Plаintiff initiated this action against defendants on 26 January 1999. In its amended complaint, plaintiff presents claims for misappropriation of trade secrets, two counts of tortious interference with a contract, defamation, breach of employee duty of loyalty, unfair and deceptive trade practices, civil conspiracy and punitive damages. Following discovery, plaintiff moved for summary judgment against defendant Curtis Kennedy (Kennedy) for the breach of employee duty of loyalty claim and against all defendants on the civil conspiracy claim. All defendants moved for summary judgment on all claims. Defendant American Sigma, Inc. (Sigma) also moved to strike certain exhibits which plaintiff submitted with its motion for summary judgment. After receiving arguments and reviewing the record over the course of three hearings, the trial court denied plaintiffs motion for summary judgment, Sigma’s motion tо strike, and Kennedy’s motion for summary judgment with regard to the breach of employee duty of loyalty claim against him. However, the trial court granted defendants’ summary judgment motion on all remaining claims. Plaintiff then voluntarily dismissed without prejudice its surviving claim against Kennedy.
The relevant facts as presented by the record may be summarized as follows: Plaintiff is a corporation which provides sales representation for manufacturers of watеr and wastewater equipment and processes. Sigma is a subsidiary corporation of Danaher, Inc. and manufactures water and wastewater equipment. In May of 1994, plaintiff and Sigma entered into a contract wherein Sigma appointed plaintiff as its exclusive sales representative for North Carolina, South Carolina and Virginia. The parties renewed the contract in April of 1997. Each contract included a clausе giving either party the right to terminate the contract by serving the other written notice within thirty (30) days. The contracts also contained a provision in which plaintiff agreed to keep Sigma informed as to its sales activities within its assigned territory.
Kennedy began working for plaintiff as a salesperson on 18 April 1994. On this date, he signed a statement indicating that he had reviewed plaintiff’s “Policies and Rules” which contained provisions requiring employees tо devote all of their “time, attention, knowledge, and skills solely” to plaintiffs business. The “Policies and Rules” also prohibited employees from imparting to outsiders information relative to plaintiff’s business affairs. Kennedy’s job responsibilities included the selling of Sigma’s products.
Around August of 1998, Kennedy approached Donald Miller (Miller) and suggested the possibility of their forming a new manufacturers’ sales representative company. Miller had worked fоr Sigma in various sales and business development positions since January 1983 but had resigned his employment effective 14 August 1998. At that time, Miller remained undecided as to his future plans; however, by mid-September both he and Kennedy had committed to the idea of their forming a new company — Carolina Environmental Technologies, LLC (CET). Throughout the next several weeks, they exchanged e-mails in which they discussed preliminary plans for launching CET. These plans involved setting up an office in Kennedy’s home, attending a water and wastewater industry association conference, and identifying potential clients. The list of potential clients included Sigma. On 6 November 1998, they incorporated CET with
Meanwhile, as part of its subsidiary relationship with Danaher Inc., Sigma had begun to implement various management tеchniques designed to increase growth of its business. In early 1998, Sigma’s Regional Sales Manager, James Heuer (Heuer), created a “Rep Plan” for each sales representative, including plaintiff. The “Rep Plan” provided plaintiff with sales goals and “action items” to assist plaintiff in achieving the goals within its territory. However, by May of 1998, Sigma had concluded that plaintiff was not going to achieve increased sales, unless it increased its representation activities. One month later, Sigma’s President, Richard Wissenbach (Wissenbach), assigned Susan McHugh (McHugh) as the Regional Manager for plaintiff’s territory and instructed her to increase sales and Sigma’s market share. Over the next two months, McHugh met once with plaintiff and reached the conclusion that plaintiff “did not appear to be motivated to improve sales and increase Sigma’s market share in the [territory.” Consequently, during the fаll of 1998, McHugh and Sigma’s sales director, Todd Garber (Garber), began to re-evaluate plaintiff’s representation of Sigma and considered finding a replacement.
In late September of 1998, Miller approached Garber to discuss the possibility of having CET represent its products in the Carolinas. Following this discussion and after CET was incorporated, CET developed a “Sales Action Plan” in which it identified key markets for Sigma products and оutlined a business strategy time line for 1999. This plan was submitted to Sigma on 12 November 1998. In the meantime, McHugh, Garber and Wissenbach met with plaintiff’s President, Tony Combs, regarding the lack of growth in Sigma’s sales within plaintiffs territory. Subsequent to this meeting, McHugh prepared a memorandum dated 23 November 1998 and titled “Justification to Replace Representation in North Carolina/South Carolina/Virginia Territory” (McHugh memorandum). In the memorandum, McHugh pointed out that plaintiffs year-to-date sales were $668,000 against an annual target of $1.1 million and that plaintiffs sales of Sigma products had shown a zero growth rate over a three-year period. McHugh also stated that plaintiff had experienced an attrition rate in employees with “[t]he most recent vacancy [being] confirmed 12/7/98 by the resignation of Comb’s key North & South Carolina salesman.” As a result of the factors summarized in this memorandum, Sigma notified plaintiff on 21 Deсember 1998 of its intention to exercise the termination clause of their contract effective January 1999.
