United States District Court, D. Minnesota
Oberdorfer and Nicole L. Faulkner, Stinson Leonard Street
LLP, Minneapolis, MN, for plaintiff Midwest Sign & Screen
Printing Supply Co.
D. Olson, Anthony Ostlund Baer & Louwagie P.A.,
Minneapolis, MN, for defendant Robert Dalpe.
Jennifer A. Nodes and Jennifer Zwilling, Jackson Lewis P.C.,
for defendant Laird Plastics, Inc.
OPINION AND ORDER
C. TOSTRUD, UNITED STATES DISTRICT JUDGE
Sign & Screen Printing Supply seeks a preliminary
injunction forbidding its former employee, Robert Dalpe, from
“working for or assisting” his new employer,
Laird Plastics, “in any capacity that competes with
Midwest” in violation of an employment agreement
between Midwest and Dalpe. Midwest has introduced evidence
showing that Dalpe likely violated his employment agreement
by emailing himself Midwest's confidential information
before his Midwest employment ended and that, if not
modified, Dalpe's new position would enable him to assist
Laird in competing with Midwest. Midwest has not, however,
shown a likelihood of success on other essential elements of
its claims, and Laird and Dalpe have introduced evidence
showing that Dalpe no longer possesses or intends to use or
disclose Midwest's confidential information and that
Dalpe's job duties with Laird have been limited to
minimize the probability of violating Dalpe's employment
agreement with Midwest. For these reasons, among others,
Midwest has not shown a likelihood of success on the merits
or irreparable harm to justify ordering the extraordinary
remedy of a preliminary injunction.
and Laird's business activities overlap but are not
identical. Midwest is “a full-service supplier of sign
materials, including paints and substrates; screen materials,
including inks, adhesives, and frames; digital media,
equipment, and software; and other digital services.”
First May Aff. ¶ 3 [ECF No. 5]; Mem. in Supp. at 2 [ECF
No. 4] (“Midwest prides itself [on] being more than
simply a supplier. It offers its customers a full-service
experience with expert hands-on consultation from its
experienced sales representatives.”). Midwest serves
customers in twenty-nine states. Weinberg Aff. ¶ 18, Ex.
D [ECF No. 6]. Laird is “the largest plastics
distributor in the nation, ” with fifty locations in
the continental United States and Canada. Reply Mem. at 2
[ECF No. 36]; First Jenkins Decl. ¶¶ 2-3 [ECF No.
32] (stating Laird has over 25, 000 customers). Laird says
that “[a]s a result of its geographic breadth, each
Laird location tailors its product offerings to the demands
of the individual local market.” First Jenkins Decl.
¶¶ 4, 7. At its location in Portland, Oregon, where
Dalpe is supposed to work, Laird offers three categories of
plastic products: (1) graphic materials, like rigid sheet
stock and semi-rigid plastics, which are primarily used for
large, indoor signage; (2) acrylics and polycarbonates, which
are hard and often see-through materials used when customers
require a more durable or transparent product; and (3)
mechanical/engineering materials, which are plastics used
industrially, such as conveyor equipment in a manufacturing
plant. Id. ¶¶ 11, 13, 17, 20.
and Laird dispute the extent to which they compete. Midwest
says there is considerable identity between its business and
Laird's, calling the two “direct
competitors.” Mem. in Supp. at 9; see First
May Aff. ¶ 9; Second May Aff. ¶ 4 [ECF No. 38].
Laird says that it and Midwest do not “sell blue
widgets to the same local hardware store, ” and that it
“sells vastly different plastics products to a largely
dissimilar customer base.” Mem. in Opp'n at 1 [ECF
No. 31]; First Jenkins Decl. ¶ 40 (“Of Laird's
approximate 350 customers in the Portland Market, less than
ten are also customers of Midwest.”). Midwest and
Laird's submissions identify specific products they both
sell, albeit with different volume and regularity. These
include “roll stock” (for digital printing and
lamination) and “rigid sheet stock” (for
signage). See Dalpe Decl. ¶ 16 [ECF No. 33];
Second May Aff. Ex. C [ECF No. 38-1]; First Jenkins Decl.
¶¶ 31-41. The Parties' submissions also
identify products sold by one but not the other. Midwest
sells screen-printing supplies and digital-printing inks;
Laird does not. Id. Laird sells industrial plastics,
also known as “rod and tube”; Midwest does not.
began working for Midwest in June 2011. Dalpe Decl. ¶ 1;
Froelke Aff. Ex. A [ECF No. 7]. His first job was Operations
Manager, which involved managing Midwest's warehouse,
inventory, and customer support at a California location.
