arrived at by independent development, reverse
engineering, or was obtained from another person with a right to disclose the trade
secret.” N.C.G.S. § 66-152(1).
49. White argues that the Complaint fails to allege with the requisite
specificity the trade secrets at issue.
50. However, Jekson has alleged that it “owns a proprietary tray loading,
sorting, counting, and inspection system, which constitutes a trade secret under the
NCTSPA.” (Compl. ¶ 84.) That system is more specifically described as one “designed to automatically orient and load 9mm rounds tip-down into 5x10 (50 count) plastic
trays, inspect each round for primer defects using a vision system, and reject trays
with defective rounds—all while achieving a high throughput rate.” (Compl. ¶ 29.)
51. Jekson alleges that this design constitutes a trade secret and is a “novel
solution tailored to the ammunition industry (with applicability to the
pharmaceutical industry) and is a key part of Jekson’s competitive advantage.”
(Compl. ¶ 30.)
52. Jekson contends that it made efforts to protect information about its
tray loading design (and its other trade secrets) by limiting access within the
company to a need-to-know basis, housing proprietary information on its secure
document management platform, and avoiding public dissemination of proprietary
information—requiring employees to sign non-disclosure agreements and providing
employees with laptop computers and cell phones which are password protected.
(Compl. ¶¶ 32, 36.)
53. Jekson further describes other information claimed to be trade secrets
in support of this claim, including
a. Jekson’s IP and information relating to the development, design, performance, and operation of Jekson’s proprietary systems, processes, technology, and custom-designed equipment;
b. Information relating to Jekson’s actual and prospective customers, including customer lists and opportunity lists;
c. Jekson’s pricing information and strategies; and
d. Business plans, strategies, projections, and opportunities.
(Compl. ¶ 85.) 54. Although Jekson’s allegations regarding its other alleged trade secrets
are somewhat lacking in specificity, its detailed assertions regarding the ammunition
tray are sufficient to satisfy this element of a claim for misappropriation of a trade
secret.
55. White also asserts that the Complaint fails to adequately allege acts of
misappropriation.
56. But Jekson’s Complaint alleges that White (1) voiced his contention
“that Jekson’s IP, including its proprietary designs, are actually his designs” (Compl.
¶ 38); (2) “stall[ed] business opportunities that had arisen from this new system, and
. . . even began advocating for Jekson to get out of the ammunition industry
altogether” (Compl. ¶ 41); (3) “began instructing Yereance (Jekson’s Project and
Product Manager) to ignore ammunition client calls and emails, and stated that he
did not want to participate in future calls or meetings with ammunition clients”
(Compl. ¶ 42); (4) “was simultaneously seeking Jekson’s confidential information
regarding the ammunition industry, including Jekson’s pipeline and opportunity
lists, and customer information to use for himself . . . fervently request[ing] this
information from Yereance on multiple occasions in August and September 2024”
(Compl. ¶ 43); (5) took a physical rendering of Jekson’s proprietary tray loading
system from the Jekson facility to a 3D scanning vendor and resigned the following
day (Compl. ¶¶ 46, 50); and (6) while still employed by Jekson, formed a new company
that directly competes against Jekson by focusing on the tray loading, counting, and inspection systems for the ammunition and pharmaceutical industries (Compl. ¶¶ 53,
55).
57. These allegations are easily sufficient to satisfy the misappropriation
element of Jekson’s claim under the NCTSPA. See Strata Solar, LLC v. Naftel, 2020
NCBC LEXIS 129, at *34 (N.C. Super. Ct. Oct. 29, 2020) (finding misappropriation
sufficiently pled where plaintiff alleged that defendants acquired trade secrets
without authorization and used them in competition with plaintiff); Wells Fargo Ins.
Servs. USA v. Link, 2018 NCBC LEXIS 42, at *40–42 (N.C. Super. Ct. May 8, 2018)
(holding that plaintiff had sufficiently pled a misappropriation claim where it made
allegations that defendant had access to plaintiff’s trade secrets through his
employment and used those secrets to solicit plaintiff’s customers for the benefit of a
competitor).
58. Therefore, White’s Motion to Dismiss is DENIED as to the
misappropriation of trade secrets claim.
III. Conversion
59. Our Supreme Court has held that “[t]here are, in effect, two essential
elements of a conversion claim: ownership in the plaintiff and wrongful possession or
conversion by the defendant.” Variety Wholesalers, Inc. v. Sale Logistics Traffic
Servs., LLC, 365 N.C. 520, 523 (2012) (cleaned up). “In cases where the defendant
comes into possession of the plaintiff’s property lawfully, the plaintiff must show that
it made a demand for the return of the property that was refused by the defendant.” Morris Int’l v. Packer, 2021 NCBC LEXIS 99, at *75 (N.C. Super. Ct. Nov. 2, 2021)
(cleaned up).
60. White contends that this claim fails because the Complaint does not
allege that he refused a demand from Jekson that he return its property. However,
under North Carolina law, this additional requirement is necessary only when the
defendant lawfully came into possession of the converted items. See Lockerman v. S.
River Elec. Membership Corp., 250 N.C. App. 631, 641 (2016) (“[W]here a person or
entity has lawfully obtained possession, the true owner must demand return of the
goods and receive an absolute refusal to surrender them.”) (emphasis added); Stratton
v. Royal Bank of Can., 211 N.C. App. 78, 83 (2011) (“[W]hen the defendant lawfully
obtains possession or control and then exercises unauthorized dominion or control
over the property, demand and refusal become necessary elements of the tort.”).
61. Here, Jekson has alleged that White took a prototype of its ammunition
tray without permission and failed to return it. (Compl. ¶¶ 46, 49, 63, 89.) Thus,
Jekson was not required to plead demand and refusal and, as a result, has adequately
pled a claim for conversion. Therefore, the Motion to Dismiss with regard to this
claim is DENIED.
IV. UDTP
62. To establish a prima facie claim for UDTP, a plaintiff must show: “(1)
the defendant committed an unfair or deceptive act or practice, (2) the action in
question was in or affecting commerce, and (3) the act proximately caused injury to
the plaintiff.” Gen. Fid. Ins. v. WFT, Inc., 269 N.C. App. 181, 191 (2020) (cleaned up). 63. Although White argues that Jekson has failed to plead a valid claim for
UDTP, the Court has allowed Jekson’s claims for misappropriation of trade secrets
and conversion to go forward. Under North Carolina case law, these claims are
sufficient to serve as predicates for a UDTP claim. See Power Home Solar, LLC v.
Sigora Solar, LLC, 2021 NCBC LEXIS 55, at *51 (N.C. Super. Ct. June 18, 2021)
(“Our Courts have long recognized that claims for misappropriation of trade secrets .
. . may form the basis of a UDTPA claim.” (cleaned up)); Bartlett Milling Co. v. Walnut
Grove Auction & Realty Co., 192 N.C. App. 74, 83 (2008) (“[A]cts of ‘conversion’ may
constitute unfair and deceptive trade practices[.]”).
64. Thus, the Motion to Dismiss the UDTP claim is DENIED.
CONCLUSION
65. Therefore, for the reasons set out above, White’s Motion to Dismiss is
DENIED.
SO ORDERED, this the 4th day of March 2026.
/s/ Mark A. Davis Mark A. Davis Special Superior Court Judge for Complex Business Cases