Minc LLC v. Stebbins

1

MINC, LLC, Plaintiff, v. ANDREW STEBBINS, et al., Defendants.

No. 22-cv-1655

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

September 4, 2024

MEMORANDUM OPINION AND ORDER

BRIDGET MEEHAN BRENNAN UNITED STATES DISTRICT JUDGE.

Before the Court is the Joint Motion to Stay and Motion to Certify a Question of Law to the Ohio Supreme Court submitted by Defendants Andrew Stebbins and Buckingham, Doolittle &amp Burroughs, LLC. (Doc. 46.) The motion is fully briefed. (Docs. 48, 49.) Also before the Court is Defendants' partial motion to dismiss the first amended complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). (Doc 44.) Minc, LLC opposed that motion (Doc. 47), and Defendants replied (Doc. 50). After consideration of all briefing, and for the reasons explained below, the Court DENIES the motion to stay and to certify a question of law to the Ohio Supreme Court, and GRANTS in part and DENIES in part the motion to dismiss.

I. Background

A. Factual Background^[1]

Minc, LLC (“Minc”) is a law firm specializing in litigating online reputational harm. (Doc. 36, PageID #481.)^[2] Minc hired Andrew Stebbins (“Stebbins”) as an associate in March 2019. (Id. at 482.) When Stebbins joined Minc, Minc required him to sign an employment agreement (the “Employment Agreement”). (Id.) The Employment Agreement, in part, includes restrictions on Stebbins' use of confidential and trade secret information and includes a nonsolicitation provision restricting his ability to solicit Minc's employees should he depart from Minc. (Id.) Specifically, the Employment Agreement provided, in relevant part:

Confidentiality.

At all times following Minc's agreement to employ Employee, during Employee's employment with Minc, and at any time after the termination of Employee's employment with Minc for any reason, Employee will not disseminate, publish, disclose, use for Employee's own benefit or the benefit of others, or divulge or convey to others, any Trade Secrets of Minc or that of third parties obtained by Employee following Minc's agreement to employ Employee and/or in the course of Employee's employment with Minc.

* * *

Employee further agrees that at all times following Minc's agreement to employ Employee, during Employee's employment with Minc, and after the termination of Employee's employment with Minc for any reason, except on behalf of Minc, Employee will not disseminate, publish, disclose, use for Employee's own benefit or the benefit of others, or divulge or convey to others, any Confidential Information of Minc in any form, tangible or intangible.

Non-Solicitation of Employees.

Employee agrees that during Employee's employment with Minc and for a period of twelve (12) months after termination of Employee's employment with Minc for any reason, Employee will not recruit, hire or attempt to recruit or hire, directly or by assisting others, any other employee of Minc with whom Employee had material contact during Employee's employment with Minc.

(Id. at 487-89.)^[3]The Employment Agreement defines “Trade Secrets” as

information contained within Minc's internal intranet and/or database (including, but not limited to, training resources, presentations, contacts, web content removal companies, pricing information, business transactions), Minc's actual or potential vendor lists (including contact name, addresses, telephone numbers, and specific characteristics), pricing information (such as price lists, quotation guides, previous or outstanding quotations, or billing data.

(Id. at 488.) The Employment Agreement defines “Confidential Information” as

proprietary business information that is treated as confidential or secret by Minc, but that may not constitute a Trade Secret.... Confidential Information does not include information that is generally available to the public other than as a result of a breach of a contractual or other duty of confidentiality.

(Id.) Lastly, the Employment Agreement further required Stebbins to return “all Minc property” upon his termination, which includes

vendor lists or names, addresses, telephone numbers and services, vendor background information, vendor pricing, quotation guides and billing information, client files, all drawings, plans, manuals, letters, notes, notebooks, reports, sketches, formulae, source codes, computer programs and similar items, memoranda, and all other materials and all copies thereof relating in any way to Minc's business and in any way obtained by Employee during the period of Employee's employment with Minc which are in Employee's possession, custody or control.

(Id.)

