AirFacts, Inc. v. Diego De Amezaga
909 F.3d 84
4th Cir.2018Background
- Employee Diego de Amezaga worked at AirFacts (developer of TicketGuard auditing software) from 2008–2015 and signed an Employment Agreement containing: Paragraph 4.2 (return company property/confidential materials on termination) and Paragraph 8.1(d) (one‑year restriction on providing services to customers that are competitive or similar).
- On his final day he emailed proration-related development documents ("Proration Documents") to his personal email and, about a month later, used former AirFacts credentials to download two ATPCO‑based flowcharts ("Flowcharts") from a limited-access Lucidchart account; he submitted the Flowcharts in a job application but largely did not otherwise access or disclose the materials.
- After leaving AirFacts, de Amezaga began work at American Airlines in a Refunds managerial role; AirFacts contends this role and limited interactions with American’s Proration group violated the non‑compete/non‑similarity clause in Paragraph 8.1(d).
- AirFacts sued for breach of contract (Paragraphs 4.2 and 8.1), misappropriation of trade secrets under the Maryland Uniform Trade Secrets Act (Flowcharts and Proration Documents), and conversion; district court entered injunctions and conducted a five‑day bench trial, ultimately ruling for de Amezaga on all counts.
- On appeal the Fourth Circuit: affirmed the judgment as to Paragraph 8.1 (non‑compete/non‑similarity) and as to misappropriation of the Proration Documents (finding authorized access credible), but vacated and remanded as to (1) the Paragraph 4.2 retention claim (district court erred in finding abandonment) and (2) the Flowcharts trade‑secret/ misappropriation determination (district court erred in holding they were not trade secrets).
Issues
| Issue | Plaintiff's Argument (AirFacts) | Defendant's Argument (de Amezaga) | Held |
|---|---|---|---|
| Whether AirFacts abandoned its Paragraph 4.2 breach claim | Did not abandon; Paragraph 4.2 claim was pled, litigated, and supported by forensic evidence of retained documents | Argued AirFacts expressly abandoned Paragraph 4.2 at closing | Reversed district court: no clear, unambiguous abandonment; vacated and remanded for merits review of Paragraph 4.2 |
| Whether de Amezaga breached Paragraph 8.1(d)(i) by working for AirFacts’ customer (American) in a role "similar to" AirFacts’ services | Processing refunds uses similar industry rules as audits and thus is similar/competitive to AirFacts’ auditing services | His Refunds role used American’s proprietary refund software, served passengers (not ticket sellers), and did not perform audits or TicketGuard work | Affirmed: not similar or competitive; no breach of Paragraph 8.1(d)(i) |
| Whether de Amezaga breached Paragraph 8.1(d)(ii) by working on tasks similar to AirFacts’ anticipated proration product | He had material knowledge of proration product and interacted with American’s Proration group, so his role risked competition | He performed no proration services at American; interactions were minimal and within distinct departmental duties | Affirmed: no breach of Paragraph 8.1(d)(ii) |
| Whether the Flowcharts are trade secrets and were misappropriated under MUTSA | Flowcharts are protectable: compilation/arrangement of ATPCO data with unique value and access was restricted; thus misappropriation occurred | Flowcharts reflect public ATPCO data and were widely known within AirFacts; not protectable | Reversed district court: Flowcharts can be trade secrets given unique compilation/effort and access controls; vacated and remanded to address misappropriation question |
| Whether the Proration Documents were misappropriated | Emailing them to personal account on final day equals improper acquisition/use | He accessed them as part of employment, emailed to be available to answer employer questions, and did not use or disclose them post‑employment | Affirmed: district court credibility finding that access/use was authorized; no misappropriation |
Key Cases Cited
- Roanoke Cement Co. v. Falk Corp., 413 F.3d 431 (4th Cir. 2005) (standard of review for bench trial judgments)
- Trandes Corp. v. Guy F. Atkinson Co., 996 F.2d 655 (4th Cir. 1993) (elements and framework for trade secret claims)
- EndoSurg Med., Inc. v. EndoMaster Med., Inc., 71 F. Supp. 3d 525 (D. Md. 2014) (MUTSA elements and trade secret analysis)
- Imperial Chem. Indus. v. Nat’l Distillers & Chem. Corp., 342 F.2d 737 (2d Cir. 1965) (combination of public information may be protected as trade secret)
- Comprehensive Techs. Int’l, Inc. v. Software Artisans, Inc., 3 F.3d 730 (4th Cir. 1993) (trade secret may exist in combination of public information)
- Motor City Bagels, L.L.C. v. Am. Bagel Co., 50 F. Supp. 2d 460 (D. Md. 1999) (compilation/effort can support trade secret status)
- Mettler–Toledo, Inc. v. Acker, 908 F. Supp. 240 (M.D. Pa. 1995) (compilation of public data can be protectable)
- ISC‑Bunker Ramo Corp. v. Altech, Inc., 765 F. Supp. 1310 (N.D. Ill. 1990) (effort of compiling useful information entitled to protection)
- Space Aero Prods. Co. v. R. E. Darling Co., 208 A.2d 74 (Md. 1965) (trade secret scope includes industrial know‑how and information)
- LeJeune v. Coin Acceptors, Inc., 849 A.2d 451 (Md. 2004) (misappropriation includes acquisition by improper means)
- Diamond v. T. Rowe Price Assocs., 852 F. Supp. 372 (D. Md. 1994) (authorized remote possession of documents can negate misappropriation)