KPM Analytics North America Corporation v. Blue Sun Scientific, LLC

UNITED STATES DISTRICT COURT

DISTRICT OF MASSACHUSETTS

_______________________________________

)

KPM ANALYTICS NORTH AMERICA )

CORPORATION, ) CIVIL ACTION

Plaintiff, ) NO. 4:21-CV-10572-TSH

v. )

)

BLUE SUN SCIENTIFIC, LLC, THE )

INNOVATIVE TECHNOLOGIES GROUP )

& CO., LTD., ARNOLD EILERT, )

MICHELLE GAJEWSKI, ROBERT )

GAJEWSKI, RACHAEL GLENISTER, )

GREGORY ISRAELSON, IRVIN LUCAS, )

and PHILIP OSSOWSKI, )

Defendants. )

______________________________________ )

ORDER AND MEMORANDUM ON DEFENDANTS’ MOTIONS TO DISMISS (Docket

Nos. 20, 23, 25, 27, 29, 31, 33, & 35)

July 15, 2021

HILLMAN, D.J.

KPM Analytics North America Corporation (“Plaintiff” or “KPM”) filed this action

against Blue Sun Scientific, LLC, (“Blue Sun”) and The Innovative Technologies Group & Co.,

Ltd. (“ITG”) (collectively, “Corporate Defendants”); Robert Gajewski; Michelle Gajewski;

Arnold Eilert; Rachael Glenister; Gregory Israelson; Irvin Lucas; and Philip Ossowski

(collectively, “Individual Defendants”). KPM alleges violations of the Defend Trade Secrets Act

(“DTSA”), 18 U.S.C. § 1836, et seq., the Massachusetts Uniform Trade Secrets Act

(“MUTSA”), conversion, and unjust enrichment against all Defendants. It also alleges breach of

contract, violations of the covenants of good faith and fair dealing, and breach of duty of loyalty

against certain Individual Defendants and tortious interference with contractual relations and

unfair or deceptive trade practices, in violation of M.G.L. 93A, § 11, against the Corporate

Defendants.

The Corporate Defendants move to dismiss for lack of personal jurisdiction and for

failure to state a claim. (Docket No. 20). The Individual Defendants move to dismiss for failure

to state a claim, and one moves for dismissal based upon improper venue. (Docket Nos. 23, 25,

27, 29, 31, 33, 35). After hearing and for the following reasons, the Court issues this ruling to

dismiss certain claims and certain Defendants. Please see the Appendix attached to this Order

for a chart summarizing which motions have been granted and which motions have been denied.

Background1

KPM is a corporation with a principal place of business in Milford, Massachusetts.

(Compl., ¶ 3, Docket No. 1). KPM’s business division Unity Scientific (“Unity”) manufactures

instruments which analyze the chemical composition of common substances found in consumer

products, such as the amount of moisture, oil or protein in flour, agricultural ingredients,

chocolate, or processed foods. (¶¶ 1, 18-19). These instruments are designed to be easy to

operate and maintain in a production line or in a quality control laboratory. (Id.). Each analyzer

contains the measuring apparatus and a computer which can report the data from each

measurement to KPM for chemical analysis.

KPM’s analyzers use near infrared (“NIR”) spectroscopy, a scientific technique which

measures the diffraction of light or other electromagnetic radiation and provides faster results

than traditional wet chemistry testing methods. (¶ 21). The readings that the analyzers produce

1 The following facts are taken from the Plaintiff’s Verified Complaint (Docket No. 1) and assumed

true for the purposes of this motion.

must be referenced against the proprietary data in KPM’s calibration database, which uses

calibration datasets to match the measurements reported by the analyzer to the properties

associated with certain chemicals (water, oil, protein) based on samples and reference values in

the database. (¶ 24). Per KPM, each calibration dataset in its calibration database is drawn from

as many as 50-100 samples that KPM has collected over the past twenty years, and the database

includes tens of thousands of samples and over 500,00 reference chemistry values. (¶ 26).

KPM’s technicians and engineers work with customers to collect and process observed variations

of constituent materials with simultaneously measured laboratory results to create calibration

datasets. (¶ 28). One calibration dataset may take weeks or months to prepare; the more

samples, the more accurate the calibration and the analysis. (¶ 26). KPM asserts that it would

require decades of effort, significant investments, and an extensive customer base for a

competitor to establish a comparable calibration database. (¶ 29).

Once NIR spectroscopy is performed on a sample and referenced to the appropriate

calibration dataset in the database, KPM reports the results of the analysis to the customer using

its proprietary UCAL Software. That software has been continuously developed, updated, tested,

and released for the past twelve years. (¶ 30). KPM asserts that significant investment and

several years of effort would be required to replace or replicate the software, which is critical to

support NIR analyzers. (Id.).

In order to ensure that only its employees and consultants that work with the calibration

data can access it, KPM’s IT provider has established procedures to protect this information.

They require management sign-off and instituted access-control processes and the calibration

database is stored on a protected, confidential Windows File Server. (¶¶ 30-31). KPM also

requires non-disclosure and confidentiality agreements with its employees to prevent

dissemination. (Id.).

Blue Sun, a Maryland-based limited liability corporation, entered the NIR analyzer

market in 2018 as KPM’s direct competitor. (¶¶ 4, 40). ITG is Blue Sun’s parent company and

owner and is also incorporated and headquartered in Maryland. (Id.).

In early 2021, KPM began to suspect that Blue Sun had persuaded seven of KPM’s current

and former employees (the Individual Defendants) to misappropriate KPM’s trade secrets and

confidential information in violation of their non-disclosure and/or non-competition agreements.

(¶ 41). Blue Sun later hired those employees when they left KPM and have used and continue to

use KPM’s trade secrets and confidential data to attract new customers and poach KPM’s existing

clients and business opportunities. (Id.).

Robert Gajewski

Robert Gajewski worked for KPM from 2003 until January 13, 2019 as an employee;

from February 1, 2019 to May 13, 2019 as an independent contractor; and from May 13, 2019 to

April 5, 2021 as an employee. (¶ 37). On September 25, 2008, he executed a Confidentiality

and Non-Competition Agreement agreeing to maintain as secret KPM’s confidential information.

(Docket No. 1-6 at 1-9). Upon his resignation as an employee in 2019, he signed a letter

acknowledging that “all trade secrets, business plans and procedures, client contact list and other

confidential information of KPM” were proprietary information that he could not use pursuant to

his prior 2008 agreement. (Id. at 10-11). When he rejoined KPM as a business development

director in June 2019, his offer letter included and referenced an employee handbook, which

contained restrictions on the use of KPM’s confidential information. (Id.). As an employee of

KPM, Robert Gajewski had access to trade secrets and confidential information, including

datasets, source code, and customer files. (Compl. ¶ 37). KPM alleges that Gajewski acted on

behalf of Blue Sun while employed by KPM on numerous occasions. (¶¶ 42, 44–45, 48, 50–51,

53, 64–81).

On January 11, 2019, KPM employee Arnold Eilert sent Michelle Gajewski and

rob@bluesunscientific.com an email that a KPM customer was dissatisfied with KPM’s human

breast milk application, which KPM was “de-emphasizing.” Eilert wrote that, “[w]hat I would

like to have told [the KPM client] is that I know of a start-up company that may be interested in

continuing where Unity left off, but I don’t know if that is true. If Blue Sun is looking to pursue

sales/development for this application it might make sense for someone to contact Jae to discuss

how they might be able to move it forward.” (Docket No. 1-8).

