                   IN THE SUPREME COURT OF NORTH CAROLINA

                                    No. 300A18

                                Filed 10 May 2019

WELLS FARGO INSURANCE SERVICES USA, INC.

              v.
KEVIN LINK, NELSON RAYNOR, ELIZABETH PACK, and BB&T INSURANCE
SERVICES, INC.



        Appeal pursuant to N.C.G.S. § 7A-27(a)(2) from an order and opinion on

defendants’ motion to dismiss entered on 8 May 2018 by Judge Gregory P. McGuire,

Special Superior Court Judge for Complex Business Cases, in Superior Court, Wake

County, after the case was designated a mandatory complex business case by the

Chief Justice under N.C.G.S. § 7A-45.4(a).   Heard in the Supreme Court on 10 April

2019.


        Fisher & Phillips LLP, by J. Michael Honeycutt, Meredith W. Norvell, and
        Holly N. Mancl, for plaintiff-appellant.

        Parry Tyndall White, by K. Alan Parry, Michelle M. Walker, and Megan E.A.
        Bishop, for defendant-appellees.


        PER CURIAM.


        AFFIRMED.
STATE OF NORTH CAROLINA                  IN THE GENERAL COURT OF JUSTICE
COUNTY OF WAKE                               SUPERIOR COURT DIVISION
                                                   17 CVS 12848

WELLS FARGO INSURANCE
SERVICES USA, INC.,

                           Plaintiff,
                                                ORDER AND OPINION ON
       v.                                       DEFENDANTS’ MOTION TO
KEVIN LINK, NELSON RAYNOR,                            DISMISS
ELIZABETH PACK and BB&T
INSURANCE SERVICES, INC.

                           Defendants.


      THIS MATTER comes before the Court on Defendants Kevin Link, Nelson

Raynor, Elizabeth Pack, and BB&T Insurance Services, Inc.’s Partial Motion to

Dismiss Pursuant to Rule 12(b)(6). (“Motion to Dismiss”, ECF No. 7.) Defendants

seek to dismiss Counts One–Five, Seven, and Eight in the Complaint, but do not seek

dismissal of Count Six.

      THE COURT, having considered the Motion to Dismiss, the briefs filed in

support of and in opposition to the Motion to Dismiss, the arguments of counsel at

the hearing, and other appropriate matters of record, CONCLUDES, in its discretion,

that the Motion to Dismiss should be GRANTED, in part, and DENIED, in part, for

the reasons set forth below.


      Fisher & Phillips, by J. Michael Honeycutt and Meredith W. Norvell, for
      Plaintiff Wells Fargo Insurance Services USA, Inc.

      Parry Tyndall White, by K. Alan Parry and Michelle M. Walker, for Defendants
      Kevin Link, Nelson Raynor, Elizabeth Pack, and BB&T Insurance Services,
      Inc.
McGuire, Judge.



                  I.      FACTS AND PROCEDURAL BACKGROUND

      1.      The Court does not make findings of fact on motions to dismiss under

N.C. Gen. Stat. § 1A-1, Rule 12(b)(6) (hereinafter, “Rule(s)”), but only recites those

facts included in the complaint that are relevant to the Court’s determination of the

Motion. See, e.g., Concrete Serv. Corp. v. Inv’rs Grp., Inc., 79 N.C. App. 678, 681, 340

S.E.2d 755, 758 (1986).

      A. The parties

      2.     Plaintiff Wells Fargo Insurance Services USA, Inc. (“Plaintiff” or “Wells

Fargo”) is a North Carolina-licensed insurance broker that sells insurance products

and services to its customers. (Compl., ECF No. 3, at ¶ 9.) Wells Fargo alleges that

it provides “insurance products and services that are unique to the particular needs

of its customers.” (Id. at ¶ 16.)

      3.     Defendant BB&T Insurance Services, Inc. (“BB&T”) is also an insurance

broker providing insurance products and services to its customers in the same

segment of the insurance market. (Id. at ¶ 10.)

      4.     Wells Fargo employed Defendant Kevin Link (“Link”) as a Senior Sales

Executive. Link was responsible for “soliciting insurance customers and providing

risk management services.” (Id. at ¶ 11.) Link resigned from Wells Fargo effective

October 31, 2016, and began working for BB&T. (Id.)

      5.     Wells Fargo employed Defendant Nelson Raynor (“Raynor”) as a

Commercial Insurance Producer. Raynor was responsible for “procuring insurance
customers and providing risk management services.” (Id. at ¶ 12.) On April 12, 2017,

Raynor resigned from Wells Fargo and began working for BB&T. (Id.)

         6.   Wells Fargo employed Elizabeth Pack (“Pack”) as a Marketing

Placement Specialist. Pack was responsible for marketing to Wells Fargo’s insurance

customers. (Id. at ¶ 13.) On April 3, 2017, Pack resigned from Wells Fargo and began

working for BB&T. (Id. at ¶ 13.) (Collectively, Link, Raynor, and Pack are referred

to as the “Individual Defendants.”)

         7.   While employed with Wells Fargo, the Individual Defendants “brokered

and serviced the insurance needs of Wells Fargo customers assigned to them” and

had knowledge about the insurance needs and policies of their customers. (Id. at

¶ 14.)

         8.   Wells Fargo has developed and maintains certain “confidential and

trade secret information” concerning its customers.       (Id. at ¶¶ 17–21.)     The

confidential and trade secret information “provides Wells Fargo with a competitive

advantage over its competitors who do not know the information.” (Id. at ¶ 20.) Wells

Fargo makes efforts to protect the secrecy of its confidential and trade secret

information through the use of written confidentiality agreements, and the

implementation of a Code of Ethics and Information Security Policy and policies in

its Team Member Handbook. (Id. at ¶¶ 22–25.)

         B. Link’s and Raynor’s Restrictive Agreements

         9.   During their employment with Wells Fargo, Link and Raynor each

executed an agreement with Wells Fargo entitled “Agreement Regarding Trade
Secrets, Confidential Information, Nonsolicitation and Assignment of Inventions”

(the “Restrictive Agreements”). (ECF No. 3, at ¶ 27; Link Restrictive Agreement,

ECF No. 3, Ex. 1; Raynor Restrictive Agreement, ECF No. 3, Ex. 2.) The Restrictive

Agreements provide that for a period of two (2) years immediately following

termination of their employment for any reason, Link and Raynor will not:

      a. [S]olicit, recruit or promote the solicitation or recruitment of any
         employee or consultant of the Company for the purpose of
         encouraging that employee or consultant to leave the Company’s
         employ or sever an agreement for services;

      b. [S]olicit, participate in or promote the solicitation of any of the
         Company’s clients, customers, or prospective customers with whom
         [they] had Material Contact and/or regarding whom [they] received
         Confidential Information, for the purpose of providing products or
         services that are in competition with the Company’s products or
         services (“Competitive Products/Services”). “Material Contact”
         means interaction between [them] and the customer, client or
         prospective customer within one (1) year prior to [their] last day as a
         team member which takes place to manage, service, or further the
         business relationship; or

      c. Accept insurance business from or provide Competitive
         Products/Services to customers or clients of the Company:
               i. with whom [they] had Material Contact, and/or
              ii. were [their] clients or customers of the Company within six
                  (6) months prior to [their] termination of employment.

(ECF No. 3, at ¶¶ 30, 34.)

      10.    The Restrictive Agreements also prohibit Link and Raynor from using

or disclosing Wells Fargo’s “Trade Secrets” and “Confidential Information”. (Id. at

¶¶ 30 and 35.) The Restrictive Agreements define “Trade Secrets” as including, but

not limited to:

             [T]he names, addresses, and contact information of the
             Company’s customers and prospective customers, as well
             as any other personal or financial information relating to
             any customer or prospect, including, without limitation,
             account numbers, balances, portfolios, maturity and/or
             expiration or renewal dates, loans, policies, investment
             activities, purchasing practices, insurance, annuity
             policies and objectives;

             [A]ny information concerning the Company’s operations,
             including without limitation, information related to its
             methods, services, pricing, costs, margins and mark ups,
             finances, practices, strategies, business plans, agreements,
             decision-making, systems, technology, policies, procedures,
             marketing, sales, techniques, agent information, and
             processes;

             [A]ny other proprietary and confidential information
             relating to the Company’s customers, employees, products,
             services, sales, technologies, or business affairs.

