JMJS, INC. v. STANISLAUS IDZI

CourtDistrict Court, W.D. Pennsylvania
DecidedSeptember 26, 2023
Docket2:22-cv-01514
StatusUnknown

This text of JMJS, INC. v. STANISLAUS IDZI (JMJS, INC. v. STANISLAUS IDZI) is published on Counsel Stack Legal Research, covering District Court, W.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
JMJS, INC. v. STANISLAUS IDZI, (W.D. Pa. 2023).

Opinion

FOR THE WESTERN DISTRICT OF PENNSYLVANIA

JMJS, INC., d/b/a Coe Distributing ) ) Plaintiff, ) ) v. ) 2:22cv1514 ) Electronic Filing STANISLAUS IDZI and NDI OFFICE ) FURNITURE, LLC, ) ) Defendants. )

OPINION

JMJS, Inc., doing business as Coe Distributing ("plaintiff" or "COE"), commenced this action seeking redress for the alleged violation of a confidentiality agreement between it and defendant Stanislaus Idzi ("Idzi"), its previous employee and corporate officer. After separating from plaintiff, Idzi assumed a role at one of plaintiff's competitors that substantially was similar to the role he occupied for plaintiff. Plaintiff advances claims against both Idzi and his new employer, NDI Office Furniture ("NDI"), for violation of the Defend Trade Secrets Act, Pennsylvania's Uniform Trade Secrets Act (and common law), and unfair competition. It also advances a claim for breach of the duty of loyalty and fiduciary duty against Idzi. Presently before the court is NDI's motion to dismiss for lack of personal jurisdiction. For the reasons set forth below, the motion will be denied. Plaintiff is a national office furniture distributor that sells furniture and accessories throughout the United States and the Caribbean. It utilizes three distribution centers in Pennsylvania, North Carolina and Texas. First Amended Complaint (Doc. No. 18) at ¶¶ 1-2. Idzi began his employment with plaintiff in January of 2011 in the position of Vice President of ¶ 3.1 NDI is an office furniture distributor that sells its furniture and accessories "throughout the continental United States." Id. at ¶ 4. NDI had and continues to have "regular contacts with the Commonwealth of Pennsylvania through its Territory Manager(s) and by doing business within and through the Commonwealth of Pennsylvania’s borders." Id. at ¶ 12. NDI hired Idzi in May of 2022 "as Chief Operating Officer, a role much like his role at COE." Id. at ¶ 5. He continues to work for NDI in this position. Id. at ¶ 9. Plaintiff sells office furniture "to resellers in the United States and Caribbean through a network of outside office furniture representatives, in-house customer service representatives

who support the office furniture representatives and communicate with the customers daily, and the distribution centers that coordinate delivery of the products . . . ." Id. at ¶ 16. An important aspect of its business is establishing and maintaining a network of customer accounts. Id. at ¶ 17. The office furniture industry is highly competitive. Id. at ¶ 18. Companies competing in this industry consistently attempt to develop favorable pricing, terms, product lines and related services so as to maintain a competitive advantage. Id. "To maintain its competitive position, COE creates, compiles and maintains 'Proprietary Information' related to its business. Such information includes, among other things, marketing strategies; contact and vendor lists; customer lists; customer preferences; sales data; company

financial data, including forecasts, sales incentive plans, strategic plans, compensation and

1 Defendant notes that plaintiff continues to be a minority shareholder in plaintiff. 2 Information Technology; distributor relationships, programs and agreements; new strategic vendor relationships; product pricing; product costs; product sourcing; product profitability; product specification; product quality and performance; product design; new product development; and know-how associated with proprietary products offered by COE." Id. at ¶ 19. This proprietary information generally is unknown in the industry and plaintiff has invested a substantial amount in order create, develop and maintain it. Id. at ¶ 20. The information provides plaintiff with an economic advantage over its competitors. Id. Plaintiff "maintains the 'Proprietary Information' as secret and takes steps to limit access to" it. Id. at ¶ 20. As part of this process, plaintiff "requires all of its employees to sign and

adhere to a confidentiality agreement whereby each and every employee agrees to 'maintain and protect the secrecy of the Proprietary Information' during his or her employment with COE 'and after the termination thereof for any reason.'" Id. at ¶ 21. Idzi agreed to and signed one of these confidentiality agreements. Id. at ¶ 22. Except with permission from plaintiff, Idzi's confidentiality agreement precludes him from disclosing the information, using the information for personal benefit or for the benefit of another entity or person, making copies of or duplicating the information, or permitting another person or entity to use or distribute the information. Id. at ¶ 23. Idzi also agreed not to retain or remove from plaintiff's premises any records, files, or other documents or copies thereof or any Proprietary Information whatsoever, and further agreed to return the same immediately upon

termination of employment. Id. at ¶ 25. As part of his employment, plaintiff "provided Idzi access to highly sensitive customer preference and customer project information; COE product and pricing information; and other 3 distribution of its products. COE also approved Idzi’s use of an external hard drive to download and repeatedly access COE’s trade secrets and confidential trade information and create trade secrets and confidential trade information for COE work that no one other than Idzi could access." Id. at ¶ 32. This included "access to the most sensitive trade secrets and confidential trade information relating to COE’s product, marketing, pricing, sales and distribution strategies" and participation in plaintiff's "executive team meetings where COE vendors, customers, accounts, and strategies (e.g., competitor analysis, customer acquisition, vendor negotiations, sales forecasts) were discussed and information was shared." Id. at ¶ 33. Prior to November of 2020, Idzi used an employer-purchased external hard drive to

perform his work. Id. at ¶ 34. He "used the external hard drive to download and repeatedly access COE’s trade secrets and confidential trade information and create trade secrets and confidential trade information for COE work that no one other than Idzi could access." Id. at ¶ 35. In November of 2020, Idzi purchased a new Samsung hard drive and submitted paperwork to plaintiff for reimbursement. Id. at ¶¶ 36-37. He then transferred the content of the external hard drive onto the Samsung hard drive and thereafter repeatedly used the Samsung hard drive to perform his work. Id. at ¶¶ 39-40. In doing so he "created trade secrets and confidential trade information on the Samsung hard drive, for [his work for plaintiff] that no one other than Idzi could access." Id. at ¶ 40.

After his termination, at plaintiff's request Idzi through counsel verified that he had "identified in writing all of the COE 'Proprietary Information' in his possession and returned [the] same to COE." Id. at ¶ 41. He did not identify or return the Samsung hard drive. Id. at ¶ 42. 4 he "assumed the roe of Chief Operating Officer at NDI." Id. at 44. He retained the Samsung hard drive throughout this time. Id. at ¶¶ 43-44. "NDI knew that Idzi was most recently employed by COE when NDI hired him." Id. at ¶ 45. NDI knew or in the alternative should have foreseen that Idzi was a party to a confidentiality agreement with plaintiff. Id. at ¶ 46. In August of 2022, plaintiff discovered that Idzi had failed to return the Samsung hard drive upon his termination. Id. at ¶ 47. Plaintiff's counsel then emailed counsel for both Idzi and NDI and inquired as to the whereabouts of the Samsung hard drive, and demanded that if the Samsung hard drive was in Idzi’s possession, it be returned immediately due to good faith

concerns that it contained trade secrets and confidential trade information. Id. at ¶ 48.

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JMJS, INC. v. STANISLAUS IDZI, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jmjs-inc-v-stanislaus-idzi-pawd-2023.