BADGER DAYLIGHTING CORP. v. RUTHERFORD
1:24-cv-00912
| S.D. Ind. | Mar 31, 2025Background
- Badger Daylighting Corp., an Indiana-based company, sued former employee Shannon Rutherford for breach of contract (including restrictive covenants and confidentiality), breach of fiduciary duties, and misappropriation of trade secrets under both Indiana and federal law.
- Rutherford, a Louisiana resident, had worked for Badger as an outside sales representative in Texas and Louisiana, with access to proprietary client information and signed various restrictive covenants and confidentiality agreements as a condition of her employment.
- After resigning in April 2024, Rutherford began working for a direct Badger competitor, allegedly soliciting Badger employees and customers, and transferring confidential information to her personal email and unauthorized devices.
- Badger sought injunctive relief and damages; a preliminary injunction was later entered by consent. Rutherford moved to dismiss for lack of personal jurisdiction and failure to state a claim.
- The core procedural matter was Rutherford’s motion to dismiss under Fed. R. Civ. P. 12(b)(2) and 12(b)(6).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of Indiana Choice of Law | Indiana law governs; Badger is IN company, agreement valid | Louisiana law/policy should override; LA has stronger interest | Indiana choice of law clause enforced |
| Personal Jurisdiction via Forum Clause | Valid forum selection clause supports jurisdiction | Forum clause unenforceable due to LA public policy | Forum selection valid; IN court has jurisdiction |
| Sufficiency of Trade Secret/Misuse Claim | Rutherford transferred confidential info, sufficient pleading | Complaint lacks specifics re: secrets, transfer, and misuse | Complaint alleges sufficient facts; claim proceeds |
| Restrictive Covenant/Reasonableness | Fact-intensive; Badger pled breach, damages, contract | Covenants are too broad/unreasonable under IN law | Dismissal premature; claims survive |
| Breach of Fiduciary Duty | Rutherford misused confidential info pre-departure | No facts show use or sharing of info while still employed | Complaint states plausible claim |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading standards for Rule 12(b)(6) motions)
- Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487 (federal diversity courts apply forum state’s choice-of-law rules)
- Purdue Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773 (plaintiff's burden in proving personal jurisdiction)
- TruServ Corp. v. Flegles, Inc., 419 F.3d 584 (forum selection clauses may confer personal jurisdiction)
- M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (forum selection clause enforceability governed by strong public policy of forum state)