Office Depot, Inc. v. Impact Office Products, LLC

821 F. Supp. 2d 912, 2011 U.S. Dist. LEXIS 109420, 2011 WL 4452397
CourtDistrict Court, N.D. Ohio
DecidedSeptember 26, 2011
DocketCase No. 1:09 CV 2791
StatusPublished
Cited by17 cases

This text of 821 F. Supp. 2d 912 (Office Depot, Inc. v. Impact Office Products, LLC) is published on Counsel Stack Legal Research, covering District Court, N.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Office Depot, Inc. v. Impact Office Products, LLC, 821 F. Supp. 2d 912, 2011 U.S. Dist. LEXIS 109420, 2011 WL 4452397 (N.D. Ohio 2011).

Opinion

ORDER

SOLOMON OLIVER, JR., Chief Judge.

Currently pending before the court in the above-captioned case are Defendants’ Impact Office Products (“Defendant IOP”), Patrick Lavelle and Brian Kyle (“Defendants Kyle and Lavelle”), (collectively, referred to as “Defendants”), Motion to Dismiss pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief can be granted. (Defs.’ Mot. to Dismiss, ECF No. 26.) On February 8, 2010, Plaintiff Office Depot, Inc. (“Plaintiff’ or “Office Depot”), filed its own Motion to Dismiss Defendants’ counterclaims. (Counter-Def.’s Mot. to Dismiss, ECF No. 29.) For the following reasons, the court grants in part and denies in part Defendants’ Motion to Dismiss. (ECF No. 26.) Further, the court grants Plaintiff’s Motion to Dismiss Defendants’ counterclaims. (ECF No. 30.)

I. FACTUAL AND PROCEDURAL HISTORY

Plaintiff is a Delaware Corporation engaged in the business of providing office products and office services. (Compl. ¶ 9, ECF No. 1.) Defendants Kyle and Lavelle are Plaintiff’s former employees who, as managers, were responsible for marketing, selling, and servicing the office supply needs of small and medium-sized companies. (Id. ¶ 15.) As a Major Accounts Business Development Manager, Kyle was responsible for procuring, maintaining and servicing large accounts in the Northeast Ohio area. (Id. ¶ 32.) As a Territory Development Manager, Lavelle was responsible for procuring, maintaining and servicing medium-sized accounts in the Akron, Canton, and Youngstown, Ohio areas. (Id. ¶ 33.)

In their capacity as employees and managers, Kyle and Lavelle had general access to confidential proprietary information and trade secrets developed and used by Office Depot, including, but not limited to, financial information, sales information, pricing models, and customer lists. (Id. ¶ 16.) Plaintiff has promulgated policies designed to protect this information, such as Plaintiffs Code of Ethical Behavior, Confidentiality Policy, Information Security Handbook, Global information Security Policy and System Password Security. (Id. ¶ 17.) Plaintiff limits access to such information [916]*916depending on the information’s relative business value or sensitivity, and the particular employee’s need to access such information. (Id.)

Further, Plaintiff requires all sales employees, including sales managers, to execute a written Employee Agreement providing for the protection and continued confidentiality of Plaintiffs Information and trade secrets both during and after their employment. (Id.) Kyle executed the Employee Agreement when he was hired as an Account Manager in March of 2003. (Id. ¶ 19, Ex. 1.) Lavelle executed the Employment Agreement when he was hired as a Business Development Manager in April of 2006. (Id. ¶20, Ex. 2.) In these positions, Kyle and Lavelle had unfettered access to virtually all of Plaintiffs confidential and proprietary information. (Id. ¶ 34.)

