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Summit Fire Protection Co. v. Reich

United States District Court, D. Nebraska

May 13, 2019

SUMMIT FIRE PROTECTION CO., a Minnesota corporation; Plaintiff,
v.
TED REICH, Defendant.

          MEMORANDUM AND ORDER

          Laurie Smith Camp Senior United States District Judge.

         This matter is before the Court on the Motion for Temporary Restraining Order and Preliminary Injunction, ECF No. 6, filed by Plaintiff Summit Fire Protection Co. (“Summit”). Summit appeared before the Court on May 13, 2019, for a hearing on the Motion. Defendant Ted Reich and his counsel also appeared at the hearing. The parties agreed that the matter would proceed only on the question of whether a Temporary Restraining Order should be issued, and the Court would hear the request for Preliminary Injunction in the future. For the reasons stated below, the Court will deny the Motion for Temporary Restraining Order and set the matter for hearing on Summit's Motion for Preliminary Injunction.

         BACKGROUND

         The following is a summary of the facts alleged in Summit's Complaint, ECF No. 1, and supported by evidence Summit submitted in support of its Motion, ECF No. 8-1 through 8-12. At the hearing, counsel for Reich made a proffer which the Court accepted as evidence. The Court considers this evidence for the limited purpose of deciding the pending Motion for Temporary Restraining Order.

         Summit is a provider of fire life safety services including fire sprinkler systems, fire extinguishers, and fire alarm systems. Summit performs work selling, installing, inspecting, and repairing sprinkler systems, fire extinguishers, and fire alarm systems. Summit performs these services at regular intervals for its clients.

         Summit hired Reich as a service manager in June 2015. He had job and management responsibilities, including managing field staffing, scheduling, dispatching, sales, customer service, scheduling inspections of fire sprinkler systems, and completing inspections of fire sprinkler systems. On or about July 13, 2015, Reich executed an “Acknowledgement and Receipt of Employee Handbook” (the “Acknowledgement”). The Acknowledgement states:

[C]onfidentiality is a major principle governing the Company's work environment and that all information which is not generally known or readily ascertainable by the general public through proper means which relates to the Company's products, services, customers, or existing or reasonably foreseeable business must be treated confidentially at all times. I am aware that, during the course of my employment, confidential information will be made available to me as defined in the Handbook and other related information. I understand that this information is critical to the success of the Company and must not be disseminated or used outside of my employment, whether voluntary or involuntary. In the event of the termination of my employment, whether voluntary or involuntary, I agree not to use this information or disseminate it to any other individual or entity, I also understand that as an employee of the Company, I owe it a duty of loyalty as defined under applicable law and will abide by it.

Ex. A at 17, ECF No. 8-2, PageID.72.

         Summit's employee handbook defined confidential information as “information which is not generally known or readily ascertainable by the general public through proper means. It includes, but is not limited to, all designs, specifications, acknowledgements, customer lists, accounting and financial information, production information, internal correspondence, and sales and customer information.” Ex. A at 10, ECF No. 8-2, PageID.65.

         On or about September 1, 2018, Reich's job responsibilities changed and he began working for Summit as a project foreman, overseeing installation of a sprinkler system at a new construction site. Because of this change, Reich had regular access to a Summit network drive that Summit alleges contained information about Summit's customers. Reich was issued a company HP laptop, Samsung Tablet, Apple iPad, and Samsung Galaxy 8 phone (collectively the “Electronic Devices”). Reich used the Electronic Devices to complete the tasks assigned to him within the scope of his employment duties.

         On March 8, 2019, Reich resigned from Summit. Summit alleges that at the time of his resignation, Reich was already employed by Total Fire, one of Summit's competitors. As evidence, Summit alleges that Reich had regular and frequent phone contact with Total Fire while he was still employed by Summit, including 72 calls while he was “clocked in” as an employee of Summit. Reich asserts that these calls were likely related to his employment with Summit because Total Fire was a regular subcontractor of Summit. Summit also alleges that on January 9, 2019, Reich accessed a document titled, “Total Fire & Security Business Plan Ted Copy.Ink” on his summit-issued laptop. Shakespeare Aff. at 2, ECF No. 8-4. Reich asserts that this was an unfinished document that he provided to a business associate as a template, and that he did not access the document in connection with his employment with Total Fire.

         Summit conducted a forensic analysis of Reich's Summit-issued Electronic Devices after his resignation. The analysis revealed that 8 USB devices had connected to Reich's Summit-issued HP laptop between January and March of 2019. Shakespeare Aff. Ex. A, ECF No. 8-5. Summit alleges that at least two of the USB devices contained Summit's confidential customer information. For example, the document “WORK ORDER TRACKING.xlsx” contained information about (1) the identity of Summit's customers in the Omaha area, (2) the customers' contact information, (3) frequency of inspections for each customer, and (4) the dates on which inspections were coming due. Additionally, the document “Barone Fire Sprinkler Accounts.lnk” contained a detailed listing of all of Summit's sprinkler inspection accounts in Nebraska with a customer. The document “JHatcher daywoks 2015.xls” contained a comprehensive list of service work performed (including job number, customer, and date) on behalf of Summit by the manager of Summit's Omaha office, John Hatcher, since the office's inception. The analysis also revealed that Reich deleted the browsing history from his laptop's internet browser on March 8, 2019.

         After Reich's resignation, he began soliciting Summit's customers on behalf of Total Fire. As of May 10, 2019, Summit claims that Reich, on behalf of Total Fire, has successfully solicited at least 30 of Summit's customer accounts. On April 26, 2019, Summit filed this action asserting several causes of action against Reich, including breach of contract, misappropriation of trade secrets, and breach of duty of loyalty. Reich, through counsel, asserts that he did not ...


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