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Certainteed Ceilings Corp. v. Aiken

United States District Court, E.D. Pennsylvania

January 29, 2015

CERTAINTEED CEILINGS CORP., Plaintiff,
v.
DANIEL F. AIKEN, Defendant.

MEMORANDUM RE: DEFENDANT'S MOTION TO DISMISS

MICHAEL M. BAYLSON, District Judge.

I. Introduction

In this diversity action, Plaintiff CertainTeed Ceilings Corporation ("CertainTeed") alleges that its former sales representative, Defendant Daniel Aiken ("Aiken"), breached his contractual and fiduciary duties and misappropriated trade secrets when Aiken resigned from CertainTeed to work for a competing company. Presently before the Court is Aiken's Rule 12(b)(6) motion to dismiss the counts of CertainTeed's Amended Complaint that allege breach of fiduciary duty and misappropriation of trade secrets. For the reasons set forth in this memorandum, the Court will grant Aiken's motion with respect to Count Two, alleging breach of fiduciary duty, and deny Aiken's motion with respect to the counts alleging misappropriation of trade secrets in violation of various state Uniform Trade Secrets Acts.

II. Factual and Procedural Background[1]

CertainTeed's Amended Complaint alleges that Aiken was employed as a CertainTeed Architectural Sales Associate and then Architectural Sales Manager from June 1, 2010 until he resigned effective May 1, 2014. Am. Compl. ¶¶ 12-14 (ECF 14). His job was to sell acoustical ceiling systems to distributors and contractors through interactions with architects, contractors, and distributors. Id . ¶ 18. Aiken's sales territory encompassed portions of Virginia, West Virginia, Maryland, Delaware, and the District of Columbia. Id. at 19 & Ex. C.

During the course of his employment, Aiken allegedly had access to CertainTeed's confidential information and trade secrets, including "customer lists, detailed information about CertainTeed customers' projects, projects, product development plans, marketing, sales and business methods, systems and strategies, sales, competitor, and market intelligence, product and plant cost structure, pricing models and projects with Ecophon specifications." Id . ¶ 22. He was also responsible for "maintaining a database of architects, contractors and distributors and information about them and existing projects for his Territory." Id . ¶ 21. Aiken "used CertainTeed's Confidential Information and Trade Secrets in the regular performance of his duties as an Architectural Sales Manager." Id . ¶ 23.

Before taking his job at CertainTeed, Aiken signed a "Noncompete Employee Agreement" that required him to protect CertainTeed's confidential, trade secret, and proprietary information during and after his term of employment and restricted him from working for a competitor for one year after leaving CertainTeed. Id . ¶¶ 26-33 & Ex. D. CertainTeed regularly uses employment agreements and noncompete covenants to protect its confidential information and trade secrets. Id . ¶ 9.

Immediately after resigning from CertainTeed, Aiken started a job with Rockfon, LLC, one of CertainTeed's direct competitors in the ceiling products market. Id . ¶¶ 24-25, 35, 49, 52. At Rockfon, Aiken is an "Architectural Sales Manager" with "identical and/or nearly identical job responsibilities" to his role at CertainTeed. Id . ¶¶ 37-39. Aiken was hired by Rockfon to work in substantially the same territory he had served for CertainTeed.[2] Id . ¶¶ 40-41. CertainTeed alleges that (1) "it would be impossible for Aiken to perform his duties with Rockfon without disclosing CertainTeed's Confidential Information and Trade Secrets and/or there is a substantial threat of such disclosure, " id. ¶ 43; (2) "Aiken has and/or inevitably will disclose and/or use CertainTeed's Confidential Information and Trade Secrets in the performance of his job duties with Rockfon, " id. ¶ 47; and (3) "Aiken has and/or inevitably will disclose and/or use CertainTeed's Confidential Information and Trade Secrets to compete with CertainTeed, " id. ¶ 48.

CertainTeed alleges six separate counts: (I) breach of contract, based on Aiken's alleged violation of the noncompete and nondisclosure provisions in his Noncompete Employee Agreement, id. ¶¶ 56-66; (II) breach of fiduciary duty, based on Aiken's alleged disclosures of CertainTeed's confidential information and trade secrets, id. ¶¶ 67-75; and (III-VI) violations of the Uniform Trade Secrets Acts of Pennsylvania, Maryland, Virginia, and the District of Columbia, id. ¶¶ 76-107. CertainTeed seeks both damages and injunctive relief. Id. at 18-19.

