Ansis V. Viksnins, Esq., and Carrie Ryan Gallia, Esq. Lindquist & Vennum PLLP, counsel for Plaintiff.
Joseph T. Dixon, Jr., Esq., and John N. Bisanz, Jr., Esq., Henson & Efron, PA, counsel for Defendants.
MEMORANDUM OPINION AND ORDER
DONOVAN W. FRANK, District Judge.
This matter is before the Court on a Motion for Summary Judgment brought by Defendants AP Supply, Inc. ("AP Supply"), Nicholas Gary Anderson ("Anderson"), Erik J. Mortimer ("Mortimer"), and Craig Andrew Passeretti ("Passeretti") (together, "Defendants") (Doc. No. 36). For the reasons discussed below, the Court grants in part and denies in part the motion.
I. The Parties
Plaintiff Harley Automotive Group, Inc. ("Harley") sells wholesale automotive parts and supplies via telephone to motor vehicle dealerships across North America. (Doc. No. 1, Compl. ¶ 9.) Harley has approximately eighty employees and facilities in Oakdale, Minnesota, and Fort Myers, Florida. ( Id. ¶ 9; Doc. No. 43, Doc. No. 39, Bisanz Aff. ¶ 2, Ex. A ("Harley Dep.") at 7-13.) Jim Harley is the owner of Harley. (Harley Dep. at 5-6.)
Defendants Anderson, Mortimer, and Passeretti all worked at Harley as sales representatives before they left to work at AP Supply. (Bisanz Aff. ¶ 3, Ex. B ("AP Supply Dep.") at 14.) AP Supply was originally incorporated in North Dakota in February 2010, and was later converted into a Wisconsin corporation. (AP Supply Dep. at 12-13.) AP Supply, like Harley, uses telemarketing to wholesale automotive parts to dealerships in the United States.
II. Harley's Business
Harley maintains a database of customer information on its computer system. (Bisanz Aff. ¶ 5, Ex. D ("Bongiovanni Dep.") at 23-27; Doc. No. 42, Bongiovanni Decl. ¶ 4.) Part of the database includes a compilation of dealership names, addresses, telephone numbers, and the names of contacts at each dealership. (Bongiovanni Decl. ¶ 5.) The database contains information for current and past Harley customers, including approximately 5, 000 active customers in the United States. (Bongiovanni Dep. 23-24.)
Harley sells auto parts under several different names or affiliated entities, such as American Parts Warehouse, Advanced Automotive Industries, American Auto Parts, Pro-Source Abrasives, and Captiva Automotive. (Harley Dep. at 8-14.) Most of Harley's various entities operate out of the same facility and use the same product list. ( Id. )
Harley identifies potential customers by purchasing lists from a provider called InfoUSA and then makes cold-calls from that list. (Bongiovanni Dep. at 11.) InfoUSA allows its clients to narrow the list of potential customers by using a Standard Industrial Classification ("SIC") code that limits a list to certain types of businesses. ( Id. at 13-15.) Harley purchases a list from InfoUSA every couple of years in order to keep the list current and identify new potential customers. ( Id. at 15-16.) The lists from InfoUSA include information about businesses such as the company's name, address, and phone number. ( Id. ) Harley asserts that its customer database also contains some information that is not available from InfoUSA, such as updated contact information, the names of individual contacts, or personal information about buyers. (Harley Dep. at 24-25; Steiner Dep. at 30-31, 39; Bongiovanni Decl. ¶ 7.)
After logging in with a username and password, Harley's sales representatives have access to Harley's parts list and a portion of the customer database containing the sales accounts assigned to them. (Bongiovanni Dep. at 97-101.) Customer information is not labeled "confidential." ( Id. at 27.)
III. Individual Defendants' Employment with Harley
Anderson began working for Harley as a sales representative in January 1995. (Bisanz Aff. ¶ 8, Ex. G ("Anderson Dep.") at 21.) Passeretti was a Harley employee from 1998 through 2004. (Bisanz Aff. ¶ 9, Ex. H ("Passeretti Dep.") at 11.) In 2004, Passeretti claims he was let go from Harley, and in January 1995, Passeretti started a wholesaling business with another former Harley sales representative, and later worked for a third company telemarketing automotive parts. ( Id. at 23, 28-31.) Passeretti returned to Harley as a sales representative in April 2007. (Bisanz Aff. ¶ 11, Ex. J.) Mortimer began working for Harley as a sales representative in December 2006. (Bisanz Aff. ¶ 12, Ex. K.)