Plaintiff appeals the trial court’s grant of summary judgment with respect to defendants Sigma, Kennedy and Miller. Sigma cross-assigns as error the trial court’s denial of its motion to strike certain exhibits submitted by plaintiff. Finally, Kennedy filed a motion to dismiss plaintiff’s appeal as interlocutory.
We first address defendant Kennedy’s motion to dismiss plaintiff’s appeal. Kennedy contends that, because the trial court granted only a partial summary judgment as to him, the trial court’s order is interlocutory and therefore is not immediately appealable.
Ordinarily, an appeal from an order granting summary judgment to fewer than all of a plaintiff’s claim is premature and subject to dismissal.
See Mozingo v. North Carolina Nat’l Bank,
Turning to the substantive issues, plaintiff assigns as error the trial court’s grant оf defendants’ motion for summary judgment, arguing there were genuine issues of material fact regarding its claims for misappropriation of trade secrets, tortious interference with a contract, civil conspiracy, unfair and deceptive trade practices, and punitive damages.
Summary judgment is appropriate where “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that a party is entitled to a judgment as a matter of law.” N.C. Gen. Stat. § 1A-1, Rule 56(c) (1999);
Johnson v. Phoenix Mut. Life Ins. Co.,
I. Misappropriation of Trade Secrets
Plaintiff first argues that a factual issue exists regarding its claim for misapproрriation of trade secrets. The law of this State gives the owner of a trade secret a cause of action and remedy for its misappropriation. N.C. Gen. Stat. § 66-152 et seq. (1999). The burden of proof initially rests with the owner who must establish aprima facie case of misappropriation by introducing substantial evidence that the person against whom relief is sought:
(1) knows or should have known of the trade secret; and
(2) has had a specific opportunity to acquire it for disclosure or use or has acquired, disclosed, or used it without the express or implied consent or authority of the owner.
N.C. Gen. Stat. § 66-155 (1999). Once the owner establishes a
prima facie
case, the burden of proof shifts to the defendant who may rebut the allegation by introducing substantial evidence that the trade secret was acquired through “independent development, reverse engineering, or . . . was obtained from another person with a right to disclose the trade secret.”
Id.; see also Byrd’s Lawn & Landscaping, Inc. v. Smith,
The threshold questiоn in any misappropriation of trade secrets case is whether the information obtained constitutes a trade secret which is defined as:
[B]usiness or technical information, including but not limited to a formula, pattern, program, device, compilation of information, method, technique, or process that:
a. Derives independent actual or potential commercial value from not being generally known or readily аscertainablethrough independent development or reverse engineering by persons who can obtain economic value from its disclosure or use; and
b. Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
N.C. Gen. Stat. § 66-152(3) (1999). From this statutory definition, our courts have fashioned six factors which are to be considered when determining whether information is a trade secret:
(1) the extent tо which the information is known outside the business;
(2) the extent to which it is known to employees and others involved in the business;
(3) the extent of measures taken to guard the secrecy of the information;
(4) the value of information to business and its competitors;
(5) the amount of effort Or money expended in developing the information; and
(6) the ease or difficulty with which the information could properly be acquired or duplicated by others.
State ex rel Utilities Comm’n v. MCI,
Here, plaintiff contends the following information constitutes three trade secrets: (1) the contents of a 6 November 1998 e-mail sent by Kennedy to Miller, (2) a customer database stored on a computer which Kennedy used during his employment with plaintiff, and (3) a “Territory Review Summary.” We disagree.
First, the 6 November 1998 e-mail sent by Kennedy to Miller contains sales forecasting information which identifies existing сustomers for Sigma’s products along with the names of prospective customers within plaintiffs territory. However, the record shows that Sigma either already possessed this information or could have easily compiled it from its business records. Moreover, plaintiff’s president provided this identical information in a 29 January 1999 letter to Sigma. Consequently, the information was not subject to reasonable efforts to maintain its secrecy.
See Glaxo Inc. v. Novopharm Ltd.,
After applying the six factors set forth in Wilmington Star News, we conclude the information identified by plaintiff does not constitute trade secrets. Thus, the trial court properly granted defendants’ motion for summary judgment on plaintiffs claim for misappropriation of trade secrets.
II. Tortious Interference with a Contract
Plaintiff next argues that factual issues exist with respect to each of its two counts for tortious interference with a contract. In order to maintain an action for tortious interference with a contract, a plaintiff must show: (1) a valid contract between the plaintiff and a third person; (2) the defendant knows of the contract; (3) the defendant intentionally induces the third person not to perform the contract; (4) the defendant’s inducement is unjustified and (5) actual damages to the plaintiff.
