United States District Court, D. South Carolina, Charleston Division
Saint-Gobain Corporation; CertainTeed Corporation (Roofing Group); CertainTeed Gypsum, Inc.; Saint-Gobain ADFORS America, Inc.; and GS Roofing Products Company, Inc.; Plaintiffs,
Missy Raye Littrell Miller, Defendant.
MARGARET B. SEYMOUR, Senior District Judge.
This matter is before the court on Plaintiffs Saint-Gobain Corporation ("Saint-Gobain"); CertainTeed Corporation (Roofing Group) ("CertainTeed"); CertainTeed Gypsum, Inc. ("CTG"); Saint-Gobain ADFORS America, Inc. ("ADFORS"); and GS Roofing Products, Inc.'s renewed motion for preliminary injunction filed September 24, 2014. ECF No. 34. Defendant Missy Raye Littrell Miller ("Defendant") filed a response in opposition to Plaintiffs' renewed motion for preliminary injunction on October 14, 2014. ECF No. 41. Plaintiffs filed a reply in support of the motion for preliminary injunction on October 24, 2014. ECF No. 43. On October 31, 2014, the parties appeared before this court for a hearing on the renewed motion for preliminary injunction.
Saint-Gobain is an international corporation with numerous subsidiaries, including the other named Plaintiffs in this action. While the division of Saint-Gobain involved in this action is based in the United States, Saint-Gobain's larger corporate group is based in France. Saint-Gobain manufactures and supplies "interior and exterior building materials such as vinyl siding, piping and... roofing and gypsum products." ECF No. 1 at 3. With operations in sixty-four countries and 2013 sales that exceeded fifty billion dollars, Saint-Gobain is known as a world leader in many of its industries.
Defendant began working for Plaintiffs on or about March 7, 2005. ECF No. 10-1 at 12. Defendant held various positions with Plaintiffs and was eventually promoted to Quality & Process Engineering Manager for Glass Mat Operations at ADFORS' plant located in Charleston, South Carolina. ECF No. 14-1 at 3 ¶ 2. During her employment with Plaintiffs, Defendant became "essentially an expert in glass mat quality problems, " which was the focus of her positions with Plaintiffs. Id. at 4 ¶ 3. As Defendant's responsibilities with Plaintiffs increased, she was given increased access to confidential "technical and business information..., including... manufacturing processes, methods, [and] drawings and designs related to developments, operations and improvements...." Id. at 5 ¶ 6. In addition, during her employment with Plaintiffs, Defendant was a member of a Joint Development Team, which participated in a "highly-confidential project" with CTG on a "certain gypsum product...." Id. at 8 ¶ 13. To prevent the disclosure of its confidential information, Plaintiffs required that Defendant enter into multiple non-disclosure/noncompetition agreements, including, but not limited to, the following: (1) Noncompete Employment Agreement (November 1, 2013); (2) Noncompete Employment Agreement (March 26, 2012); (3) Noncompete Employment Agreement (June 18, 2007); and (4) Employee Confidential Information Protection Agreement (March 7, 2005) (collectively, the "Employment Agreements"). Id. at 12. As paraphrased by Plaintiffs, Defendant's duties under the Employment Agreements included the following:
[Defendant] has an ongoing duty and obligation... not to disclose any of Plaintiffs' Confidential and Trade Secret Information, and, for a one-year period following termination of her employment with Plaintiffs, not to engage in or contribute her knowledge to any work or activity that involves a product, process, apparatus, service or development which is then competitive with or similar to a product, process, apparatus, service or development on which she worked.
ECF No. 10-1 at 17 (emphasis in original). The actual provision reads, in pertinent part, as follows:
I shall not, without written consent signed by an officer of the Company, directly or indirectly (whether as owner, partner, consultant, employee or otherwise), at any time during the one-year period following my termination of my employment with the Company, engage in or contribute my knowledge to any work or activity that involves a product, process, apparatus, service, or development (i) which is then competitive with or similar to a product, process, apparatus, service or development on which I worked or (ii) with respect to which I had access to Confidential Information while at the Company at any time during the period prior to such termination.