(ECF No. 3, at Exs. 1 and 2.) The Restrictive Agreements do not contain a

separate definition of “Confidential Information.”


      11.    The Restrictive Agreements define “the Company” as: “a Wells Fargo

company and/or any of its past, present, and future parent companies, subsidiaries,

predecessors, successors, affiliates, and acquisitions.” (Id.)

      12.    Under the Restrictive Agreements, Link and Raynor also were required

to return to Wells Fargo upon termination of employment all “Confidential

Information of the Company” and all “Records of the Company” in their respective

possessions. (Id. at ¶¶ 31, 36; Exs. 1 and 2.)

      C. The resignations from Wells Fargo and breaches of the Restrictive
         Agreements

      13.    Link resigned from Wells Fargo on October 31, 2016, Pack resigned on

April 3, 2017, and Raynor resigned on April 12, 2017. Link and Raynor “solicit[ed]
and encourage[ed]” each other, and Pack, to terminate employment with Wells Fargo.

(ECF No. 3, at ¶¶ 40–41.)

      14.    On or about April 12, 2017, immediately prior to submitting his

resignation, Raynor entered Wells Fargo’s offices at around 8:00 p.m. and printed and

copied documents for approximately one hour. (Id. at ¶¶ 42, 101.) Wells Fargo alleges

that it “is informed and believes . . . that the documents printed and copied by

Defendant Raynor contained highly confidential and trade secret information

belonging to Wells Fargo.” (Id. at ¶ 46.)

      15.    Since becoming employed with BB&T, Link, Raynor, and Pack have

contacted and solicited Wells Fargo’s customers “in an attempt to divert their

insurance business away from Wells Fargo” and to BB&T. (Id. at ¶¶ 47–48.) Wells

Fargo alleges upon information and belief that Link, Raynor, and Pack used Wells

Fargo’s trade secrets and confidential information “to identify, contact, solicit and

induce Wells Fargo clients to transfer their accounts and otherwise divert business

from Wells Fargo to BB&T.” (Id. at ¶ 56.) In the Complaint, Wells Fargo lists

approximately 18 Wells Fargo customers assigned to Link or Raynor who have

transferred their insurance business to BB&T since Link and Raynor left Wells

Fargo. (Id. at ¶¶ 53–71.)

      16.    On November 27, 2017, Wells Fargo filed the Complaint.           In the

Complaint, Wells Fargo alleges four separate claims against Link and Raynor for

breaches of Restrictive Agreements: breach of the non-solicitation of customers

provision (Count One); breach of the non-solicitation of employees provisions (Count
Two); breach of the confidential information provisions (Count Three); and breach of

the return of property provision (Count Four). Wells Fargo also alleges the following

claims against all of the Defendants: misappropriation of trade secrets in violation

of the North Carolina Trade Secrets Protection Act (“NCTSPA”), N.C. General

Statute § 66-152 et seq., (hereinafter “G.S.”) (Count Five); tortious interference with

contractual relations (Count Seven); and unfair and deceptive trade practices (Count

Eight). Finally, Wells Fargo alleges a claim for computer trespass under G.S. § 14-

458 against Raynor only (Count Six).

      17.      On November 28, 2017, the case was designated to the North Carolina

Business Court and assigned to the undersigned. (Designation Order, ECF No. 1;

Assignment Order, ECF No. 2.)

      18.      On December 28, 2017, Defendants filed the Motion to Dismiss and a

supporting memorandum of law. (Def. Memo. Supp. Mot. Dismiss, ECF No. 8.) On

January 22, 2018, Plaintiff filed its brief in opposition to the Motion to Dismiss. (Pl.

Br. Opp. Mot. Dismiss, ECF No. 10.) Defendants filed a reply on February 8, 2018.

(Def. Reply Supp. Mot. Dismiss, ECF No. 15.) On February 20, 2018, the Court heard

oral argument on the Motion to Dismiss. The Motion to Dismiss is now ripe for

disposition.

                                    II.    ANALYSIS

      19.      The Court, in deciding a Rule 12(b)(6) motion, treats the well-pleaded

allegations of the complaint as true and admitted. Sutton v. Duke, 277 N.C. 94, 98

(1970).   However, conclusions of law or unwarranted deductions of fact are not
deemed admitted. Id. The facts and permissible inferences set forth in the complaint

are to be treated in a light most favorable to the nonmoving party. Ford v. Peaches

Entm’t Corp., 83 N.C. App. 155, 156 (1986). As our Court of Appeals has noted, the

“essential question” raised by a Rule 12(b)(6) motion is “whether the complaint, when

liberally construed, states a claim upon which relief can be granted on any theory.”

Barnaby v. Boardman, 70 N.C. App. 299, 302, 318 S.E.2d 907, 909 (1984), rev’d on

other grounds, 313 N.C. 565 (1985) (citations and emphasis omitted).

       20.    Our appellate courts frequently reaffirm that North Carolina is a notice

pleading state. See, e.g., Feltman v. City of Wilson, 238 N.C. App. 246, 252, 767 S.E.2d

615, 620 (2014) (quoting Wake Cty. v. Hotels.com, L.P., 235 N.C. App. 633, 646–47,

762 S.E.2d 477, 486 (2014)). “Under notice pleading, a statement of claim is adequate

if it gives sufficient notice of the claim asserted to enable the adverse party to answer

and prepare for trial, to allow for the application of the res judicata, and to show the

type of case brought.” Id. Accordingly, “a complaint should not be dismissed for

insufficiency unless it appears to a certainty that plaintiff is entitled to no relief under

any state of facts which could be proved in support of the claim.” Sutton, 277 N.C. at

103, 176 S.E.2d at 166 (1970) (emphasis omitted).

       21.    A Rule 12(b)(6) motion should be granted when the complaint, on its

face, reveals (a) that no law supports the plaintiff's claim, (b) the absence of facts

sufficient to form a viable claim, or (c) some fact which necessarily defeats the

plaintiff's claim. Jackson v. Bumgardner, 318 N.C. 172, 175 (1986). In addition, the

Court may consider documents which are the subject of plaintiff’s complaint and to
which the complaint specifically refers, including the contract that forms the subject

matter of the action. Oberlin Capital, L.P. v. Slavin, 147 N.C. App. 52, 60, 554 S.E.2d

840, 847 (2001).

      22.    The Court first will address Wells Fargo’s claims for breach of the

Restrictive Agreements by Link and Raynor, and then the claims alleged against all

of the Defendants.

      A. Breach of the non-solicitation of customers restriction (Count One)

      23.    In its first claim, Wells Fargo alleges Link and Raynor breached the

prohibitions against soliciting or accepting insurance business from Wells Fargo’s

customers contained in sections III.b. and III.c. of the Restrictive Agreements. (ECF

No. 3, at ¶¶ 80–84.) Section III.b. prohibits Link and Raynor from soliciting “the

Company’s” customers or prospective customers with whom they had “Material

Contact and/or” customers about whom they received “Confidential Information.” (Id.

at ¶¶ 30 and 34.) “Material Contact” is defined as interaction with the customer

during the year prior to their respective terminations of employment from Wells

Fargo. Section III.c. of the Restrictive Agreements prohibits Link and Raynor from

accepting “insurance business” from or providing competitive products and services

to customers of “the Company” with whom they had “Material Contact and/or” who

were “customers of the Company within six (6) months prior to [their] termination of

employment.” (Id.)

      24.      North Carolina courts will enforce a covenant not to compete if it is:

“(1) in writing; (2) reasonable as to [the] terms, time, and territory; (3) made a part of
the employment contract; (4) based on valuable consideration; and (5) not against

public policy.” Triangle Leasing Co. v. McMahon, 327 N.C. 224, 228, 393 S.E.2d 854,

857 (1990); United Lab., Inc. v. Kuykendall, 322 N.C. 643, 649–50, 370 S.E.2d 375,

380 (1988). The party seeking enforcement of a restrictive covenant has the burden

of proving its reasonableness. Medical Staffing Network, Inc. v. Ridgway, 194 N.C.

App. 649, 655, 670 S.E.2d 321, 327 (2009). The reasonableness of a non-competition

covenant is a matter of law for the court to decide. Id.