See United Laboratories, Inc. v. Kuykendall,
Plaintiff’s first count claims Sigma and Miller tortiously interfered with Kennedy’s employment by inducing Kennedy to compete directly with plaintiff. Specifically, plaintiff contends that its employment relationship with Kennedy was subject to the provisions in its “Policies and Rules” which prohibited an employee from disclosing information relevant to its business affairs and required the employee to devote all of his “time, attention, knowledge, and skills solely” to its “business and interests.” Assuming that these “Policies and Rules” form the basis of a contractual relationship between Kennedy and plaintiff, plaintiff fails to provide any evidence that either Sigma or Miller had knowledge of the terms or intentionally induced Kennedy to breach this contraсtual relationship. Moreover, our Supreme Court has held that the mere enticement and hiring of an at-will employee by a competing company, absent an improper motive, does not give rise to a tortious interference with a contract claim.
See Peoples Security Life Ins. Co. v. Hooks,
B. Plaintiff — Sisma Exclusive Representation Contract
Plaintiffs second claim is that Miller and Kennedy tortiously interfered with its exclusive representation contract with Sigma by inducing Sigma to cancel the contract. In support of this claim, plaintiff points to two speсific actions of Miller and Kennedy: (1) a 23 October 1998 letter from Miller to Sigma, and (2) the Sales Action Plan which CET submitted to Sigma on 12 November 1998. On each of these dates, Miller and Kennedy had a different relationship with the plaintiff; i.e. Miller as a potential competitor and Kennedy as an employee. Therefore, we review plaintiffs claim as to each defendant in these different contexts.
Where the circumstances surrounding a tоrtious interference claim involve a business competitor, the party asserting the claim must show that the competitor acted with malice or a bad motive.
Childress,
Next, plaintiff argues that Kennedy’s interference with its contract with Sigma was unjustified because it involved the breach of his “fiduciary duty of loyalty” to plaintiff. Our Supreme Court has recently addressed the issue of an at-will employee’s duty of loyalty to his employer in the context of starting a competing company.
See Dalton v. Camp,
III. Civil Conspiracy
In its next assignment of error, plaintiff argues the trial court erred in granting summary judgment on its claim for civil conspiracy.
A claim for civil conspiracy “requires the showing of an agreement between two or more persons to do an unlawful act or to do a lawful act in an unlawful way that results in damages to the claimant.”
Dalton v. Camp,
The essence of plaintiffs civil conspiracy сlaim is that although Sigma could lawfully terminate its exclusive representation, the manner in which defendants went about this termination was unlawful. In light of our previous discussion we find no basis for this contention.
Plaintiff suggests that the inconsistent dates in the McHugh memorandum show that defendants had agreed amongst themselves to replace plaintiff with CET months in advance of Sigma’s termination notice. However, the fact that Sigma may have agreed with Miller and Kennedy that their company, yet to be formed, would eventually replace plaintiff does not by itself demonstrate that the defendants acted unlawfully. Indeed, Sigma’s effort to secure an alternative representative prior to the exercise of a 30-day termination clause, appears to us to be a sound business practice.
See Tar Heel Industries v. E.I. duPont de Nemours,
IV. Unfair and Decent,ive Trade Practices
Plaintiff next contends its claim for unfair and deceptive trade practicеs should have survived summary judgment. To prevail on a
Chapter 75 unfair and deceptive trade practices claim, a plaintiff must show: “(1) an unfair or deceptive act or practice, or unfair method of competition, (2) in or effecting commerce, and (3) which proximately caused actual injury to the plaintiff or his business.”
Dalton,
Here, plaintiffs claim that defendants engaged in unfair and deceptive trade practices rests with its claims for misappropriation of trade secrets, tortious interference with contracts and civil conspiracy. Having determined that the trial сourt properly granted summary judgment on each of these claims, we likewise conclude that no claim for unfair and deceptive trade practices exists.
V. Punitive Damages
Finally, plaintiff alleges a claim for punitive damages. Pursuant to our statutes, punitive damages may be awarded only if a claimant proves that the defendant is liable for compensatory damages and that the defendant is guilty of fraud, malice, or willful or wanton conduct. N.C. Gen. Stat. § 1D-I5(a) (1999).
We have already concluded that the trial court properly granted defendants’ summary judgment on plaintiff’s claims for misappropriation of trade secrets, tortious interference with contracts, civil conspiracy
Having found no factual issue with respect to each of plaintiff’s claims for compensatory and punitive damages and in light of the fact plaintiff has taken a voluntary dismissal with respect to its remaining claim against Kennedy, we conclude the trial court properly granted summary judgment for the defendants.
In sum, we deny defendant Kennedy’s motion to dismiss plaintiff’s appeal as interlocutory. The trial court’s grant of summary judg- merit for defendants is affirmed. Therefore, we do not address Sigma’s cross-assignment of error.
Affirmed.