Court Opinion

ID: 7803608
Source: CourtListenerOpinion
Date Created: 2022-08-25 18:00:34.454499+00
Date Added: 2024-06-11T16:29:41.477160
License: Public Domain

Case: 21-30368     Document: 00516447147          Page: 1    Date Filed: 08/25/2022

              United States Court of Appeals
                   for the Fifth Circuit
                                                                       United States Court of Appeals
                                                                                Fifth Circuit

                                                                              FILED
                                                                        August 25, 2022
                                   No. 21-30368                          Lyle W. Cayce
                                                                              Clerk

   People Source Staffing Professionals, L.L.C., an Oklahoma
   limited liability company,

                                                            Plaintiff—Appellant,

                                       versus

   Anna Robertson, an individual; Wayne Williamson, an
   individual; Kathy Williamson, an individual; Shauna Bradley,
   an individual; Will Source, Incorporated, a Delaware corporation,

                                                         Defendants—Appellees.

                  Appeal from the United States District Court
                     for the Western District of Louisiana
                            USDC No. 3:19-CV-430

   Before Jolly, Willett, and Oldham, Circuit Judges.
   Per Curiam:*
          Appellant People Source supplies temp workers. It brought various
   claims under Louisiana state law against its competitor Will Source and

          *
            Pursuant to 5th Circuit Rule 47.5, the court has determined that this
   opinion should not be published and is not precedent except under the limited
   circumstances set forth in 5th Circuit Rule 47.5.4.
Case: 21-30368      Document: 00516447147           Page: 2   Date Filed: 08/25/2022

                                     No. 21-30368

   several Will Source employees. The district court granted summary
   judgment to the defendants. We affirm.
                                          I.
          This suit arises out of a “mass resignation” by People Source
   employees on March 15, 2019. People Source alleged that following the mass
   resignation, appellees conspired to (and did) set up Will Source to compete
   with People Source, and that they used People Source trade secrets and other
   confidential information to do so.
          People Source sued the appellees in federal district court. It brought
   various claims under Louisiana state law. The district court granted summary
   judgment to the defendants. On appeal, People Source alleges that the
   district court made a host of errors that fall into two categories: (1) it
   improperly excluded certain evidence, and (2) it erroneously granted
   summary judgment to the appellees.
                                         II.
          We start with the district court’s decision to strike evidence. Our
   review is for abuse of discretion. See Cambridge Toxicology Grp., Inc. v.
   Exnicios, 495 F.3d 169, 178 (5th Cir. 2007). Here, the district court struck two
   pieces of evidence.
          The first was a document the parties call “the Petrin Agreement.”
   People Source submitted this document as an attachment to a declaration by
   Courtney Keefover. The district court granted the motion to strike as to
   paragraph 11 of the Keefover declaration because it was not within the
   declarant’s personal knowledge. And it also agreed to strike the Petrin
   Agreement, which was attached as an exhibit in support of paragraph 11. The
   district court excluded it after concluding “Courtney Keefover [couldn’t]

                                          2
Case: 21-30368      Document: 00516447147           Page: 3   Date Filed: 08/25/2022

                                     No. 21-30368

   authenticate” the Petrin Agreement because it, too, was “not within her
   personal knowledge.”
          We see no error in the district court’s conclusion, much less do we
   find an abuse of discretion. Although appellant was not obliged to
   authenticate its summary-judgment evidence, the summary-judgment rules
   permit a party to “object that the material cited to support or dispute a fact
   cannot be presented in a form that would be admissible evidence.” Fed. R.
   Civ. P. 56(c)(2). Upon objection, “[t]he burden is on the proponent to show
   that the material is admissible as presented or to explain the admissible form
   that is anticipated.” Fed. R. Civ. P. 56(c) advisory committee’s note to
   2010 amendment. And here, although it was possible the Agreement could
   be “authenticated in other ways at trial,” the district court noted People
   Source “listed no witnesses who could authenticate” the document.
          The second piece of stricken evidence was a document called “the
   Reeves Affidavit.” People Source produced it after the applicable discovery
   deadline, and the district court excluded it for that reason. District courts
   have “broad discretion” to control pretrial discovery, and a “decision to
   exclude evidence as a means of enforcing a pretrial order ‘must not be
   disturbed’ absent a clear abuse of discretion.” Geiserman v. MacDonald, 893
   F.2d 787, 790 (5th Cir. 1990). There is no such abuse of discretion here.
                                         III.
          We review a grant of summary judgment de novo. Kariuki v. Tarango,
   709 F.3d 495, 501 (5th Cir. 2013).
          People Source first argues the district court erred in granting summary
   judgment on its claims under the Louisiana Uniform Trade Secrets Act
   (“LUTSA”). To make out a LUTSA claim, a plaintiff must establish
   “(a) the existence of a trade secret, (b) a misappropriation of the trade secret
   by another, and (c) the actual loss caused by the misappropriation.” Brand

