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Summit Fire Protection Co. v. Reich

United States District Court, D. Nebraska

October 11, 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 a Preliminary Injunction, ECF No. 6, submitted by Plaintiff Summit Fire Protection Co. (“Summit”). After a hearing on the matter, and for the reasons stated below, the Court will grant the Motion in part.

         BACKGROUND

         The following is a summary of the facts alleged in Summit's Complaint, ECF No. 1, as well as the briefs and evidence submitted by both parties. ECF Nos. 8, 45-47, 50- 51, 55. At the hearing, the Court took judicial notice of the evidence filed on the record. The parties did not submit additional evidence. The Court considers this evidence only for purposes of the pending Motion for Preliminary Injunction.

         Summit is a provider of fire life safety services including fire sprinkler systems, fire extinguishers, and fire alarm systems. Summit sells, installs, inspects, and repairs sprinkler systems, fire extinguishers, and fire alarm systems. Summit typically inspects its clients' sprinkler systems, fire extinguishers, and fire alarm systems at regular intervals.

         Summit hired Reich as a service manager in June 2015. Reich's responsibilities included managing Summit's field employees in Nebraska. Reich also managed scheduling, dispatching, sales, customer service, and fire sprinkler systems inspections.

         On or about July 13, 2015, Reich executed an "Acknowledgement and Receipt of Employee Handbook" (the "Acknowledgement"). Rubald Decl. 7. The Acknowledgement stated:

[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. As a foreman, Reich oversaw sprinkler system installations at new construction sites. After this change, Reich had regular access to a Summit network drive that allegedly contained confidential information and trade secrets. 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 and began working for Total Fire. Summit presented evidence that after Reich's resignation, he began soliciting Summit's customers on behalf of Total Fire. Over forty Summit customers have switched to Total Fire since Reich's resignation. On his last day of his employment with Summit, Reich returned the Electronic Devices. Reich also submitted evidence that he destroyed USB devices potentially containing Summit information. Reeser Aff. ECF No. 47-2. Reich maintained that he did not send any Summit documents to Total Fire employees other than documents used on joint projects. Answers to Interrogs. 1, ECF No. 51-3, PageID.562.

         After Reich's resignation, Summit conducted a forensic analysis of his Summit-issued Electronic Devices. 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. One of the USB devices contained a document called “New estimate form.xlsx.” Ex. A, ECF No. 45-1.

         Summit filed this action on April 26, 2019, and a motion for temporary restraining order and preliminary injunction on May 10, 2019. On May 13, 2019, the Court denied Summit's temporary restraining order because Summit was not able to show that Reich was in possession of, or had disclosed, any of Summit's confidential information. Nevertheless, the Court permitted the ...


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