On July 18–19, 2019, Gajewski traveled to Michigan to service KPM analyzers for

KPM’s customer, Post Foods, but documentation from the visit identifies Mr. Gajewski as a

“Blue Sun Service Engineer.” (Docket No. 1-10; Compl. ¶ 44). On August 14, 2019, KPM

customer Lamb Weston’s employee sent an email about an error code on her KPM analyzer to

Michelle Gajewski’s KPM email address and to rob@bluesunscientific.com—KPM believes that

the rob@bluesunscientific.com email address belongs to Robert Gajewski. (Compl. ¶ 45).

On January 17, 2020, KPM customer Olam sent emails requesting assistance with the

calibration dataset for garlic powder to Gajewski’s KPM email address and

irvin@bluesunscientific.com; Gajewski responded to assist the customer and removed

irvin@bluesunscientific.com from the ensuing email chain. (Docket No. 1-12; Compl. ¶ 48).

On March 26, 2020, Post Consumer Foods, another KPM customer, sent a $900 purchase

order for equipment to Rob Gajewski’s KPM email address, but the order form showed that Blue

Sun, not KPM, was the equipment supplier, and that Gajewski had provided the reference quote

for the transaction three days earlier. (Docket No. 1-16 at 3).

On November 24, 2020, KPM discovered an anonymous email sent to

info@kpmanalytics.com which claimed that Mr. Gajewski was working for both KPM and Blue

Sun. (Compl. ¶ 53).

By March 29, 2021, Blue Sun had published 34 application notes on its website about its

NIR Spectroscopy products. (¶ 54). Application notes are a “critical component” of the sale of

NIR spectroscopy equipment because they “create confidence and trust that a supplier has the

calibration history to perform certain measurements for their product of interest.” (¶¶ 59, 62).

When a customer purchases an NIR spectroscopy product, it also purchases the ability of the

accompanying calibration database to take the measurements collected by the analyzer, measure

it against the calibration database, and have accurate parameter/constituent results compared to

traditional reference methods. (¶ 60). An application note demonstrates the ability of a specific

calibration to perform on a range of samples—in other words, how accurate the analyzer’s

measurements are compared to more traditional (and time-consuming) chemistry reference

methods. (Id.). Each data point in the application note reflects a unique sample that has been

measured using both NIR spectroscopy and a traditional chemistry reference method. (¶ 55). A

standard application note has thousands of data points. (¶ 57).

As of March 29, 2021, 13 of Blue Sun’s 34 application notes listed “robga” as the

author—KPM alleges that “robga” is Mr. Gajewski, who was still employed by KPM when Blue

Sun’s application notes were published. (¶ 64). KPM conducted a digital search of the work

computer it had supplied to Gajewski. (¶ 65). It reviewed the various KPM datasets, calibration

models, and software on Mr. Gajewski’s KPM’s computer, used them to generate application

notes for specific products, and compared those application notes with Blue Sun’s published

application notes. (¶ 65). According to KPM, at least 11 of the 13 Blue Sun application notes

authored by “robga” identically match the versions found on Mr. Gajewski’s KPM computer. (¶

66).

For example, Blue Sun’s skim milk powder application note, by “robga,” is a pdf file

dated January 2, 2021. (¶ 70). It includes four graphs which purport to show the accuracy of

Blue Sun analyzers in measuring four constituents in powdered skim milk: fat, lactose, moisture,

and protein. (Docket No. 1-17). KPM’s records show that Gajewski accessed and modified

KPM’s data on skim milk powder on January 2, 2021. (¶ 72). KPM used the values in the files

that Gajewski had accessed on his KPM computer on January 2, 2021 to generate graphs for fat,

lactose, moisture, and protein, and compared that application note to Blue Sun’s skim milk

powder application note and found that they were identically matched. (¶¶ 73-9). KPM believes

that ten other application notes on Blue Sun’s website show similar identicality, and alleges that

Blue Sun’s application notes, its underlying datasets, calibrations, and reporting software tool

were all derived from KPM confidential information taken from Gajewski’s KPM computer. (¶

80-81).

On April 5, 2021, after learning of this and other conduct, KPM terminated both Robert

Gajewski and Michelle Gajewski’s employment. (¶¶ 37–38).

Michelle Gajewski

Michelle Gajewski, Robert Gajewski’s wife, worked for KPM as a consultant from 2008

to 2014; she become an employee in January 2014 in the role of Service Coordinator/Sales

Support. (¶ 38). On December 27, 2013, she signed a Non-Disclosure Agreement agreeing to

protect KPM’s confidential information. (Docket No. 1-7). § 11 of the Agreement provides that

any dispute arising out of the Agreement or the parties’ relationship “shall be mediated,

arbitrated or litigated solely within the state of Connecticut.” Through her employment at KPM

and/or as Robert Gajewski’s spouse, Michelle Gajewski had access to KPM’s trade secrets and

confidential information, including datasets, source code, and customer files. (Compl. ¶ 38).

On several occasions, Michelle Gajewski received tracking notifications at her KPM

email address regarding UPS packages related to Blue Sun. (¶ 46). On September 5, 2019, UPS

emailed Gajewski that a package had been delivered to Blue Sun. (Id.). On December 16, 2019,

UPS notified her, at the request of Blue Sun, about a package sent to Gerald Saporito at Post

Foods; Post Foods was the client that Robert Gajewski visited in July 2019 to service KPM

analyzers, although the client’s records indicated he was a Blue Sun technician. (¶ 47). On July

9, 2020, UPS emailed Michelle Gajewski that her package to Blue Sun had been delivered,

presumably implying that she had sent the second package to Blue Sun herself. (¶ 52). KPM

does not know what any of the packages contained and is not aware of any legitimate business

reason for Gajewski to receive shipping alerts about packages to Blue Sun or track packages sent

by KPM customers on Blue Sun’s behalf.

On January 11, 2019, KPM employee Arnold Eilert sent Michelle Gajewski and

rob@bluesunscientific.com an email that a KPM customer, UC San Diego Medical Center, was

dissatisfied with KPM’s human breast milk application, which KPM was “de-emphasizing.”

Eilert wrote that: “[w]hat I would like to have told him is that I know of a start-up company that

may be interested in continuing where Unity left off, but I don’t know if that is true. If Blue Sun

is looking to pursue sales/development for this application it might make sense for someone to

contact Jae to discuss how they might be able to move it forward.” (Docket No. 1-8). The

complaint does not state whether either responded.

On August 14, 2019, KPM client Lamb Weston sent an email to Michelle Gajewski and

rob@bluesunscientific.com seeking help with an error message on a KPM analyzer. (¶ 45). The

complaint does not state whether either responded.

Arnold Eilert

Arnold Eilert worked for KPM as an Applied Technology Manager from 2008 to 2020.

(¶ 32). On September 30, 2008, he signed a Confidentiality and Non-Competition Agreement

agreeing to maintain as secret KPM’s confidential information. (Docket No. 1-1). In his role

with KPM, Eilert had access to KPM’s trade secrets and confidential information, including

datasets, source code, and customer files. (¶ 32).

