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Republic Services Inc. v. Steves

United States District Court, D. Arizona

August 7, 2018

Republic Services Incorporated, Plaintiff,
v.
Sean Steves, an individual, and Jane Doe Steves, husband and wife, Defendants.

          ORDER

          Neil V. Wake Senior United States District Judge

         Before the Court is Defendant's Motion for Judgment on the Pleadings on Plaintiff's Non-Compete Claims and for a Protective Order as to Related Discovery (Doc. 33). The Motion will be granted.

         I. BACKGROUND

         A. Factual Background Allegations

         Plaintiff Republic Services Incorporated (“Republic”) brought this action against its former employee Sean Steves (“Steves”). (Doc. 1.) The following allegations are taken from Republic's Complaint. “Republic provides non-hazardous solid waste and recycling services to various customers.” (Doc. 24 at ¶ 8.) Steves “worked for Republic or its predecessors in various positions from in or around September 2001 until in or around May 2018.” (Id. at ¶ 14.)

         In May of 2016, Steves was promoted to “Director, Operations Support-Hauling.” (Id. at ¶ 21.) As a condition of his promotion, he signed a Non-Competition, Non-Solicitation and Confidentiality Agreement (the “Agreement”). (Id. at ¶ 25; Doc. 1 at ¶ 25.) The Agreement was effective as of May 2, 2016. (Doc. 3-1, Ex. 4 at 33.) Arizona law governs the Agreement. (Id. at 36.) As the Agreement's name suggests, it contains three restrictive covenants:

1. Confidentiality: Steves agreed that during the term of his employment and for five years after he would “not disclose Confidential Information to any person or entity either inside or outside of Company within the United States or any other territory, province or location in which Company conducts business other than as necessary in carrying out [Steves's] duties and responsibilities for Company, without first obtaining Company's prior written consent.” (Id.) The Agreement further requires Steves “to immediately return” to Republic all Republic property upon Republic's request or the termination of his employment, and it makes clear that Republic owns all intellectual property created in the scope of Steves's employment. (Id. at 33-34.)
2. Non-Solicitation: Steves agreed that during the term of his employment and for eighteen months after he would not solicit on behalf of any competitor “any customers or potential customers of Company with whom [he] had Material Contact.” (Id. at 35.) The Agreement also prevents Steves from poaching “any employee, consultant, agent or independent contractor” of Republic to work for a competitor. (Id.)
3. Non-Competition (Section 3.2): Steves agreed, in Section 3.2 of the Agreement, that during the term of his employment and for eighteen months after he would not “Render Services” on behalf of any competitor. (Id.) “Render Services” is a defined term that includes almost any act conceivably related to the non-hazardous waste management industry. (See Id. at 34.) As relevant here, such acts include “performing any kind of services, functions, duties or actions (including, but not limited to, sales, marketing, brokering, supervision and/or management) related to Non-hazardous Solid Waste Management” and “performing any activities that are the same as, or substantially similar to, the duties and functions [Steves] performed for Company at any time during the last eighteen (18) months of [Steves's] employment.” (Id.)[1]

         Steves worked in his new position until April of 2018. He then notified Republic he was resigning. (Doc. 1 at ¶ 48; Doc. 24 at ¶ 48.) He informed Republic that he had accepted a position at Casella Waste Systems, Inc., one of the five “Principal Competitors” identified by name in the Agreement. (Id.; Doc. 3-1, Ex. 4 at 34.)

         B. This Lawsuit and Motion

         Republic filed this suit seeking to enforce the Agreement's restrictive covenants. Among other things, Republic alleges that Steves “misappropriated approximately 10.5 gigabytes of Republic's information.” (Doc. 1 at ¶ 62.) He was also seen on video surveillance logs entering Republic's corporate headquarters on a Saturday. (Id. at ¶¶ 65, 67.) When he walked in, he had an empty duffel bag; when he left, the duffel bag was full. (Id. at ¶¶ 65-66.) The Saturday in question, Republic asserts, was the only Saturday on which Steves had gone to Republic's headquarters all year. (Id. at ¶ 67.) Much of this lawsuit, then, is about confidential information Steves allegedly misappropriated from Republic, in violation of federal law, Arizona law, and the Agreement.

         Steves seeks judgment on the pleadings regarding a different portion of the lawsuit. He argues that the Agreement's covenant not to compete violates Arizona law as an “improper effort to block direct competition.” (Doc. 33 at 4.) The Court now considers that contention.

         II. JUDGMENT ...


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