M.C. Dean, Inc. v. City of Miami Beach

199 F. Supp. 3d 1349, 2016 WL 4179807, 2016 U.S. Dist. LEXIS 184589
CourtDistrict Court, S.D. Florida
DecidedAugust 8, 2016
DocketCASE NO. 16-21731-CIV-ALTONAGA/O’Sullivan
StatusPublished
Cited by10 cases

This text of 199 F. Supp. 3d 1349 (M.C. Dean, Inc. v. City of Miami Beach) is published on Counsel Stack Legal Research, covering District Court, S.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
M.C. Dean, Inc. v. City of Miami Beach, 199 F. Supp. 3d 1349, 2016 WL 4179807, 2016 U.S. Dist. LEXIS 184589 (S.D. Fla. 2016).

Opinion

ORDER

CECILIA M. ALTONAGA, UNITED STATES DISTRICT JUDGE

THIS CAUSE came before the Court on Defendants, City of Miami Beach, Florida (“City”) and International Brotherhood of Electrical Workers, Local 349’s (“Local 349[’s]”) (collectively “Defendants[’]”) Motion to Dismiss Complaint [ECF No. 28] (“Motion”), for failure to state a claim for relief under Federal Rule of Civil Procedure 12(b)(6), filed July 7, 2016. The Court has carefully reviewed the Complaint [ECF No. 1]; Motion; Plaintiff, M.C. Dean, Inc.’s (“M.C. Dean[’s]”) Response ... (“Response”) [ECF No. 30]; Defendants’ Reply ... (“Reply”) [ECF No. 31]; and applicable law. For the reasons explained below, the Motion is granted.

I. BACKGROUND1

A. Allegations of the Complaint

Plaintiff M.C. Dean is an electrical design-build and systems integration firm for complex, mission-critical organizations; it invests substantial funds in identifying, recruiting and training its employees. (See Compl. ¶ 6). Clark Construction Group, LLC (“Clark”) is the general contractor for the Miami Beach Convention Center renovation project, and M.C. Dean is its subcontractor on that project. (See id. ¶ 7). M.C. Dean is contractually obligated to provide certified payrolls to Clark, disclosing private, personally identifying information such as the names, addresses, social security numbers, driver’s license numbers, pay rates, fringe benefits, hours worked and other similar information of its employees. (See id. ¶ 8). M.C. Dean provided these payrolls to Clark and not to the City. (See id. ¶ 9).

M.C. Dean’s success depends on its employees and monetary investment in recruitment and training processes. (See id. ¶ 6). Knowledge of M.C. Dean’s training practices and employees’ identities is valuable to groups lacking this knowledge, including Local 349. (See id.). In March 2016, Local 349 requested copies of M,C. Dean’s certified payrolls from the City pursuant to the Florida Public Records Act. (See id. ¶ 10). M.C. Dean objected to the disclosure, and after the City reviewed M.C. Dean’s position statement and expert’s affidavit explaining the records constitute trade secrets (see id. ¶ 11), the City determined it would only disclose redacted [1351]*1351certified payrolls to Local 349 (see id. ¶ 12).

Nevertheless, on March 22, 2016, the City informed M.C. Dean a City clerk had “inadvertently” disclosed un-redacted versions of the payrolls to Local 349. (See id. ¶¶ 12-13). M.C. Dean immediately requested the City retrieve copies of the payrolls from Local 349, and demanded Local 349 delete digital or electronic copies and destroy physical copies. (See id. ¶ 13). Local 349 denied these requests by the City.and Plaintiff. (See id.). Plaintiff alleges Defendants caused and continue to cause misappropriation of Plaintiffs trade secrets. (See id.).

The Complaint’s Affidavit of Matthew Kilpatrick [ECF No. 1-1], operations manager for the Florida Division of M.C. Dean, recounts the value of the information at issue (see id. ¶¶ 5-6), and the steps M.C. Dean has taken to protect it:

M.C. Dean has taken measures to prevent the disclosure of the information to anyone other than those few who have been selected to have access for limited purposes, and M.C. Dean intends to continue such measures. For example, M.C. Dean provided the certified payrolls at issue to Clark Construction Group, LLC. M.C. Dean did not provide them to the City of Miami Beach or any other entity. M.C. Dean does not disclose a listing of its employees internally. Only selected Human Resources and Payroll personnel and the top executives of M.C. Dean have access to this information. M.C. Dean’s strict confidentiality of this information recently resulted in the M.C. Dean employee in charge of recruiting for Florida being denied access to this type of information.

(Id. ¶ 7). The Affidavit of Dr. Steven Her-scovici of consulting firm The Brattle Group, Inc. [ECF No. 1-1], also attached to the Complaint, addresses M.C. Dean’s policy regarding the disclosure of its employee lists and personally identifying information of its electricians and electrical workers (see id. 2-3); describes the value of. that information (see id. 3-4); explains different approaches to valuing employee lists such as M.C. Dean’s (see id. 5-6); and concludes “certified payrolls include employee and personally identifying information which constitutes M.C. Dean’s trade secrets and confidential business information especially since M.C. Dean maintains the confidentiality of such information” (id. 7).

The Complaint states two claims for relief against the City and Local 349. The first is titled, “Violation of Defend Trade Secrets Act (‘DTSA’),” and the second is for “Violation of the Florida Uniform Trade Secrets Act (‘FUTSA’).” (Compl. 4).

B. City Code and Contract Provisions

The City’s wage ordinance applies to its public contracts, including the prime contract between the City and Clark. (See Mot. Ex. A; Miami Beach Code (“Miami Beach Code”) § 31-27), The prime contract with Clark requires it to maintain the payroll information at issue. For example,

The Construction Manager’s payroll records shall contain the name, address and social security number of each employee, his or her correct classification, rate of pay, daily and weekly number of hours worked, itemized deductions made and actual wages paid, with hourly base rate, hourly fringe rate and hourly benefit rate clearly indicated.

(Mot. Ex. A, ¶ 11.2.1(g) [ECF No. 28-1]). The duty to have this payroll information extends to subcontractors:

The Construction Manager shall comply with, and shall require all Subcontractors to comply with, Sections 31-27 through 31-30 of the City Code, ... with regard to minimum hourly wage rates [1352]*1352for all employees who provide services pursuant to this Agreement .... * * *
d. Construction Manager shall maintain payrolls and basic records relating thereto during the course of the Work and shall preserve such for a period of three (3) years thereafter for all laborers, mechanics, and apprentices working at the Project Site. Such records shall contain the name and address of each such employee; its [sic] current classification; rate of pay ...; daily and weekly number of hours worked; deductions made; and actual wages paid.

(Id. ¶ 16.7.3 (alterations added)).

Requiring Clark to have the information mandated under the prime contract allows the City to conduct audits. (See id. ¶ 16.14). Furthermore, the prime contract clarifies none of the payroll information is protected: “Plans, prints, technical documents and data prepared or developed by Construction Manager, Subcontractors or Suppliers and furnished to the City in the performance of the Work shall be the property of City and may be used by City without restriction.” (Id. ¶ 16.16.4; see also id. ¶ 16.16.3 (“Construction Manager further agrees to secure from all Subcontractors ... and convey to city, all ... trade secrets and similar rights associated with the Work_” (alterations added)).

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199 F. Supp. 3d 1349, 2016 WL 4179807, 2016 U.S. Dist. LEXIS 184589, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mc-dean-inc-v-city-of-miami-beach-flsd-2016.