RLM Communications, Inc. v. Amy Tuschen
831 F.3d 190
| 4th Cir. | 2016Background
- Amy Tuschen worked at RLM Communications for six years, became Director of Information Assurance, and managed a government information-assurance contract (the Contract).
- On hiring in 2007 she signed a Confidentiality Agreement and a Covenant Not to Compete (Noncompete). She resigned ~1 year before the Contract expired, copied Contract-related files from her employer-issued laptop onto a CD, and gave that CD to her successor.
- Tuschen took a job at nearby competitor eScience as Director of Cyber and IT Solutions and assisted eScience in bidding for the Follow-on Contract; she also contacted former RLM colleagues about joining eScience if it won.
- RLM sued Tuschen and eScience in state court asserting breach of the Noncompete and Confidentiality Agreement, trade-secret misappropriation, conversion, tortious interference, unfair trade practices, civil conspiracy, and sought injunctive relief; the case was removed to federal court.
- The district court granted summary judgment to Tuschen and eScience on all claims; the Fourth Circuit affirmed, holding the Noncompete unenforceable as overbroad and that RLM failed to show breach, misappropriation, conversion, or wrongful interference.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability / breach of Noncompete | Noncompete is part of employment; employment is consideration; Noncompete protects RLM’s legitimate interests | Noncompete is overbroad (bars any participation in similar business, directly or indirectly) and thus unenforceable | Noncompete unenforceable as overbroad; summary judgment for defendants affirmed |
| Breach of Confidentiality Agreement | Tuschen copied confidential files onto a CD without permission, violating the Agreement | Copy was made to assist successor in performance of duties; employer retained laptop; no evidence of unauthorized retention or disclosure | No genuine issue: copy was made in performance of duties/with employer acquiescence; summary judgment for defendants affirmed |
| Trade-secret misappropriation (N.C. statute) | Tuschen had access and presumably retained/shared CD with eScience; eScience’s technical improvement after hiring Tuschen shows misappropriation | Tuschen had authorized access; no evidence she retained or used files or shared them; eScience’s bid does not show a sudden technical leap | Where employee had authorized access, employer must present evidence raising an inference of actual acquisition or use; RLM failed to do so; summary judgment affirmed |
| Tortious interference with contractual relations (against eScience) | eScience induced performance breach by soliciting RLM employees and competing for contract | eScience acted as a competitor pursuing lawful business interests; its hiring was competitive conduct, not wrongful interference | Competition was justified interference; no evidence of improper motive; summary judgment for eScience affirmed |
Key Cases Cited
- Kadis v. Britt, 29 S.E.2d 543 (N.C. 1944) (noncompete covenants disfavored)
- VisionAIR, Inc. v. James, 606 S.E.2d 359 (N.C. Ct. App. 2004) (limits on noncompete scope)
- Farr Assocs., Inc. v. Baskin, 530 S.E.2d 878 (N.C. Ct. App. 2000) (requirements for enforceable covenant not to compete)
- Manpower of Guilford Cty., Inc. v. Hedgecock, 257 S.E.2d 109 (N.C. Ct. App. 1979) (scope of permissible restriction tied to duties performed)
- Med. Staffing Network, Inc. v. Ridgway, 670 S.E.2d 321 (N.C. Ct. App. 2009) (prima facie misappropriation where employee accessed confidential files with unusual frequency)
- Copypro, Inc. v. Musgrove, 754 S.E.2d 188 (N.C. Ct. App. 2014) (overbroad covenants that bar unrelated work are unenforceable)
- Hartman v. W.H. Odell & Assocs., Inc., 450 S.E.2d 912 (N.C. Ct. App. 1994) (limits on blue‑penciling overbroad covenants)
- Henley Paper Co. v. McAllister, 117 S.E.2d 431 (N.C. 1960) (overbroad covenant struck down)
- Kinesis Advertising, Inc. v. Hill, 652 S.E.2d 284 (N.C. Ct. App. 2007) (covenant invalid where it prohibits any association with similar-service businesses)
- Beverage Sys. of the Carolinas, LLC v. Associated Beverage Repair, LLC, 784 S.E.2d 457 (N.C. 2016) (court cannot rewrite an unreasonable covenant)
- Home Fin. Co. of Georgetown v. O’Daniel, 74 S.E.2d 717 (N.C. 1953) (definition and effect of prima facie evidence in procedure)
- Anderson v. Liberty Lobby, 477 U.S. 242 (U.S. 1986) (summary judgment standard)