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Deluxe Financial Services, LLC v. Shaw

United States District Court, D. Minnesota

August 3, 2017

DELUXE FINANCIAL SERVICES, LLC, Plaintiff,
v.
BRIAN S. SHAW and HARLAND CLARKE CORP., Defendants.

          CHARLES F. KNAPP, FAEGRE BAKER DANIELS LLP, FOR PLAINTIFF.

          JILLIAN M. FLOWER, JACKSON LEWIS PC, FOR DEFENDANT BRIAN S. SHAW.

          JAMES SOTTILE, IV AND BRETT J. BROADWATER, JONES DAY, RICHARD Q. LIU, JONES DAY, FOR DEFENDANT HARLAND CLARKE CORP.

          MEMORANDUM OPINION AND ORDER DENYING DEFENDANTS' MOTIONS TO DISMISS

          JOHN R. TUNHEIM CHIEF JUDGE UNITED STATES DISTRICT COURT

         Plaintiff Deluxe Financial Services, LLC, (“Deluxe”) brings this action against Defendants Brian S. Shaw and Harland Clarke Corp. (“Harland Clarke”) (collectively, “Defendants”). Deluxe brought claims against Defendants for misappropriation of trade secrets under the Federal Defend Trade Secrets Act (“DTSA”), 18 U.S.C. §§ 1836, et seq.; misappropriation of trade secrets under the Ohio Uniform Trade Secrets Act (“OUTSA”), Ohio Rev. Code §§ 1333.61, et seq.; tortious interference; and unjust enrichment.

         Defendants move to dismiss those claims under Fed.R.Civ.P. 12(b)(6) contending that: (1) Deluxe fails to state a claim for trade secret misappropriation under DTSA and OUTSA, and (2) OUTSA preempts Deluxe's claims for tortious interference and unjust enrichment.

         Because the Amended Complaint contains a detailed factual statement to support a trade secret misappropriation claim and Deluxe may plead alternative and inconsistent legal theories against Defendants, the Court will deny Defendants' motions to dismiss.

         BACKGROUND

         I. UNDERLYING EVENTS

         Deluxe and Harland Clarke “are the two largest [financial institution] check printers in the United States. They are direct competitors.” (Am. Compl. ¶ 4, Nov. 7, 2016, Docket No. 14.) Deluxe employed Shaw as a business development executive for 25 years. (Id. ¶¶ 8, 15.) As part of his position, Shaw structured “sophisticated deal structures and pricing strategies” to differentiate and enhance Deluxe's market position. (Id. ¶ 17.)

         To fulfill these job duties, Shaw had access to Deluxe's trade secret information relating to “customer pricing data, production costs, check unit volumes, profitability, sales analyses, sales strategies, deal structures, sales plans, ‘key account' data, check program management techniques, and account details (‘Confidential Sales Information').” (Id. ¶ 18.) “This Confidential Sales Information is not publicly known” and Deluxe invests significant efforts to preserve its confidentiality. (Id. ¶¶ 20-21.)

         A. The Confidentiality Agreement Between Shaw and Deluxe

         In 2012, Shaw entered into a Non-Competition, Non-Solicitation, and Confidentiality Agreement (the “Agreement”) with Deluxe. (Id. ¶ 23; Ex. A to Am. Compl. (“Agreement”), Nov. 8, 2016, Docket No. 17.) In pertinent part, Shaw agreed that during his employment and thereafter to “hold in the strictest confidence and . . . not disclose, use, [or] publish any of [Deluxe's] Confidential Information, ” unless Deluxe permitted otherwise. (Agreement at 2.) The Agreement defined “Confidential Information” as “information that was developed, created, or discovered by or on behalf of [Deluxe] or any of its Affiliates, or which became or will become known by, or was or is conveyed to [Deluxe], which has commercial value in [Deluxe's] business and which [Deluxe] regards as confidential.” (Id. at 2.) The parties intended the Agreement to ensure Confidential Information remained at the workplace, as Shaw agreed that “all of the Confidential Information is and shall be the sole property of [Deluxe] and its successors and assigns.” (Id. at 2.)

         B. Shaw Joins Harland Clarke

         In May 2014, Deluxe eliminated Shaw's position and advised him that he would no longer have a position at the company. (Am. Compl. ¶ 39.) Prior to leaving Deluxe, Shaw forwarded emails to his personal account regarding various proprietary details about Deluxe's relationship with a customer, (id. ¶ 40), and retained “at least nine USB devices containing confidential, proprietary, and/or trade secret business files of Deluxe, ” (id. ¶ 41, see also Id. ¶¶ 42-47).

         After the expiration of his eighteen-month non-competition agreement, Shaw joined Harland Clarke. (Id. ¶ 48.) In the summer of 2016, Deluxe's longstanding customer circulated a request for proposal (“RFP”) for a new contract. (Id. ¶ 53.) While at Deluxe, Shaw retained information regarding this customer's pricing and analytics and numerous files about the customer. (Id. ΒΆΒΆ 51-52.) Harland Clarke and ...


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