Trueblue Inc v. DeRuby
MEMORANDUM OPINION AND ORDER denying 6 Partial Motion to Dismiss, except to the extent the breach of fiduciary duty claim is based on the misappropriation of a trade secret. (Ordered by Chief Judge Barbara M.G. Lynn on 4/13/2018) (zkc)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
Civil Action No. 3:18-cv-0192-M
MEMORANDUM OPINION AND ORDER
Before the Court is Defendant’s Rule 12(b)(6) Partial Motion to Dismiss for Failure to
State a Claim. (ECF No. 6). For the reasons stated below, the Motion is DENIED.
Factual and Procedural Background
From approximately December 31, 2008 to March 9, 2017, Defendant was employed by
CLP Resources Inc., a wholly owned subsidiary of Plaintiff. (Compl. ¶¶ 5-6, ECF No. 1).
Plaintiff alleges that while employed by CLP, Defendant began working for True Talent, a
competing corporation which Defendant has an ownership stake. (Id. ¶¶ 13-14). Plaintiff also
alleges that Defendant misappropriated trade secrets, made use of company resources in support
of a competing corporation, solicited at least one existing CLP customer on behalf of a
competing corporation, induced a CLP Branch Manager to violate his non-compete to work on
behalf of a competing corporation, and took confidential information. (Id. ¶¶ 15-37).
On January 25, 2018, Plaintiff filed this action for breach of contract, breach of fiduciary
duty, tortious interference with prospective relations, and violation of the Texas Uniform Trades
Secrets Act (“TUTSA”). (ECF No. 1). On February 26, 2018, Defendant filed a Partial Motion
to Dismiss claiming that Plaintiff’s breach of fiduciary duty claim is preempted by the TUTSA.
(ECF No. 6).
a. Rule 12(b)(6)
A pleading must contain “a short and plain statement of the claim showing that the
pleader is entitled to relief.” FED. R. CIV. P. 8(a)(2). The pleading standard Rule 8 announces
does not require “detailed factual allegations,” but it does demand more than an unadorned
accusation devoid of factual support. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). To survive a motion to dismiss, a complaint
must contain sufficient factual matter to state a claim for relief that is plausible on its face.
Twombly, 550 U.S. at 570. The court must accept all of the plaintiff's factual allegations as true,
but it is not bound to accept as true “a legal conclusion couched as a factual
allegation.” Id. at
555. Where the facts do not permit the court to infer more than the mere possibility of
misconduct, the complaint has stopped short of showing that the pleader is plausibly entitled to
relief. Iqbal, 556 U.S. at 678.
The Texas Uniform Trade Secrets Act generally “displaces conflicting tort, restitutionary,
and other law of this state providing civil remedies for misappropriation of a trade secret.” TEX.
CIV. PRAC. & REM. CODE ANN. § 134A.007(a). Courts interpreting the nearly identical provision
of the Uniform Trade Secrets Act have uniformly held that a claim is not preempted if the
plaintiff is able to show the claim is based on facts unrelated to the misappropriation of the trade
secret. See, e.g., Coulter Corp. v. Leinert, 869 F. Supp. 732 (E.D. Mo. 1994); Smithfield Ham
and Prods. Co., Inc. v. Portion Pac, Inc., 905 F. Supp. 346, 348 (E.D. Va. 1995); Micro Display
Sys., Inc. v. Axtel, Inc., 699 F. Supp. 202, 205 (D. Minn. 1988). As stated in Smithfield, “[t]he
plain language of the preemption provision indicates that the law was intended to prevent
inconsistent theories of relief for the same underlying harm by eliminating alternative theories of
common law recovery which are premised on the misappropriation of a trade secret.” 905 F.
Supp. at 348.
Plaintiff’s breach of fiduciary duty claim depends in part on Defendant’s alleged
misappropriation of trade secrets. However, there are sufficient facts to support a breach of
fiduciary duty claim on other grounds. Under Texas law, an employee may prepare to go into
competition with his employer before resigning without breaching fiduciary duty, but may not
act for the employee’s future interest at the expense of the employer by a course of conduct
designed to hurt the employer. Johnson v. Brewer & Pritchard, P.C, 73 S.W.3d 193, 199 (Tex.
2002). Plaintiff here alleges that Defendant worked on behalf of a competitor while still
employed by Plaintiff, made use of company resources, and solicited Plaintiff’s customers and
staff, all at the expense of his employer. (Id. ¶¶ 15-37); see also 360 Mortg. Grp., LLC v.
Homebridge Fin. Servs., Inc., 2016 WL 900577, at *7 (W.D. Tex. Mar. 2, 2016) (holding that
although the breach of fiduciary duty claim relied in part on the misappropriation of a trade
secret, the facts surrounding plaintiff’s dual employment were sufficient to withstand a TUTSA
preemption claim). Contrary to Defendant’s argument, this case is unlike Embarcadero Techs.,
Inc. v. Redgate Software, Inc., 2018 WL 315753, at *5 (W.D. Tex. Jan. 5, 2018), and Super Starr
Int’l, LLC v. Fresh Tex. Produce, LLC, 531 S.W.3d 829, 843 (Tex. App.—Corpus Christi 2017,
no pet. h.), in which the breach of fiduciary duty claims were premised only on the
misappropriation of a trade secret.
Therefore, the TUTSA does not preempt Plaintiff’s breach of fiduciary duty claim
regarding Defendant’s dual employment.
For the reasons stated above, Plaintiff has pleaded a sufficient factual matter to state a
claim for breach of fiduciary duty. Therefore, Defendant’s Rule 12(b)(6) Partial Motion to
Dismiss is DENIED, except to the extent the breach of fiduciary duty claim is based on the
misappropriation of a trade secret.
April 13, 2018.
BARBARA M. G. LYNN
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?