On January 11, 2019, Eilert sent an email from his personal email account to Michelle

Gajewski at her KPM email address and to rob@bluesunscientific.com which informed the

recipients that a KPM customer, UC San Diego Medical Center, was not satisfied with KPM’s

human breast milk application, that Eilert had informed the customer that KPM was “de-

emphasizing this application,” suggested that Blue Sun may be able to develop a better system,

mused that “someone” should reach out to the customer, and provided the customer’s contact

person and phone number. (¶ 42; Docket No. 1-8). Specifically, Eilert wrote that: “[w]hat I

would like to have told him [the KPM customer] is that I know of a start-up company that may

be interested in continuing where Unity left off, but I don’t know if that is true. If Blue Sun is

looking to pursue sales/development for this application it might make sense for someone to

contact Jae to discuss how they might be able to move it forward.” (Docket No. 1-8).

On January 20, 2020, KPM customer A&L Canada forwarded an email chain to Eilert’s

KPM email address. The email chain was a discussion between A&L and a former KPM

employee who had since moved to Blue Sun about phasing out the use of KPM’s analyzers and

using Blue Sun analyzers instead. (¶ 49; Docket No. 1-13). Mr. Eilert, still a KPM employee,

took no action to prevent the loss of KPM’s customer to Blue Sun. (Id.). Instead, he forwarded

the email chain from his KPM email to his personal email account. (Docket No. 1-14).

Eilert left KPM on December 31, 2020, and is now employed by Blue Sun. (¶ 32).

Rachael Glenister

Rachael Glenister worked for KPM from August 24, 2015 to July 10, 2020. (¶ 33). On

August 23, 2015, she signed a Confidentiality and Non-Competition Agreement agreeing to

maintain KPM’s confidential information. (Docket No. 1-2). In her role with KPM, Glenister

had access to KPM’s trade secrets and confidential information, particularly its customer files.

(Compl. ¶ 33).

KPM alleges that Glenister caused KPM to lose at least three sales opportunities to Blue

Sun, either while she was employed by KPM or in violation of her non-competition agreement.

On September 4, 2019, Glenister generated a $61,000 sales opportunity from Texas A&M

AgriLife, but she closed the opportunity on June 9, 2020, reporting that the customer had “No

Budget/Lost Funding.” (¶ 83). KPM later learned that Blue Sun received an order from Texas

A&M AgriLife on April 20, 2020 and amended it on July 20, 2020, the date that Glenister left

KPM. 2 (Id.). Glenister also created a sales opportunity with Panhandle Milling while employed

by KPM, but after Glenister left KPM, Panhandle placed an order with Blue Sun in late 2020. (¶

84). Finally, Glenister created a sales opportunity with Agri-King, Inc. before she left KPM, but

Agri-King Inc. ultimately placed an order with Blue Sun. (¶ 85).

2 The Complaint provides two different end dates for Glenister’s employment at KPM: July 10,

2020 (¶ 33) and July 20, 2020 (¶ 83). Therefore, Blue Sun either amended its purchase order

from AgriLife the day that Glenister left KPM, or ten days later.

Glenister left KPM on July 10, 2020, and is now employed by Blue Sun. (¶ 33). KPM

alleges her employment at Blue Sun violates her non-competition agreement. (Id.).

Gregory Israelson

Gregory Israelson worked for KPM from March 4, 2016 to March 12, 2021. (¶ 34). On

March 3, 2016, Israelson signed a Confidentiality and Non-Competition Agreement agreeing to

maintain as secret KPM’s confidential information. (Docket No. 1-3). In his role with KPM,

Israelson had access to KPM’s trade secrets and confidential information, including datasets,

source code, and customer files. (¶ 34).

On July 9, 2020, while employed by KPM, Israelson received an email at his KPM email

address from greg@bluesunscientific.com, which KPM believes also belongs to Israelson.

(Docket No. 9). The email contained a link for a software program used for remote copying of

files with a request to join a session. (¶ 43). KPM alleges that Mr. Israelson’s purpose in

sending this software copying tool was to provide confidential KPM information to Blue Sun

without KPM’s knowledge or authorization, and that there is no reason why Israelson should

have had a Blue Sun email address while employed by KPM. (Id.).

KPM alleges that Mr. Israelson is now an employee of Blue Sun (or has acted on Blue

Sun’s behalf) in violation of his non-competition agreement with KPM. (¶ 34).

Irvin Lucas

Irvin Lucas worked for KPM from January 5, 2015 to May 7, 2019. (¶ 35). On January 5,

2015, Lucas signed a Confidentiality and Non-Competition Agreement agreeing to maintain as

secret KPM’s confidential information. (Id.). In his role with KPM, Lucas had access to KPM’s

trade secrets and confidential information, including datasets, source code, and customer files. (¶

35).

Lucas became an employee of Blue Sun in 2020, conduct which KPM alleges violates his

non-competition agreement. (Id.). KPM believes Lucas is now the president of Blue Sun. (Id.).

Lucas wiped his KPM company computer before returning it and leaving KPM. (Id.). Per KPM,

this action suggests that Lucas was involved in improper conduct that he wished to conceal from

KPM, including the potential disclosure of KPM trade secrets to Blue Sun or others. (Id.).

On January 17, 2020, KPM customer Olam emailed Robert Gajewski at his KPM email

address and Lucas, who was then employed at Blue Sun, asking for assistance with the garlic

powder application on a KPM analyzer. (Docket No. 1-12).

On March 30, 2020, ProAnalytics, a KPM distributor, purchased replacement parts from

Blue Sun through Gajewski, rather than from KPM; the purchase order for the parts was emailed

to Gajewski, with Lucas copied as a secondary recipient. (Id.). KPM alleges that Lucas

remained bound by his non-competition agreement with KPM during both the Olam and

ProAnalytics correspondences.

Philip Ossowski

Philip Ossowski worked for KPM from March 26, 2019 to January 29, 2021. (¶ 36). On

April 10, 2019, he signed a Confidentiality and Non-Competition Agreement agreeing to

maintain as secret KPM’s trade secrets and confidential information. (Id.). In his role with

KPM, Ossowski had access to KPM’s trade secrets and confidential information including

datasets and/or customer files. (¶ 36). There are no specific allegations concerning Ossowski’s

conduct in the complaint, besides Blue Sun’s allegation that Ossowski’s current employment

with Blue Sun violates his noncompetition agreement with KPM. (Id.).

KPM brings six claims against the Corporate Defendants: violation of the Defend Trade

Secrets Act (Count I); violation of the Massachusetts Uniform Trade Secrets Act (Count II);

tortious interference with contractual relations (Count VII); conversion (Count VIII); unjust

enrichment (Count IX); and unfair or deceptive trade practices, in violation of M.G.L. 93A, §11

(Count X). KPM raises seven claims against the Individual Defendants: violation of the Defend

Trade Secrets Act (Count I); violation of the Massachusetts Uniform Trade Secrets Act (Count

II); breach of contract (Count III); violation of the implied covenant of good faith and fair

dealing (Count IV); breach of duty of loyalty (Count V); conversion (Count VIII); and unjust

enrichment (Count IX). KPM also raises a breach of contract claim against Defendants

Glenister, Israelson, Lucas, and Ossowski based on violation of noncompetition agreements they

signed with KPM (Count VI). Defendants move to dismiss all claims. (Docket Nos. 20, 23, 25,

27, 29, 31, 33, & 35).