      25.    In the absence of an express geographic territory restriction, a court can

enforce a restriction prohibiting a former employee from soliciting customers or

clients. Whittaker Gen. Med. Corp. v. Daniel, 324 N.C. 523, 526, 379 S.E.2d 824, 826f

(1989) (relying on Kuykendall and enforcing a noncompetition agreement that

included client-based restrictions for 24 months without any expressly defined

geographical territory other than the employee's sales territory at the time of

termination and holding that “customers developed by a salesperson are the property

of the employer and may be protected by a contract under which the salesperson is

forbidden from soliciting those customers for a reasonable time after leaving his or

her employment”); Wade S. Dunbar Ins. Agency, Inc. v. Barber, 147 N.C. App. 463,

469, 556 S.E.2d 331, 336 (2001) (enforcing covenant prohibiting solicitation of any

former employer’s customers).

      26.    A customer-based restriction on solicitation is analyzed in much the

same manner as a geographic restriction, taking into consideration many of the same

factors and, particularly, the time period of the restriction. See, e.g., Wade S. Dunbar
Ins. Agency, 147 N.C. App. at 469, 556 S.E.2d 335; Farr Assocs., Inc. v. Baskin, 138

N.C. App. 276, 281–82, 530 S.E.2d 878, 883 (2000) (“The geographic limitation of that

case is analogous to the client-based limitation in the case at bar.”); Sandhills Home

Care, L.L.C. v. Companion Home Care – Unimed, Inc., 2016 NCBC LEXIS 61, at *25

(N.C. Super. Ct. Aug. 1, 2016).

      27.        In this case, Defendants challenge the prohibitions on soliciting or

accepting insurance business from Wells Fargo customers on the grounds that the

definitions of the terms “the Company” and “Confidential Information” make the

restrictions unreasonably broad and vague, and unenforceable as a matter of law.

(ECF No. 8, at pp. 8–10.) Accordingly, the Court must determine whether sections

III.b. and III.c. are unreasonable as a matter of law.

            i.         Section III.b.

      28.         Section III.b. does not have a geographic restriction, but instead

prohibits Link and Raynor, for a period of two years, from soliciting “the Company’s”

customers and prospective customers with whom Link and Raynor had “Material

Contact and/or” about whom they received “Confidential Information.” (ECF No. 3,

at Exs. 1 and 2, sec. III.) Defendants do not challenge the reasonableness of the

prohibition on Link and Raynor soliciting Wells Fargo customers or prospective

customers with whom they had Material Contact. Instead, Defendants argue that

the terms “the Company” and “Confidential Information” are defined so broadly in

the Employment Agreement that it makes the prohibition against Link and Raynor

soliciting customers and prospective customers about whom they received
“Confidential Information” unreasonably vague and overly broad. (ECF No. 8, at pp.

8–10.)

         29.     The Employment Agreements define “the Company” to include not

only Wells Fargo Insurance Services, but also its “past, present, and future parent

companies, subsidiaries, predecessors, successors, affiliates, and acquisitions.” (ECF

No. 3, Exs. 1 and 2.) The Employment Agreement does not identify the subsidiary

and affiliate companies, but according to publicly available data from Wells Fargo, it

is a vast organization with many affiliate companies.

         30.   Wells Fargo noted to its shareholders in its 2016 Annual Report that

Wells Fargo “provide[s] banking, insurance, investments, mortgage, and consumer

and commercial finance through more than 8,600 locations, 13,000 ATMs, digital

(online, mobile and social), and contact centers (phone, email and correspondence),

and [Wells Fargo] ha[s] offices in 42 countries and territories.” WELLS FARGO, 2016

ANNUAL REPORT 36 (2016)1. Wells Fargo listed 44 significant subsidiaries in an

attached exhibit to its Form 10-K annual report to the United States Securities

Exchange Commission (“SEC”) for 2017. Wells Fargo, Form 10-K Annual Report to

SEC (Exhibit 21) (Jan. 3, 2018)2.          The listed subsidiaries include, inter alia,

companies that provide personal, commercial, and real estate financing, insurance

companies, venture capital firms, securities companies, and holding companies. Id.



1 Available online at: https://www.wellsfargo.com/assets/pdf/about/investor-relations/annual-
reports/2016-annual-report.pdf
2 Available online at:

https://www.sec.gov/Archives/edgar/data/72971/000007297118000272/wfc-
12312017xex21.htm
In 2016, Wells Fargo employed over 269,000 full-time employees. WELLS FARGO, 2016

ANNUAL REPORT 36 (2016).

       31.     Defendants contend that North Carolina courts have found similarly

broad prohibitions on soliciting customers of parent, subsidiary, and affiliate

companies for whom the former employees performed no services unreasonable as

matter of law.    Medical Staffing Network, 194 N.C. App. at 657, 670 S.E.2d at 328

(finding restrictive covenants unenforceable because the plaintiff had no legitimate

business interest in foreclosing solicitation of clients of “an unrestricted and

undefined set of [the plaintiff's] affiliated companies that engage in business distinct

from the . . . business in which [the defendant] had been employed”).

       32.     To the extent that Link and Raynor are prohibited from soliciting Wells

Fargo customers or prospective customers with whom they had “Material Contact”

during the last year of their employment, the potential inclusion of customers of

affiliate    companies does not necessarily render the restriction overbroad and

unreasonable. See, e.g., Laboratory Corp. of America Holdings v. Kearns, 84 F. Supp.

3d 447, 459 (M.D.N.C. Jan. 30, 2015) (“In North Carolina, covenants prohibiting

competition for a former employer’s customers are only enforceable when they

prohibit the employee from contacting customers with whom the employee actually

had contact during his former employment.”). If Link and Raynor had significant

interactions with customers or prospective customers of affiliate companies of Wells

Fargo, Wells Fargo may have a legitimate interest in restricting them from soliciting

those customers.
        33.   Link and Raynor, however, are not only prohibited from soliciting Wells

Fargo customers with whom they had “Material Contact”, but also from soliciting

customers and prospective customers about whom they received “Confidential

Information.”    The Restrictive Agreements define “Confidential Information” as

including “the Company’s Trade Secrets and other proprietary information relating

to its business methods, personnel, and customers.” (ECF No. 3, at Exs. 1 and 2, sec.

II.) Wells Fargo’s “Trade Secrets” are defined as including, but not limited to:

              [T]he names, address, and contact information of the
              Company’s customers and prospective customers, as well
              as any other personal or financial information relating to
              any customer or prospect, including, without limitation,
              account numbers, balances, portfolios, maturity and/or
              expiration or renewal dates, loans, policies, investment
              activities, purchasing practices, insurance, annuity
              policies and objectives;

              [A]ny information concerning the Company’s operations,
              including without limitation, information related to its
              methods, services, pricing, costs, margins and mark ups,
              finances, practices, strategies, business plans, agreements,
              decision-making, systems, technology, policies, procedures,
              marketing, sales, techniques, agent information, and
              processes; [and]

              [A]ny other proprietary and/or confidential information
              relating to the Company’s customers, employees, products,
              services, sales, technologies, or business affairs.

(Id.)


        34.   The   Restrictive   Agreements    further   expand   the   definition   of

“Confidential Information” to include the “Records of the Company,” and provide

that:
                ‘Records’ include, but are not limited to original,
                duplicated, computerized, memorized, handwritten or any
                other form of information, whether contained in materials
                provided to me by the Company, or by any institution
                acquired by the Company, or compiled by me in any form
                or manner including information in documents or
                electronic devices, such as software, flowcharts, graphs,
                spreadsheets, resource manuals, videotapes, calendars,
                day timers, planners, rolodexes, or telephone directories
                maintained in personal computers, laptop computers,
                personal digital assistants or any other device.
(Id.)


        35.     Defendants argue that the restriction on soliciting customers or

prospective customers of “the Company” about whom they received “Confidential

Information” is far too broad based on the definitions used in the Restrictive

Agreements.        For example, the Restrictive Agreements define “Confidential

Information” as including the names and addresses of customers and prospective

customers of Wells Fargo and any of its affiliate companies, and Wells Fargo’s

“Records”     as    including   “memorized,   handwritten   or   any   other   form   of

information, . . . such as software, flowcharts, graphs, spreadsheets, resource

manuals, videotapes, calendars, day timers, planners, rolodexes, or telephone

directories.”      Arguably, the clause prohibits solicitation of any customers or

prospective customers of Wells Fargo-affiliate companies whose name, address, or

other contact information was shown (purposefully or inadvertently) to Link or

Raynor during their employment, whether or not that customer or prospective

customer had any dealings with Wells Fargo’s insurance division or with Link or

Raynor. Defendants aptly point out that, read literally, the non-solicitation provision
in section III.b. would prohibit Link and Raynor from soliciting a prospective

customer of a Wells Fargo affiliate company based simply on them having seen an

“actual or prospective customer’s name in a calendar, day timer, planner, rolodex, or

telephone directory maintained anywhere at any Wells Fargo company.” (ECF No.