Both of the Employment Agreements contained non-competition, non-solicitation, and nondisclosure-of-confidential-information provisions governing post-employment behavior. (Id. ¶¶ 19-27.) The non-competition provision prohibited Defendants Kyle and Lavelle, during the period of employment and for six months thereafter, from working for or engaging in any business relations with Plaintiffs competitors within any geographical area in which Plaintiff or its subsidiaries engage or plan to engage in business. (Id. ¶ 21.) Similarly, the non-solicitation provision prohibited Defendants from soliciting Plaintiffs customers or interfering with Plaintiffs business relationships during the period of employment and for a period of six months following termination of their employment. (Id. ¶22.) In the event of a breach, the Agreement tolled the six-month period until the breach or violation is duly cured. (Id. ¶ 23.) Finally, the non-disclosure of confidential information provision prohibited Defendants from disclosing the Plaintiffs confidential information to third parties without the Plaintiffs prior written consent. (Id: ¶ 25.) Defendants’ agreements provided that they were to return all confidential and proprietary information upon termination of their employment. (Id. ¶ 26.)

In June of 2009, Defendants Kyle and Lavelle voluntarily resigned from Plaintiffs corporation and did not disclose that they had been hired by one of Plaintiffs competitors, IOP. (Id. ¶30.) Defendant IOP is an office supply company with its principal place of business in.Maryland. (Id. ¶¶ 46^47.) Plaintiff alleges that until recently, IOP had not engaged in any business in the State of Ohio. (Id. ¶ 47.) Plaintiff alleges that Kyle, prior to his resignation, copied, downloaded and emailed to his personal e-mail address and to Lavelle, various confidential documents. (Id. ¶ 37.) Plaintiff further alleges that prior to Defendants’ resignation, Defendants had begun forwarding confidential information and trade secrets to IOP, and that once in the employ of IOP, Defendants began or continued to solicit Plaintiffs customers. (Id. ¶¶ 39-40.) Plaintiff learned of Defendants’ alleged violations of their Employee Agreements in October of 2009. (Id. ¶ 43.) On October 14, 2009, Plaintiff sent both Kyle and Lavelle a letter reminding them of their contractual obligations, to which only Kyle responded. (Id. ¶¶ 44-45, Ex. 3, 4.) Further, on October 15, 2009, Plaintiff notified IOP that Kyle and Lavelle had binding contracts with Plaintiff prohibiting them from working for a competitor, appropriating confidential information and trade secrets, and contacting and soliciting Plaintiffs customers. (Id. ¶ 49, Ex. 5.)

On December 1, 2009, Plaintiff filed its Complaint, asserting various statutory and common-law claims against the Defendants, specifically: breach of contract against Kyle and Lavelle (Count One); common law and statutory misappropria[917]*917tion of trade secrets against all Defendants (Count Two); tortious interference with contract against IOP (Count Three); unjust enrichment against all Defendants (Count Four); breach of duty of loyalty, good faith and fair dealing against Kyle and Lavelle (Count Five); and tortious interference with business relations against all Defendants (Count Six).

On January 15, 2010, Defendant IOP and Defendants Kyle and Lavelle separately filed their Answer to Plaintiffs Complaint and raised a counterclaim against Plaintiff for tortious interference with prospective business relations (Counterclaim One). (Def. IOP’s Answer and Countercl., ECF No. 24; Defs. Kyle and Lavelle’s Answer and Countercl., ECF No. 25.)1 Further, Defendants collectively filed their Motion to Dismiss Plaintiffs Complaint pursuant to Rule 12(b)(6). (Defs’ Mot. to Dismiss, ECF No. 26.) Defendants moved to dismiss Counts Three, Four, Five, and Six in their entirety, and Count Two to the extent it includes a common law trade secret misappropriation claim. (Defs’ Mem. Supp. Mot. to Dismiss 1-2, ECF No. 26.) The sole ground asserted for dismissal is that these claims are displaced and preempted by the Ohio Uniform Trade Secret Act (“OUTSA”). (Id.) On February 8, 2010, Plaintiff filed a Memorandum in Support of its Motion to Dismiss Defendants’ Counterclaim. (PL Mem. Supp. Mot. to Dismiss, ECF No.

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821 F. Supp. 2d 912, 2011 U.S. Dist. LEXIS 109420, 2011 WL 4452397, Counsel Stack Legal Research, https://law.counselstack.com/opinion/office-depot-inc-v-impact-office-products-llc-ohnd-2011.