Legal Standards

Lack of Personal Jurisdiction – Federal Rule of Civil Procedure 12(b)(2)

When considering a Rule 12(b)(2) motion, “the inquiry is whether the plaintiff had

proffered evidence which, if credited, is sufficient to support findings of all facts essential to

personal jurisdiction.” Phillips v. Prairie Eye Ctr., 530 F.3d 22, 26 (1st Cir. 2008). The plaintiff

bears the burden of showing that the court may exercise personal jurisdiction over the defendant

and “must put forward evidence of specific facts to demonstrate that jurisdiction exists.” A

Corp. v. All Am. Plumbing, 812 F.3d 54, 58 (1st Cir. 2016) (internal quotation marks and citation

omitted). Further, courts “take the plaintiff's evidentiary proffers as true and construe them in

the light most favorable to the plaintiff's claim.” C.W. Downer & Co. v. Bioriginal Food & Sci.

Corp., 771 F.3d 59, 65 (1st Cir. 2014). Finally, courts also “consider uncontradicted facts

proffered by the defendant.” Id.

Failure to State a Claim – Federal Rule of Civil Procedure 12(b)(6)

In evaluating a Rule 12(b)(6) motion to dismiss, the court must accept all factual

allegations in the complaint as true and draw all reasonable inferences in the plaintiff’s favor.

Langadinos v. American Airlines, Inc., 199 F.3d 68, 69 (1st Cir. 2000). To survive the motion,

the complaint must allege “a plausible entitlement to relief.” Bell Atl. Corp. v. Twombly, 550

U.S. 544, 559 (2007). “[A] plaintiff’s obligation to provide the ‘grounds’ of his ‘entitle[ment] to

relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a

cause of action will not do.” Id. at 555. “The relevant inquiry focuses on the reasonableness of

the inference of liability that the plaintiff is asking the court to draw from the facts alleged in the

complaint.” Ocasio-Hernandez v. Fortuno-Burset, 640 F.3d 1, 13 (1st Cir. 2011). “[W]here the

well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct,

the complaint has alleged—but it has not ‘show[n]’—that the pleader is entitled to relief.”

Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) (quoting Fed. R. Civ. P. 8(a)(2)).

Discussion

I. Corporate Defendants

A. Lack of Personal Jurisdiction

“In determining whether a non-resident defendant is subject to its jurisdiction, a federal

court exercising diversity jurisdiction is the functional equivalent of a state court sitting in the

forum state.” Sawtelle v. Farrell, 70 F.3d 1381, 1387 (1st Cir. 1995). Thus, to establish personal

jurisdiction over the Corporate Defendants, KPM must satisfy the requirements of both the

Massachusetts long-arm statute and the Due Process Clause of the Fourteenth Amendment.

World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 290, 100 S.Ct. 559, 62 L.Ed.2d 490

(1980). “[C]ourts should consider the long-arm statute first, before approaching the

constitutional question.” SCVNGR, Inc. v. Punchh, Inc., 478 Mass. 324, 330, 85 N.E.3d 50

(2017). Determining first whether the long-arm statute's requirements are met is consistent with

the duty to avoid “decid[ing] questions of a constitutional nature unless absolutely necessary to a

decision of the case.” Burton v. United States, 196 U.S. 283, 295, 25 S.Ct. 243, 49 L.Ed. 482

(1905).

1. Massachusetts Long-Arm Statute

The Massachusetts long-arm statute provides, in relevant part: “A court may exercise

personal jurisdiction over a person, who acts directly or by an agent, as to a cause of action in

law or equity arising from the person...causing tortious injury by an act or omission in this

commonwealth.” M.G. L. c. 233A, § 3(c). Thus, a defendant must have caused tortious injury in

the Commonwealth and the plaintiff’s claims must have arisen from that injury. This

requirement has been considered satisfied in cases where out-of-state conduct has allegedly

caused tortious injury in Massachusetts. Ealing Corp. v. Harrods Ltd., 790 F.2d 978, 982 (1st

Cir. 1986) (fraudulent representations made by out-of-state defendant to Massachusetts company

constituted acts that conferred jurisdiction under subsection (c)).

Corporate Defendants argue that §3(c) does not apply because none of their alleged actions

occurred within the forum. KPM relies on the decision in Captivate, LLC v. Datalock Sys., Inc.,

198-cv-02429-BLS2, 2019 WL 7707968 (Mass. Sup. Ct. Dec. 10, 2019) to support its argument

that the alleged out-of-state conduct can satisfy §3(c).

In Captivate, the Superior Court found that §3(c) permits personal jurisdiction over a

non-resident defendant for actions directed at a Massachusetts corporation. Id. Captivate, a

Massachusetts corporation, alleged that a long-time employee, Kenneth Hafen, had stolen $5

million from the company. Id. at *1. The theft was allegedly accomplished through the creation

of a sham corporation, DataLock, that billed Captivate for goods and services it never received.

Id. Captivate further alleged that Eric Frommer, Hafen’s son-in-law and a resident of Florida,

had allegedly assisted in the illegal scheme via DataLock. Id. at *2. The physical address

connected to the P.O. Box listed on DataLock’s invoices was Frommer’s home address. Id.

DataLock’s bank records showed that checks drawn from its account were made payable directly

to Frommer. Id. Captivate claimed that Fommer’s conduct had resulted in substantial injury to

the company, but Frommer moved to dismiss for lack of personal jurisdiction. Id. The Superior

Court found that P.O. Box and bank record allegations were sufficient to support Captivate’s

claim that Frommer was involved in the theft, that there was a basis to infer Frommer knowingly

participated in intentional misconduct directed at a Massachusetts company, and that it could

exercise personal jurisdiction over Frommer pursuant to §3(c). Id.

As in Captivate, KPM’s allegations against the Corporate Defendants are sufficient to

establish personal jurisdiction under § 3(c). KPM has alleged that the Corporate Defendants

knowingly and intentionally used the Individual Defendants to steal KPM’s trade secrets and

other confidential information. Two of the Individual Defendants—Robert Gajewski and

Gregory Israelson—had active Blue Sun email addresses while they were still employed by

KPM. (Compl. ¶¶ 34, 42-3). Blue Sun posted eleven application notes on its website that

contain data identical to the proprietary data found on Robert Gajewski’s KPM computer which

appear to have been created by Gajewski in January 2021, when he was still a KPM employee.

(¶ 64). These allegations are sufficient to support KPM’s claim that the Corporate Defendants

were involved in the alleged theft of trade secrets and knowingly participated in intentional

misconduct directed at a Massachusetts company. Accordingly, §3(c) of the long-arm statute

supports a finding of jurisdiction over the Corporate Defendants.

KPM also relies on the decision in The Scuderi Grp., LLC v. LGD Tech., LLC, 575 F.

