R.E. Whittaker Co. v. Offutt

29 Pa. D. & C.5th 490
CourtPennsylvania Court of Common Pleas, Lawrence County
DecidedApril 16, 2013
DocketNo. 11794 OF 2008, C.A.; 10055 OF 2009, C.A.
StatusPublished

This text of 29 Pa. D. & C.5th 490 (R.E. Whittaker Co. v. Offutt) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Lawrence County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
R.E. Whittaker Co. v. Offutt, 29 Pa. D. & C.5th 490 (Pa. Super. Ct. 2013).

Opinion

MOTTO, J.,

Before the court for disposition is the defendants’ motion for summary judgment. In their motion, the defendants contend that the current state of the record, including the testimony at all prior proceedings and evidence developed by deposition in discovery and otherwise, establishes that there exists no evidence to support any cause of action set forth in the complaints filed in the above captioned cases. The [493]*493complaints allege that defendants Offutt and Stephenson breached written and oral contracts of employment and engaged in a conspiracy with defendant Peek to unlawfully compete with plaintiff Whittaker by utilizing Whittaker’s confidential and trade secret information, and that in so doing created the corporate defendant, Clear Floor Care, Inc. (“Clear Floor”) to unlawfully engage in business in competition with Whittaker.

Procedural Histoiy

Whittaker filed its ten-count complaint against the individual defendants, Offutt, Stephenson and Peek on October 22, 2008. Offutt and Stephenson were former employees of Whittaker. Although Peek was never employed by Whittaker, the complaint alleges that Offutt, Stephenson and Peek engaged in a conspiracy to compete unfairly and unlawfully with Whittaker by using confidential and trade secret information belonging to Whittaker and appropriated by Offutt and Stephenson. According to the complaint, Offutt breached a written employment agreement that contained a two-year no-compete clause and that Stephenson breached an oral employment agreement. Plaintiff further alleged that Offutt, Stephenson and peek were interfering with Whittaker’s contractual business relations by having misappropriated Whittaker’s trade secrets and confidential business information.

On October 27, 2008 Whittaker filed a petition for preliminaiy injunction to enjoin defendants from competing with Whittaker and from utilizing the [494]*494misappropriated trade secrets and confidential information. Whittaker is engaged in the business of selling carpet cleaning machines and chemicals utilized in its machines. Whittaker has consistently alleged that defendants are seeking to unlawfully compete against Whittaker in the same business and to further that objective have created a corporate entity, defendant Clear Floor Care, Inc. (“Clear Floor”) for such purposes.

Defendants’ answers denied any misappropriation of trade secrets or confidential information and any unlawful conspiracy, and, further, Peek, being a domiciliaiy of Georgia and having done no business in Pennsylvania, sought to dismiss the complaint against him for lack of personal jurisdiction.

In December of2008 this court conducted four days of hearing on plaintiff’s petition for preliminary injunction.

On January 13, 2009 Whittaker filed its complaint against Clear Floor with the two actions being consolidated by order dated February 23, 2009.

On April 14, 2009 the court issued its opinion and order which granted plaintiff’s petition for preliminary injunction and enjoined the defendants from directly or indirectly engaging in any business which competed with Whittaker; soliciting or attempting to solicit, directly or indirectly, any former or current customer or client, or prospective customer or client of Whittaker; from directly or indirectly soliciting, recruiting or encouraging any employee of Whittaker to terminate employment with whittaker; from using, reproducing, distributing, [495]*495transmitting, disclosing, or otherwise transferring in any form directly or indirectly, any of Whittaker’s trade secrets or confidential information, and specifically enjoining defendant Offutt from violating specific provisions of the employment agreement dated May 21, 2007 entered into between Offutt and Whittaker.

Defendants appealed the issuance of the preliminary injunction to the Superior Court of Pennsylvania. The court’s issuance of the preliminary injunction was affirmed by the Superior Court.

On December 1, 2010 defendants filed a petition to dissolve injunction. After hearing and by order dated December 5, 2011 the court modified the injunction by limiting it to use of Whittaker’s trade secrets, including the chemistry and/or formula of Whittaker’s “Crystal” cleaning products and the compilation of the identity of Whittaker’s customers and customers’ preferences. Otherwise, the defendants were permitted to engage in competition with Whittaker.

Since the entry of the order granting the initial preliminary injunction, the parties have engaged in substantial discovery having significant relevance to the defendants’ pending motion for summary judgment.

