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DTC Energy Group, Inc. v. Hirschfeld

United States District Court, D. Colorado

January 4, 2018

DTC ENERGY GROUP, INC., a Colorado Corporation, Plaintiff,
ADAM HIRSCHFELD JOSEPH GALBAN, and ALLY CONSULTING, LLC f/k/a WYADOK STAFFING, LLC, a limited liability company, Defendants.



         This matter comes before the Court on defendant Adam Hirschfeld's Motion to Compel Arbitration and Stay Proceedings [Docket No. 26]. The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 1331 and 1367.

         I. BACKGROUND

         Plaintiff DTC Energy Group and defendant Ally Consulting, LLC (“Ally”) are competitors in the oil and gas staffing industry. Docket No. 24 at 2-3, 10, ¶¶ 4, 7, 10, 42. Defendants Adam Hirschfeld and Joseph Galban are former employees of DTC who currently work for Ally. Id. at 3, ¶¶ 8-9.[1] Plaintiff alleges that defendants misappropriated confidential information and trade secrets belonging to plaintiff, including information related to plaintiff's operations, customer and candidate databases, and pricing strategy. Id. at 1-2, 17-19, ¶¶ 2, 82-90.

         On July 14, 2017, plaintiff filed a Motion for Temporary Restraining Order and Preliminary Injunction [Docket No. 4] seeking, among other things, to enjoin defendants' continued use and disclosure of plaintiff's confidential information and trade secrets. Docket No. 4 at 3. At the July 20, 2017 hearing on the motion for a temporary restraining order, the Court issued an oral ruling that plaintiff had failed to demonstrate a likelihood of success on the merits and denied plaintiff's request for a temporary restraining order. Docket No. 17 at 68, 68:21-24.

         On September 13, 2017, plaintiff filed an amended complaint and an amended motion for a preliminary injunction. Docket No. 24; Docket No. 25. The amended complaint asserts claims for breach of contract, breach of the duty of loyalty, unjust enrichment, tortious interference with business relations, tortious interference with contract, unfair competition, civil theft, civil conspiracy, and misappropriation of trade secrets under 18 U.S.C. § 1839 and Colo. Rev. Stat. § 7-74-102. Docket No. 24 at 19-30. None of the defendants has responded to the amended preliminary injunction motion, and only Mr. Galban and Ally have filed answers to the amended complaint. See Docket No. 27; Docket No. 28. On September 26, 2017, Mr. Hirschfeld filed a Motion to Compel Arbitration and Stay Proceedings [Docket No. 26], contending that the claims against him are subject to arbitration under the terms of his employment agreement with DTC. Docket No. 26. Paragraph 16 of that agreement provides, in relevant part:

Except for an action exclusively seeking injunctive relief, any disagreement, claim or controversy arising under or in connection with this Agreement, Employee's employment or termination of employment with the Company shall be resolved by way of confidential binding arbitration, pursuant to the Uniform Arbitration Act, C.R.S. § 13-22-201 et. seq., to be conducted in the City and County of Denver, State of Colorado, all costs of enforcement, collection, including reasonable attorney's fees, to be awarded to the party or parties substantially prevailing therein.

Docket No. 24-1 at 7, ¶ 16. There is no dispute that this agreement governed Mr. Hirschfeld's employment with DTC. See Docket No. 29 at 3, ¶ 2.


         The parties agree that Colorado law governs the interpretation of the arbitration provision in Mr. Hirschfeld's employment agreement. See Docket No. 26 at 2, ¶ 4; Docket No. 29 at 6. Under Colorado law, “[a]rbitration is a matter of contract and is governed by contract principles.” Winter Park Real Estate & Invs., Inc. v. Anderson, 160 P.3d 399, 403 (Colo.App. 2007). W hen interpreting a contract, a court must “seek to effectuate the intent and reasonable expectations of the parties.” Id. If the parties' intent is unclear, however, “a court must apply a presumption in favor of arbitration, and prohibit litigation unless the court can say . . . that the arbitration provision is not susceptible of any interpretation that encompasses the subject matter of the dispute.” Id.

         To the extent the parties also rely on federal law in support of their arguments, the Federal Arbitration Act (“FAA”) does not differ from Colorado law in any respect material to this case. Like Colorado law, the FAA “reflect[s] both a liberal . . . policy favoring arbitration and the fundamental principle that arbitration is a matter of contract.” Sanchez v. Nitro-Lift Technologies, LLC, 762 F.3d 1139, 1145 (10th Cir. 2014) (quoting AT & T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011)).

         Pursuant to these principles, courts “must rigorously enforce arbitration agreements according to their terms, ” Am. Express Co. v. Italian Colors Restaurant, 570 U.S. 228, 133 S.Ct. 2304, 2309 (2013), and resolve “any doubts concerning the scope of arbitrable issues” in favor of arbitration. Sanchez, 762 F.3d at 1146 (quoting Moses H. Cone Mem'l Hosp. v. Mercury Construction Corp., 460 U.S. 1, 24-25 (1983)).

         III. ANALYSIS

         Although Mr. Hirschfeld concedes that plaintiff's amended complaint seeks only injunctive relief against him, see Docket No. 26 at 7, he argues that plaintiff's claims are subject to arbitration for two reasons: (1) the arbitration provision is broad and thus a presumption in favor of arbitration applies; and (2) plaintiff asserts claims against Mr. Hirschfeld - such as breach of contract, breach of loyalty, civil theft, ...

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