Supp. 2d 312, 320-21 (D. Mass. 2008), where the court concluded that a chapter 93A violation

constitutes a tortious injury for the purposes of § 3(c). Id. (citing La Vallee v. Parrot–Ice Drink

Prods. of Am., Inc., 193 F. Supp. 2d 296, 300 (D. Mass. 2002) (“[T]he First Circuit Court of

Appeals has ‘assume[d], without deciding, that a Chapter 93A violation would constitute a

tortious injury under [subsection (c)].’”) (quoting Lyle Richards Int'l, Ltd. v. Ashworth, Inc., 132

F.3d 111, 114 (1st Cir.1997))). KPM’s allegation that the Corporate Defendants violated

Chapter 93A (Count X) further supports a finding of jurisdiction under § 3(c) of Massachusetts’

long-arm statute.

2. Constitutional Due Process

“The exercise of personal jurisdiction may, consistent with due process, be either

‘specific or case-linked’ or ‘general or all-purpose.’” Cossart v. United Excel Corp., 804 F.3d 13,

20 (1st Cir. 2015) (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915,

919, 131 S.Ct. 2846, 180 L.Ed.2d 796 (2011)). Because KPM waives any argument that

Massachusetts may exercise general jurisdiction over the Corporate Defendants, it must establish

that the Corporate Defendants’ contacts with the Commonwealth are sufficient for this Court to

assert specific jurisdiction.

The inquiry into whether a defendant has the requisite “minimum contacts” necessary to

support specific personal jurisdiction is inherently imprecise: “the criteria which we mark the

boundary line between those activities which justify the subjection of a corporation to suit, and

those which do not, cannot be simply mechanical or quantitative.” International Shoe Co. v.

Washington, 326 U.S. 310, 319, 66 S.Ct. 154, 90 L.Ed. 95 (1945). To assist in this necessarily

individualized assessment, a plaintiff seeking to establish specific jurisdiction must demonstrate

that three conditions are satisfied:

“First, the claim underlying the litigation must directly arise out of, or relate to, the

defendant's forum-state activities. Second, the defendant's in-state contacts must

represent a purposeful availment of the privilege of conducting activities in the

forum state, thereby invoking the benefits and protections of that state's laws and

making the defendant's involuntary presence before the state's courts foreseeable.

Third, the exercise of jurisdiction must ... be reasonable.”

Phillips v. Prairie Eye Ctr., 530 F.3d 22, 27 (1st Cir. 2008) (quoting Adelson v. Hananel, 510 F.3d

43, 49 (1st Cir. 2007)).

(a) Relatedness

The relatedness inquiry “serves the important function of focusing the court's attention on

the nexus between a plaintiff's claim and the defendant's contacts with the forum.” Sawtelle v.

Farrell, 70 F.3d 1381, 1389 (1st Cir. 1995). The court “must consider the contacts between the

defendants and the forum state viewed through the prism of plaintiff['s] ... claim.” Cossart, 804

F.3d at 20 (alterations in original) (citation omitted). “The evidence produced to support specific

jurisdiction must show that the cause of action either arises directly out of, or is related to, the

defendant's forum-based contacts.” Harlow v. Children's Hosp., 432 F.3d 50, 60-61 (1st Cir.

2005). Thus, “[t]here must be more than just an attenuated connection between the contacts and

the claim.” Phillips, 530 F.3d at 27; see also Walden v. Fiore, 571 U.S. 277, 290, 134 S.Ct.

1115, 188 L.Ed.2d 12 (2014) (“The proper question is not where the plaintiff experienced the

particular injury or effect but whether the defendant's conduct connects him to the forum state.”).

The Corporate Defendants contend that KPM’s claims do not “arise out of or relate to”

any of their activities within Massachusetts, while KPM relies on Astro-Med to demonstrate that

a nonresident defendant’s out-of-state conduct can constitute a sufficient nexus to confer

jurisdiction in the forum state. See Astro-Med, Inc. v. Nihon Kohden America, Inc., 591 F.3d 1

(1st Cir. 2009). In Astro-Med, a California corporation violated a Florida-based employee’s

Employment Agreement with a Rhode Island company. Id. at 10. The Rhode Island plaintiff

sued the California-based corporate defendant for tortious interference with contractual relations

and misappropriation of trade secrets in the District of Rhode Island, but the California defendant

argued that jurisdiction could not lie in Rhode Island because all the company’s dealings with the

employee took place in either California or Florida. Id. at 6,10. The First Circuit rejected that

premise, concluding that a defendant “need not be physically present in the forum state to cause

injury (and thus ‘activity’ for jurisdictional purposes) in the forum state.” Id at 10. (quoting N.

Laminate Sales v. Davis, 403 F.3d 14, 25 (1st Cir. 2005)). Instead, it determined that the

relatedness requirement was satisfied because the California defendant’s conduct in California

and Florida was the cause of the breach of contract in Rhode Island and the in-forum injury was

clearly related to the Rhode Island company’s tortious interference claim. Id.

Like the plaintiff in Astro-Med, KPM’s allegations against the Corporate Defendants are

sufficient to demonstrate relatedness. Whether the Corporate Defendants’ contact with KPM’s

employees or former employees occurred outside of Massachusetts is immaterial; as alleged, the

Corporate Defendants conduct relates to contracts between a Massachusetts company and its

employees. Therefore, the tortious harm resulting from the Corporate Defendants’ alleged

interference is an in-forum injury and the relatedness condition is fulfilled.

To provide support for its other claims against the Corporate Defendants, KPM relies on

Conning v. Halpern, 2019 WL 2514730 (D. Mass. June 18, 2019). In Conning, the court

articulated that “the effects of intentional torts in the forum state may suffice to satisfy the

relatedness requirement where intentional conduct was expressly aimed at the forum state and

caused harm the defendant knew would likely be suffered in the forum state. Id. at *6 (citing

Calder v. Jones, 465 U.S. 783, 789 (1984)). KPM asserts that it stores its confidential

information and trade secrets on servers physically located in Massachusetts. (Docket No. at 4).

As alleged, the Corporate Defendants’ misappropriation of trade secrets and conversion of

KPM’s confidential information constitute intentional conduct aimed and causing harm in

Massachusetts. Accordingly, the relatedness requirement is also met for those claims.

(b) Purposeful Availment

“In determining whether the purposeful availment condition is satisfied, our key focal

points are the voluntariness of the defendants' relevant Massachusetts contacts and the

foreseeability of the defendants falling subject to Massachusetts's jurisdiction.” Copia

Communications, LLC v. AMResorts, L.P., 812 F.3d 1, 5 (1st Cir. 2016) (quotation marks and

citation omitted). Voluntariness requires that the defendant's contacts with the forum state are

“not based on the unilateral actions of another party or a third person.” Nowak v. Tak How

Investments, Ltd., 94 F.3d 708, 716 (1st Cir. 1996) (citing Burger King Corp. v. Rudzewicz, 471

U.S. 462, 475, 105 S.Ct. 2174 (1985)). Foreseeability requires that “the defendant's contacts

with the forum state be such that he should reasonably anticipate being haled into court there.”

Id. (citing World-Wide Volkswagen, 444 U.S. at 297, 100 S.Ct. 559). When inquiring whether

Defendant has purposefully availed itself of the forum, however, the only relevant contacts are

those that gave rise to the cause of action. See Copia, 812 F.3d at 5.

