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Brown & Brown of Mississippi, LLC v. Baker

United States District Court, S.D. Mississippi, Southern Division

November 7, 2017

BROWN AND BROWN OF MISSISSIPPI, LLC PLAINTIFF/ COUNTER-DEFENDANT
v.
SHERRIE BAKER DEFENDANT/ COUNTER-PLAINTIFF

          MEMORANDUM OPINION AND ORDER CONCERNING THE PARTIES' MOTIONS FOR SUMMARY JUDGMENT

          LOUIS GUIROLA, JR., UNITED STATES DISTRICT JUDGE

         BEFORE THE COURT are the Motions [60, 62] for Summary Judgment filed by the plaintiff/counter-defendant Brown and Brown of Mississippi, LLC (hereafter referred to as “Brown”) and the Motion [64] for Summary Judgment filed by the defendant/counter-plaintiff Sherrie Baker. In its first Motion [60], Brown seeks summary judgment as to its claims against Baker for injunctive relief, violations of the Mississippi Uniform Trade Secrets Act, and tortious interference with prospective business relations. In its second Motion [62], Brown seeks summary judgment as to Baker's counterclaims for: defamation/libel/slander, interference with business relationships, breach of contract, gender discrimination, age discrimination, retaliation, and hostile work environment. In her Motion [64], Baker seeks summary judgment as to Brown's claims for injunctive relief, violations of the Mississippi Uniform Trade Secrets Act, and tortious interference with prospective business relations. The Motions have been fully briefed. After reviewing the submissions of the parties, the record in this matter, and the applicable law, the Court finds that Brown's Motion for Summary Judgment as to its claims against Baker should be denied. Baker's Motion for Summary Judgment is granted as to Brown's claim for injunctive relief but denied in all other respects. Brown's Motion for Summary Judgment as to Baker's counterclaims is granted.

         FACTS

         In January 1999, Baker began working at Sawyer Foster Insurance, where she specialized in selling health benefits insurance. (Baker Resp., Ex. A at 2, ECF No. 76-1). Sawyer Foster Insurance was purchased by Beecher Carlson in May 2006, and Baker signed an Employment Agreements that provides:

At all times during Executive's employment and during the Restricted Period, Executive hereby expressly covenants and agrees that she will not, on her own behalf or on behalf of any other person, company, partnership, corporation or other entity, solicit, divert, or take away Business from any Customer of Employer for the purpose of providing insurance brokerage, risk management, or related consulting services that are competitive with the Employer's Business.

(Id.; Brown Mot., Ex. 1 at §7(f), ECF No. 63-2). The term “Restricted Period” in the Agreement “means a period of two (2) years following termination of Executive's employment with the Company, regardless of the reason for the termination.” (Brown Mot., Ex. 1 at 6 § 7(a)(i), ECF No. 63-2). The Agreement further provides “The Company, may, without Executive's consent, assign this Agreement to any affiliate or any successor to its business.” (Id. at § 12).

         Brown purchased the agency from Beecher Carlson on or about July 1, 2013. (Baker Resp., Ex. A at 3, ECF No. 76-1). In February 2014, Brown promoted Baker to the position of Profit Center Leader with a salary of $125, 000 plus bonuses for meeting profit goals. (Id.) Baker claims that Thomas Sawyer - one of the agency's former owners who continued to work at the agency after it was purchased by Beecher Carlson and Brown - began verbally abusing her and acting hostile toward her after she was promoted. (Id.) Baker served as Sawyer's supervisor and she had the authority to terminate him, but she claims that one of Brown's regional managers discouraged her from terminating Sawyer. (Brown Mot., Ex. 46 at 19-34, ECF No. 63-47).

         On January 26, 2015, Brown's regional manager informed Baker that she would no longer serve as profit center leader. (Baker Resp., Ex. A at 3, ECF No. 76-1). Brown's regional manager testified that the Gulfport, Mississippi office no longer needed a separate profit center leader because the Gulfport office was consolidated with its New Orleans office. (Brown Mot., Ex. 6 at 103, ECF No. 63-7; Brown Mot., Ex. 50 at 23, ECF No. 63-51). After that point, Mark Pennebaker served as profit center for the New Orleans and Gulfport offices. (Brown Mot., Ex. 6 at 128, ECF No. 63-7).

         After she was removed from the profit center leader position, Baker's salary was $100, 000 with a thirty percent commission rate on new business. (Brown Mot., Ex. 8 at 2, ECF No. 63-9). Baker claims that she was excluded from meetings and communications and she was asked to introduce an agent newly hired by Brown to her clients. (Baker Resp., Ex. A at 8, ECF No. 76-1).

