Baker Hughes Inc. v. S&S Chemical, LLC
836 F.3d 554
| 6th Cir. | 2016Background
- Stevens worked for Baker (and predecessor) and signed a Termination Agreement promising to keep Baker’s trade secrets confidential; he left in 1996.
- Stevens sued Baker in Oklahoma in 1999 over unpaid compensation; the suit was resolved for $10,000 and dismissal with prejudice.
- Baker circulated a March 30, 2000 draft "Settlement Agreement and Full and Final Mutual Release" (the Settlement); Stevens and his counsel Giles signed a copy on March 31, 2000 and Giles faxed it to Baker on April 7, 2000; no copy signed by Baker appears in the record.
- Years later Baker alleged Stevens/S&S used Baker’s EP Processes and sued for breach of the Termination Agreement and trade-secret misappropriation (filed 2014). Defendants asserted the Settlement’s broad release barred Baker’s claims.
- District court relied on the signed Settlement, Giles’s declaration, and billing records to find a binding contract and that the Release covered Stevens’ confidentiality obligations; summary judgment for Defendants was entered and affirmed on appeal.
Issues
| Issue | Plaintiff's Argument (Baker) | Defendant's Argument (Stevens) | Held |
|---|---|---|---|
| Whether the March 2000 Settlement is a binding contract on Baker | No: absence of Baker’s signature creates a genuine factual dispute about mutual assent | Yes: Baker sent the draft, Stevens/Giles signed and returned it, and Baker performed ($10,000 payment), evidencing offer, acceptance, and performance | Settlement is binding under Oklahoma law (offer/acceptance and performance made it enforceable) |
| Whether Giles and his billing records should have been excluded under Rules 26/37 | Giles and records were not disclosed in initial disclosures; failure to supplement requires exclusion | Defendants lacked knowledge of Giles’ relevance until Baker produced the Settlement; Baker had actual knowledge and opportunity to explore Giles before discovery closed | Exclusion not required: disclosure failure was harmless/substantially justified because Baker knew of Giles and had time to investigate |
| Whether Giles’s affidavit violated Rule 56(c)(4) (personal knowledge) | The affidavit contains speculation and legal conclusions not based on personal knowledge, so it should be excluded | Even if bits were improper, the documentary record independently supports contract formation and performance | Any error was harmless; documents alone supported the judgment so consideration of the affidavit does not require reversal |
| Whether post-settlement conduct (reminders in 2002, 2008, 2013) can alter interpretation of the Release | Stevens’ failure to assert the Release in later interactions shows parties did not agree to the Release | Settlement language is unambiguous and broad; when unambiguous, extrinsic post-contract conduct is irrelevant | Release is unambiguous and covers confidentiality obligations; post-contract conduct does not change its meaning |
Key Cases Cited
- Watson v. Cartee, 817 F.3d 299 (6th Cir. 2016) (standard of review for summary judgment)
- Rocheleau v. Elder Living Constr., LLC, 814 F.3d 398 (6th Cir. 2016) (summary judgment standard)
- Ondo v. City of Cleveland, 795 F.3d 597 (6th Cir. 2015) (abuse-of-discretion review for discovery evidentiary rulings)
- Briggs v. Potter, 463 F.3d 507 (6th Cir. 2006) (discussing disclosure/exclusion under discovery rules)
- Meridian Leasing, Inc. v. Associated Aviation Underwriters, Inc., 409 F.3d 342 (6th Cir. 2005) (de novo review of contract interpretation)
- Stewart v. Bd. of Educ., Sch. Dist. No. 2, Stephens Cty., 230 P. 504 (Okla. 1924) (unsigned instrument can be binding where parties perform)
- Howe v. City of Akron, 801 F.3d 718 (6th Cir. 2015) (harmlessness in Rule 26 disclosure analysis)
- Brainard v. Am. Skandia Life Assurance Corp., 432 F.3d 655 (6th Cir. 2005) (harmless-error analysis for evidentiary rulings)
- Pitco Prod. Co. v. Chaparral Energy, Inc., 63 P.3d 541 (Okla. 2003) (when contract language is unambiguous, extrinsic evidence of intent is not considered)