The Corporate Defendants argue that they never purposefully availed themselves of the

Massachusetts forum. Blue Sun’s only contact with Massachusetts is communications with

former KPM employees which did not take place in the Commonwealth (none of the seven

Individual Defendants reside in Massachusetts). Further, Blue Sun does not maintain an office,

mailing address, or own property in Massachusetts. Blue Sun also does not market products,

conduct business, pay taxes, make sales, or employ anyone in Massachusetts. (Docket No. 21 at

10–11).

KPM alleges that Blue Sun was fully aware of the confidentiality agreements between

KPM and its former employees. KPM claims that Lucas, who was subject to a KPM

confidentiality and non-compete agreement, likely knew agreements of that nature were standard

practice at KPM. Given that the Complaint alleges Lucas was Blue Sun’s president at the time

of the complained-of conduct, KPM argues that the Corporate Defendants were aware that other

KPM employees were subject to similar agreements.

KPM again relies on Astro-Med to support its argument. There, the defendant company’s

knowledge of the employee’s Employment Agreement with the Rhode Island-based plaintiff was

sufficient to constitute purposeful availment. Astro Med, 591 F.3d at 10. The court determined

that it must have been foreseeable to the defendant corporation that it might be held accountable

for its conduct in the Rhode Island forum. Id. Here, KPM has plausibly alleged that the

Corporate Defendants had knowledge of the employment agreements between KPM and its

former employees requiring confidentiality. Given that KPM is a Massachusetts-based

employer, that knowledge makes it foreseeable that the Corporate Defendants might be held

accountable for their conduct in Massachusetts. (Docket No. 50 at 12). Accordingly, the

Corporate Defendants have purposefully availed themselves of the Massachusetts forum.

Regarding KPM’s tort claims, the First Circuit’s decision in N. Laminate is illustrative.

N. Laminate v. Davis, 403 F.3d 14 (1st Cir. 2005). There, the court determined that the

Defendant knew that his misrepresentations in New York would likely cause financial injury to

the plaintiff in New Hampshire, and this knowledge made it foreseeable that the Defendant could

be held accountable for his actions in a New Hampshire court. Id. Here, KPM alleges that the

Corporate Defendants are responsible for misappropriation of KPM’s trade secrets and

conversion of its confidential information (Counts I, II, and VIII). It is similarly reasonable to

presume that the Corporate Defendants knew this conduct would likely cause financial injury to

Massachusetts-based KPM. Such knowledge makes it sufficiently foreseeable that the Corporate

Defendants may be held accountable for these actions in Massachusetts, satisfying the purposeful

availment requirement.

(c) Reasonableness

Asserting jurisdiction must comport with traditional notions of “fair play and substantial

justice.” International Shoe, 326 U.S. at 320. “Out of this requirement, courts have developed a

series of factors that bear on the fairness of subjecting a nonresident to a foreign tribunal.”

Nowak, 94 F.3d at 717. These “gestalt factors” are:

(1) the defendant's burden of appearing [in the forum state], (2) the forum state's

interest in adjudicating the dispute, (3) the plaintiff's interest in obtaining

convenient and effective relief, (4) the judicial system's interest in obtaining the

most effective resolution of the controversy, and (5) the common interests of all

sovereigns in promoting substantive social policies.

C.W. Downer, 771 F.3d at 69 (alterations in original) (quoting Ticketmaster-New York, Inc. v.

Alioto, 26 F.3d 201, 209 (1st Cir. 1994)). The gestalt factors help the court do substantial justice,

especially where the relatedness and purposeful availment inquiries are close. Nowak, 94 F.3d at

717. “In such cases, the gestalt factors may tip the constitutional balance.” Id. Consequently, our

assessment of these factors operates on a sliding scale: “[T]he weaker the plaintiff's showing on

the first two prongs (relatedness and purposeful availment), the less a defendant need show in

terms of unreasonableness to defeat jurisdiction.” Ticketmaster, 26 F.3d at 210. “The reverse is

equally true: a strong showing of reasonableness may serve to fortify a more marginal showing of

relatedness and purposefulness.” Nowak, 94 F.3d at 717.

(i) Burden of Appearance

While it is always a burden for a foreign defendant to appear in the forum state, to accord

this factor any substantial weight, the defendant must show that the “exercise of jurisdiction in

the present circumstances is onerous in a special, unusual, or other constitutionally significant

way.” Pritzker v. Yari, 42 F.3d 53, 64 (1st Cir. 1994).

Because they are Maryland-based entities, the Corporate Defendants argue that defending

themselves in Massachusetts presents a significant burden. They emphasize that Blue Sun has

no contact with Massachusetts and that ITG has only limited and unrelated contacts. This

burden, however, is no different than the burden that any other foreign defendants haled into a

court in the Commonwealth faces. Since the Corporate Defendants have done nothing to

demonstrate that their burden is special or unusual, this factor tips in favor of exercising

jurisdiction.

(ii) Interest of the Forum

“Massachusetts has a significant interest in ensuring that contracts entered into by

Massachusetts residents are given full effect.” Champion Exposition Servs., Inc. v. Hi-Tech

Elec., LLC, 273 F. Supp. 2d 172, 179 (D. Mass. 2003). Further, a forum state has a significant

interest in asserting jurisdiction over a defendant who causes tortious injury within its borders.

Ticketmaster, 26 F.3d at 211.

Here, both propositions provide the Commonwealth with an interest in this case. The

forum state has an interest in giving KPM’s confidentiality and non-compete agreements full

effect. In addition, Massachusetts has an interest in asserting jurisdiction over the Corporate

Defendants for tortuously interfering with KPM’s employer-employee relationships and

consequently causing injury to KPM inside the Commonwealth. Thus, this factor also tilts in

favor of asserting jurisdiction.

(iii) Remaining Factors

The Corporate Defendants do not challenge this Court’s jurisdiction based on the

remaining gestalt factors.

KPM’s allegations are sufficient to establish specific personal jurisdiction over the

Corporate Defendants. Accordingly, this Court’s exercise of jurisdiction over Corporate

Defendants comports with Constitutional Due Process. Given that KPM’s allegation are also

sufficient to satisfy the Massachusetts long-arm statute, the Corporate Defendants’ 12(b)(2)

motion to dismiss is denied.

B. Failure to State a Claim

The Corporate Defendants assert that KPM has failed to state a claim on all six counts

brought against them: violation of the Defend Trade Secrets Act (Count I); violation of the

Massachusetts Uniform Trade Secrets Act (Count II); tortious interference with contractual

relations (Count VII); conversion (Count VIII); unjust enrichment (Count IX); and violation of

M.G.L. 93A, §11 (Count X).

1. Defend Trade Secrets Act (Count I) and Misappropriation of Trade Secrets (Count II)

Counts I and II assert that Corporate Defendants misappropriated KPM’s trade secrets in

violation of the federal Defend Trade Secrets Act (“DTSA”) and the Massachusetts Uniform

Trade Secrets Act (“MUTSA”), M.G.L. c. 93, § 42.

The DTSA and MUTSA are nearly equivalent. Allscripts Healthcare, LLC v.

DR/Decision Resources, LLC, 386 F. Supp. 3d 89, 94 (D. Mass. 2019) (citing Optos, Inc. v.