8, at pp. 9–10.)

      36.      In its brief, Plaintiff does not address the breadth of the definitions of

“the Company” and “Confidential Information” in the Restrictive Agreements, or

attempt to explain why it has a business interest in prohibiting solicitation of such a

vast array of customers. Instead, it argues that the provision restricting solicitation

of customers or prospective customers about whom Link and Raynor received

“Confidential Information” can be disregarded because “Link and Raynor would not

have had access to confidential information concerning a client or customer they did

not service, and there is no allegation in the Complaint alleging that they did.” (ECF

No. 10, at p. 9.) Plaintiff misapprehends their burden in responding to the Motion to

Dismiss.    Plaintiff has not alleged that Link and Raynor received “Confidential

Information” only regarding Wells Fargo customers and prospective customers whom

they serviced, and the Court cannot accept the representations in its brief in lieu of

allegations in the Complaint.

      37.     At the hearing on the Motion to Dismiss, Plaintiff’s counsel also

suggested that Wells Fargo would only seek to restrain Link and Raynor from

soliciting customers with whom they had “Material Contact,” as Plaintiff has done in

this lawsuit, and not customers about whom Link and Raynor received Confidential
Information. This argument, however, is unavailing. It is the Court’s duty at this

stage to analyze the restrictive covenant, as alleged, and determine whether it is

reasonable and enforceable. The Court cannot read provisions out of the Restrictive

Agreements based on Plaintiff’s representations in order to make the covenant

enforceable. A court may not construe an agreement in a way that ignores or deletes

its plain terms. See, e.g., State v. Philip Morris USA, Inc., 193 N.C. App. 1, 12–13,

666 S.E.2d 783, 791 (2008) (stating that where the language of a contract is

unambiguous, a court cannot ignore, insert, or improperly construe the meaning of

any contract terms, but instead a court must infer the intent of the parties from the

terms in the contract); Happ v. Creek Pointe Homeowner’s Ass’n, 215 N.C. App. 96,

103–04, 717 S.E.2d 401, 406 (2011) (holding that even where the language of a

contract is ambiguous, it is a “fundamental rule of contract construction” that the

court “gives effect to all of its provisions, if the court is reasonably able to do so”).

       38.    Finally, Plaintiff argues that, to the extent the prohibition in section

III.b. on soliciting customers about whom Link and Raynor received “Confidential

Information” makes the covenant over-broad, the Court can “blue pencil,” or remove,

that provision and enforce only the restriction on soliciting customers with whom they

had “Material Contact.” (ECF No. 10, at pp. 12–13.) Under the “blue pencil doctrine,”

North Carolina courts may specifically enforce divisible or separable sections of

restrictive covenants while striking portions that are unenforceable.             Whittaker

General Medical Corp., 324 N.C. at 528, 379 S.E.2d at 828 (“If the contract is

separable, however, and one part is reasonable, the courts will enforce the reasonable
provision” (citing Welcome Wagon, Inc. v. Pender, 255 N.C. 244, 120 S.E. 2d 739

(1961).); see also, Hartman v. W.H. Odell & Assocs., 117 N.C. App. 307, 317, 450

S.E.2d 912, 920 (1994) (“When the language of a covenant not to compete is overly

broad, North Carolina's “blue pencil” rule severely limits what the court may do to

alter the covenant. A court at most may choose not to enforce a distinctly

separable part of a covenant in order to render the provision reasonable. It may not

otherwise revise or rewrite the covenant.”).

      39.     The Court cannot “blue pencil” the provisions in section III.b. because

the provision addressing customers about whom Link and Raynor received

“Confidential Information” is not “distinctly separable” from the “Material Contact”

provision. The two provisions are not contained in separately numbered paragraphs,

separate sentences, or even separated by the word “or.” Rather, the provisions are

separated by the term “and/or.” The use of “and/or” suggests that the prohibitions

could be read in both the conjunctive and disjunctive senses, and creates an

ambiguity. “When the language in a contract is ambiguous, we view the practical

result of the restriction by ‘construing the restriction strictly against its

draftsman[.]’” Electrical South, Inc. v. Lewis, 96 N.C. App. 160, 167, 385 S.E.2d 352,

356 (1989) (citing Manpower of Guilford County, Inc. v. Hedgecock, 42 N.C. App. 515,

522, 257 S.E.2d 109, 115 (1979)). In this case, the Court concludes that the term

“and/or” must be construed against Wells Fargo and read in the conjunctive sense for

the purpose of applying the “blue pencil” doctrine. Under this interpretation, the

provision restricting Link and Raynor from soliciting customers about whom they
received “Confidential Information” is not clearly separable from the other

restrictions in section III.b. and cannot be stricken.

            ii.         Section III.c.

      40.         Section III.c. of the Restrictive Agreement prohibits Link and Raynor,

for two years from their dates of termination, from accepting “insurance business

from or provid[ing] Competitive Products/Services to” customers of “the Company”

with whom they had “Material Contact, and/or” who were customers of “the

Company” within the six months prior to their respective terminations from Wells

Fargo. (ECF No. 3, at ¶¶ 30 and 34; Exs. 1 and 2.)

      41.         Defendants first challenge the scope of section III.c. on the grounds that

it prohibits Link and Raynor from “accepting insurance business from” former Wells

Fargo customers. (ECF No. 8, at pp. 10–11.) Defendants contend that the term

“insurance business” is undefined in the Restrictive Agreements and could encompass

insurance products and services beyond the commercial insurance policies and

services with which Link and Raynor were involved. (Id.) Defendants argue that the

prohibition on accepting “insurance business” of any type from former customers is

broader than necessary to protects Wells Fargo’s business interests. (Id.) While the

Court concludes that there may be merit to Defendants’ argument, the Court

arguably could “blue pencil” the phrase “accepting insurance business from” out of

the description of the conduct restricted by section III.c. because the term is separated

from the prohibition on “provid[ing] Competitive Products/Services to” by the word

“or”, and could be viewed as a “distinctly severable” part of the covenant. Hartman,
117 N.C. App. at 317, 450 S.E.2d at 920; see also, Superior Performers, Inc. v. Meaike,

2014 U.S. Dist. LEXIS 50302, at *39–40 (M.D.N.C. Apr. 11, 2014) (“Although it is not

separated off by number or in a different clause, the language can readily be struck

through and the rest of the restrictive covenant still makes sense and stands on its

own. Therefore, to the extent that the “or its Affiliates” language renders the

restrictive covenant unreasonable, it is likely separable from the remainder of the

covenant, which is reasonable.”).

      42.    However, even if the phrase “accepting insurance business from” could

be severed from the prohibition, it would not salvage the covenant in section III.c.

because the covenant prohibits Link and Raynor from providing competitive

insurance products to customers with whom they had “Material Contact, and/or . . .

customers of the Company within six (6) months prior to” their respective

terminations from employment with Wells Fargo. (ECF No. 3, at ¶¶ 30 and 34.)

Again, “the Company” is defined so broadly in the Restrictive Agreements that it

sweeps within its ambit customers of far-flung Wells Fargo subsidiaries and affiliates

unrelated to Wells Fargo’s commercial insurance business, and customers w ith

whom Link and Raynor would have had no contact. See, Medical Staffing Network,

194 N.C. App. at 657, 670 S.E.2d at 328. In addition, for the same reasons discussed

above, the use of “and/or” must be construed against Wells Fargo, and III.c.ii. cannot

be “blue penciled” out of the covenant contained in section III.c. Accordingly, the

Court concludes that the restrictive covenant in section III.c. is too broad and is

unreasonable as a matter of law.
      43.    Sections III.b. and III.c. of the Restrictive Agreements are too broadly

written to be enforceable under North Carolina law. Accordingly, Defendants’ motion

to dismiss Plaintiff’s First Count for breach of the non-solicitation of customers

provisions in sections III.b. and III.c. of the Restrictive Agreements should be

GRANTED.

