RLM Communications, Inc. v. Amy Tuschen

831 F.3d 190, 41 I.E.R. Cas. (BNA) 971, 2016 U.S. App. LEXIS 13726, 2016 WL 4039679
CourtCourt of Appeals for the Fourth Circuit
DecidedJuly 28, 2016
Docket14-2351
StatusPublished
Cited by22 cases

This text of 831 F.3d 190 (RLM Communications, Inc. v. Amy Tuschen) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
RLM Communications, Inc. v. Amy Tuschen, 831 F.3d 190, 41 I.E.R. Cas. (BNA) 971, 2016 U.S. App. LEXIS 13726, 2016 WL 4039679 (4th Cir. 2016).

Opinion

Affirmed by published opinion. Judge DIAZ wrote the opinion, in which Judge KING and Judge HARRIS joined.

*194 DIAZ, Circuit Judge:

After working for six years at RLM Communications, Inc., Amy Tuschen resigned and joined a competitor, eSeience and Technology Solutions, Inc. Although RLM and eSeience had offices just a few miles from each other, RLM did not initially object to Tuschen’s move. Later, however, RLM discovered that eSeience was planning to bid against it on a government contract very similar to one that Tuschen had managed during her tenure at RLM. RLM also learned that Tuschen was soliciting her former RLM colleagues to join eSeience in the event her new employer won the contract.

RLM brought multiple claims against eSeience and Tuschen, alleging principally that Tuschen breached a covenant not to compete and unlawfully took confidential information from RLM and shared it with eSeience. After discovery, the district court granted summary judgment to eSeience and Tuschen on all of RLM’s claims. Because the covenant not to compete was not enforceable and RLM failed to present sufficient evidence that Tuschen took or shared RLM’s confidential information, we affirm.

I.

A.

RLM is a government contractor specializing in services such as cyber security, information technology, information assurance (i.e., managing the various risks associated with an organization’s information and data systems), and management support. On June 5, 2007, Tuschen signed an offer letter from RLM, accepting a position as a Training and Development Representative. In this role, Tuschen was to provide instruction at the U.S. Army Leader College of Information Technology at Fort Gordon, Georgia. On her first day of work, Tuschen executed two more documents: a Confidentiality Agreement and a Covenant Not to Compete (the “Noncom-pete”). 1

Over the next six years, RLM promoted Tuschen several times, ultimately making her Director of Information Assurance. One of Tuschen’s responsibilities in this position was to manage an information-assurance contract with the U.S. government (the “Contract”). The Contract was set to expire on June 30, 2014, at which time the government was to rebid the services as a new contract (the “Follow-on Contract”). About a year before the Contract expired, Tuschen gave RLM two weeks’ notice of her resignation. Prior to departing, she copied several files related to the Contract from her employer-issued laptop computer onto a CD, which she gave to her successor, Dennis Yelverton.

Before Tuschen’s departure, RLM learned that she planned to join eSeience, a competing federal contractor with an office just down the street from RLM. Not only did RLM not object to Tuschen’s plan to work for eSeience, but it gave her $1,000 in gift cards and a “giant bouquet of roses” as parting gifts. J.A. 257.

Within days of resigning from RLM, Tuschen began working for eSeience as its Director of Cyber and IT Solutions. At eSeience, she was charged with helping the company develop a bid for the Follow-on Contract and with reaching out to former colleagues at RLM to secure their services should eSeience win the Follow-on Contract. She contacted several RLM employees for this purpose.

Meanwhile, the government issued its request for proposals for the Follow-on Contract in May 2014. This led to some *195 technical jockeying between RLM and eS-cience over how large a company would be permitted to. serve as prime contractor. The original request for proposals assigned the Follow-on Contract a North American Industry Classification System (NAICS) code that had the effect of enabling eScience to bid as prime contractor but disqualifying the larger RLM. But the day after the request for proposals was released, the government amended it, assigning a different NAICS code that would allow RLM to bid as prime contractor.

Seeking to avoid competition from larger firms such as RLM, eScience appealed to the U.S. Small Business Administration, which reinstated the original NAICS code. It was a fleeting victory: RLM, which could participate in a bid as a subcontractor rather than as prime contractor, was part of the team that won the Follow-on Contract.

B.

RLM filed suit in North Carolina state court against Tuschen and eScience, seeking a temporary restraining order (“TRO”) and asserting nine claims: (1) breach of contract (related to the Noncom-pete); (2) breach of contract (related to the Confidentiality Agreement); (3) unfair and deceptive trade practices; (4) tortious interference with contractual relations; (5) misappropriation of trade secrets; (6) unjust enrichment; (7) civil conspiracy; (8) preliminary and permanent injunction; and (9) conversion. The state court granted the TRO, and Tuschen and eScience removed to federal court, where they moved to dismiss all claims.

The district court converted their motion to dismiss into a motion for summary judgment to be supplemented after discovery. RLM quickly moved for a TRO and a preliminary injunction (as relevant here). The district court granted a TRO on the same terms set forth in state court, but soon after replaced it with a preliminary injunction based in part on the parties’ consent. It also converted the request for a preliminary injunction into a motion for a permanent injunction.

In November 2014, the district court granted Tuschen and eScience’s motion for summary judgment on all claims and denied RLM’s motion for a permanent injunction. RLM Commc’ns, Inc. v. Tuschen, 66 F.Supp.3d 681 (E.D.N.C. 2014).

This appeal followed.

II.

We review the district court’s grant of summary judgment de novo, viewing the facts in the light most favorable to RLM, the nonmovant. See Askew v. HRFC, LLC, 810 F.3d 263, 266 (4th Cir. 2016). We may affirm “on any legal ground supported by the record and are not limited to the grounds relied on by the district court.” Jackson v. Kimel, 992 F.2d 1318, 1322 (4th Cir. 1993). Summary judgment is warranted where “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). Because we are sitting in diversity, addressing matters of North Carolina law, we apply governing North Carolina law or, if necessary, predict how the Supreme Court of North Carolina would rule on an unsettled issue. See Askew, 810 F.3d at 266.

On appeal, RLM has abandoned its unjust-enrichment claim. We address the remaining issues in the following order: breach of the Noncompete, breach of the Confidentiality Agreement, misappropriation of trade secrets, conversion, tortious interference with contractual relations, unfair and deceptive trade practices, civil conspiracy, and permanent injunction.

*196 III.

First, RLM faults the district court for granting summary judgment on its claim that Tuschen breached the terms of the Noncompete. The district concluded that the Noncompete was invalid for lack of consideration.

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831 F.3d 190, 41 I.E.R. Cas. (BNA) 971, 2016 U.S. App. LEXIS 13726, 2016 WL 4039679, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rlm-communications-inc-v-amy-tuschen-ca4-2016.