Trade secret claims survive restrictive covenant challenge

The North Carolina Business Court largely preserved a transportation company’s trade-secret and restrictive covenant claims against two former employees accused of joining a competitor and taking confidential information.

The plaintiffs alleged that the defendants left the company to work for a competing business and took confidential business information and trade secrets. The complaint asserted claims for trade-secret misappropriation, breach of restrictive covenants, tortious interference, unfair and deceptive trade practices and injunctive relief.

The court dismissed the employee nonsolicitation claim against one defendant, finding the complaint alleged that the other defendant persuaded six employees to leave but did not plead facts tying that defendant to the recruitment. Generalized allegations against both defendants were insufficient.

But the court declined to dismiss the customer nonsolicitation claim, rejecting the argument that the covenant was facially overbroad at the pleading stage. The court said enforceability required a fuller factual record concerning reasonableness and business circumstances.

The court also dismissed tortious interference claims because the plaintiffs failed to identify any specific contract, customer relationship or prospective business opportunity lost because of the defendants’ conduct. The unfair and deceptive trade practices claim survived only to the extent it was based on alleged trade-secret misappropriation and the surviving customer nonsolicitation allegations. A standalone claim for injunctive relief was dismissed because an injunction is a remedy, not an independent cause of action.

The 6 page opinion is Best Logistics Group Inc. v. Bravo, Lawyers Weekly No. 020-046-26.