Topcon Medical Sys., Inc., 777 F. Supp. 2d 217, 238 (D. Mass. 2011)). To establish a claim for

misappropriation of trade secrets under either statute, a plaintiff must show that: (1) the

information at issue qualifies as a trade secret, (2) it “took reasonable steps to preserve the

secrecy of the information,” and (3) “the defendant used improper means, in breach of a

confidential relationship, to acquire and use the trade secret.” Incase Inc. v. Timex Corp., 488

F.3d 46, 52 (1st Cir. 2007). The DTSA also requires that the trade secret be “used in, or intended

for use in, interstate or foreign commerce.” 18 U.S.C. §1836(b)(1).

(a) Whether the Information at Issue Constitutes a Trade Secret

The Corporate Defendants argue that KPM has failed to sufficiently allege that the

information at issue qualifies as a trade secret because some of the data in its calibration database

is collected from customer samples rather than KPM’s own data. KPM retorts that the

calibration data sets are trade secrets because they represent decades of investment of time and

resources, that customer data is only one element of the database, and that customer

contributions to the calibration data sets are not disqualifying.

“A trade secret may consist of any formula, pattern, device or compilation of information

which is used in one's business, and which gives him an opportunity to obtain an advantage over

competitors who do not know or use it.” T.H. Glennon Co., Inc. v. Monday, No. 18-30120, 2020

WL 1270970, at *14 (D. Mass. Mar. 17, 2020) (quoting J.T. Healy & Son, Inc. v. James A.

Murphy & Son, Inc., 357 Mass. 728, 736, 260 N.E.2d 723 (1970)). “[G]enerally, a compilation

of information which is used in a business can be a trade secret,” including equipment service

manuals that contain information provided by component manufacturers and which are publicly

available for purchase, where the manuals were produced for employee use only and also

contained the plaintiff’s proprietary information. Picker Int'l Corp. v. Imaging Equip. Servs.,

Inc., 931 F. Supp. 18, 38 (D. Mass. 1995), aff'd sub nom. Picker Int'l Inc. v. Leavitt, 94 F.3d 640

(1st Cir. 1996); Data General v. Digital Computer Controls, Inc., 297 A.2d 433, 359

(Del.Ch.1971); J.T. Healy & Son, Inc. v. James A. Murphy & Son, Inc., 357 Mass. 728, 736, 260

N.E.2d 723, 729 (1970); RESTATEMENT OF TORTS § 757, comment b. Even a compilation of

publicly available information is protected if the business has combined it in a unique way. Id.

(citing ISC–Bunker Ramo Corp. v. Altech, Inc., 765 F. Supp. 1310, 1321–22 (N.D.Ill.1990);

Anacomp, Inc. v. Shell Knob Services, Inc., 1994 WL 9681, at *8 (S.D.N.Y.1994).

Like the equipment service manuals in Picker, KPM’s calibration data sets constitute

protected trade secrets. While the calibration datasets do include information from customer

samples, KPM’s investment of time and resources to collect, organize, and compile that

information into datasets for particular constituents that can be utilized in conjunction with its

NIR spectroscopy equipment renders them protected. Furthermore, KPM has not made its

database of customer-contributed information publicly available. These allegations are sufficient,

for purposes of R. 12(b)(6), to establish that the calibration datasets at issue are trade secrets.

(b) Reasonable Steps to Secure the Trade Secret’s Confidentiality

The Corporate Defendants alternatively claim that KPM did not take reasonable steps to

maintain the calibration datasets’ secrecy, again relying on the fact that KPM’s data was sourced

from KPM’s customers.

“A trade secret must be secret; ‘[m]atters of public knowledge or of general knowledge in

an industry cannot be appropriated by one as his secret.’” FabriClear, LLC v. Harvest Direct,

LLC, 481 F. Supp. 3d. 27, 35 (D. Mass. 2020) (citing Iconics, Inc. v. Massaro, 266 F. Supp. 3d

449, 452 (D. Mass. 2017) (quoting J.T. Healy & Son, Inc., 357 Mass. at 736, 260 N.E.2d 723)).

In FabriClear, the defendant argued that because the plaintiff had published the names of the

four ingredients in its pest repellent, the formula was no longer protected. Id. I disagreed,

finding that without publishing the proportion of each of the four ingredients in the final product,

the formula could not be considered public knowledge and was a protected trade secret. Id.

Accordingly, the formula was protected. Id.

Like the pest repellent formula in FabriClear, KPM’s calibration datasets are protected.

While some values of the datasets may be known to the individual KPM customers who

submitted them to KPM, neither the customer nor the public have knowledge of the many

remaining values from multiple sources that go into creating each dataset. (Docket No. 50 at

18). Therefore, despite the partial customer sourcing, KPM’s calibration datasets constitute

protected trade secrets.

(c) Improper Means of Obtaining the Trade Secret

The Corporate Defendants posit that KPM cannot bring a trade secrets claim against them

unless the alleged disclosures violated a confidential relationship between KPM and the

Corporate Defendants. See Burten v. Milton Bradley Co., 763 F. 2d 461, 463 (1st Cir. 1985) (“In

order to successfully establish a cause of action for misappropriation, therefore, a plaintiff must

show that he or she shared a confidential relationship with the defendant….”). Under their

reading of the trade secret statutes, no trade secret claim against the Corporate Defendants is

viable since the only confidential relationships alleged are between KPM and the Individual

Defendants (KPM’s former employees).

The Court takes issue with such a narrow reading of the DTSA and MUTSA. “Under

Massachusetts trade secret law, a third party who knowingly benefits from a trade secret which a

person in a confidential relationship obtained from the plaintiff is liable to the plaintiff for the

misappropriation of that trade secret.” Data Gen. Corp. v. Grumman Sys. Support Corp., 795 F.

Supp. 501, 507 (D. Mass. 1992), aff'd, 36 F.3d 1147 (1st Cir. 1994). In an oft-cited case dating

back to 1980, the Supreme Judicial Court held that a corporation which received and used a

competitor’s trade secrets from a third party could be liable for misappropriation under state law

even though the corporation had no confidential relationship with the competitor, so long as the

information claimed to be a trade secret was in fact secret and the corporation who received it

had notice that the third party had disclosed it in violation of a legal duty to keep it secret.

Curtiss-Wright Corp. v. Ede-Brown Tool & Die Co., 381 Mass. 1, 5-6 (Mass. 1980) (citing Third

Restatement of Torts § 757).

Furthermore, the plain text of both statutes implies that a defendant can be liable for

inducing a third party to disclose confidential information in breach of a confidential

relationship. MUTSA creates a private right of action for misappropriation of trade secrets by

improper means and defines improper means broadly to include the use or disclosure of

another’s trade secret if the recipient knew or had reason to know that the knowledge was

derived from or though a person who had a duty to limit its use, disclosure, or acquisition.

M.G.L. 93A § 42. DTSA contains very similar language. 18 U.S.C. § 1839(5).

The Corporate Defendants’ citation to Craft Beer Seller is inapposite, as the defendant in

that case, a company which hosts anonymous reviews of major employers for prospective job

hunters, was not in a position the same position to have notice of the plaintiff’s trade secrets

before they were posted online. See Craft Beer Seller, LLC v. Glassdoor, Inc., 2018 WL

5505247 (D. Mass. Oct. 17, 2018).

