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Cargill Incorporated v. Kuan

United States District Court, D. Colorado

October 20, 2014

CARGILL INCORPORATED, a Delaware corporation, Plaintiff,
v.
JASON KUAN, Defendant.

ORDER DENYING PLAINTIFF CARGILL INCORPORATED'S MOTION FOR A TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION (ECF NO. 2)

RAYMOND P. MOORE, District Judge.

THIS MATTER is before the Court on Plaintiff Cargill Incorporated's Motion for a Temporary Restraining Order and Preliminary Injunction ("Motion") (ECF No. 2) requesting, as relevant to this Order, the issuance of a preliminary injunction to prevent Defendant Jason Kuan from working as the President of the "case ready" business of JBS USA, a Cargill competitor. At issue is whether Mr. Kuan has "threatened" to and/or would "inevitably" disclose Cargill trade secrets such that he should be enjoined for one (1) year from working at JBS in North America. An evidentiary hearing was held on September 24, 2014, and the parties submitted briefs on October 1, 2014. The Court has diversity jurisdiction pursuant to 28 U.S.C. ยง 1332(a). Upon consideration of the Motion, the Court file, the arguments and evidence presented at the hearing (including assessing the credibility of the witnesses), and the applicable rules, statutes and case law, and being otherwise fully advised, Cargill's request that Mr. Kuan be enjoined from working at JBS in any capacity relating to or concerning case ready meats for one year is DENIED.

I. FACTUAL AND PROCEDURAL BACKGROUND

Cargill is a global food and agricultural company incorporated in Delaware but headquartered in Minnesota. One of Cargill's business units or divisions is the Case Ready Division which is operated in the United States and Canada. In this division, Cargill cuts large pieces of meat into smaller sizes, packs and weighs the cut pieces individually, and then ships these packages to retailers ready to be placed in their cases for purchase by consumers. Cargill serves primarily the major retailers in the U.S. and Canada.

In 1994, Mr. Kuan joined Cargill[1] in its Toronto, Ontario, Canada office after he graduated from the University of Lethbridge in Alberta, Canada. (Exhibit 2.) Mr. Kuan continued to work in the Toronto office until he was "stationed"[2] in Newnan, Georgia from about February 1998[3] until August of 2000. (Ex. 2.)

On August 17, 1998, while stationed in Georgia, Mr. Kuan signed an "Employee Confidential Information, Inventions, and Original Works of Authorship Agreement." (Ex. D.) On January 14, 1999, also while stationed in Georgia, Mr. Kuan signed a second "Employee Confidential Information, Inventions, and Original Works of Authorship Agreement" ("Agreement") which "supersedes and replaces" prior agreements of the same nature. (Ex. E.) The Agreement provides that it was made "[i]n consideration of [Mr. Kuan's] employment by Cargill ("Cargill" as used herein includes Cargill, Incorporated, its existing and future subsidiaries and affiliated companies)." (Ex. E.) Although stationed in Georgia, Mr. Kuan believes he signed the Agreement in Canada. No evidence was presented concerning the circumstances of the signing of the Agreement (or the earlier agreement), such as whether the parties engaged in any negotiations.

The Agreement requires Mr. Kuan not to "use, disclose or communicate" Cargill's confidential information or trade secrets during his employment and thereafter, and to return all confidential Cargill information upon his termination from employment. The Agreement, however, contains no restriction on Mr. Kuan's employment upon termination. While Cargill has non-compete agreements, it never asked Mr. Kuan to sign one.

After Georgia, Mr. Kuan was stationed in Wichita, Kansas from August 2000 to June 2007, and then stationed back to Toronto from June 1, 2007 until he resigned on August 1, 2014. (Ex. 2.) On this record, Mr. Kuan worked in the United States for almost half his career at Cargill.

Jody Horner is president of Cargill Case Ready and Cargill Meat Solutions. Her management team included a General Manager for Cargill's United States business and a General Manager for Cargill's Canada business. Until June 1, 2014, Mr. Kuan was the General Manager for Cargill's Canada business. In this position, Mr. Kuan had knowledge of and/or involvement in Cargill's customer strategies, financial affairs, plant operations, growth plans, and innovation.

In August 2013, Cargill started work on its business plan which included information concerning Cargill's financials, assessment of its competitors, customers, capacity, and assessment of its value added business. In March 2014, Cargill completed a draft of its business plan, the "Case Ready Strategy." (Ex. 10.)

On June 1, 2014, Mr. Kuan changed positions, moving from the Case Ready Division in Guelph, Ontario to the Value Added or McDonald's business unit in London, Ontario. Shortly thereafter, JBS contacted Mr. Kuan about a possible employment opportunity. After meeting Mr. Kuan, JBS offered Mr. Kuan a position which he did not accept. Nonetheless, negotiations continued.

On July 7, 2014, Mr. Kuan sent, via email on his Cargill issued laptop, his entire contacts file - containing Case Ready business contacts as well as personal contacts - to his personal email address. He also downloaded onto a personal external hard drive (the "Seagate Hard Drive") some, but not all, of the folders contained on his Cargill laptop. Many of these folders contained information about Cargill's case ready business. Mr. Kuan testified he did so because he had backup and other technical problems on his Cargill laptop. Mr. Kuan put the Seagate Hard Drive along with a USB drive ("Thumb Drive") and physical copies of other Cargill documents in a box (the "Box") which he kept in his car. (Ex. 23.) At that time, Mr. Kuan was in transition, living out of a hotel during his job change.

On Friday, August 1, 2014, Mr. Kuan accepted an offer of employment from JBS. He gave Cargill two weeks' notice that he was leaving to work for JBS, and told Human Resources that he had some items to return. Mr. Kuan was flying to Colorado, and was told to bring the items back to the London office when he returned. When he was unable to return on Monday as planned, Mr. Kuan notified Human Resources that he had not been back to London but would return "a few things" when he returned. (Ex. F.)

Mr. Kuan became a JBS employee on or about August 7, 2014. (Exs. 28-29.) JBS's Code of Conduct requires Mr. Kuan to refrain from disclosing secret or confidential information of others. (Exs. 28-29.) No evidence was presented that JBS requested or ...


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