The case of Pittsburgh Logistics Sys., Inc. v. Barricks, No. :20-CV-04282, 2022 WL 705870 (S.D. Tex. 2022), dealt with determining whether a customer list was a trade secret under the Defend Trade Secrets Act (DTSA) and the Texas Uniform Trade Secret Act (TUTSA). Additionally, this case dealt with determining whether Pittsburgh Logistics Systems’s (PLS) claims for unfair competition, tortious interference with prospective business, and breach of fiduciary duty were preempted by TUTSA. Ultimately, the court determined that a factual issue existed as to whether PLS’s customer list was a trade secret. Moreover, the court determined that the TUTSA preempted PLS’s claims for unfair competition, tortious interference with prospective business, and breach of fiduciary duty.
PLS, a third-party logistics service company, hired Andrew Barricks (Barricks) in 2012. As part of his employment, Barricks signed an employment agreement that included a non-solicitation provision, a non-competition provision, and a return of company information provision. Barricks’s role with PLS primarily involved cultivating and maintaining relationships with PLS clients. In March of 2020, Barricks accepted a position with Glen Rose Transportation Management (GRTM). GRTM, also in the third-party logistics industry, was a competitor of PLS.
Barricks’s change in employment was the impetus of this lawsuit. PLS alleged that while Barricks was transitioning from his role with PLS to his role with GRTM, Barricks used his PLS email address to email a PLS customer list to his personal email. PLS asserted that this customer list contained the names of six clients whom Barricks worked with while he was an employee of PLS. PLS maintained that its customer lists were held in strict confidence and that only employees were privy to that information.
On April 9, 2020, Barricks officially resigned from his position with PLS. However, Barricks remained with PLS through April 14th to help PLS with the transition. PLS alleged that between April 10 and April 14 Barricks began to correspond with PLS customers on behalf of GRTM. Barricks denied these allegations and asserted that he created the alleged customer list himself. Additionally, Barricks asserted that he was never provided with a customer list from PLS, that all the clients he had with PLS were from contacts he had before his employment with PLS or from cold calling while with PLS, and that after he departed PLS he directed all his previous clients back to PLS. From April 2020 through August 31, 2021, GRTM received $925,663.04 in gross revenue from customers allegedly on the customer list that Barricks sent to his private email.
On March 7, 2022, both parties filed cross-motions for summary judgment. To establish a DTSA claim, PLS was required to show that it (1) owned a trade secret, (2) that Barrick misappropriated PLS’s trade secret, and (3) that PLS’s misappropriated trade secret is related to a service used in interstate commerce. To establish its misappropriation of trade secrets claim under TUTSA, PLS was required to show (1) the existence of its trade secret, (2) that Barrick breached his confidential relationship with PLS, (3) that Barrick used PLS’s trade secret, and (4) that PLS suffered injury. PLS argued that it provided Barrick with the customer list, and Barrick argued that he generated the customer list himself. Accordingly, the trial court denied both summary judgment motions and concluded that a fact issue existed.
PLS further alleged that TUTSA does not preempt its unfair competition claim, its tortious interference with prospective business claim, and its breach of fiduciary duty claim. The trial court disagreed with PLS’s contentions and found that TUTSA did preempt PLS’s claims. The trial court based its decision on its determination that each of PLS’s other claims rely on its misappropriation claims. Accordingly, the trial court granted Barrick’s summary judgment motion on this point.
There are two key takeaways from this case. First, the existence of a trade secret may be a factual issue for the jury to decide. Second, TUTSA will preempt other claims that rely on fundamentally the same evidence. Here, each of PLS’s claims, aside from its DTSA and TUTSA claims, relied on many of the same facts as its misappropriation claim did.