Anderson, Passeretti, and Mortimer all signed employment agreements with Harley (the "Employment Agreement(s)"). (Bisanz Aff. ¶¶ 10, 11, 12, Exs. I, J, K.) The relevant sections of the respective agreements provide as follows:
SECTION 7. PROHIBITION ON DISCLOSURE OF INFORMATION.
Employer has invested time and money in developing and refining its customer lists, business practices and procedures and has thereby obtained a decisive competitive advantage over other automobile parts business in the area. Employee shall not at any time during his/her employment under this Agreement, except in the normal course of Employer's business, or after termination of that employment, disclose to any person or organization information regarding Employer's customers, or the procedures and systems utilized by Employer to service Employer's customers which the Employee acquired knowledge of during his/her employment with Employer.
Section 8. RESTRICTIVE COVENANT.
Employee hereby acknowledges that he/she has had either no previous training or experience or limited training and experience as an auto parts Sales Representative and that Employer will expend its resources in training and assisting Employee in developing skills as a Sales Representative. Employee also acknowledges that were he/she to undertake employment with one of Employer's competitors, Employer would suffer a substantial loss of its investment and be put at an unfair competitive disadvantage.
For a period of twelve (12) months following the termination of Employee's employment hereunder, Employee shall not, either directly or indirectly, solicit the sale of, arrange for the distribution of, sell, or distribute automobile parts from a location within a 300 mile radius of either [Harley's Oakdale, Minnesota, or Ft. Myers, Florida, locations].
For a period of twelve (12) months following the termination of Employee's employment hereunder, Employee shall not accept employment with any other person or entity engaged in the business of selling or distributing automotive parts within a 300 mile radius of either [Harley's Oakdale, Minnesota or Ft. Myers, Florida locations], nor shall Employee hold any ownership interest in any entity engaged in the business of selling or distributing automotive parts located within a 300 mile radius of either [Harley's Oakdale, Minnesota or Ft. Myers, Florida locations].
SECTION 9. SURRENDER OF RECORDS AND PROPERTY.
Upon termination of his/her employment with Employer, Employee shall deliver promptly to Employer all records, manuals, books, blank forms, documents, letters, memoranda, notebooks, notes, reports, data, tables, calculations or copies thereof, which are the property of the Employer or which relate in any way to the business, products, practices or techniques of the Employer.
(Bisanz Aff. ¶ 11, Ex. J ("Employment Agreement").)
IV. Big Rig Supply
In December 2009, Anderson and Passeretti incorporated C&N Supply, Inc. (d/b/a "Big Rig Supply"). (AP Supply Dep. at 15, 19.) Big Rig Supply's principal place of business was in Lindstrom, Minnesota. ( Id. at 23.) Big Rig Supply was in the business of wholesale telemarketing that sold exclusively to heavy truck dealers. ( Id. at 19-22.) Anderson and Passeretti generated a customer list for Big Rig Supply by running internet searches for "heavy truck dealerships" on www.google.com and www.yellowpages.com. ( Id. at 30-31.) In addition, Passeretti used a resource through the Ramsey County Public Library called ReferenceUSA, which allowed Passeretti to search for truck dealerships by using a SIC code to narrow his search to truck dealerships. ( Id. at 32-33.) Passeretti was able to download and print information about hundreds of heavy truck dealerships. ( Id. at 34.) Passeretti and others then taped this information to note cards for reference. ( Id. at 34-35.) The note cards contained dealership names, addresses, and phone numbers. ( Id. at 36.) Big Rig Supply closed in January 2010. ( Id. at 25.) Passeretti and Anderson were both employees at Harley during the time they operated Big Rig Supply and had each been working at Big Rig Supply for about 20 hours per month. ( Id. at 29.)
V. AP Supply
On February 3, 2010, Passeretti and Anderson both terminated their employment with Harley. (Doc. No. 43, Gallia Decl. ¶¶ 15, 16, Exs. N, O.) Mortimer terminated his employment with Harley in March 2010. (Bisanz Aff. ¶ 4, Ex. C ("Mortimer Dep.") at 18-19.)
On February 4, 2010, Passeretti and Anderson opened AP Supply. (Anderson Dep. at 27.) AP Supply was originally located in Jamestown, North Dakota. (AP Supply Dep. at 16.) Both Anderson and Passeretti commuted to Jamestown, North Dakota, from Minnesota every ...