Dalpe Decl. ¶ 1; Mem. in Supp. at 2. In April 2015,
Midwest promoted Dalpe to the position of Northwest Sales
Manager. Dalpe Decl. ¶ 1; Weinberg Aff. Ex. A. In this
new role, Dalpe officed in Portland but oversaw sales for
Midwest's “Pacific Northwest” region, which
included all of Oregon and Washington, and parts of Idaho,
Alaska, Montana, and British Columbia. Weinberg Aff. ¶
7. According to Midwest's “Job Description”
document, Dalpe's duties as Sales Manager included
leading a team of five sales representatives, meeting with
key customers, approving customer quotes and proposals, and
“monitor[ing] Midwest's competition, their
products, sales and marketing activities.” Weinberg
Aff. Ex. C at 1. He also participated in weekly sales calls
with the Vice President of Sales and other Sales Managers
nationwide. Weinberg Aff. ¶ 17.
of his promotion to Northwest Sales Manager, Midwest required
Dalpe to renew his acceptance of a contract entitled
“Confidentiality, Nonsolicitation and Noncompetition
Agreement.” Weinberg Aff. Ex. B (2015 Agreement,
hereinafter “Agreement”); see also
Froelke Aff. Ex. A (2011 Agreement). Principally at issue in
this motion are the Agreement's non-disclosure (¶
2), non-retention (¶ 3), and non-compete (¶¶ 5
and 6) provisions:
2. I will not, during or after the term of my employment,
disclose [Midwest's] confidential information to any
other person or entity, or use [Midwest's] confidential
information for my own benefit or for the benefit of another,
unless [Midwest] expressly direct[s] me to do so.
3. If either [Midwest] or I terminate my employment, I will
deliver to [Midwest] immediately all of [Midwest's]
confidential information, in whatever format, and will not
retain any copies. . . .
5. For a period of 12 months after the termination of my
employment (whether voluntary or involuntary), I will not
own, work for or assist any entity that offers products or
services that compete with products or services that
6. For a period of 12 months after the termination of my
employment (whether voluntary or involuntary), I will not
provide products or services that compete with
[Midwest's] to any entity who was a customer of
[Midwest's] during my employment with [Midwest].
¶¶ 2-3, 5-6. The Agreement also contains
choice-of-law and choice-of-forum clauses providing that
Minnesota law shall govern “any disputes arising out of
or in any [sic] related to this Agreement” and that
Dalpe consents to jurisdiction in Minnesota courts.
Id. ¶ 11.
December 2018, Dalpe began meeting with individuals from
Laird to discuss the possibility of leaving Midwest for
Laird. See First Jenkins Decl. ¶¶ 51-55.
On February 25, 2019, Laird offered Dalpe a position as the
Profit Center Manager to lead Laird's Portland location.
Id. ¶ 56. That same day, Dalpe informed Midwest
that he intended to terminate his employment to work with
Laird. Weinberg Aff. ¶¶ 19-20. Dalpe's last day
at Midwest was March 8, 2019, and his first day at Laird was
March 19, 2019. Dalpe Decl. ¶¶ 31-32.
before and after meeting with Laird representatives, Dalpe
sent several emails from his Midwest work account to his
personal account attaching Midwest documents. Dalpe Decl.
¶ 33; First May Aff. ¶¶ 12-13. The information
included Midwest's annual profit and loss statements and
daily margin reports dating back to 2015, account lists and
contact information for over 2, 700 Midwest customers, and
copies of an offer letter and employment agreement for a
recently-hired Midwest sales representative. See
First May Aff. ¶ 13. Dalpe does not dispute that this
information is confidential but testifies that he did this
“in order to ensure compliance with [his] non-compete
obligations and without any intention of sharing the
information with Laird or using the information at Laird for
competitive advantage, ” and so he could calculate his
commission amount. Dalpe Decl. ¶¶ 34-35. Midwest
says the “vast majority” of information Dalpe
sent himself is not timely or pertinent to “the method
by which [his] bonus or other compensation is
calculated.” First May Aff. ¶ 14.
has not provided a job description for Dalpe's new
position except to say that Profit Center Managers in general
“lead each Laird location” and are
“responsible for overseeing all aspects of local
operations including hiring and terminating personnel,
developing and implementing sales strategies, selecting
suppliers, and identifying investment opportunities.”
