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Sterling Computers Corp. v. Haskell

United States District Court, D. South Dakota, Southern Division

February 1, 2018




         On May 30, 2017, plaintiff, Sterling Computers Corporation, filed a complaint alleging a violation of the Defend Trade Secrets Act (DTSA) and misappropriation of trade secrets under South Dakota's Uniform Trade Secrets Act (UTSA) against defendant, Julie Haskell. Docket 1. On May 31, 2017, Sterling filed an Emergency Motion for Expedited Discovery and to Preserve Evidence. Docket 6. Haskell moves to dismiss both counts of the complaint for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). Docket 18. Sterling opposes the motion. Docket 28. The parties stipulated to set aside Sterling's Emergency Motion for Expedited Discovery and to Preserve Evidence pending the outcome of Haskell's motion to dismiss (Docket 22), and the court entered an order adopting the stipulation. Docket 23. For the reasons that follow, the court denies Haskell's motion to dismiss.


         The facts alleged in the complaint, accepted as true, are as follows:

         Sterling, a California corporation with its principal place of business in Dakota Dunes, South Dakota, sells information technology solutions and products to government and education clients. On or about November 6, 2006, Haskell began her employment with Sterling as a Senior Account Executive while living in Nebraska. Upon her request, Haskell was transferred to Colorado Springs, Colorado in August 2016.

         As a value-added reseller of IT products, Sterling utilizes a variety of vendors when its salespersons bid for client contracts. Sterling uses Salesforce, an internet database, to store and retrieve information relevant to its business operations. Such information includes client lists, contact information, notes on clients and potential clients, and current project bids submitted by Sterling. Current employees of Sterling can access the Salesforce database with a unique username and password. Sterling maintains reports on its employees' access to Salesforce.

         When Haskell began her employment with Sterling in 2006, she signed a form acknowledging that she received and read Sterling's employee handbook, which contained a confidentiality policy. In 2011 and 2015, Haskell signed additional forms acknowledging her receipt of the revised handbooks. Both the 2011 and 2015 handbooks contained non-disclosure policies and listed some of Sterling's confidential information subject to the non-disclosure policies.

         On or about February 10, 2017, Haskell terminated her employment with Sterling to accept a position with a competitor, M2 Technology, a Texas corporation with an office in Colorado. The next day, the President of Sterling began to shut off Haskell's access to Sterling's email and network when he noticed that Haskell was signed into the network and deleting emails from her inbox. He then terminated Haskell's connection and locked her out of Sterling's system.

         Following Haskell's termination, Mike Porach, a Sterling Pre-Sales Solutions Architect, was assigned to follow up with the Missile Defense Agency account that Haskell had been in charge of prior to leaving Sterling. Porach discovered that Haskell did not ask Neutanix, a vendor whose products were quoted to the Missile Defense Agency by Sterling, to perform a deal registration. A deal registration is a feature used by Neutanix that gives the channel partner-here Sterling-priority for a lead and guaranteed pricing during the negotiation. Competitors cannot negotiate with the lead during a set period of time if a deal registration is in place.

         Porach then discovered that Haskell had asked Neutanix to put the deal registration in her name rather than in Sterling's name, which led Sterling to search Haskell's previous emails and Salesforce log. Sterling discovered that on or about January 13, 2017, a few weeks before terminating her employment with Sterling, Haskell had requested assistance from another Sterling employee to create a list on Salesforce of all Colorado contacts, which is highly unusual. Additionally, several Sterling customers have attempted to reply to Haskell's prior Sterling email address regarding sales projects that Haskell initiated while at Sterling.

         Sterling alleges that Haskell continues to possess confidential information, specifically the details of the Missile Defense Agency project and a list of Sterling's Colorado contacts from Salesforce, and she is misusing such information to unfairly compete with Sterling. Thus, Sterling brings suit against Haskell for violation of the DTSA and UTSA.


         A court may dismiss a complaint “for failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.' ” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. “The plausibility standard is not akin to a ‘probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id.

         The court assesses plausibility by considering only the materials in the pleadings and exhibits attached to the complaint, drawing on experience and common sense, and reviewing the plaintiff's claim as a whole. Whitney v. Guys, Inc., 700 F.3d 1118, 1128 (8th Cir. 2012). Inferences are construed in favor of the nonmoving party. Id. at 1129 (citing Braden v. Wal-Mart Stores, Inc., 588 F.3d 585, 595 (8th Cir. 2009)). A well-pleaded complaint should survive a motion to dismiss “even if it strikes a savvy judge that actual proof ...

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