Office Depot, Inc. v. Impact Office Products, LLC
2011 U.S. Dist. LEXIS 109420
| N.D. Ohio | 2011Background
- Office Depot sues Kyle, Lavelle, and IOP for breach of contract, misappropriation of trade secrets, and related torts after Kyle and Lavelle resigned in 2009 and joined IOP.
- Kyle and Lavelle allegedly had access to confidential information and signed Employee Agreements with non-competition, non-solicitation, and nondisclosure provisions.
- Plaintiff alleges Kyle and Lavelle copied, emailed, and transmitted confidential documents and began soliciting Office Depot’s customers for IOP prior to resigning.
- In October 2009 Office Depot notified Kyle, Lavelle, and IOP of contractual obligations; Kyle responded; IOP was informed of binding restrictions against competition and disclosure.
- Plaintiff filed the complaint on December 1, 2009 alleging six counts; Defendants answered and asserted counterclaims for tortious interference with prospective business relations, and then moved to dismiss under Rule 12(b)(6).
- The court analyzes preemption under the Ohio Uniform Trade Secrets Act (OUTSA) to determine which common-law claims may survive and whether counterclaims may proceed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether OUTSA preempts common-law misappropriation claims | Office Depot argues OUTSA preempts only misappropriation-based claims and permits independent factual bases. | Defendants contend OUTSA preempts all common-law claims grounded in misappropriation. | OUTSA preempts the misappropriation-based portions of Count Two and related claims. |
| Whether Count Three (tortious interference with contract) survives OUTSA preemption | Count Three has an independent factual basis not solely based on misappropriation. | Count Three is wholly grounded in misappropriation of trade secrets. | Count Three survives in part, because it rests on independent facts (inducing breach of employee agreement). |
| Whether Count Four (unjust enrichment) is preempted by OUTSA | Count Four relies on different remedies beyond misappropriation, including conversion of business opportunities. | Count Four is based on misappropriation and should be preempted. | Count Four is preempted to the extent based on misappropriation, but survives to the extent based on independent facts (conversion of business opportunities). |
| Whether Count Five (breach of duty of loyalty) is preempted | Part of Count Five rests on independent non-misappropriation conduct beyond confidential disclosures. | Count Five is primarily based on misappropriation of confidential information. | Count Five survives in part for independent factual basis; preempted to the extent based on misappropriation. |
| Whether Count Six (tortious interference with business relations) survives OUTSA preemption | Count Six includes independent allegations of interference with current and prospective relations beyond misappropriation. | Count Six is solely tied to misappropriation allegations. | Count Six survives in part to the extent of independent factual basis; dismissed in part. |
Key Cases Cited
- A&B-Abell Elevator Co. v. Columbus/Central Ohio Bldg. & Constr. Trades Council, 73 Ohio St.3d 1 (Ohio 1995) (privilege and interference standards in tortclaims)
- Wright v. MetroHealth Med. Ctr., 58 F.3d 1130 (6th Cir. 1995) (privilege to interfere with contracts; good faith defense)
- Canderm Pharmacol., Ltd. v. Elder Pharm., Inc., 862 F.2d 597 (6th Cir. 1988) (recognizes privilege and independent-basis considerations in interfernce claims)
- Hauck Mfg. Co. v. Astee Indus., Inc., 375 F.Supp.2d 649 (E.D. Tenn. 2004) (preemption analysis for UTSA mixed claims; partial preemption approach)
- Allied Erecting and Dismantling Co. v. Genesis Equip. & Mfg., 649 F.Supp.2d 702 (N.D. Ohio 2009) (same-facts standard for UTSA preemption; independent factual basis retained)