ECF No. 10-5 at 37. On April 2, 2014, after working for Plaintiffs for nine years, Defendant submitted her notice of resignation. ECF No. 1 at 4 ¶ 18. In her notice of resignation, Defendant indicated that she was accepting a position with Atlas Roofing Corporation ("Atlas Roofing"), a customer of Saint-Gobain and a direct competitor of CertainTeed and CTG in the "roofing, shingles, and gypsum industries." Id. at ¶¶ 19, 20; Id. at 13 ¶ 76. More specifically, Defendant accepted a position as Plant Manager of Atlas Roofing's plant in Hampton, Georgia. Although Defendant was never employed by CertainTeed, it is the position of the Plaintiffs that employment with a company that directly competes with any subsidiary of Saint-Gobain violates the terms of the Employment Agreements. According to Plaintiffs, the Defendant's acceptance of a position with Atlas Roofing violated the terms of the Employment Agreements. On April 15, 2014, while Defendant was still employed with Plaintiffs, Plaintiffs allegedly attempted to meet with Defendant to "resolve the conflict of her new position with her post-termination obligations...." ECF No. 10-1 at 10. Following the instructions of Atlas Roofing, Defendant allegedly refused to meet with Plaintiffs about her new position. Id. In a letter dated April 17, 2014, Dale Rushing ("Rushing"), Atlas Roofing's Vice President of Manufacturing, responded to an email from Ron Franklin ("Franklin"), ADFORS' glass mat operation manager, concerning Defendant's new position. In the letter, Rushing explained Defendant's duties and provided a written job description of Defendant's new position. ECF No. 14-1 at 11. Defendant terminated her employment with Plaintiffs on April 23, 2014. Id. at 4 ¶ 18.
On April 25, 2014, Plaintiffs filed a complaint in this court alleging (1) breach of contract; (2) breach of fiduciary duty; (3) violation of the South Carolina Trade Secrets Act; (4) violation of the Georgia Trade Secrets Act; and (5) violation of the Trade Secrets Acts of any other State in which Defendant discloses and/or uses Plaintiffs' trade secrets and confidential information. ECF No. 1 at 2. Defendant answered Plaintiffs' complaint and filed counterclaims against Plaintiffs on April 29, 2014. ECF No. 7. Plaintiffs filed a Motion for Preliminary Injunction and a Motion for Expedited Discovery on May 2, 2014. ECF Nos. 10, 11. On July 14, 2014, this court held a hearing on Plaintiffs' motions. At the conclusion of the hearing, the court denied the request for a preliminary injunction but granted the motion for expedited discovery. The court also granted Plaintiffs leave to renew the motion for preliminary injunction once limited discovery had been completed. After the completion of limited discovery, Plaintiffs renewed their motion for a preliminary injunction on September 24, 2014, seeking to prevent Defendant from being employed as a plant manager at Atlas Roofing for one year. ECF Nos. 34, 35.
A. Applicable Law
In an action that commences in federal court based on diversity of citizenship, the court must apply state law. See Erie R. Co. v. Tompkins, 304 U.S. 64, 78 (1938) ("Except in matters governed by the Federal Constitution or by acts of Congress, the law to be applied in any case is the law of the state."). Since this action commenced in South Carolina, this court must apply the choice of law principles of the state of South Carolina in order to resolve this dispute. See Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487 (1941) (holding that a federal court sitting in diversity must apply the choice of law rules of the state in which it sits).
Under South Carolina choice of law rules, the law of the jurisdiction where the contract was formed is generally applied. Unisun Ins. Co. v. Hertz Rental Corp., 429 S.E.2d 182, 184 (S.C. Ct. App. 1993). However, if the parties to a contract specify the law under which the contract shall be governed, South Carolina courts honor the parties' choice of law unless the application of foreign law results in a violation of South Carolina public policy. Nucor Corp. v. Bell, 482 F.Supp.2d 714, 728 (D.S.C. 2007); see also Standard Register Co. v. Kerrigan, 119 S.E.2d 553, 541-42 (S.C. 1961) ("The contract... provides that it shall be construed according to the law of the state of Ohio, but if it is invalid under the law of the State where it is to be performed and contrary to our public policy, we will not enforce it."). Here, the parties to the Employment Agreements specified that the agreements would be governed by Pennsylvania law. ECF No. 1-4 at ...