      B. Breach of the non-solicitation of employees covenants (Count Two)

      44.    In its second claim, Wells Fargo alleges that Link and Raynor breached

the provisions of the Restrictive Agreements prohibiting them from soliciting Wells

Fargo’s employees to terminate employment with Wells Fargo. (ECF No. 3, at ¶¶ 80–

84.) Section III.a. of the Restrictive Agreements provide that for two years following

termination, Link and Raynor “will not . . . solicit, recruit, or promote the solicitation

or recruitment of any employee or consultant of the Company for the purpose of

encouraging that employee or consultant to leave the Company’s employ or sever an

agreement for services.” (Id. at ¶¶ 30 and 34.)

      45.    Courts in North Carolina have recognized that reasonable restrictions

on a former employee's right to solicit an employer's current employees are

enforceable. Kennedy v. Kennedy, 160 N.C. App. 1, 11–12, 584 S.E.2d 328, 335 (2003)

(“[T]he covenant prohibiting Carroll from soliciting and hiring plaintiff’s former

employees for the three-year period does not violate public policy.”); Superior

Performers, Inc., 2014 U.S. Dist. LEXIS 50302, at *30 (finding a two year restriction

on soliciting former employer's current employees reasonable).          A restriction on
solicitation of employees generally is subject to the same requirements as other

restrictive covenants. Sandhills Home Care, L.L.C., 2016 NCBC LEXIS 61, at *36.

        46.   Here, the non-solicitation of employees covenant is in writing and

supported by consideration. Defendants do not argue that the covenant would violate

public policy. See, Sandhills Home Care, 2016 NCBC LEXIS 61, at *36 (citing Phelps

Staffing, LLC v. C.T. Phelps, Inc., 226 N.C. App. 506, 510, 740 S.E.2d 923, 927 (2013)).

Defendants contend, however, that the non-solicitation of employees restriction is

overbroad and unreasonable because it prohibits Link and Raynor from soliciting

employees of “the Company.” (ECF No. 8, at pp. 11–12.) As noted herein, in 2016,

Wells Fargo claimed to have 44 subsidiary companies employing a total of over

269,000 employees in personal and commercial banking, investment, insurance, and

other businesses. As written, the Restrictive Agreement would prohibit Link and

Raynor from soliciting or attempting to solicit hundreds of thousands of employees in

a variety of businesses other than commercial insurance and across a vast geographic

area.

        47.   Covenants restricting former employees from soliciting a former

employer’s employees are another means of protecting the former employer’s interest

in the good-will it has with its customers. Kennedy, 160 N.C. App. at 11–12, 584

S.E.2d at 335 (enforcing prohibition against dentist soliciting his former practice’s

employees, holding “[t]he evidence demonstrates that plaintiff’s employees, many of

whom had been employed in plaintiff's practice for several years, were a valuable part

of the asset owned by plaintiff, that the employees had developed personal
relationships with plaintiff's patients, that the employees were an integral part of a

patient’s experience with plaintiff”). To establish that a non-solicitation of employees

covenant is reasonable, an employer must establish that it has a protectable business

interest in prohibiting solicitation of former employees, and such prohibition must be

no broader than necessary to protect that interest. In Medical Staffing Network, Inc.,

the Court held that a prohibition on the defendant soliciting employees of the

plaintiff’s affiliate businesses for which the defendant did not work was overbroad.


             [The plaintiff] presented no evidence, and the trial court
             made no findings that [the plaintiff] had any legitimate
             business interest in . . . foreclosing the solicitation of
             employees of . . . an unrestricted and undefined set of [the
             plaintiff’s] affiliated companies that engage in business
             distinct from the medical staffing business in which [the
             defendant] had been employed. We conclude that on its
             face, this bar extends beyond any legitimate interest [the
             plaintiff] might have in this case.

194 N.C. App. at 657, 670 S.E.2d at 328.


      48.    Plaintiff has not alleged any facts that would support a legitimate

business interest in restricting Link or Raynor from soliciting employees working for

Wells Fargo’s affiliate companies in any segment of the banking, investment, or

insurance industries. It is highly unlikely that the vast majority of these employees

would have had any involvement or contact with Wells Fargo’s commercial insurance

customers. The non-solicitation of employees covenant, as written, is unreasonable

and unenforceable as a matter of law. Id.
      49.    Accordingly, the Defendants’ motion to dismiss Count Two for breach of

the non-solicitation of employees provisions in section III.a. of the Restrictive

Agreements should be GRANTED.

      C. Breach of the confidentiality covenant against Link and return of
         property provision against Link (Counts Three and Four)

      50.    Plaintiff also makes claims that Link and Raynor violated the covenants

prohibiting use or disclosure of “Confidential Information,” and the provisions

requiring return of “Records” and “Confidential Information,” in the Restrictive

Agreements. (ECF No. 3, at ¶¶ 85–94.) Defendants argue the Complaint does not

state claims against Link and seek dismissal of Counts Three and Four against Link

only. (ECF No. 8, at pp. 12–14.) They do not seek dismissal of these claims against

Raynor. (Id.) Defendants argue that Plaintiff makes nothing more than conclusory

allegations against Link, and does not plead facts supporting the claims for breach of

the confidentiality and return of property provisions. (Id.)

      51.    “The elements of a claim for breach of contract are (1) existence of a valid

contract and (2) breach of the terms of [the] contract.” McLamb v. T.P. Inc., 173 N.C.

App. 586, 588, 619 S.E.2d 577, 580 (2005); Regency Ctrs. Acquisition, LLC v. Crescent

Acquisitions, LLC, 2018 NCBC LEXIS 7, at *18 (N.C. Super. Ct. Jan. 24, 2018). The

North Carolina Court of Appeals has held that “an agreement is not in restraint of

trade . . . if it does not seek to prevent a party from engaging in a similar business in

competition with the promisee, but instead seeks to prevent the disclosure or use

of confidential information.” Chemimetals Processing, Inc. v. McEneny, 124 N.C. App.

194, 197, 476 S.E.2d 374, 376 (1996). Such an agreement is enforceable “even though
the agreement is unlimited as to time and area, upon a showing that it protects a

legitimate business interest of the promisee.” Id. at 197, 476 S.E.2d at 376-

77 (citation omitted).

      52.     The Court has thoroughly reviewed the allegations in the Complaint

and concludes that Plaintiff has sufficiently alleged a claim against Link for breach

of the “Confidential Information” restrictions, but has not alleged any facts that

would support the claim that Link failed to return “Records and Confidential

Information” after his resignation from Wells Fargo.

      53.    With regard to the claim for breach of the “Confidential Information”

covenant, Plaintiff alleges that Link executed the Restrictive Agreement prohibiting

the use or disclosure of “Confidential Information.” (ECF No. 3, at ¶ 30.) Plaintiff

further alleges that Link solicited and obtained for BB&T the insurance business of

customers that he serviced for Wells Fargo. (Id. at ¶¶ 39, 47, and 53.) Finally,

Plaintiff alleges, albeit “upon information and belief”, that Link “used “Wells Fargo’s

Confidential Information . . . to identify, contact, solicit, and induce” his former

customers and to divert their business to BB&T. (Id. at ¶¶ 56, 88.) These allegations

sufficiently state a claim for breach of contract regarding the “Confidential

Information” provisions of the Restrictive Agreement at this stage of the case. Myrtle

Apartments, Inc. v. Lumbermen's Mut. Casualty Co., 258 N.C. 49, 51, 127 S.E.2d 759,

761 (1962) (finding that in stating claims in a complaint, a plaintiff “may allege facts

based on actual knowledge, or upon information and belief”). Defendants’ motion to

dismiss Plaintiff’s Count Three against Link should be DENIED.
      54.    With regard to Count Four, the Complaint contains only the conclusory

allegation that Link “fail[ed] to return to Wells Fargo its property upon resigning”

from employment with Plaintiff. (Id. at ¶ 92.) Plaintiff does not, however, allege

what property Link possessed or failed to return at the time of his resignation, nor

any other facts underlying its claim for breach of the return of property provisions in

the Restrictive Agreement. This is insufficient to support a claim for breach of the

return of property provision. Myrtle Apartments, Inc., 258 N.C. at 51, 127 S.E.2d at

761 (“In testing the sufficiency of a complaint, the court ignores the conclusions and

looks to the facts.”) Defendants’ motion to dismiss Count Four against Link should

be GRANTED.

