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Insight Global LLC v. Borchardt

United States District Court, N.D. Illinois, Eastern Division

May 17, 2018



          Hon, Virginia M. Kendall United States District Judge.

         Plaintiff Insight Global, LLC (“Insight”) sued Defendants Kaley Borchardt (“Borchardt”) and Kelly Mitchell Group, Inc. (“KMG”) pursuant to the Defense Trade Secrets Act of 2016 (Counts I and II);[1] the Illinois Trade Secrets Act (Counts III and IV);[2] common law claims for breach of contract and breach of loyalty (Counts V through VIII); and for tortious interference with contract (Counts IX and X). (Dkt. No. 1.) Pending before the Court is Defendants' Motion to Dismiss Counts I and II (against Borchardt) and Counts IX and X (against KMG) pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief may be granted. (Dkt. No. 24.) In the alternative the Defendants' motion seeks a more definite statement pursuant to Fed.R.Civ.P. 12(e). Id. For the following reasons the Court denies the motion. [24.]


         Plaintiff Insight and Defendant KMG are a staffing services companies that operate in the fields of information technology, accounting, and finance and engineering. (Dkt. No. 1, ¶¶ 15, 67.) Prior to filing this suit, Insight employed Borchardt from 2014 through the time of her departure on January 3, 2018, and provided her with a full range of training along with access to Insight's trade secrets. Id. ¶28. When Borchardt started working with Insight she had little-to-no experience in the staffing services industry. Id. During her time with Insight, Borchardt was introduced to trade secrets including but not limited to: (1) information about Insight's customer and client relationships such as customers' staffing placement history, current and long-term needs and preferences and pricing; (2) identities and personal contact information for hiring managers and vendor managers who are Insight's primary customer contacts, and who are difficult to identify from publically-available information; (3) proprietary information relating to pricing for various contract skills sets, margins, and thresholds for profitability; and (4) proprietary bidding procedures, recruiting methods and sales strategies for negotiating and winning business with contractors and clients. Id. ¶33.

         On at least four separate occasions Borchardt signed an At-Will Employment Agreement that set forth the terms and conditions of her employment. Id. ¶ 42. Included in the terms of those agreements were various restrictive covenants including but not limited to a Trade Secrets Provision, a Non-Disclosure Provision, a Non-Competition Provision, a Non-Solicitation Provision, a Return of Materials Provision, a Notifications Provision, a Tolling Provision, and an Attorney's Fees Provision. Id. ¶¶ 43-53; Ex. A.[4]

         In January 2018 the relationship between Borchardt and Insight came to an end, id. ¶ 5, and Insight soon after learned that she started working for a direct competitor, Defendant KMG, in the same region where she worked for Insight. Id. ¶ 55. Prior to and in expectation of her departure, Borchardt began collecting trade secrets and confidential information including but not limited to “(i) details regarding Insight Global clients …, (ii) information regarding active and former contractors …, and (iii) leads for prospective contractors and customers with whom Insight Global intended to conduct business.” Id. ¶¶ 56, 57. Insight also alleges that she accessed Insight's computer system and either accessed, downloaded, or printed over 160 pages of “On the Job” reports and other information containing customer and contractor information, sales reports, and other sensitive materials. Id. ¶ 58, 59.

         Insight sued after learning that Borchardt began working for KMG shortly after she resigned from Insight alleging federal and state trade secrets violations, and various contract-related common law violations against both Borchardt and KMG. (Dkt. No. 1.) She seeks both injunctive relief and actual damages. Id. Borchardt and KMG filed this current Motion to Dismiss, or in the alternative a more definite statement, pursuant to Rule 12(b)(6) and 12(e). (Dkt. No. 24.)


         A complaint must contain “sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face, '” with the Court accepting well-pled facts as true and drawing reasonable inferences in favor of the plaintiff. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic v. Twombly, 550 U.S. 544, 570 (1955)); Roberts, 817 F.3d at 564. Motions to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) challenge the viability of a complaint for failure to state a claim upon which relief may be granted. Camasta v. Jos. A. Bank Clothiers, Inc., 761 F.3d 732, 736 (7th Cir. 2014). Under the federal notice pleading standards, “factual allegations [in a complaint] must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. The absence of such a showing warrants dismissal of a complaint.

         The Federal Rules permit a party to move for a more definite statement of a pleading that is “so vague or ambiguous that the party cannot reasonably prepare a response.” Fed.R.Civ.P. 12(e); Chapman v. Yellow Cab Coop., 875 F.3d 846, 849 (7th cir. 2017). Such a request by a party “is the right way to ask plaintiffs to lay out details that enable the defendants to respond intelligently and the court to handle the litigation effectively.” Id. (citing Airborne Beepers & Video, Inc. v. AT&T Mobility LLC, 499 F.3d 663, 665 (7th Cir. 2007)).


         1. The DTSA Claims

         The Defense of Trade Secrets Act of 2016 created a private right of action for the owner of a trade secret maintained in relation to a product or service used in interstate commerce that is misappropriated by another party in order to obtain injunctive relief and actual damages for any misappropriation, including but not limited to exemplary damages for willful and maliciously misappropriations. 18 U.S.C. § 1836(b)(1), (3)(A)-(B), (3)(C); see also Signal Fin. Holdings LLC v. Looking Glass Fin. LLC, 2018 WL 636769, at *3 (N.D. Ill. Jan. 31, 2018). The DTSA defines “misappropriation” as follows:

(A) acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was ...

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