                                          3
Case: 21-30368      Document: 00516447147           Page: 4     Date Filed: 08/25/2022

                                     No. 21-30368

   Servs., L.L.C. v. Irex Corp., 909 F.3d 151, 156 (5th Cir. 2018) (quoting Reingold
   v. Swiftships, Inc., 126 F.3d 645, 646 (5th Cir. 1997)). The district court
   concluded People Source lacked evidence to create a triable fact issue on
   misappropriation and therefore was entitled to summary judgment on the
   LUTSA claims. We see no basis for disturbing that conclusion.
          Appellant also argues the district court erred in granting summary
   judgment on its claims under the Louisiana Unfair Trade Practices Act
   (“LUTPA”). LUTPA makes unlawful “unfair methods of competition and
   unfair or deceptive acts or practices in the conduct of any trade or
   commerce.” La. R.S. 51:1405. “[O]nly egregious actions involving
   elements of fraud, misrepresentation, deception, or other unethical conduct
   will be sanctioned based on LUTPA.” Cheramie Servs., Inc. v. Shell Deepwater
   Prod., Inc., 2009-1633, p. 12 (La. 4/23/10); 35 So. 3d 1053, 1060.
          The district court thoroughly reviewed the evidence presented,
   analyzed the LUTPA issues, and concluded People Source failed to provide
   evidence sufficient to create a triable fact issue. We have carefully reviewed
   the district court’s analysis and see no basis for disturbing it.
          People Source next contends the district court erred by
   misinterpreting its conspiracy claim and “analyzing it solely according to the
   elements of a Louisiana state law fraud claim.” People Source’s complaint
   alleged a “conspiracy to commit fraud.” Accordingly, the district court laid
   out the elements of a fraud claim: (1) a misrepresentation, suppression, or
   omission of true information; (2) the intent to obtain an unjust advantage or
   to cause damage or inconvenience to another; and (3) the error induced by a
   fraudulent act must relate to a circumstance substantially influencing the
   victim’s consent to the contract. Grigsby & Assocs., Inc. v. City of Shreveport,
   294 F. Supp. 3d 529, 544 (W.D. La. 2018). It then held People Source was
   missing an element: “there was no misrepresentation or suppression of the

                                           4
Case: 21-30368      Document: 00516447147           Page: 5    Date Filed: 08/25/2022

                                     No. 21-30368

   truth by any of the Defendants that substantially influenced People Source’s
   course of conduct.” Because fraud is the underlying tort for the conspiracy
   claim, and People Source failed to establish an element of fraud, the district
   court did not err in granting summary judgment to defendants on the
   conspiracy claim.
          Next, People Source argues the district court erred by granting
   summary judgment on its breach-of-fiduciary-duties claims. “The defining
   characteristic of a fiduciary relationship . . . is the special relationship of
   confidence or trust imposed by one in another who undertakes to act
   primarily for the benefit of the principal in a particular endeavor.” Sampson
   v. DCI of Alexandria, 2007-671, p. 7 (La. App. 3 Cir. 10/31/07); 970 So. 2d
   55, 60. “An employee owes his employer a duty to be loyal and faithful to the
   employer’s interest and business. . . . However, this duty of allegiance does
   not rise to the level of a fiduciary duty unless the employee is also an agent or
   mandatary of his employer.” Innovative Manpower Sols., LLC v. Ironman
   Staffing, LLC, 929 F. Supp. 2d 597, 609 (W.D. La. 2013). Many employees
   who are not fiduciaries have a lesser duty of fidelity to their employers—that
   duty requires them “not to act in antagonism or opposition to the interest of
   the employer,” Harrison v. CD Consulting, Inc., 2005-1087, p. 6 (La. App. 1
   Cir. 5/5/06); 934 So. 2d 166, 170, but it nonetheless allows an employee to
   prepare to compete with a former employer.
          The district court concluded neither Shauna Bradley nor Anna
   Robertson qualified as a fiduciary of People Source and accordingly granted
   summary judgment on these claims. Bradley was “an account manager for
   People Source,” but she did “not have a special duty as an agent or
   mandatary for People Source.” And Robertson was “not an officer, director,
   or owner of People Source” in a “special relationship of confidence or trust,”
   Sampson, 970 So. at 60, so she was “not an agent or mandatary of People
   Source that owed a fiduciary duty.” The district court did not err in

                                          5
Case: 21-30368      Document: 00516447147             Page: 6   Date Filed: 08/25/2022

                                       No. 21-30368

   concluding there was no triable issue of fact regarding whether either
   qualified as a fiduciary. And although both Bradley and Robertson may have
   owed a lesser duty of fidelity to People Source, any argument to that effect
   has not been presented and is deemed forfeited.
          Finally, People Source argues the district court erred in granting
   summary judgment on the breach-of-contract claim. The relevant contract
   obligations were set out in the Louisiana Non-Compete and Non-Solicitation
   Agreements (the “Agreement”), which Bradley signed. But Louisiana law
   strongly disfavors agreements in restraint of trade. See La. R.S. 23:921(a)(1)
   (“Every contract or agreement, or provision thereof, by which anyone is
   restrained from exercising a lawful profession, trade or business of any kind,
   except as provided in this section, shall be null and void.”). A non-solicitation
   or non-competition agreement is only valid in Louisiana if three requirements
   are met: (1) a two-year maximum duration, (2) a list of the areas in which the
   former employee is restrained, and (3) competition between the former
   employee and employer. Env’t Safety & Health Consulting Servs., Inc. v.
   Fowler, 2019-0813 (La. App. 4 Cir. 3/11/20), writ denied, 202-00729 (La.
   10/6/20); 302 So. 3d 528. The district court correctly applied that law and
   held the Agreement was overbroad and unenforceable. Based on that
   conclusion, the district court was correct to grant summary judgment on the
   breach-of-contract claim, which depended entirely on the enforceability of
   the Agreement.
                                   *        *         *
          We have considered People Source’s other arguments and find them
   unpersuasive. For the foregoing reasons, and for substantially the same given
   in the district court’s two thorough opinions granting the motions for
   summary judgment, we refuse to disturb the judgment below.
          AFFIRMED.

                                            6