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Ricoh USA, Inc. v. Bailon

United States District Court, E.D. Pennsylvania

December 6, 2019

RICOH USA, INC.
v.
RAYMOND BAILON et al.

          MEMORANDUM

          John Milton Younge Judge.

         I. INTRODUCTION

         In this action, Plaintifff Ricoh USA, Inc. (“Ricoh”) asserts claims against a former employee, Defendant Raymond Bailon (“Bailon”) and his subsequent employer, Defendant All Copy Products, Inc. (“All Copy”), arising from Bailon's alleged breach of a Confidentiality and Non-Compete Agreement with Ricoh.

         Presently before the Court is Bailon's and All Copy's Motion to Dismiss Ricoh's Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). (ECF No. 9.) The Court finds this matter appropriate for resolution without oral argument. Fed.R.Civ.P. 78; L.R. 7.1(f). For the following reasons, Bailon's and All Copy's Motion will be granted, and Ricoh's Complaint (ECF No. 1) will be dismissed with leave to amend.

         II. BACKGROUND [1]

         Ricoh, formerly known as IKON Office Solutions, Inc. (“IKON”), is engaged in the business of providing various office and workplace management equipment, services, and supplies.[2] (Compl ¶ 1.) Bailon began his employment with IKON on January 2, 1995, as an Integrated Account Manager. (Id. ¶ 15.) In 2010, Bailon was promoted to Customer Relationship Manager, a sales management position. (Id. ¶ 16.) The Complaint does not specify when in 2010 Bailon was promoted. Ricoh alleges that “[w]ith Bailon's promotion to Customer Relationship Manager, he began earning a commission based on sales and an increase in his total wages.” (Id. ¶ 17.)

         On September 7, 2010, Bailon signed the Agreement, with an effective date of October 1, 2010. (Id. ¶ 26; see also Agmt.) The Agreement provided that Bailon would not use or disclose Ricoh's trade secret or confidential information except as required in the course of his employment with Ricoh. (Agmt. ¶ 7.) The Agreement further provided that for a period of twenty-four months after termination of his employment with Ricoh, Bailon would not: (1) become affiliated with or employed by any competitor of Ricoh, (id. ¶ 8); (2) cause a current or prospective Ricoh customer to do business with a competitor or to reduce its business with Ricoh, (id.);[3] or (3) cause any Ricoh employees to leave the company or hire or cause a third party to hire any Ricoh employees, (id. ¶ 10).

         Ricoh alleges that Bailon signed the Agreement “in consideration for, among other things, Ricoh's disclosure of trade secrets and confidential information to Bailon, as well as Bailon's promotion to Customer Relationship Manager and a substantial increase in his overall compensation (his compensation increased by approximately 35% during the first 12 months after he accepted the position).” (Compl. ¶ 26.) Ricoh further alleges that it “has provided valuable consideration to Bailon in exchange for [the Agreement], including but not limited to the significant increase in [his] compensation, access to and the benefit from the goodwill Ricoh has developed with customers to which Bailon was assigned, the benefit and use of Ricoh's trade secret and confidential information and valuable specialized training. . . .” (Id. ¶ 38.)

Employee desires to continue to be employed, by the Company. The Company desires to continue to employ, Employee, provided that as an express condition of such continued employment, Employee enters into this Agreement with the Company.

(Non-Compete Agmt., Background Stmt.) The “Consideration” provision of the Agreement states:

In consideration of Employee's employment with the Company, the Company's disclosure of trade secrets and confidential information to Employee, and the Company's provision of compensation and benefits to Employee, Employee agrees to be bound by the terms and conditions of this Agreement.

(Id. ¶ 3.) The Agreement's confidential information provision recites that “[i]n exchange for the mutual promises and obligations contained in this Agreement, and contemporaneous with its execution, Employer agrees to allow Employee to acquire, be exposed to, and/or have access to material, data, and information of the Company and/or its customers or clients that is confidential, proprietary and/or a trade secret. . . .” (Id. ¶ 7.) Finally, the prefatory language of the Agreement's non-competition provision states: “In consideration of the mutual promises contained in this Agreement, the sufficiency of which is acknowledged by the parties, . . .” (Id. ¶ 8.)

         Bailon's employment with Ricoh terminated on March 31, 2017, and, at that time, his title was Customer Relationship Specialist. (Id. ¶¶ 18, 39.) The Complaint includes a series of allegations about the responsibilities Bailon had, and the confidential information and trade secret information he was privy to, as a Customer Relations Specialist, but it does not state when Bailon attained that position or allege any temporal or other connection between his final position and the Non-Compete Agreement. At some point after Bailon's employment with Ricoh ended, he began working for All Copy, a Ricoh competitor. (Id. ¶ 40.)

         On January 1, 2019, Ricoh filed this lawsuit alleging that Bailon has violated his obligations under the Agreement and that All Copy has interfered with those obligations. Specifically, Ricoh alleges that Bailon directly or indirectly solicited at least three Ricoh customers and caused them to do business with All Copy. (Id. ¶¶ 41-44.) Ricoh further alleges that Bailon has solicited or encouraged other employees to leave Ricoh and has assisted All Copy or third parties in hiring those employees. (Id. ΒΆΒΆ 45-47.) Ricoh's Complaint asserts claims against Bailon for breach of contract (Count I), against All Copy for intentional interference with Bailon's Agreement with Ricoh (Count II), and against both Bailon and All Copy for ...


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