United States District Court, E.D. Louisiana
SMITTY'S SUPPLY, INC.
LINDSAY MORGAN HEGNA
ORDER AND REASONS
ANN VIAL LEMMON UNITED STATES DISTRICT JUDGE
HEREBY ORDERED that Smitty's Supply, Inc.'s Motion
for Partial Summary Judgment Regarding Stephen Kelley's
Breach of Contract for Maintaining and Using Smitty's
Confidential Documents Following his Resignation (Rec. Doc.
242) is DENIED.
FURTHER ORDERED that Smitty's Supply, Inc.'s Motion
for Partial Summary Judgment Regarding Regarding Lindsey
Morgan Hegna's Breach of Contract for Maintaining and
Using Smitty's Confidential Documents Following her
Termination (Rec. Doc. 250) is DENIED.
FURTHER ORDERED that Stephen D. Kelley's and Lindsey
Morgan Hegna's Motion for Summary Judgment on
Smitty's Supply, Inc.'s Confidentiality Counterclaim
(Rec. Doc. 341) is GRANTED.
D. Kelley and Lindsey Morgan Hegna are former employees of
Smitty's Supply, Inc. ("Smitty's"), a
manufacturer and distributor of oils, lubricants, and related
products. Kelley worked as Chief Financial Officer from
February 2014 through May 2016, and Hegna worked as Vice
President of Sales from July 2014 to March 2016.
had signed confidentiality agreements with Smitty's,
which survived the termination of their employment. Section
One of the Employee Confidentiality Agreement provided in
Confidentiality. The Company will divulge
confidential and trade secret information to Employee as a
result of his/her employment by the Company, and Employee
agrees that the Company is entitled to protect such
information from improper use and/or disclosure. Employee
will not at any time, whether during employment or after
termination of employment, by either party, for whatever
reason, reveal to any person or entity any of the trade
secrets or valuable confidential information of the Company
or of any third party that the Company is under an obligation
to keep confidential (the collectively, the
"Confidential Information"), except as may be
required in the ordinary course of performing his duties as
an Employee of the Company.. . . Employee shall keep secret
all Confidential Information and/or other matters entrusted
to him/her and shall not use or attempt to use any such
Confidential Information in any manner that may injure or
cause loss to the Company. For purposes of this Agreement,
Confidential Information shall not include any information
that is or was (i) already in the public domain (through no
fault of Employee or any person acting on behalf of
Employee), (ii) already known to Employee prior to his/her
employment by the Company, (iii) disclosed to Employee by a
third party under no obligation of confidentiality to the
Company, or (iv) required by law or court order to be
disclosed, provided Employee provides the Company with prior
written notice of any such disclosure to the extent possible
pursuant to any court order or other applicable law.
their separation from Smitty's, Hegna and Kelley each
filed suit against Smitty's seeking recovery of compensation
allegedly owed to them by Smitty's. Subsequently,
Smitty's filed identical counterclaims against Hegna and
Kelley, alleging that Hegna and Kelley breached their
confidentiality agreements by, inter alia, retaining
confidential Smitty's documents after their separations
from Smitty's, sharing confidential documents in
connection with the instant litigation, and in Kelley's
case, advising Hegna of her position vis-a-vis certain stock
plans (for which Kelley was the administrator and Hegna
believed she was a participant), following her termination
but prior to his resignation.
instant motions, Smitty's seeks summary judgment finding
that Kelley and Hegna breached their confidentiality
agreements by retaining the confidential documents and using
them to prosecute their claims against Smitty's, causing
damages to Smitty's by requiring it to defend the instant
suits. Kelley and Hegna seek summary judgment dismissing the
breach of contract claims, arguing that they did not breach
the agreements, and further, that Smitty's has suffered
no damages from an alleged breach.
Summary Judgment Standard
of the Federal Rules of Civil Procedure provides that the
"court shall grant summary judgment if the movant shows
that there is no genuine dispute as to any material fact and
the movant is entitled to judgment as a matter of law."
Granting a motion for summary judgment is proper if the
pleadings, depositions, answers to interrogatories,
admissions on file, and affidavits filed in support of the
motion demonstrate that there is no genuine issue as to any
material fact that the moving party is entitled to judgment
as a matter of law. Fed.R.Civ.P. 56(a); Anderson v.
Liberty Lobby, Inc., 106 S.Ct. 2505, 2509-10 (1986). The
court must find "[a] factual dispute . . . [to be]
'genuine' if the evidence is such that a reasonable
jury could return a verdict for the nonmoving party . . .
[and a] fact . . . [to be] ...