CertainTeed filed suit on June 25, 2014 and moved for a preliminary injunction that same day (ECF 1, 3). Aiken filed a motion to dismiss on July 16, 2014 (ECF 7) and CertainTeed responded by filing an Amended Complaint on August 4, 2014 (ECF 14). On August 19, 2014, Aiken filed the present Motion to Dismiss Counts II through VI of the Amended Complaint, relating to the claims for breach of fiduciary duty and violations of the four state Uniform Trade Secrets Acts (ECF 22). CertainTeed filed an opposition to Aiken's motion on September 5, 2014 (ECF 30). Aiken's motion to dismiss is ripe for resolution.

Concurrently, the parties agreed to conduct expedited discovery (ECF 5), the Court held oral argument on the motion for preliminary injunction (ECF 32, 33), and the Court granted a preliminary injunction on October 9, 2014 (ECF 33, 37). Aiken's appeal of the preliminary injunction order is presently pending before the Third Circuit (ECF 38).

III. The Parties' Contentions

Aiken seeks dismissal of all counts except for CertainTeed's breach of contract claim. Mot. to Dismiss (ECF 22). With respect to CertainTeed's claims for misappropriation of trade secrets under the Pennsylvania, Maryland, Virginia, and District of Columbia Uniform Trade Secrets Acts (Counts III through VI), Aiken makes two arguments. First, he argues that CertainTeed has failed to plead sufficient facts to identify the trade secrets in Aiken's possession and to show that Aiken has or likely will disclose those trade secrets. Aiken Memo. of Law at 5-10 (ECF 22-1). Second, Aiken argues that CertainTeed's misappropriation claims are based on a theory of inevitable disclosure, which is not recognized in Maryland, Virginia, or the District of Columbia, and that CertainTeed has not pled sufficient facts to make this claim plausible under Pennsylvania law. Id. at 10-12. CertainTeed counters that it has sufficiently identified its trade secrets for the purposes of pleading, has pled the requisite facts to support a claim for inevitable disclosure of trade secrets under Pennsylvania law, and has pled facts that support claims for actual or threatened misappropriation of trade secrets in all four states. CertainTeed Opp. at 6-18 (ECF 30).

As for CertainTeed's claim for breach of fiduciary duty, Aiken argues that there are no allegations that he breached any duty during his employment and that any allegations that he breached an ongoing duty fail for the same reasons as CertainTeed's statutory misappropriation of trade secrets claims. Aiken Memo. of Law at 12-13. Aiken also argues that the breach of fiduciary duty claim is barred by the gist of the action doctrine, which bars tort claims based on or identical to contractual claims. Id. at 13-14. CertainTeed responds that the facts alleged in its complaint show that Aiken violated his fiduciary duty to CertainTeed during his employment, that his fiduciary duty not to disclose confidential information continues after his employment, and that the fiduciary duty claim is broader than the statutory misappropriation claims because it includes disclosure of confidential information in addition to trade secrets. CertainTeed Opp. at 19-22. CertainTeed contends that the gist of the action doctrine does not apply because Aiken's fiduciary duty arises from the fact of his employment, not from his signing a Noncompete Employee Agreement, and thus CertainTeed's breach of fiduciary duty claim is independent of its breach of contract claim. Id. at 22-23.

IV. Legal Standard

When deciding a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the court may look only to the facts alleged in the complaint and its attachments. Jordan v. Fox, Rothschild, O'Brien & Frankel, 20 F.3d 1250, 1261 (3d Cir. 1994). The court must accept as true all well-pleaded allegations in the complaint and view them in the light most favorable to the plaintiff. Angelastro v. Prudential-Bache Sec., Inc., 764 F.2d 939, 944 (3d Cir. 1985). The well-pleaded allegations accepted as true for purposes of a Rule 12(b)(6) motion to dismiss include "facts alleged on information and belief." Melo-Sonics Corp. v. Cropp, 342 F.2d 856, 859 (3d Cir. 1965).

A valid complaint requires only "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Iqbal clarified that the Court's decision in Bell Atlantic ...


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