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Council For Educational Travel, Usa v. Agata Czopek and Harristown Development Corporation

September 2, 2011

COUNCIL FOR EDUCATIONAL TRAVEL, USA,
PLAINTIFF
v.
AGATA CZOPEK AND HARRISTOWN DEVELOPMENT CORPORATION, :: DEFENDANTS



The opinion of the court was delivered by: Judge Sylvia H. Rambo

MEMORANDUM

Before the court are Defendants Harristown Development Corporation ("HDC") and Agata Czopek's ("Czopek") motions to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. (Docs. 12 & 17.) For the reasons set forth below, the motions will be granted in part and denied in part.

I. Background*fn1

A. Parties

Plaintiff, Council for Educational Travel, USA ("CETUSA") is a nonprofit organization that is dedicated to promoting the understanding of different cultures. (Compl. ¶ 6.) CETUSA works to coordinate employment opportunities for exchange students from all over the world. (Id.) Defendant HDC is a corporation with its principal place of business in Pennsylvania.*fn2 (Id. ¶ 3.) Defendant Czopek was hired by CETUSA to manage its client accounts for those clients located in the region around Harrisburg, Pennsylvania. (Id. ¶ 12.)

B. Facts

During her employment with CETUSA, Czopek was provided with client lists and other proprietary information including, but not limited to, a list of CETUSA's overseas partners. (Id. ¶ 13.) On December 22, 2009, Czopek signed a written acknowledgment in which she agreed to return: all tangible and intangible property belonging to CETUSA issued to [the employee], or created by [the employee] as an employee during [the employee's] employment, including but not limited to . . . documents relating or pertaining to potential contacts, contracts, coordinators, clients, host families, mailing lists, account information, samples, prototypes, price lists, pricing information . . . . (Id. ¶ 14.) Additionally, the acknowledgment states: "I further represent and warrant that I will not retain any copies, electronic or otherwise, of such property upon separation of employment with CETUSA." (Id.)

On November 5, 2010, Czopek left her employment at CETUSA without any advance notification and began working at HDC. (Id. ¶ 16.) The complaint alleges that Czopek did not return any documents "relating or pertaining to potential contacts, contracts, coordinators, clients, host families, mailing lists, account information, samples, prototypes, price lists, [or] pricing information" upon her termination. (Id. ¶ 17.) It further alleges that if she is permitted to continue working at HDC, CETUSA will suffer irreparable injury. (Id. ¶ 18.) Lastly, the complaint avers that Czopek and HDC have divulged and continue to divulge, make use of, and profit from this information, including but not limited to CETUSA's client lists, fees charged, and other proprietary information concerning CETUSA's relationship with clients. (Id. ¶ 19.)

C. Procedural History

On April 11, 2011, Plaintiff filed its complaint claiming (1) misappropriation of trade secrets in violation of the Pennsylvania Uniform Trade Secrets Act, 12 PA. CONS. STAT. § 5301, et seq. ("PUTSA")against Czopek and HDC (Count I); (2) breach of fiduciary duty and duty of loyalty against Czopek (Count II); and (3) intentional interference with actual and prospective contractual relations against Czopek and HDC (Count III). (Doc. 1.) Defendant HDC filed its motion to dismiss on May 9, 2011 (Doc. 12) and brief in support on May 23, 2011 (Doc. 14). Plaintiff filed a brief in opposition on June 8, 2011 (Doc. 16) to which HDC replied on June 27, 2011 (Doc. 19). Defendant Czopek filed a motion to dismiss on June 13, 2011 (Doc. 17) and brief in support on June 21, 2011 (Doc. 18). A brief in opposition was filed on June 30, 2011 (Doc. 20) and reply brief on July 15, 2011 (Doc. 22). Thus, both motions are ripe for disposition.

II. Standard

When presented with a motion to dismiss for failure to state a claim, the court "must accept all of the complaint's well-pleaded facts as true, but may disregard any legal conclusions," Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009), and ultimately must determine "whether the facts alleged in the complaint are sufficient to show that the plaintiff has a 'plausible claim for relief.'" Id. at 211 (quoting Ashcroft v. Iqbal, ___U.S.___, 129 S. Ct. 1937, 1950 (2009)). Additionally, the court must "accept as true all factual allegations in the complaint and all reasonable inferences that can be drawn therefrom, and view them in the light most favorable to the plaintiff." Kanter v. Barella, 489 F.3d 170, 177 (3d Cir. 2007) (quoting Evancho v. Fisher, 423 F.3d 347, 350 (3d Cir. 2005)). The complaint must do more than allege the plaintiff's entitlement to relief; it must "show such an entitlement with its facts." Fowler, 578 F.3d at 211 (citations omitted). As the Supreme Court instructed in Iqbal, "[w]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not 'show[n]'-'that the pleader is entitled to relief.'" Iqbal, 129 S. Ct. at 1950 (quoting FED. R. CIV. P. 8(a) (alterations in original)). In other words, a claim has "facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. at 1949 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements do not suffice." Id.

"To decide a motion to dismiss, courts generally consider only the allegations contained in the complaint, exhibits attached to the complaint and matters of public record." Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993) (citations omitted); see also Sands v. McCormick, 502 F.3d 263, 268 (3d Cir. 2007). The court may consider "undisputedly authentic document[s] that a defendant attaches as an exhibit to a motion to dismiss if the plaintiff's claims are based on the [attached] document[s]." Pension Benefit, 998 F.2d at 1196. Additionally, "documents whose contents are alleged in the complaint and whose authenticity no party questions, but which are not physically attached to the pleading, may be considered." Pryor v. Nat'l Collegiate Athletic Ass'n, 288 F.3d 548, 560 (3d Cir. 2002) (citation omitted); see also U.S. Express Lines, Ltd. v. Higgins, 281 F.3d 383, 388 (3d Cir. 2002) ("Although a district court may not consider matters extraneous to the pleadings, a document integral to or explicitly relied upon in the complaint may be considered without converting the motion to dismiss into one for summary judgment.") (internal quotation omitted). However, the court may not rely on other parts of the record in making its decision. Jordan v. Fox, Rothschild, O'Brien & Frankel, 20 F.3d 1250, 1261 (3d Cir. 1994).

III. Discussion

A. Misappropriation of Trade Secrets under PUTSA

Both HDC and Czopek raise three arguments for dismissal of CETUSA's misappropriation of trade secrets claim. First, they claim that CETUSA failed to specifically allege that a non-compete agreement was executed between Czopek and CETUSA. Second, they claim that CETUSA failed to identify what specific confidential information was misappropriated. Lastly, to the extent that CETUSA is alleging that Czopek misappropriated client lists, Defendants argue that an employee's personal contacts while made during plaintiff's employ are not trade secrets. For the reasons below, the court disagrees.

First, although the complaint does not specifically reference a "non-compete agreement" or "confidentiality agreement," it does state that CETUSA requires its staff to sign an "acknowledgment" that, as noted above, expressly requires the return of tangible and intangible proprietary and confidential information upon separation of employment with CETUSA including, inter alia, client lists and account information.

Under PUTSA, misappropriation does not necessarily require that a restrictive covenant be executed. A "misappropriation" is defined under the statute as:

(1) acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was ...


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