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PPS Service Group, LLC v. Eckert

United States District Court, S.D. Ohio, Western Division

August 20, 2019

PPS SERVICE GROUP, LLC, Plaintiff,
v.
ADAM ECKERT, et al., Defendants.

          Barrett J.

          REPORT AND RECOMMENDATION

          Stephanie K. Bowman United States Magistrate Judge.

         This is an action for misappropriation of trade secrets under the Defend Trade Secrets Act of 2016 (DTSA), 18 U.S.C. § 1831 et seq., and the Ohio Uniform Trade Secrets Act (OUTSA), R.C. 1333.61, et seq., along with additional common-law claims. Plaintiffs seek a preliminary injunction prohibiting Defendants from benefitting from the use of PPS' confidential and proprietary materials - materials that Plaintiff alleges Defendants misappropriated while working for PPS but secretly running a competitive business - pending the resolution of this matter. Based on the allegations contained in the Verified Complaint, Defendant Roby agreed to the issuance of a preliminary injunction.[1] (Doc. 9). However, after conducting brief discovery, Roby now believes that the principal allegations in Plaintiff's complaint that supported entry of a Preliminary Injunction are demonstrably not true. As such, Roby seeks to dissolve the agreed upon preliminary injunction. (See Doc. 24).

         The undersigned held a comprehensive three-day hearing on the motion for a preliminary injunction on March 21, March 27, and April 19, 2019.

         I. Background and Facts

         In late 2016, Adam Eckert shared a business opportunity with a longtime friend and former kindergarten pal, Matt Johnson. (See Johnson Depo[2]., Ex. 1 at 60-61). At the time, Mr. Eckert “had vast knowledge, obviously, of the industry (with) many years of experience” and knowledge of “RFPs and clients (that) were going to become available.” Id. Mr. Johnson saw that Mr. Eckert's knowledge presented “an opportunity to start (a) business with (Mr. Eckert) at the forefront.” Id.

         Thereafter, Mr. Johnson formed PPS Service Group (“PPS”) to take advantage of Mr. Eckert's knowledge, experience, and opportunities. (Id. at 8-10, 13, 60-61; see also, Exh. 2). PPS provides nationwide landscaping, snow and ice removal, parking lot maintenance, and customized facility management services. Mr. Johnson became PPS' President and Owner, but he remained employed by ProPharma Sales (a separate entity he owns). (Id. at 6-12) PPS then used Mr. Eckert's pre-existing knowledge and contacts to secure snow removal, ice removal, and landscape contracts from retailers, which PPS then sought out third parties to perform the actual work. (Id. at 9). According to Mr. Johnson, PPS' sales were the product of Mr. Eckert's “previous relationships with people within the industry.” (Id. at 17).

         In September 2017, PPS hired another industry veteran, Robert Roby. (Id. at 16). Like Mr. Eckert, Mr. Roby had decades of experience and numerous contacts. (Id. at 63). He had been an executive leader driving procurement departments for 13 years. (See Doc. 23, Ex. 3). He formerly worked with national leaders in the industry, Brickman and CaseSnow Management and had experience and contacts throughout the United States. Id. PPS required Mr. Roby to sign an Employment Offer and a Non-Disclosure Agreement (“NDA”). (See Doc. 23 Exhs. 4 and 5).

         In January of 2018, Mr. Roby testified that he was offered a job by Kris Tull, the head of procurement at FacilitySource. Roby testified that Tull wanted to hire him to find vendors for thousands of sites. However, the position was located in Arizona. Roby did not want to move his family from Ohio, so he declined the offer. (Doc. 55 at 6). Tull then suggested that Roby start his own company and do the same work as an independent contractor. Thereafter Roby formed his own company REMS Nationwide Procurement, LLC (“REMS”).

         Roby testified that REMS did not perform any services. Instead, REMS brokered the deal from the contractor for the client. (Doc. 64 at 39). REMS was created to be the procurement “middleman” between a company like PPS and those who clear parking lots. (See Doc. 24, Exh. 3). PPS was created to be a “middleman” between retailers and service providers who would clear parking lots. (See Doc. 24, Ex. 3, Roby Aff.). In this regard, REMS would perform the task of procuring laborers for contracts already secured between a PPS (or by its competitors like Cherry Logistics, Merit, Dentco, etc.) and a retailer. Id. PPS would service the contract. (Doc. 64, at 93).

         PPS' customers and prospects are retailers. Id. Meanwhile, REMS' customers and prospects are PPS and its competitors. Id. Additionally, the pricing models used by PPS and REMS have nothing in common. Id. REMS charges a nominal flat rate per parking lot (i.e., $90). Id. The roles of REM and PPS is illustrated below:

         (Image Omitted)

         Beginning in January 2018, and continuing through their termination from PPS in September 2018, PPS contends that Defendants secretly conducted business on behalf of and solicited customers for REMS. In this regard, Plaintiff contends that Defendants often used their PPS email accounts to communicate with each other, their partners at REMS, and potential clients.

         Notably on January 5, 2018, Roby emailed another REMS owner[3] a list of store locations for a PPS client. (Verified Complaint ¶20.).

         On January 18, 2018, Roby sent an email to a potential PPS client. This client had contacted PPS about having PPS enter into a contract to provide snow removal services at up to 16, 000 locations nationwide. Instead of working to get the client for PPS, Plaintiff contends that Defendant Roby signed his email as the “President” of REMS. He said, “REMS will be happy to help you…” and provided a series of PowerPoint slides describing REMS. (Verified Complaint ¶23.)

         In a January 24, 2018 email, Eckert discussed with other REMS owners the development of a “pricing model” for REMS to present to clients. In developing this pricing model, Plaintiff claims that Eckert used proprietary pricing data from PPS, and even refers to a PPS customer. He adds at the end of the email: “I know this might get a little messy but it protects us and our proprietary data.” (Verified Complaint ¶31.)

         In March 2018, Plaintiff contends that Roby used his PPS email account to communicate with a potential client. Plaintiff contends other emails showed that Roby used his PPS email account and contacts to obtain pricing information in order to present a bid to this client. (Verified Complaint ¶33.) Again, in May and July 2018, Plaintiff alleges that when Roby used his PPS email to send to REMS, a PPS confidential and proprietary spreadsheet containing pricing and vendor ...


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