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Forge Industrial Staffing, Inc. v. De La Fuente

October 16, 2006

FORGE INDUSTRIAL STAFFING, INC., PLAINTIFF,
v.
GEORGE DE LA FUENTE, AND IMPAQ SOLUTIONS, INC., DEFENDANTS.



The opinion of the court was delivered by: Judge Blanche M. Manning

MEMORANDUM AND ORDER

Plaintiff Forge Industrial Staffing, Inc. has brought suit against George De La Fuente and Impaq Solutions, Inc. alleging breach of fiduciary duty (Count I), breach of duty of loyalty (Count II), violation of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030 (Count III), breach of contract (Count IV), and tortious interference against Impaq (Count V). De La Fuente and Impaq move to dismiss all counts under Fed. R. Civ. P. 12(b)(6). For the reasons stated below, the motion is denied.

I. Facts

For the purposes of this motion to dismiss, the court accepts all well-pleaded allegations as true.

Forge's business

Forge specializes in providing highly skilled, full-time, temporary industrial workers to its clients in the Midwest. Forge operates in Illinois, Indiana, Kentucky, Michigan, and Ohio with 150 employees and places thousands of temporary workers. According to Forge, the industry is highly competitive and Forge's profitability depends on numerous factors including its ability to provide customer service, identify and attract reliable and skilled industrial workers, provide creative pricing and benefit strategies, minimize injury and benefit costs, and obtain and maintain its customer relationships.

De La Fuente's employment at Forge

De La Fuente was hired by Forge in February 1998 as manager of support services and in early 2000 was promoted to director of operations. Forge alleges that this position was akin to an executive vice-president position at other companies. De La Fuente was one of five directors at the company. He reported directly to the president and had access to all aspects of Forge's business, including proprietary information, customer information, proposals, cost structures, and reports, among other things. Forge alleges that its proprietary and confidential information is valuable and takes reasonable steps to protect it, including, among other things, having employees (De La Fuente included) execute a Proprietary Interest Protection Agreement.

In early 2005, De La Fuente was moved to the director of risk management position "due to certain performance issues." In this role, De La Fuente still participated in directors' meetings, contributed to high level business initiatives, and continued to have access to information regarding all aspects of Forge's business.

Forge alleges that De Le Fuente's performance continued to suffer after he became the director of risk management and that when he was spoken to about his job functions, he indicated that he was going "to bring Forge down."

De La Fuente's use of computers

In all of his roles at Forge, De La Fuente used Forge's computer systems, which were linked across state lines and were used to make proposals to customers, monitor assignments at client sites, communicate with customers, and manage payment issues. Forge has a number of policies, procedures, and agreements that it uses to protect its confidential information and safeguard its customer relationships, among other things. De La Fuente was involved in the development of many of these policies and procedures.

Forge's investigation of De La Fuente

Forge alleges that when De La Fuente threatened to "bring Forge down," it began to investigate his conduct at the company. On May 24, 2006, Forge asked De La Fuente to submit his laptop computer to the Forge information technology ("IT") department. He initially refused and did not turn it in until the next day, a delay which "raised a few eyebrows." On May 25, 2006, the day that De La Fuente turned in his computer, Forge gave it to a third-party computer forensic examiner for inspection. Forge spent over $5,000 for this inspection as well as for the examiner's attempt to recover destroyed data.

Upon examination, the examiner discovered various improper activities and measures that De La Fuente used to hide his actions. Many aspects of De La Fuente's hard drive were impaired, altered, or destroyed, thus limiting the recovery of data.

Through its investigation, Forge uncovered an alleged scheme by which De La Fuente was setting up a competing business and in the process was taking Forge's customers and revenue. Forge alleges that it learned that as far back as 2001, De La Fuente incorporated and served as president of Impaq, a competing industrial staffing company. These findings were made from the website addresses and web pages found on De La Fuente's computer. Forge further learned that the domain name impaqinc.com was registered to De La Fuente at his home address and that Impaq's address was also De Le Fuente's home address.

Forge's examination showed that software designed to destroy files and the hard drive itself has been run on the computer on or about May 24 and 25, 2006. Forge also became aware that files and documents, such as reports, charts, and communications, had been deleted from the computer and that the destruction software was used to hide internet activity and destroy evidence of Impaq.

In addition to the above, Forge's investigation revealed that the computer had been used to visit websites containing explicit images of the male anatomy and then download these images in violation of Forge's express policies.

II. Motion to Dismiss Standard

In ruling pursuant to Fed. R. Civ. P. 12(b)(6), the court assumes the truth of all well-pled factual allegations in the complaint, construing allegations liberally and viewing them in the light most favorable to the non-moving party. McMath v. City of Gary, 976 F.2d 1026, 1031 (7th Cir. 1992); Craigs, Inc. v. General Electric Capital Corp., 12 F.3d 686, 688 (7th Cir. 1993). Dismissal is properly granted if it is clear that no set of facts which plaintiff could prove consistent with the pleadings would entitle plaintiff to relief. Conley v. Gibson, 355 U.S. 41, 45-46 (1957); Kunik v. Racine County, Wis., 946 F.2d 1574, 1579 (7th Cir. 1991). The court will not dismiss a complaint unless it is clear that there is no set of facts on which a plaintiff could recover on a claim. Freiburger v. Emery Air Charter, 795 F. Supp. 253, 259 (N.D. Ill. 1992).

III. Analysis

A. Breach of Fiduciary Duty and Breach of Loyalty ...


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