Labor & Employment – Breach of Contract – Misappropriation of Trade Secrets

Allegations do not warrant invoking the inevitable disclosure doctrine, as Plaintiff has not alleged that, because its former employees who had access to trade secret information left to work for a competitor, such information will inevitably be disclosed.

The Court granted in part and denied in part Defendant’s motion.

This action arose out of Plaintiff Accelerando Inc.’s contention that its competitor, Relentless Solutions Inc., has misappropriated trade secrets taken by Plaintiff’s former employees, including Defendant Robert Yoder, who left to work for Relentless. Plaintiff alleges that, in using Plaintiff’s confidential or trade secret information, Relentless has breached its contract with Plaintiff and wrongfully interfered with Plaintiff’s service contracts with its customers by inducing them to terminate the service contracts to work with Relentless instead.

Relentless moved to dismiss all of Plaintiff’s claims against Relentless, which included: (1) misappropriation of trade secrets in violation of N.C.G.S. § 66-152, et seq. (Count One); (2) breach of contract related to the E4CP Agreement (Count Three); (3) wrongful interference with contract (Count Four); (4) unfair and deceptive trade practices pursuant to N.C.G.S. § 75-1.1, et seq. (Count Five); (5) unjust enrichment (Count Six); and (6) permanent injunction (Count Seven).

Among other things, Plaintiff alleged that “Relentless, through [other employees Scott] Muller, [Dana] Dollaeye, and Mr. Yoder, has misappropriated [Plaintiff’s] trade secrets by using them against [Plaintiff] to solicit [Plaintiff’s] customers.” Specifically, Plaintiff contended that “[b]ecause Relentless knew from the Confidential Customer Service Protocols how [Plaintiff] handled customer service issues, it knew how to undercut [Plaintiff] to its customers.” Additionally, Plaintiff alleged that based on its misuse of Plaintiff’s trade secrets, Relentless successfully encouraged four specific customers to leave Plaintiff and work with Relentless instead. The Court determined that the allegations in the Amended Complaint are minimally sufficient at this stage to state a claim for misappropriation of trade secrets against Relentless based on Relentless’ alleged misappropriation of the Customer Service Protocols taken by Dollaeye. However, to the extent Count One is also based on Relentless’ use of trade secrets allegedly taken by Yoder or Muller, the Court determined the allegations in the Amended Complaint insufficient to state a claim for misappropriation of trade secrets as (i) with respect to Yoder, Plaintiff only alleged that Yoder took confidential customer information, which Plaintiff conceded does not constitute trade secrets, and otherwise has generally alleged upon information and belief that Yoder stole unspecified trade secret information from Plaintiff; and (ii) with respect to Muller, the Amended Complaint contains no allegations that trade secrets were taken by Muller and subsequently used by Relentless. Further, the Court rejected Relentless’ argument that these allegations warrant invoking the inevitable disclosure doctrine. Plaintiff has not simply alleged that, because former employees of Plaintiff who had access to trade secret information left to work for a competitor, such information will inevitably be disclosed. Rather, Plaintiff has specifically alleged that Relentless accessed the alleged trade secret information taken by Dollaeye, used it to identify flaws in Plaintiff’s services and encourage customers to leave Plaintiff to work with Relentless, and, as a result, four customers left to work with Relentless. These are allegations of actual, as opposed to inevitable, disclosure and use. Therefore, the Court denied in part the motion as to Count One to the extent it is based on Relentless’ alleged misappropriation of the Customer Service Protocols taken by Dollaeye. The motion is granted in part as to Count One to the extent it is based on unidentified trade secrets allegedly taken by Yoder or Muller.

Plaintiff alleged Relentless breached paragraph C of the parties’ Ecommerce 4 Counterpoint Reseller Agreement (the E4CP Agreement) by using Plaintiff’s confidential, trade secret, and proprietary information to compete with Plaintiff. The Court determined that Plaintiff sufficiently pleaded facts that state a claim for breach of contract. Specifically, Plaintiff alleged that the E4CP Agreement is a valid, enforceable agreement between Plaintiff and Relentless, and that Relentless breached that agreement by using confidential, trade secret, and proprietary information to compete with Accelerando to solicit Plaintiff’s customers to work with Relentless, Therefore, the Court denied the motion as to Count Three for breach of the E4CP Agreement.

Granted in part, denied in part.

Accelerando Inc. v. Relentless Solutions Inc. (Lawyers’ Weekly No. 020-028-25, 22 pp.) (Michael L. Robinson, J.) 2025 NCBC 28. Brooks, Pierce, McLendon, Humphrey & Leonard, L.L.P. by Jennifer K. Van Zant and Amanda S. Hawkins, for Plaintiff Accelerando, Inc. Fitzgerald Hanna & Sullivan, PLLC by Andrew L. Fitzgerald, for Defendant Relentless Solutions, Inc. North Carolina Business Court