         In May 2015, Baker filed documents with the Secretary of State to create her own agency, Coast Benefit Professionals, LLC. (Id. at 8). On June 29, 2015, Baker's assistant Samantha Gunter Wilson[1] resigned her position with Brown effective July 10, 2015. (Brown Mot., Ex. 12, ECF No. 63-13). Six days earlier, Wilson had emailed her contact list - which included Wilson's personal contacts as well as the contact information, user names and passwords[2] of some of Brown's customers - from her Brown email address to her private email address. (Brown Mot., Ex. 14 at 42, 45, ECF No. 63-15). Wilson sent additional Brown customer information to her private email address on July 6, 2015. (Id. at 59). She sent a customer's contract with Brown to Baker's private email address on July 7, 2015. (Id. at 66-68). Wilson testified that she sent the contract to Baker pursuant to Baker's request. (Id.) Wilson testified that these emails were probably sent because Wilson and Baker were continuing to provide services to clients on behalf of Brown and occasionally they worked from home. (Id. at 71). However, Wilson admitted that these particular customers became customers of Baker's agency. (Id. at 59, 69).

         On July 6, 2015, Baker wrote a letter to Brown resigning her position effective July 17, 2015. (Brown Mot., Ex. 15, ECF No. 63-16). As early as July 10, 2015, Baker had emailed an announcement concerning her new agency to various individuals. (Brown Mot., Ex. 14 at 2-4, ECF No. 63-15). On July 13, 2015, Baker sent an email to a Brown client, but the signature line of the email referenced Baker's new agency, not Brown. (Brown Mot., Ex. 16 at 6, ECF No. 63-17). On July 22, 2015, after Baker's resignation went into effect, a representative of another Brown client noted in an email that Baker was going to submit a quote for the customer's business and that Baker had access to all of the customer's data. (Id. at 9). Another client email revealed that Baker was using the same fee structure as Brown. (Id. at 11). Wilson began working for Baker's agency in August 2015. (Brown Mot., Ex. 17 at 7, ECF No. 63-18).

         On June 24, 2015, Baker filed a charge for gender and age discrimination with the Equal Employment Opportunity Commission's Jackson, Mississippi office. (Brown Mot., Ex. 18, ECF No. 19). The basis of the charge was Brown's alleged demotion of Baker on January 26, 2015. (Brown, Mot., Ex. 20, ECF No. 63-21). Brown received notice of the charge on July 8, 2015. (Brown Mot., Ex. 19, ECF No. 63-20). The EEOC provided Baker with notice of her right to sue Brown on October 20, 2015, and instructed her that her lawsuit must be filed within ninety days of receipt of the notice. (Brown Mot., Ex. 27, ECF No. 63-28).

         On July 24, 2015, Brown sued Baker in the Second Judicial District of the Chancery Court of Harrison County, Mississippi, alleging violations of the Mississippi Uniform Trade Secrets Act and Tortious Interference with Prospective Business Relations. The Chancery Court awarded summary judgment to Brown “to the extent that Ms. Baker signed a binding employment agreement with [Brown].” (Brown Mot., Ex. 32 at 171, ECF No. 63-33; State Court Record at 288-89, ECF No. 5-2).

         On November 17, 2015, Baker filed a second charge of discrimination with the EEOC's Mobile, Alabama office, alleging constructive discharge, gender discrimination, age discrimination, retaliation, and hostile work environment. (Brown Mot., Ex. 29, ECF No. 63-30). She claimed that the discrimination took place between January 26, 2015, and July 6, 2015. (Id.)

         On August 11, 2016, Baker filed counterclaims against Brown for defamation/libel/slander, interference with business relationships, breach of contract, gender discrimination, age discrimination, retaliation, and hostile work environment. (Am. Mot. to Dismiss, Answer & Affirmative Defenses & Counterclaims, ECF No. 1-1). Brown removed the case to this Court on the basis of federal question jurisdiction created by some of the counterclaims.

         DISCUSSION

         A motion for summary judgment may be filed by any party asserting that there is no genuine issue of material fact and that the movant is entitled to prevail as a matter of law on any claim. Fed.R.Civ.P. 56. The movant bears the initial burden of identifying those portions of the pleadings and discovery on file, together with any affidavits, which it believes demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). Once the movant carries its burden, the burden shifts to the non-movant to show that summary judgment should not be granted. Id. at 324-25.

         I. BROWN'S CLAIMS AGAINST BAKER

         A. MISSISSIPPI UNIFORM TRADE SECRETS ACT

         The Mississippi Uniform Trade Secrets Act (MUTSA) provides: “Except to the extent that a material and prejudicial change of position prior to acquiring knowledge or reason to know of misappropriation renders a monetary recovery inequitable, a complainant is entitled to recover damages for misappropriation [of trade secrets].” Miss. Code Ann. § 75-26-7(1). If the misappropriation is willful and malicious, the court may award punitive damages and attorneys' fees. Miss. Code. Ann. § 75-26-7(2); Miss. Code Ann. § 75-26-9.

         A “trade secret” is defined as:

information, including a formula, pattern, compilation, program, device, method, technique or process, that: (i) [d]erives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and (ii) [i]s ...

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