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Fifth Third Processing, Solutions, LLC v. Michael Elliott

October 18, 2011

FIFTH THIRD PROCESSING, SOLUTIONS, LLC, PLAINTIFF,
v.
MICHAEL ELLIOTT, DEFENDANT.



The opinion of the court was delivered by: Sandra S. Beckwith Senior United States District Judge

FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER

On April 21, 2011, Plaintiff Fifth Third Processing Solutions, LLC ("FTPS") filed a complaint for a preliminary and permanent injunction against Defendant Michael Elliott. FTPS asserts two related causes of action against Elliott: 1) Elliott breached the non-solicitation clause in his employment contract when he left FTPS and accepted a similar position with Fiserv, Inc.; and 2) Elliott violated Ohio's version of the Uniform Trade Secrets Act, Ohio Rev. Code § 1333.61, et seq., by emailing to his personal account certain proprietary and confidential documents of FTPS, including customer lists and pricing information, before the termination of his employment with FTPS. FTPS seeks the following relief:

(a) A preliminary and permanent injunction, enjoining and restraining Defendant for one year from the date of Defendant's resignation, directly or indirectly, individually or on behalf of or in concert with any other person or entity, from soliciting, attempting to solicit, or otherwise interfering with FTPS's relationship with any client or prospective client;

(b) A preliminary and permanent injunction ordering Defendant to keep in strict confidence and not to disclose in any manner any confidential, proprietary, and trade secret information of FTPS to any person, group, or entity or use such information for any purpose whatsoever, including (but not limited to) information regarding the terms of any coaches' [sic] contracts.

(c) That Defendant be compelled to identify and disclose to FTPS any and all communications that either he or any other employee, officer, or agent of Fiserv had with any client or prospective client of FTPS related in any way to (1) Defendant's resignation from FTPS; (2) Defendant's employment with Fiserv; and/or (3) the potential or possibility of Defendant providing services for the client or prospective client after Defendant's resignation from FTPS on November 30, 2010.

(d) That this Court order that Defendant immediately return to FTPS all information or any other materials belonging to FTPS, or relating to the business of FTPS, and all copies thereof in any form, keeping no copy for himself.

Complaint (Doc. No. 1), at 11-12. FTPS also seeks an award of compensatory and punitive damages, costs, and attorney's fees.

The case came before the Court on September 26, 2011 for an evidentiary hearing on FTPS's complaint for a preliminary injunction. The parties then submitted post-hearing briefs (Doc. Nos. 20 & 21). The Court, having considered the pleadings filed by the parties, the evidence presented at the hearing, and the post-hearing briefs of counsel, hereby enters the following Findings of Fact, Conclusions of Law, and Order. Fed. R. Civ. P. 52(a)(2). To the extent that the foregoing findings of fact should more properly be considered conclusions of law, and vice versa, they are hereby adopted as such.

I. Findings of Fact

A. Subject Matter Jurisdiction

1. Plaintiff FTPS is a Delaware company with its principal place of business located in Cincinnati, Ohio. Complaint ¶ 2; Answer ¶ 2. FTPS, therefore, is a citizen of the States of Ohio and Delaware. Franzel v. Kerr Mfg. Co., 959 F.2d 628, 629 (6th Cir. 1992).

2. Defendant Michael Elliott is a citizen of the State of Indiana. Complaint ¶ 3; Answer ¶ 3.

3. The amount in controversy in this case is in excess of $75,000. Complaint ¶ 5; Sellers v. O'Connell, 701 F.2d 575, 578 (6th Cir. 1983) ("The general rule is that the amount claimed in good faith by the plaintiff controls unless it appears to a legal certainty that the claim is for less than the jurisdictional amount or unless the amount claimed is merely colorable.").

4. The Court has subject matter jurisdiction over this case because the parties are citizens of different states and the amount in controversy exceeds $75,000. 28 U.S.C. § 1332(a).

B. Background

5. The complaint describes FTPS's business as follows: Formerly a division of Fifth Third Bank, FTPS provides complete payment strategies for businesses and financial institutions around the world. FTPS provides services and solutions related to credit card and debit card processing, electronic benefits transfer (EBT), online payment acceptance, private label credit and debit cards, gift card programs, credit card call center support, electronic funds transfer (EFT) services, ATM services and network support.

Complaint ¶ 6.

6. Defendant began working for FTPS in 1999. As is relevant here, Defendant's final position with FTPS was vice president of sales. Elliott Dep. (Ex. 19), at 121-25. Defendant was responsible for selling FTPS's EFT services to other financial institutions. In this position, Defendant had access to a number of confidential documents of FTPS, including customer lists, pricing information, and marketing strategies, through a shared computer drive.

7. Defendant's employment with FTPS was governed by a contract entitled "2010 Incentive Compensation Plan." Ex. 1 ("the Plan"). The Plan contains a non-solicitation and non-disclosure provision in which the Defendant agreed, for a period of one year following the termination of his employment with FTPS, not to solicit customers or prospective customers, or accept the business of such customers, with whom he "had contact, involvement, or responsibility during his [] employment with FTPS." Id. §§ VII(a), (b) & (c). This section, however, does not prohibit Defendant from accepting employment that competes with FTPS so long as he does not violate the terms of the Plan. Id. § VII.

In other words, under the terms of the Plan, Defendant is free to accept employment with a competitor of FTPS as long as he does not violate, inter alia, the non-solicitation provisions of § VII of the Plan.

8. Defendant also agreed under the Plan that he would not disclose FTPS's trade secrets and confidential information to third parties or use such information for the benefit of anyone other than FTPS. Id. ยง VII. The Plan defines confidential and proprietary information as "customer names or lists, financing information, technical information, designs, processes, procedures, policies, improvements, business plans, pricing structures, price and fee schedules, supplier lists, referral sources, records, blueprints, ...


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