First Jenkins Decl. ¶ 6. Dalpe will supervise five Laird
sales representatives and report to a Regional Manager. Dalpe
Decl. ¶¶ 2-3; First Jenkins Decl. ¶ 7. Laird
attempts to distinguish Dalpe's role from what he did at
Midwest by saying he will help “grow its Portland
Market sales by adding equipment to fabricate and process
plastics, ” meaning items like “cosmetic
displays, machine guards, starwheels, pullies, rollers, and
sprockets”-something Midwest doesn't do. First
Jenkins Decl. ¶ 53; Mem. in Opp'n at 13 n.2.
days after Dalpe notified Midwest that he would be resigning
and taking a new position with Laird, counsel for Midwest
wrote to Laird and Dalpe regarding his obligations under the
Agreement. Oberdorfer Aff. ¶¶ 2-3, Exs. A, B [ECF
No. 8]. According to Midwest, “[d]espite numerous
written requests from Midwest's counsel, neither Laird
nor Dalpe” provided adequate assurances “that
Dalpe has ceased accessing and has destroyed Midwest
confidential information, ” and Dalpe refused to
“turn over [his] personal devices for Midwest's
review . . . or preservation.” Mem. in Supp. at 13;
see Oberdorfer Aff. ¶¶ 4-6, Ex. C. In
response to these communications, Laird agreed to restrict
Dalpe from directly soliciting Midwest customers but did not
agree to Midwest's request that Dalpe not supervise Laird
sales representatives who solicit Midwest customers.
Oberdorfer Aff. ¶ 6.
commenced this action against Dalpe and Laird on April 8,
2019. See Compl. at 29 [ECF No. 1]. Midwest asserts
claims for breach of contract, violation of state and federal
trade-secret acts, breach of the duty of loyalty, tortious
interference with contract, unfair competition, and aiding
and abetting. Id. ¶¶ 70-133. Midwest seeks
injunctive relief and monetary damages. See, e.g.,
id. ¶ 80; id. at 28-29. There is
diversity jurisdiction over the case under 28 U.S.C. §
1332(a)(1). See Compl. ¶¶ 12-15 (alleging
that Midwest is a Minnesota corporation with a principal
place of business in Minnesota, Dalpe is an Oregon citizen,
Laird is a Delaware corporation with its principal place of
business in Texas, and that there is over $75, 000 in
same day it filed suit, Midwest moved for a temporary
restraining order.ECF No. 3. Midwest's proposed order
describes the relief it seeks. ECF No. 9. If entered, the
proposed order would enjoin Dalpe “from violating the
terms of [the Agreement].” Id. at 1. It also
would enjoin Dalpe and Laird “from maintaining, using
or disclosing any confidential or trade secret information
belonging to Midwest.” Id. at 1-2. A hearing
on Midwest's motion occurred on May 2, 2019. ECF No. 41.
to Laird, since Midwest filed its motion, Laird and Dalpe
have “repeatedly represented” that Laird has not
requested or received Midwest's confidential information,
Laird has directed Dalpe not to use or disclose the
confidential information, Dalpe has not forwarded or stored
Midwest's confidential information, and Dalpe has deleted
the information from all devices and mediums. Mem. in
Opp'n at 14-15; Nodes Decl. ¶¶ 3-5 [ECF No.
35]; Dalpe Decl. ¶¶ 36-38. Dalpe also retained a
computer-forensics firm “to examine the content of
[his] personal devices and provide written assurance that
[he] did not disclose Midwest's confidential information
at any time and deleted all Midwest content.” Dalpe
Decl. ¶ 36.
hearing, Defendants provided new information about
self-imposed restrictions to Dalpe's job at Laird.
Following the hearing, and in response to an invitation from
the Court, Laird filed a supplemental declaration outlining
the limitations Laird represents it has imposed on
Dalpe is not to personally contact or attempt to contact any
known Midwest customers, or direct another Laird employee to
contact any known Midwest customers, during the Restrictive
Period, for the purpose of soliciting and/or selling Shared
Products [defined as roll stock and rigid sheet stock]. . . .
[W]hile Laird may continue to sell rigid sheet stock to
Shared Customers as it had prior to [Dalpe's] hire,
during the Restrictive Period, [Dalpe] is not to be
personally involved in these sales. . . . [or] any strategy
discussions regarding Shared Products to Shared Customers. .
[T]o the extent a Midwest customer contacts [Dalpe] during
the Restrictive Period to purchase a Shared Product, he is to
immediately direct them to [his supervisor] or to one ...