Factual Background

Whittaker is engaged in the business of selling carpet cleaning equipment and a line of chemicals designed to be used in connection with that equipment. Whittaker sells its products throughout the United States, Canada, Mexico, and also sells in South America, Europe, Japan and the [496]*496African continent. The Whittaker equipment is known as Roto — Wash carpet cleaning machines, manufactured in Australia, and Scott Labs produces the chemistries for use with that equipment. The cleaning products provided to Whittaker by Scott Labs is known as “Crystal Dry”, a trademark name and all of the related cleaning products utilize the word “Crystal”.

Offutt became employed by Whittaker as director of sales and executed an employment agreement dated May 22, 2007. Although Offutt’s primary responsibility was to manage the sales force, Offutt had access to trade secrets and confidential information relating to all aspects of Whittaker’s business. The employment agreement provided for a term of employment beginning June 21, 2007, to continue to June 21, 2008, unless extended by the parties and further providing for the agreement to be automatically renewed for a term of one year commencing on the anniversary of employment. Whittaker decided not to renew the employment agreement, and on May 5,2008, Offutt was notified that he was not to perform any further service for Whittaker but would be paid through the end of the contract term of one year. Offutt’s employment agreement contained a covenant not to compete and a covenant not to solicit any former or current customer or client or prospective customer or client of Whittaker with whom Offutt had material contact for a period of twenty-four months following the termination of employment. The employment agreement also required Offutt to hold confidential information in strict confident and to not utilize confidential information for a period of twenty-four [497]*497months after termination of employment, and with regard to trade secrets, to hold such information in confidence as long as such information remained a trade secret under applicable law.

Immediately after being informed that his contract would not be renewed, Offutt and Peek proceeded to make plans to start a new business to compete with Whittaker. Peek contacted the chief operating officer of Roto-Wash to determine if Roto — Wash would sell the same machines as sold to Whittaker direct to Peek. Peek also contacted Scott Labs to solicit Scott Labs to sell cleaning products to Peek. Peek and Offutt created a new corporate entity under the name “Crystal Carpet Systems, L.L.C.”

Free access — add to your briefcase to read the full text and ask questions with AI

Related

John G. Bryant Co. v. Sling Testing & Repair, Inc.
369 A.2d 1164 (Supreme Court of Pennsylvania, 1977)
A.M. Skier Agency, Inc. v. Gold
747 A.2d 936 (Superior Court of Pennsylvania, 2000)
Ertel v. Patriot-News Co.
674 A.2d 1038 (Supreme Court of Pennsylvania, 1996)
Den-Tal-Ez, Inc. v. Siemens Capital Corp.
566 A.2d 1214 (Supreme Court of Pennsylvania, 1989)
P.J.S. v. Pennsylvania State Ethics Commission
723 A.2d 174 (Supreme Court of Pennsylvania, 1999)
Fine v. Checcio
870 A.2d 850 (Supreme Court of Pennsylvania, 2005)
Basile v. H & R BLOCK, INC.
761 A.2d 1115 (Supreme Court of Pennsylvania, 2000)
Kuney v. Benjamin Franklin Clinic
751 A.2d 662 (Superior Court of Pennsylvania, 2000)
Keenheel v. Commonwealth, Pennsylvania Securities Commission
579 A.2d 1358 (Commonwealth Court of Pennsylvania, 1990)
Spring Steels, Inc. v. Molloy
162 A.2d 370 (Supreme Court of Pennsylvania, 1960)
Cochran v. GAF Corp.
666 A.2d 245 (Supreme Court of Pennsylvania, 1995)
Rush v. Philadelphia Newspapers, Inc.
732 A.2d 648 (Superior Court of Pennsylvania, 1999)
Massachi v. CITY OF NEWARK POLICE
2 A.3d 1117 (New Jersey Superior Court App Division, 2010)
Nanty-Glo Boro. v. American Surety Co.
163 A. 523 (Supreme Court of Pennsylvania, 1932)
Frontage, Inc. v. Allegheny County
162 A.2d 1 (Supreme Court of Pennsylvania, 1960)
Van Products Co. v. General Welding & Fabricating Co.
213 A.2d 769 (Supreme Court of Pennsylvania, 1965)

Cite This Page — Counsel Stack

Bluebook (online)
29 Pa. D. & C.5th 490, Counsel Stack Legal Research, https://law.counselstack.com/opinion/re-whittaker-co-v-offutt-pactcompllawren-2013.