In or around February or March 2022, Buckingham, Doolittle & Burroughs, LLC (“BDB”) sought to establish an online reputational harm practice. (Id. at 490.) To do so, BDB began recruiting Stebbins. (Id.) Between March 9 and May 11, 2022, Stebbins and BDB held several meetings. (Id.) These meetings centered around BDB establishing a new practice that was a direct replica of Minc's model with Stebbins at the helm. (Id.) Prior to meeting, BDB and Stebbins executed a non-disclosure agreement. (Id.) During these meetings, BDB requested Stebbins provide Minc's internal financial and statistical reports. (Id.) In addition, Stebbins shared a strategic plan with BDB, including financial modeling, projected revenue, costs, and profitability. (Id.) All of the information Stebbins shared during these meetings was directly based on or copied from Minc's own proprietary and confidential business strategy documents. (Id.) In addition, BDB requested, and Stebbins shared, information relating to hours billed; revenue collected; financial data; realization rates; marketing, SEO, and sales conversion metrics; client names; and information on key vendors and relationships, among other statistical and confidential information. (Id. at 491.)

On May 12, 2022, BDB offered Stebbins a partner position in its newly established online reputational practice. (Id. at 492.) The next day, Stebbins accepted the offer. (Id.) On May 18, 2022, Stebbins informed Minc of his resignation. (Id.) Stebbins' last day at Minc was May 31, 2022. (Id.) After Stebbins accepted BDB's offer, but before Stebbins' last day at Minc, Stebbins allegedly engaged in a series of activities to misappropriate as much information as possible from Minc so that he could quickly start his new practice at BDB. (Id.)

On May 14, 2022, the day after Stebbins accepted BDB's offer but before he gave notice of his resignation to Minc, Stebbins began recruiting a Minc associate, Christina Williams (“Williams”). (Id.) Stebbins provided BDB with information relating to Williams' workload, value, skills, quality of work, productivity, billable hours, revenue generated, and client origination. (Id.) Stebbins provided this information to BDB so that BDB could assess whether to hire Williams. (Id. at 493.) On June 24, 2022, BDB offered Williams an associate position, which she accepted. (Id.)

At the same time Stebbins was recruiting Williams, Stebbins allegedly engaged in the “systematic and unauthorized transfer of confidential and proprietary Minc files and information.” (Id.) For instance, Stebbins downloaded tens of thousands of Minc's confidential files to a thumb drive, which included client files, trade secrets, legal documents, and internal operational files. (Id. at 493-94.) Among the documents were client files for “200+ legal matters he worked on at Minc, including some he was not materially involved in at all.” (Id. at 494.) Additionally, Stebbins allegedly downloaded and took hundreds of files relating to Minc's operational processes, including educational materials, marketing strategies, content creation operations, SEO techniques, presentations and training materials, videos, templates, sample legal documents, marketing content, operational templates and forms, and client intake materials. (Id. at 494-95.) Stebbins also allegedly downloaded and took files relating to Minc's operational tools, resources, and key industry contacts which Minc worked to create for over a decade. (Id. at 495.)

On May 17, 2022, the day before Stebbins informed Minc of his resignation, Stebbins downloaded the entire PST file for his Minc email account. (Id. at 496.) Stebbins redownloaded the PST file on May 31, 2022. This gave Stebbins access to every email he ever sent and all attachments or documents attached thereto during his tenure with Minc. (Id.) These files necessarily included a vast array of information and included Minc's long-term and short-term strategies, financial performance, key performance indicators relating to Minc's staff, and other essential business functions. (Id.)

Hours before his departure, Stebbins looked up online “how to backup outlook.” (Id. at 497.) Subsequently, Stebbins backed up and synced his entire Minc computer files and folders to his personal OneDrive account. (Id. at 496.) Then, Stebbins looked up online “how to wipe a computer.” (Id. at 497.) Stebbins then attempted to wipe his computer and returned his Minc laptop. (Id.)

Minc also alleges that its investigation revealed Stebbins engaged in “warehousing” where Stebbins significantly increased his client load at Minc just before his departure by using his preferential access to client consultations. (Id.) This allowed Stebbins to increase his active files by almost three times his average and positioned Stebbins with a greater number of client files with which he could bring to BDB. (Id. at 497-98.)

Finally Minc alleges that after Stebbins' departure, it discovered Stebbins engaged in unauthorized work outside of Minc while he was employed there, including one instance where Stebbins engaged in the practice of law in Kentucky, a state in which Stebbins was not credentialed. (Id. at...