United States District Court, D. Arizona
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 ...