TECH USA, INC. v. Milligan

CourtDistrict Court, D. Maryland
DecidedMarch 1, 2021
Docket1:20-cv-03100
StatusUnknown

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

Bluebook
TECH USA, INC. v. Milligan, (D. Md. 2021).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

TECH USA, INC., , *

Plaintiffs, *

v. * Civil Action No. RDB-20-0310

LAUREN A. MILLIGAN, , *

Defendants. *

* * * * * * * * * * * * *

MEMORANDUM OPINION

TECH USA, Inc., TECH USA, LLC, and TECH USA Government Solutions, LLC (collectively “TECH USA” or “Plaintiff”1), have filed this five-count lawsuit against Defendant Lauren A. Milligan (“Milligan”) and Defendants Zachary Piper Holdings, LLC, Zachary Piper Solutions, LLC, and Zachary Piper, LLC (the “ZP Defendants”) alleging that Milligan, in leaving her employment with TECH USA to join the ZP Defendants, violated a federal statute and Maryland law. In Count I of the Complaint, TECH USA alleges that Milligan and the ZP Defendants violated the Defend Trade Secrets Act (“DTSA”), 18 U.S.C. § 1836. (ECF No. 1.) Specifically, it is alleged that Milligan disclosed the “identity” of some TECH USA customers as well as “other information regarding those customers.” (ECF No. 1 ¶ 7.) It is alleged that this information constituted a trade secret under the act. Therefore, the Plaintiff contends that this Court has federal question jurisdiction pursuant to 28 U.S.C.

1 The Complaint (ECF No. 1) lists three entities as plaintiffs but refers to these three entities as singular “Plaintiff,” under the title TECH USA, Inc. This Opinion accordingly refers to “TECH USA” and “Plaintiff” as a singular entity. § 1331 and requests that it exercise supplemental jurisdiction over the remaining state law claims set forth in Counts II through V pursuant to 28 U.S.C. § 1367. Accordingly, the jurisdiction of this Court is predicated upon the contention that the

disclosure of the identity of customers and information about them constitutes a trade secret. This Court has held in a series of recent opinions2 that conclusory allegations as to customer lists do not sufficiently allege the existence or misappropriation of a trade secret without further specification. The Defendant Milligan and the ZP Defendants have each moved to dismiss this Complaint pursuant to Rules 12(b)(6) and 12(b)(1) of the Federal Rules of Civil Procedure (ECF Nos. 10, 11).3 They allege that the Plaintiff fails to state a claim with respect

to a trade secret under the Defend Trade Secrets Act and by extension fails to state a basis for this Court’s exercise of supplemental jurisdiction over the remaining state law claims. The parties’ submissions have been reviewed and no hearing is necessary. See Local Rule 105.6 (D. Md. 2018). For the reasons that follow, the Defendants’ Motions to Dismiss (ECF Nos. 10, 11) are GRANTED. Specifically, Count I of the Plaintiff’s Complaint is DISMISSED WITHOUT PREJUDICE pursuant to Rule 12(b)(6), as there is no plausible

claim presented as to misappropriation of a trade secret under the Defend Trade Secrets Act. Therefore, the state law claims set forth in Counts II through V are dismissed WITHOUT PREJUDICE pursuant to Rule 12(b)(1), as this Court has no basis to exercise supplemental

2 Albert S. Smyth Co., Inc. v. Motes, CCB-17-677, 2018 WL 3635024 (D. Md. July 31, 2018); S-E-A, Ltd. v. Cornetto, JKB-18- 1761, 2018 WL 3996270 (D. Md. Aug. 21, 2018); Philips N. America LLC v. Hayes, ELH-20-1409, 2020 WL 5407796 (D. Md. Sept. 9, 2020). 3 Defendant Milligan’s motion moves to dismiss the Complaint, or in the alternative, to compel arbitration and stay proceedings. (See ECF No. 11.) Milligan’s arguments with respect to arbitration are not addressed in this Memorandum Opinion, as this Court will grant the Defendant Milligan’s motion to dismiss and adjudication of the issue of arbitration is not ripe at this time. jurisdiction pursuant to 28 U.S.C. § 1367. This dismissal is WITHOUT PREUDICE to the filing of an Amended Complaint within a specified time period. BACKGROUND In ruling on a motion to dismiss, this Court “accept[s] as true all well-pleaded facts in

a complaint and construe[s] them in the light most favorable to the plaintiff.” Wikimedia Found. v. Nat’l Sec. Agency, 857 F.3d 193, 208 (4th Cir. 2017) (citing SD3, LLC v. Black & Decker (U.S.) Inc., 801 F.3d 412, 422 (4th Cir. 2015)). Plaintiff TECH USA is a Maryland corporation with its principal place of business in Millersville, MD and a mid-size competitor in the nationwide market for providing staffing and recruiting solutions. (ECF No. 1 ¶ 1, 2.) TECH USA claims to have developed “close working relationships and extensive goodwill with its existing

government, prime contractor, commercial, and other customers in order to grasp and service their personnel and hiring needs.” (Id.) In 2005, TECH USA hired Defendant Milligan, an individual and resident of Maryland. (Id. ¶ 3.) Upon her hiring, Milligan and TECH USA executed the Confidentiality/Non- Competition Agreement (the “Agreement,” attached to Complaint as Exhibit A, ECF No. 1- 1) dated July 11, 2005. (ECF No. 1 ¶ 10.) The Agreement generally prohibits Milligan from

competing with TECH USA within a defined geographic scope as well as from soliciting TECH USA employees and/or TECH USA customers and clients for a limited period of time after Milligan leaves the company’s employ. (Id. ¶ 13.) The Agreement also provides that Milligan may not “use for [her] own benefit, or the benefit of any third party, or disclose or divulge to any third party, any Confidential Information,” as defined by the Agreement, “or Trade Secrets,” as defined in the Maryland Uniform Trade Secrets Act. (Id. ¶ 20.) “Confidential Information” is defined by the Agreement as information: not generally known by [TECH USA’s] competitors or the general public concerning [TECH USA], including, but not limited to: (a) its/their financial affairs, sales, and marketing strategies, acquisition plans, pricing and costs; (b) any of the following information about corporations or other entities (collectively Customers) for whom [TECH USA] employs, recruits, supplies or otherwise finds or arranges employees: any such Customer’s or Customer’s names, addresses, telephone numbers, contact persons, staffing requirements, and/or margin tolerances regarding pricing; . . . .

(Id. ¶ 20.) Such information is stored in the TECH USA database, which came into use in 2006. (Id. ¶ 26.) To access the database, a unique username and password are required, both of which are inactivated when an employee leaves the company. (Id.) After working for the company for more than 15 years, Milligan informed TECH USA of her resignation and her intention to work for ZP Defendants, a group of Virginia limited liability companies, headquartered in McLean, Virginia. (Id. ¶ 3-6.) The Plaintiff alleges that at some point prior to her resignation from TECH USA, Milligan met (either by phone, video, or in person) with at least one representative from the ZP Defendants, and: in the course of such meeting(s) and/or subsequently, disclosed to one or more of the ZP Defendants the identity of certain TECH USA Customers as well as other information regarding those customers, which customer information constitutes TECH USA’s Confidential Information and/or Trade Secrets.

(Id. ¶ 14.) TECH USA alleges that Milligan made such disclosures in violation of the federal Defend Trade Secrets Act (“DTSA”), as well as the Agreement. (Id.

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TECH USA, INC. v. Milligan, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tech-usa-inc-v-milligan-mdd-2021.