      D. Misappropriation of trade secrets (Count Five)

      55.    Plaintiff makes claims for misappropriation of trade secrets against all

of the Defendants. (ECF No. 3, at ¶¶ 95–104.) Defendants first argue that Plaintiff

has not identified its trade secrets with sufficient specificity to support a claim

for misappropriation under the NCTSPA. (ECF No. 8, at pp. 14–16.) Defendants also

contend that Plaintiff does not allege the act or acts by which Defendants

misappropriated any trade secrets. (Id. at pp. 15–16.)

      56.    Under the NCTSPA, “misappropriation” is defined as the “acquisition,

disclosure, or use of a trade secret of another without express or implied authority or

consent, unless such trade secret was arrived at by independent development, reverse

engineering, or was obtained from another person with a right to disclose the trade

secret.” G.S. § 66-152(1). A “Trade Secret” is:
              [B]usiness or technical information, including but not
              limited to a formula, pattern, program, device, compilation
              of information, method, technique, or process that:
              a. Derives independent actual or potential commercial
              value from not being generally known or readily
              ascertainable through independent development or reverse
              engineering by persons who can obtain economic value
              from its disclosure or use; and
              b. Is the subject of efforts that are reasonable under the
              circumstances to maintain its secrecy.
G.S. § 66-152(3).
        57.   The courts consider the following factors in determining whether

information constitutes a trade secret:

              (1) The extent to which [the] information is known outside
              the business; (2) the extent to which it is known to
              employees and others involved in the business; (3) the
              extent of measures taken to guard secrecy of the
              information; ([4]) the value of information to [the] business
              and its competitors; ([5]) the amount of effort or money
              expended in developing the information; and ([6]) the ease
              or difficulty with which the information could properly be
              acquired or duplicated by others.
Wilmington Star-News, Inc. v. New Hanover Reg’l Med. Ctr., Inc., 125 N.C. App. 174,

180–81, 480 S.E.2d 53, 56 (1997).

        58.   To survive a motion to dismiss, a plaintiff's complaint “must identify a

trade secret with sufficient particularity so as to enable a defendant to delineate that

which    he   is    accused   of   misappropriating   and    a   court   to   determine

whether [misappropriation] has or is threatened to occur.” VisionAir, Inc. v. James,

167 N.C. App. 504, 510–11, 606 S.E.2d 359, 364 (2004); AYM Techs., LLC. v. Rodgers,

2018 NCBC LEXIS 14, at *36–37 (N.C Super. Ct. Feb. 9, 2018) (quoting VisionAir).
The complaint also must set forth with sufficient specificity the acts by which the

alleged misappropriation occurred. Washburn v. Yadkin Valley Bank & Tr. Co., 190

N.C. App. 315, 327, 660 S.E.2d 577, 586 (2008) (“These allegations do not identify

with   sufficient   specificity   either   the   trade   secrets   [p]laintiffs   allegedly

misappropriated or the acts by which the alleged misappropriations were

accomplished” (emphasis added).); see also, Bldg. Ctr., Inc. v. Carter Lumber, Inc.,

2016 NCBC LEXIS 79, at *9 (N.C. Super. Ct. Oct. 21, 2016) (citing Washburn).

       59.    Defendants focus on Plaintiff’s inclusion of “customers’ names and

addresses” as part of its alleged trade secrets, and argue that such information by

itself generally does not constitute a trade secret. (ECF No. 8, at pp. 14–15.) Plaintiff,

however, has not alleged that its trade secrets consist only of its customer names and

contact information. Although the Complaint is vague in this regard, read liberally

in favor of Plaintiff, the Complaint and the attached Restrictive Agreements appear

to allege that Plaintiffs trade secrets include, inter alia:

              Information concerning Wells Fargo’s customers and the
              details of their insurance needs and policies, including but
              not limited to information concerning Wells Fargo’s
              customers and the details of their insurance needs and
              policies, including but not limited to, customer policies,
              insurance application information, policy cost information,
              payment information, profit loss statements, insurance
              schedules, certificate of holder lists, underwriting
              information, detailed customer information, detailed
              employee information, detailed property information,
              customer financial information, expiration dates of
              insurance policies and insurance daily reports.

(ECF No. 3, at ¶ 17);

              The books, files, electronic data, and all other records of
              Wells Fargo, the confidential information contained in [the
              records], and especially the data pertaining to Wells Fargo
              customers, such as customers’ names and addresses, as
              well as additional information such as customers’ social
              security numbers, account numbers, financial status, and
              other highly confidential personal and financial
              information[.]

(Id. at ¶ 97); and,

              [T]he names, addresses, and contact information of the
              Company’s customers and prospective customers, as well
              as any other personal or financial information relating to
              any customer or prospect, including, without limitation,
              account numbers, balances, portfolios, maturity and/or
              expiration or renewal dates, loans, policies, investment
              activities, purchasing practices, insurance, annuity
              policies and objectives[.]

(Id., Exs. 1 and 2, at sec. II.)

       60.    Within these sprawling lists, there are particular pieces of information

that might constitute trade secrets, including: “insurance application information,

policy cost information, payment information, profit loss statements, insurance

schedules, certificate of holder lists, [and] underwriting information”; “expiration

dates of insurance policies and insurance daily reports”; “customers’ social security

numbers, account numbers, [and] financial status”; and “maturity and/or expiration

or renewal dates, loans, . . . investment activities, purchasing practices, [and],

annuity policies and objectives.” (Id.) In addition, while not expressly pleaded, this

information, if compiled in a database or other form for each of Plaintiff’s customers,

might also constitute a trade secret. This Court has held that “where an individual

maintains a compilation of detailed records over a significant period of time,” such

that they have particular value as a compilation or manipulation of information,

“those records could constitute a trade secret even if ‘similar information may have
been ascertainable by anyone in the . . . business.’” Koch Measurement Devices, Inc.

v. Armke, 2015 NCBC LEXIS 45, at *13 (N.C. Super. Ct. May 1, 2015) (quoting Byrd's

Lawn & Landscaping, Inc. v. Smith, 142 N.C. App. 371, 376, 542 S.E.2d 689, 692

(2001)). See also, State ex rel. Utils. Comm'n v. MCI Telecomms., Corp., 132 N.C. App.

625, 634, 514 S.E.2d 276, 282 (1999) (concluding that a “compilation of information”

involving customer data and business operations which has “actual or potential

commercial value from not being generally known” is sufficient to constitute a trade

secret under the NCTSPA); RoundPoint Mortg. Co. v. Florez, 2016 NCBC LEXIS 18,

at *31–32 (N.C. Super. Ct. Feb. 18, 2016); Red Valve v. Titan Valve, 2018 NCBC

LEXIS 41, at *27 (N.C. Super. Ct. Apr. 17, 2018) (citing Koch, Byrd’s, and

RoundPoint).

      61.    The Court concludes that the allegations in this case, read generously,

are minimally sufficient to put Defendants on notice of the trade secrets that they

have allegedly misappropriated.

      62.    Defendants next argue that the claims for misappropriation must be

dismissed because Plaintiff fails to allege facts regarding the means by which

Defendants misappropriated Plaintiff’s trade secrets. (ECF No. 8, at pp. 15–16.)

With regard to Pack and BB&T, the Court agrees. Misappropriation requires the

“acquisition, disclosure, or use of a trade secret without express or implied authority

or consent.” G.S. § 66-152(1). Plaintiff does not allege any acts by which Pack and

BB&T allegedly misappropriated trade secrets. While Plaintiff alleges that Pack

“had access to” Wells Fargo’s trade secret information while she was employed, there
is no allegation that Pack accessed or acquired trade secrets at any time when she

was not authorized to do so. Plaintiff also fails to allege facts that would show Pack

disclosed or used Wells Fargo’s trade secrets, or that any particular customers for

whom Pack was responsible have diverted their business from Wells Fargo to BB&T.

      63.    In sum, the Complaint does not allege facts to support an allegation of

misappropriation against Pack, and the claim against her must be dismissed.

Defendants’ motion to dismiss the misappropriation of trade secrets claims against

Pack in Count Five of the Complaint therefore should be GRANTED.

