Krawiec v. Manly
370 N.C. 602
| N.C. | 2018Background
- Plaintiffs Michael and Jennifer Krawiec own Happy Dance (a Fred Astaire franchise). Two foreign dancers (Bogosavac and Divljak) were employed by plaintiffs under O1-B visa-based contracts that allegedly included one-year post‑employment noncompete/exclusivity provisions.
- The dancer defendants began working for Metropolitan Ballroom (owned by Jim and Monette Manly) while still under the visa‑based employment agreements; plaintiffs allege the dancers disclosed confidential information and solicited plaintiffs’ customers.
- Plaintiffs sued asserting claims including tortious interference with contract, misappropriation of trade secrets, unfair and deceptive practices (UDP), civil conspiracy, and unjust enrichment; some claims survived against the dancers but the Business Court dismissed the claims challenged here.
- The North Carolina Supreme Court reviewed de novo a Rule 12(b)(6) dismissal and treated plaintiffs’ allegations as true but also considered exhibits attached to the complaint (including immigration forms).
- The Court affirmed dismissal of plaintiffs’ claims for tortious interference with contract (against Metropolitan defendants), misappropriation of trade secrets (against all defendants), UDP (against Metropolitan), civil conspiracy (against all), and unjust enrichment (against Metropolitan), and remanded for further proceedings on the remaining claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Tortious interference with contract (Metropolitan) | Plaintiffs alleged Metropolitan knew of the exclusivity in the O1‑B visa contracts and induced breaches. | Metropolitan argued plaintiffs failed to allege Metropolitan knew of the exclusivity term because the visas did not show such a provision. | Dismissed: complaint lacks facts showing Metropolitan knew of the exclusivity term. |
| Misappropriation of trade secrets (all) | Plaintiffs identified trade secrets as dance production ideas, marketing strategies, and customer lists and alleged disclosure/use by dancers/Metropolitan. | Defendants argued allegations are too general and plaintiffs failed to plead secrecy or specific acts of misappropriation. | Dismissed: allegations are conclusory, lack particularity and facts showing reasonable efforts to maintain secrecy. |
| Unfair and deceptive practices (Metropolitan) | UDP claim rests on underlying torts (tortious interference, trade‑secret misappropriation). | Metropolitan argued those underlying torts were not properly pleaded, so UDP fails. | Dismissed: because underlying tort claims fail, UDP claim fails as a matter of law. |
| Civil conspiracy (all) | Plaintiffs alleged a conspiracy to unlawfully hire dancers, solicit customers, and disclose trade secrets that harmed plaintiffs. | Defendants argued no underlying wrongful acts were sufficiently pleaded to support conspiracy. | Dismissed: plaintiffs failed to plead wrongful acts in furtherance of a conspiracy (trade‑secret claim insufficient). |
| Unjust enrichment (Metropolitan) | Plaintiffs alleged Metropolitan benefited by employing dancers without paying for visa petitions procured by plaintiffs. | Metropolitan pointed to USCIS forms attached to complaint showing petitions do not transfer benefits and new petitions are required for new employers. | Dismissed: attached immigration forms negate any conferred, measurable benefit—complaint discloses a fact that defeats the claim. |
| Personal liability / veil piercing (Manlys individually) | Plaintiffs sought to hold Manlys individually liable via piercing when corporate claims succeed. | Defendants argued veil‑piercing is not an independent ground absent viable underlying claims. | Affirmed dismissal: because underlying claims fail, veil‑piercing theory is immaterial and insufficient. |
Key Cases Cited
- United Labs., Inc. v. Kuykendall, 322 N.C. 643 (setting elements for tortious interference with contract)
- Wood v. Guilford County, 355 N.C. 161 (standards for Rule 12(b)(6) dismissal)
- Ridgeway Brands Mfg., LLC v. State ex rel. Cooper, 362 N.C. 431 (treatment of factual allegations on dismissal)
- Washburn v. Yadkin Valley Bank & Tr. Co., 190 N.C. App. 315 (pleading particularity for trade‑secret claims under NC practice)
- Dalton v. Camp, 353 N.C. 647 (elements of an unfair and deceptive practices claim)