STANLEY R. CHESLER, District Judge.
This matter comes before the Court upon Plaintiff DG3 North America, Inc.'s ("Plaintiff" or "DG3") motion to dismiss the counterclaims asserted by Defendant Labrador Regulated Information Transparency, Inc. ("Defendant" or "Labrador"). Labrador has opposed the motion. The Court has considered the papers filed by the parties, and, for the reasons expressed below, grants the motion in part and denies it in part.
DG3 initiated this breach of contract action against Labrador in New Jersey state court, seeking to recover monies Labrador has allegedly failed to pay for printing services rendered between April and June 2014. According to the Complaint, DG3 is a New Jersey corporation engaged in the business of providing print and graphic communications services. Labrador, a Delaware corporation headquartered in Atlanta, Georgia, provides design and advisory services in connection with the preparation of documents to be filed with the Securities and Exchange Commission ("SEC"). Labrador removed this action from the Superior Count of New Jersey, Hudson County, pursuant to 28 U.S.C. § 1441, and this Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1332(a).
In its responsive pleading, Labrador asserted four counterclaims against DG3: tortious interference with employment agreement, misappropriation of trade secrets, tortious interference with business relationships and unfair competition. These claims arise from two coinciding events, both occurring in or around June 2014: DG3's launch of an advisory and consulting operation known as "Argyle" and the departure of Labrador employee Iain Poole to commence employment with DG3. According to the allegations made in the Counterclaim, prior to Argyle's launch, DG3 had been engaged solely in the business of financial printing services. The consulting services of Argyle, Labrador alleges, are virtually identical to Labrador's services and thus make DG3 a direct competitor of Labrador. Poole, who had served as Labrador's United States sales director since 2012, was allegedly approached by DG3 in 2014 to join its Argyle consulting operation. The Counterclaim alleges that DG3 began these discussions with Poole and offered him employment even though it knew, or should have known, that Poole was bound by an employment agreement with Labrador, which included restrictive covenants, including non-solicitation of customers, non-disclosure of confidential information and trade secrets and non-solicitation of Labrador employees for other employment.
Labrador grounds its claims in a number of factual allegations identifying conduct by DG3 and Poole which violated these restrictive covenants. It alleges that DG3 used Poole's knowledge of Labrador's customer identities, customer preferences and requirements, pricing structure and other information considered by Labrador to be proprietary and confidential to persuade Labrador's existing customers to switch to Argyle's services. The Counterclaim names a number of Labrador clients that have been solicited by DG3 and Poole and identifies one that transitioned its business to Argyle after being offered similar investor relations services to Labrador's. It alleges that an August 2014 email sent by Argyle to current and prospective customers, including Labrador clients, announced a corporate governance training course to be led by Poole which is, according to Labrador, nearly identical to a Labrador course. It thus avers that the email reflects another instance of DG3's attempt to solicit customers using information Poole learned during his employment with Labrador. Labrador also alleges that, through Poole, DG3 approached other Labrador employees to entice them to join DG3. Labrador seeks monetary and injunctive relief against DG3.
Pleading a cognizable claim for relief is governed by Federal Rule of Civil Procedure 8(a), which provides that a legally sufficient pleading must contain "a short and plain statement of the claim showing that the pleading is entitled to relief." Fed. R. Civ. P. 8(a)(2). Federal Rule of Civil Procedure 12(b)(6) provides a mechanism by which a defendant may defeat a claim "for failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). A complaint will survive a motion under Rule 12(b)(6) only if it states "sufficient factual allegations, accepted as true, to `state a claim for relief that is plausible on its face.'"
The Court begins its analysis by noting a well-established rule concerning the scope of a motion to dismiss. In a Rule 12(b)(6) motion, the Court is limited in its review to a few basic documents: the complaint, exhibits attached to the complaint, matters of public record, and undisputedly authentic documents if the complainant's claims are based upon those documents.
In spite of this axiomatic standard governing the sufficiency of a claim, DG3's attack on the sufficiency of the counterclaims consists almost entirely of the argument that "there is no evidence, beyond highly speculative and unsupported statements, to sustain any of these claims." (DG3 Mot. at 1) (emphasis added). Rather than engage in any meaningful analysis of the factual allegations actually set forth in Labrador's Counter-Complaint, DG3 presents its own version of events, relying primarily on the affidavit of Mr. Poole. Such extrinsic material has no bearing on this motion and will not be considered by this Court.
The movant, here DG3, "bears the burden of showing that no claim has been presented."
To state a claim for tortious interference with a contract under New Jersey law, a plaintiff must allege actual interference with a contract by a defendant who is not a party to the contract, that the interference was intentional and without justification, and the interference caused damage.
The elements of a claim for misappropriation of trade secrets claim are: (1) the existence of a trade secret; (2) communicated in confidence by the plaintiff to the employee; (3) disclosed by the employee in breach of that confidence; (4) acquired by the competitor with knowledge of the breach of confidence; and (5) used by the competitor to the detriment of one claiming misappropriation.
To assert a viable claim for tortious interference with business relations or economic advantage, a plaintiff must allege facts that "show that it had a reasonable expectation of economic advantage that was lost as a direct result of defendants' malicious interference, and that it suffered losses thereby."
DG3 has, however, correctly pointed out that the unfair competition claim is duplicative of the tortious interference claims. Though Labrador argues that the claim addresses a broader "scheme to rapidly develop a mirror business" (Labrador Opp. at 19) and is therefore not duplicative, it identifies the offending conduct as exactly the same conduct giving rise to the other counterclaims: DG3's alleged misappropriation of customer information and use of this information to solicit and encourage Labrador customers to transition their business to Argyle operation. Courts in the District of New Jersey have held that, because unfair competition is a rubric which subsumes claims for tortious interference with business or contractual relations, and not a recognized cause of action in and of itself, a claim for "unfair competition" will be dismissed where it is duplicative of a tortious interference claims.
For the foregoing reasons, the Court will dismiss Labrador's counterclaim for unfair competition but will deny DG3's motion to dismiss the counterclaims in all other respects. An appropriate Order will be filed.