      64.    Plaintiff also fails to allege facts that support its claim that BB&T

misappropriated Wells Fargo’s trade secrets. Plaintiff does not allege that Link,

Raynor, or Pack disclosed Wells Fargo’s trade secrets to BB&T or that BB&T acquired

Wells Fargo’s trade secrets by some other means. Nor does Wells Fargo claim that

BB&T has used Wells Fargo’s trade secrets, alleging only that “[u]pon information

and belief, Individual Defendants have used Wells Fargo’s . . . Trade Secrets to

identify, contact, solicit, and induce Wells Fargo’s clients.” (ECF No. 3, at ¶ 56;

emphasis added.) Instead, Plaintiff alleges only that “[u]pon information and belief,

the Defendants have misappropriated Wells Fargo’s trade secret information in order

to unfairly compete against Wells Fargo and solicit its customers.” (Id. at ¶ 102.) The

Court is not required to accept Wells Fargo’s conclusory speculation regarding

BB&T’s alleged misappropriation of trade secrets. Washburn, 190 N.C. App. at 327,

660 S.E.2d at 586 (affirming dismissal of misappropriation claim and holding

“Defendant’s allegation that it ‘believes [Plaintiffs] used its trade secrets’ is general
and conclusory”). Defendants’ motion to dismiss the misappropriation of trade secrets

claims against BB&T in Count Five of the Complaint therefore should be GRANTED.

      65.     Plaintiff’s allegations in support of its claim that Link misappropriated

trade secrets are weak, at best. Plaintiff does not expressly allege that Link ever

accessed Wells Fargo’s trade secrets without authorization or consent.          To the

contrary, Plaintiff alleges that Link had access to trade secret information only “by

way of his employment with Wells Fargo.” (ECF No. 3, at ¶ 96.) The Complaint does

not allege that Link downloaded, copied, or otherwise removed from Wells Fargo any

trade secret information, nor that Link has disclosed trade secrets to BB&T or anyone

else. Instead, Plaintiff alleges only that Link had access to Wells Fargo’s trade secret

information during his employment with Wells Fargo, that Link became employed by

BB&T, that some Wells Fargo customers for whom Link was responsible have

transferred their business to BB&T, and “upon information and belief” Link has used

Wells Fargo’s trade secret information to solicit these customers.        A significant

inferential leap is required from those alleged facts to conclude that Link

misappropriated trade secrets.

      66.    Nevertheless, the Court is mindful that Plaintiff is entitled to have

inferences drawn in its favor at this stage of the proceedings. Accordingly, the Court

concludes that the claim for misappropriation of trade secrets against Link should

survive dismissal. Therefore, Defendants’ motion to dismiss the misappropriation of

trade secrets claims against Link in Count Five of the Complaint should be DENIED.
      67.    Plaintiff’s allegations that Raynor, immediately prior to submitting his

resignation, entered Plaintiff’s offices after hours, and downloaded and copied

documents that, on information and belief, contained Plaintiff’s trade secrets,

sufficiently alleges the acts by which Raynor misappropriated trade secrets.

Therefore, Defendants’ motion to dismiss the misappropriation of trade secrets claims

against Raynor in Count Five of the Complaint should be DENIED.

      E. Tortious interference with contractual relations (Count Seven)

      68.    As its seventh claim, Plaintiff makes claims for tortious interference

with contract against all Defendants, alleging that they each interfered with the

Restrictive Agreements between Wells Fargo and Link and Raynor, respectively.

(ECF No. 3, at ¶¶ 110–15.)

      69.    To state a claim for tortious interference with contract, a plaintiff must

allege: “(1) a valid contract between plaintiff and a third party which confers upon

the plaintiff a contractual right against a third party; (2) the defendant knows of the

contract; (3) the defendant intentionally induces the third person not to perform the

contract; (4) and in doing so he acts without justification; (5) resulting in actual

damage to the plaintiff.” Kuykendall, 322 N.C. at 661, 370 S.E.2d at 387 (citing

Childress v. Abeles, 240 N.C. 667, 674, 84 S.E.2d 176, 181–82 (1954)).

      70.    As a preliminary matter, the Court has already concluded that

Plaintiff’s claims for breach of the non-solicitation of customers and non-solicitation

of employees covenants in sections III.a., III.b. and III.c. of the Restrictive

Agreements should be dismissed because those covenants are invalid and
unenforceable. Since no valid contract existed based on these covenants, Plaintiff’s

claims that the Defendants interfered with those covenants in the Restrictive

Agreements must also fail. Medical Staffing Network, Inc., 194 N.C. App. at 658, 670

S.E.2d at 328 (affirming dismissal of tortious interference claim where trial court had

found restrictive covenants overbroad and unenforceable). Accordingly, Defendants’

motion to dismiss the claims for tortious interference in Count Seven of the Complaint

claiming interference with the covenants not to solicit customers and employees

should be GRANTED.

      71.    Similarly, to the extent that Plaintiff attempts to make a claim for

tortious interference with contract based on Defendants’ alleged interference with the

return of property provisions in Restrictive Agreement, the Court has dismissed the

claim for breach of this provision as against Link. In addition, the Complaint does

not plead any facts to support an allegation that Link, Pack, or BB&T engaged in any

conduct intended to induce Raynor’s alleged breach of the return of property

provisions. Defendants’ motion to dismiss the claims for tortious interference in

Count Seven of the Complaint claiming interference with the return of property

provisions should be GRANTED.

      72.    This leaves only the claim that Defendants intentionally interfered with

the confidential information covenants in the Restrictive Agreements. With regard

to this claim, the Complaint fails to plead any facts to support an allegation that Pack

interfered with the Restrictive Agreements between Wells Fargo and Link and
Raynor.      The claim against Pack for tortious interference fails and should be

dismissed.

      73.      Defendants contend that the claim for tortious interference against

BB&T should be dismissed because Plaintiff does not plead facts in support of the

allegation that BB&T intentionally induced Link or Raynor to breach the Restrictive

Agreements. (ECF No. 8, at p. 17.) Defendants also argue that the claim for tortious

interference against BB&T fails because the allegations in the Complaint establish

that Wells Fargo and BB&T are competitors, but Plaintiff does not allege facts

supporting the conclusory claim that BB&T acted without justification in interfering

with the Restrictive Agreements.      (Id. at pp. 17–18.)    The Court agrees with

Defendants on both contentions.

      74.     First, as with Pack, the Complaint does not contain a single allegation

of fact that BB&T engaged in any conduct designed to interfere with the Restrictive

Covenants. Unlike the vast majority of cases that arise in this context, Plaintiff does

not allege that BB&T recruited Link and Raynor as part of a campaign to raid Wells

Fargo’s sales force, that BB&T encouraged Link and Raynor to secretly acquire Wells

Fargo’s confidential information, nor that BB&T directed Link and Raynor to target

their former Wells Fargo customers and solicit their commercial insurance business.

Rather, Plaintiff alleges only that Link and Raynor resigned from Wells Fargo,

became employed with BB&T, and subsequently diverted several customers from

Wells Fargo to BB&T.       These allegations do not sufficiently state that BB&T

intentionally interfered with the Restrictive Covenants.
       75.    In addition, Wells Fargo and BB&T were competitors in the commercial

insurance industry.      The North Carolina Supreme Court has held that if the

defendant’s interference is “for a legitimate business purpose, his actions are

privileged. . . . [C]ompetition in business constitutes justifiable interference in

another’s business relations and is not actionable so long as it is carried on in

furtherance of one’s own interest and by means that are lawful.” Peoples Sec. Life

Ins. Co. v. Hooks, 322 N.C. 216, 221, 367 S.E.2d 647, 650 (1988). This “privilege [to

interfere] is conditional or qualified; that is, it is lost if exercised for a wrong purpose.

In general, a wrong purpose exists where the act is done other than as a reasonable

and bona fide attempt to protect the interest of the defendant which is involved.” Id.

at 220, 367 S.E.2d at 650.

       76.    “If the defendant's only motive is a malicious wish to injure the plaintiff,

[defendant’s] actions are not justified.” Hooks, 322 N.C. at 221, 367 S.E.2d at 650.

