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Kforce Inc. v. Oxenhandler

United States District Court, W.D. Washington, Seattle

April 24, 2015

KFORCE INC., Plaintiff,
v.
BRETT OXENHANDLER, et al., Defendants.

ORDER ON DEFENDANTS' MOTION FOR PARTIAL SUMMARY JUDGMENT

MARSHA J. PECHMAN, Chief District Judge.

THIS MATTER comes before the Court on Defendants' Motion for Partial Summary Judgment. (Dkt. No. 34.) Having reviewed the Parties' briefing and all related papers, the Court GRANTS in part and DENIES in part the motion.

Background

Plaintiff Kforce and Defendant Vanderhouwen & Associates ("VHA") are competitors in the "technology specialty staffing business, " placing candidates into job openings with technology employers in search of new talent. (Dkt. Nos. 21 at 2-5, 34 at 2-4.) Plaintiff brings suit alleging that Defendants Brett Oxenhandler and Collette Bell, former Kforce employees who now work at VHA, and Patrick Walker, a VHA employee, stole a variety of confidential and proprietary information from Kforce for use at VHA. (Dkt. No. 21.) Plaintiff also alleges that VHA employees solicited Kforce employees, encouraging them to break their employment agreements with Kforce, and also solicited Kforce customers, attempting to divert their business to VHA. (Id.)

Defendants now move for summary judgment on five of Plaintiff's eight claims - breach of fiduciary duty, aiding and abetting breach of fiduciary duty, tortious interference with business relationships, unfair competition, and unjust enrichment - because these claims are preempted by the Uniform Trade Secrets Act. (Dkt. No. 34.) Defendants also move for summary judgment on Plaintiff's Consumer Protection Act unfair competition claim, in the alternative, because Plaintiff cannot meet the public interest requirement. (Id.) Finally, Defendants request that the Court grant summary judgment on all claims as to improper solicitation of Plaintiff's customers because Plaintiff's Fed.R.Civ.P. 30(b)(6) deponent was unprepared and uninformed at his deposition and could not name any customers that had been solicited. (Id.)

Plaintiff opposes the motion, arguing that these claims are independent of its trade secret misappropriation claim because the claims are based on the theft and misuse of non-trade secret information and because the solicitation of Kforce employees and customers are separate wrongs which do not involve the acquisition or disclosure of confidential information. (Dkt. No. 36.) Plaintiff also argues that it has satisfied the Consumer Protection Act's public interest requirement, and that Defendants' Fed.R.Civ.P. 30(b)(6) arguments should be rejected as improperly attempting to transform a discovery dispute into a dispositive motion. (Id.)

Discussion

I. Legal Standards

A. Summary Judgment

Summary judgment is proper where "the movant shows that there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). The moving party bears the initial burden of demonstrating the absence of a genuine issue of fact. Celotex Corp. v. Catrett , 477 U.S. 317, 323 (1986). In assessing whether a party has met its burden, the underlying evidence must be viewed in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 587 (1986).

B. Uniform Trade Secrets Act Preemption

The Washington Uniform Trade Secrets Act ("UTSA"), like the uniform trade secrets acts of other jurisdictions, "displaces conflicting tort, restitutionary, and other law of this state pertaining to civil liability for misappropriation of a trade secret." RCW 19.108.900(1). The UTSA does not displace "[c]ontractual or other civil liability or relief that is not based upon misappropriation of a trade secret." RCW 19.108.900(2). Essentially, "[a] plaintiff may not rely on acts that constitute trade secret misappropriation to support other causes of action." Thola v. Henschell , 140 Wn.App. 70, 82 (2007) (internal quotation marks and citation omitted).

To determine whether the UTSA preempts a civil claim, the Court must: "(1) assess the facts that support the plaintiff's civil claim; (2) ask whether those facts are the same as those that support the plaintiff's UTSA claim; and (3) hold that the UTSA preempts liability on the civil claim unless the common law claim is factually independent from the UTSA claim." Id. Proper application of the preemption test "precludes duplicate recovery for a single wrong." Id.

A majority of courts hold that it is not necessary to determine whether the information that a plaintiff alleges was misappropriated constitutes a trade secret before determining whether the UTSA displaces the plaintiff's common law claims. See Int'l Paper Co. v. Stuit, 2012 WL 1857143, at *7 (W.D. Wash. May 21, 2012) (citing CDC Restoration & Constr., LC v. Tradesmen Contractors, LLC , 274 P.3d 317, 330 n. 6 (Utah Ct.App. 2012), and Allied Erecting & Dismantling Co. v. Genesis Equip. & Mfg., Inc. , 649 F.Supp.2d 702, 721-22 (N.D. Ohio 2009) (collecting cases)). This conclusion stems from the fact that the UTSA's preemption provision has generally been interpreted to abolish all free-standing alternative causes of action for theft or misuse of confidential, proprietary, or otherwise secret ...


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