The malice required to overcome a justification of business competition is legal

malice, and not actual malice. Childress, 240 N.C. at 675, 84 S.E.2d at 182 (“It is not

necessary, however, to allege and prove actual malice in the sense of personal hatred,

ill will, or spite in order to make out a case for the recovery of compensatory damages

against the outsider for tortiously inducing the breach of the third person’s contract

with the plaintiff. The term ‘malice’ is used in this connection in its legal sense, and

denotes the intentional doing of the harmful act without legal justification.”); Murphy

v. McIntyre, 69 N.C. App. 323, 328–29, 317 S.E.2d 397, 401 (1984) (noting that legal

malice “means intentionally doing a wrongful act or exceeding one's legal right or
authority in order to prevent the making of a contract between two parties” and the

act “must be taken with the design of injuring one of the parties to the contract or of

gaining some advantage at the expense of a party”); Robinson, Bradshaw, & Hinson,

P.A. v. Smith, 129 N.C. App. 305, 318, 498 S.E.2d 841, 851 (1998) (“A person acts with

legal malice if he does a wrongful act or exceeds his legal right or authority in order

to prevent the continuation of the contract between the parties.”).

      77.    In order to survive dismissal, a complaint alleging tortious interference

“must admit of no motive for interference other than malice.” Pinewood Homes, Inc.

v. Harris, 184 N.C. App. 597, 605, 646 S.E.2d 826, 832–33 (2007); Filmar Racing, Inc.

v. Stewart, 141 N.C. App. 668, 674, 541 S.E.2d 733, 738 (2001) (“[W]e have held that

the complaint must admit of no motive for interference other than malice.”); Kerry

Bodenhamer Farms, LLC v. Nature's Pearl Corp., 2017 NCBC LEXIS 27, at *16 (N.C.

Super. Ct.    Mar. 27, 2017) (holding “[t]he pleading standards for a tortious

interference with contract claim are strict. The complaint must admit of no motive

for interference other than malice. When the complaint reveals that the interference

was justified or privileged, this Court must grant a motion” to dismiss (citations and

quotations omitted)).

      78.    Here, Plaintiff has alleged that the Defendants, including BB&T, acted

“without justification”, but does not plead facts supporting a claim that BB&T acted

with malice or for any improper purpose, nor that BB&T was motivated by anything

other than an interest in successfully competing against Wells Fargo. (ECF No. 3, at

¶ 113.) The recruitment of employees from a business competitor is presumptively
privileged competitive activity, absent an allegation of legal malice. Hooks, 322 N.C.

at 221, 367 S.E.2d at 650. The claim for tortious interference as against BB&T fails

and should be dismissed.

      79.    With regard to the claims against Link and Raynor for tortious

interference with the confidentiality covenants in the Restrictive Agreements,

Plaintiff has not alleged facts to support an allegation that Raynor induced Link to

violate his confidentiality covenant.      To the contrary, Raynor resigned his

employment with Wells Fargo over five months after Link left Wells Fargo and

became employed with BB&T, and Plaintiff offers no explanation as to why Raynor

would encourage Link to violate confidentiality restrictions while both were still

employed with Wells Fargo. The allegations do not support a claim for tortious

interference with the confidentiality covenants against Raynor.       Therefore, the

tortious interference with contract claim based on these allegations fails and should

be dismissed.

      80.    With regard to Link, Plaintiff alleges that “Raynor told his manager at

Wells Fargo that [ ] Link encouraged him to leave Wells Fargo for BB&T.” (ECF No.

3, at ¶ 41.) While this is not an express allegation that Link encouraged Raynor to

also violate his confidentiality covenant, the Court concludes that the allegation

arguably would support the claim for tortious interference against Link, and

Plaintiff’s claim that Link tortiously interfered with the confidentiality covenant in

Raynor’s Restrictive Agreement.
      81.    Therefore, Defendants’ motion to dismiss Count Seven for tortious

interference with contractual relations is DENIED as to Plaintiff’s claim that Link

interfered with the confidentiality covenant in Raynor’s Restrictive Agreement.

Defendants’ motion to dismiss Count Seven for tortious interference with contractual

relations as to all other Defendants and claims is GRANTED, and such claims are

DISMISSED.

      F. Unfair and deceptive trade practices (Count Eight)

      82.    As its Eighth claim, Plaintiff alleges that all Defendants have engaged

in unfair and deceptive acts or practices in violation of G.S. § 75-1.1. (ECF No. 3, at

¶¶ 116–120.) Plaintiff specifically alleges that

             Defendants’ wrongful acts, include[e] but [are] not limited
             to, Defendants’ misappropriation of trade secrets,
             conspiracy and fraudulent scheme to divert business
             opportunities away from Wells Fargo, theft of company
             property to gain an unfair advantage, interference with
             Defendant Link and Defendant Raynor’s contractual
             obligations owed to Wells Fargo, and other deceptive,
             unethical and unscrupulous conduct[.]

(ECF No. 3, at ¶ 117.)


      83.    “To establish a prima facie case of unfair and deceptive trade practices,

a plaintiff must show that (1) the defendant committed an unfair or deceptive act or

practice, (2) the act was in or affecting commerce, and (3) the act proximately caused

injury to the plaintiff.” White v. Consol. Planning, Inc., 166 N.C. App. 283, 303, 603

S.E.2d 147, 161 (2004).

      84.    Defendants correctly point out that the facts pleaded in the Complaint

do not support allegations of a “conspiracy and fraudulent scheme to divert business
opportunities away from Wells Fargo.” Plaintiff does not make claims for fraud or

conspiracy, and there are no facts alleged that would support such claims. Plaintiff

makes no argument in support of these allegations, and the claim for unfair and

deceptive trade practices cannot be based on such conduct.

      85.    In addition, the underlying claims against Pack and BB&T for

misappropriation of trade secrets and intentional interference with contract have

been dismissed. Plaintiff does not allege, nor argue, that Pack or BB&T engaged in

any other conduct that would support a claim for unfair trade practices. Therefore,

Defendants’ motion to dismiss the claims against Pack and BB&T for unfair and

deceptive trade practices in Count Eight of the Complaint should be GRANTED.

      86.    With regard to the claims against Link and Raynor, “[a] violation of the

[NCTSPA] constitutes an unfair act or practice under N.C. Gen. Stat. § 75-1.1.”

Medical Staffing Network, Inc., 194 N.C. App. at 659, 670 S.E.2d at 329 (citing N.C.

Gen. Stat. § 66-146(2007)). Since Plaintiff’s claims against Link and Raynor for

misappropriation of trade secrets survive dismissal, so must the claims for violation

of G.S. § 75-1.1. Defendants’ motion to dismiss the claims against Link and Raynor

for unfair and deceptive trade practices in Count Eight of the Complaint should be

DENIED.

                                 III.   CONCLUSION


THEREFORE, IT IS ORDERED that Defendants’ motion to dismiss is GRANTED,

in part, and DENIED, in part, as follows:
1. Defendants’ motion to dismiss Plaintiff’s First and Second Counts for breach

   of contract are GRANTED, and the claims are DISMISSED.

2. Defendants’ motion to dismiss Plaintiff’s Count Three for breach of contract

   against Link is DENIED.

3. Defendants’ motion to dismiss Count Four for breach of contract against Link

   is GRANTED, and the claim is DISMISSED.

4. Defendants’ motion to dismiss Count Five for misappropriation of trade

   secrets against Pack and BB&T is GRANTED, and those claims are

   DISMISSED.

5. Defendants’ motion to dismiss Count Five for misappropriation of trade

   secrets against Link and Raynor is DENIED.

6. Defendants’ motion to dismiss Count Seven for tortious interference with

   contractual relations is DENIED as to Plaintiff’s claim that Link interfered

   with the confidentiality covenant in Raynor’s Restrictive Agreement.

7. Defendants’ motion to dismiss Count Seven for tortious interference with

   contractual relations as to all other Defendants and claims is GRANTED, and

   those claims are DISMISSED.

8. Defendants’ motion to dismiss the claims against Pack and BB&T in Count

   Eight for unfair and deceptive trade practices is GRANTED, and those claims

   are DISMISSED.

9. Defendants’ motion to dismiss the claims against Link and Raynor in Count

   Eight for unfair and deceptive trade practices is DENIED.
This, the 8th day of May, 2018.




                                  /s/ Gregory P. McGuire
                                  Gregory P. McGuire
                                  Special Superior Court Judge
                                   for Complex Business Cases