KPM has sufficiently pled that Blue Sun had notice that at least 11 of the 34 application

notes it published on its website to advertise its Phoenix analyzers were derived from KPM’s

calibration database which are protectible trade secrets. As KPM has also sufficiently pled that it

took reasonable steps to protect that confidential information, Corporate Defendants’ motion to

dismiss Counts I and Count II for trade secret misappropriation under the DTSA and MUTSA is

denied.

2. Tortious Interference with Contractual Relations (Count VII)

Count VIII asserts that the Corporate Defendants tortiously interfered with

Confidentiality and Nondisclosure Agreements between KPM and certain Individual Defendants.

Under Massachusetts law, a claim for tortious interference with contractual relations requires a

plaintiff to show that: “(1) he had a contract with a third party; (2) the defendant knowingly

interfered with that contract; (3) the defendant’s interference, in addition to being intentional,

was improper in motive or means; and (4) the plaintiff was harmed by the defendant’s actions.”

Harrison v. NetCentric Corp., 433 Mass. 465, 476, 744 N.E.2d 622 (2001).

The Corporate Defendants challenge the sufficiency of KPM’s allegations regarding the

third element. They argue that KPM has merely alleged that Blue Sun communicated with and

hired former KPM employees. According to the Corporate Defendants, the alleged conduct does

not constitute improper motive. The Corporate Defendants rely on Pembroke Country Club, Inc.

v. Regency Savings Bank, F.S.B, 62 Mass. App. Ct. 34, 39 (Mass. App. Ct. 2004), to support

their argument. (Docket No. 21 at 16–17). In Pembroke, the court decided that when the

defendant’s purpose is the legitimate advancement of its own economic interest, that motive is

not improper for purpose of a tortious interference claim. Id.

KPM suggests a different characterization of the Corporate Defendants’ motive in

communicating with and hiring its former employees. KPM argues that the improper motive

element is satisfied by the allegations regarding the Corporate Defendants’ misappropriation of

KPM’s trade secrets. Specifically, KPM cites the allegation that the Corporate Defendants

provided certain Individual Defendants with Blue Sun email accounts while they were still

employed by KPM. KPM also points to the email containing the remote file copying software

that Gregory Israelson sent from his Blue Sun email address to his KPM email account. Further,

KPM emphasizes its allegation that Blue Sun posted KPM’s confidential data on its website in

the form of application notes after receiving it from Mr. Gajewski.

These allegations make it plausible that the Corporate Defendants were not merely

engaged in permissible employee recruiting in a competitive market. Rather, the allegations

plausibly establish that the Corporate Defendants’ motive was to encourage KPM employees to

provide confidential information to Blue Sun. This Court finds that motive sufficiently improper

to satisfy the third element. See Optos, Inc. v. Topcon Medical Sys., 777 F. Supp. 2d 217, 241

(D. Mass. 2011) (concluding that a defendant likely to succeed on the merits of a

misappropriation of trade secrets claim was also likely to prevail on its tortious interference with

contractual relations claim). Corporate Defendants’ motion to dismiss Count VII is denied.

3. Conversion (Count VIII)

The Corporate Defendants claim that KPM has failed to state a claim for conversion

because under Massachusetts law a viable conversion claim can only be based on tangible

chattels, while KPM argues that the disputed trade secrets, software, and its customer

information can be suitable chattels to support a conversion claim.

To prevail on a claim for conversion under Massachusetts law, a “plaintiff must show

that (1) the defendant intentionally and wrongfully exercised control or dominion over the

personal property; (2) the plaintiff had an ownership or possessory interest in the property at the

time of the alleged conversion; (3) the plaintiff was damaged by the defendant's conduct; and (4)

if the defendant legitimately acquired possession of the property under a good-faith claim of

right, the plaintiff's demand for its return was refused.” United States v. Peabody Const. Co.,

Inc., 392 F.Supp.2d 36, 37 (D. Mass 2005) (citing Evergreen Marine Corp. v. Six Consignments

of Frozen Scallops, 4 F.3d 90, 95 (1st Cir. 1993)).

The Corporate Defendants rely on Blake to support their argument but misconstrue the

court’s conclusion in that case. Blake v. Professional Coin Grading Service, 898 F. Supp. 2d

365, 386 (D. Mass. 2012). The Blake court granted the defendant’s motion to dismiss plaintiff’s

claim for conversion for sales proceeds, intellectual property, royalties and trade secrets noting

that generally, Massachusetts law limits conversation claims on intangible property to property

which has merged with some sort of document, and conversion claims for trade secrets are

further limited to the extent that the owner has taken steps to assert his property right by

protecting the intellectual property from disclosure. Id. at 386. Where the plaintiff’s coin

grading system was already available for public use and known in the coin collecting industry,

there could be no conversation claim because he had not taken steps to shield his purported trade

secret from disclosure. Id. Here, having already concluded that the disputed trade secrets are not

public knowledge and finding nothing to indicate voluntary dissemination, Blake is not relevant.

Intangible property can be the subject of a conversion claim in certain circumstances.

(Docket No. 50 at 21). Under the merger doctrine discussed in Blake, intangible property that is

in some way merged with or contained in a physical object can be converted. Sentient Jet, LLC

v. Apollo Jets, LLC, No. 13-CV-10081, 2014 WL 1004112, at *11 (D. Mass. Mar. 17, 2014).

For example, a viable conversion claim exists where a plaintiff has plausibly alleged that its

confidential information, including customer information, was transmitted to the defendant’s

computer system; although plaintiff did not specifically allege that the confidential information

was downloaded onto a physical device such as a flash drive, the court decided that such an

inference was reasonable and denied defendant’s motion to dismiss, as determining the manner

in which the customer information was transmitted could be resolved through discovery. Id.

Somewhat like Sentient, KPM has not specially alleged that Blue Sun downloaded the

calibration datasets, software, and confidential customer information onto a physical device, like

a computer hard drive or flash drive or printout. However, KPM does claim that its calibration

datasets and UCAL software were used to generate the application notes that Blue Sun uploaded

to its website, and that Blue Sun used KPM’s confidential customer information to poach KPM

sales opportunities. (Compl. ¶¶ 82–86). Given those allegations and the Sentient Jet precedent,

it is reasonable to infer at the motion to dismiss stage that at some point KPM’s trade secrets

were transmitted between electronic devices or were converted to a physical format, especially as

pertaining to the information KPM alleges Robert Gajewski diverted from his KPM laptop to

produce the application notes. Accordingly, the calibration datasets, software, and customer

information do constitute property that can be converted at this stage, though information learned

in discovery may later invalidate this and related conversion claims in the case. See Governo

Law Firm LLC v. Bergeron, 166 N.E.3d 416, 422 (Mass. 2021) (concluding that databases that

were downloaded onto a removable electronic device were property that could be converted).

Thus, the Corporate Defendants’ motion to dismiss Count VIII is denied.

4. Unjust Enrichment (Count IX)

To state a claim for unjust enrichment, the Plaintiff must demonstrate: (1) a benefit

conferred on the Defendant by the Plaintiff; (2) an appreciation or knowledge of the benefit by

the Defendant; and (3) the acceptance or retention of the benefit by the Defendant under

circumstances which make the acceptance or retention inequitable. Steven v. Thacker, 550 F.

Supp. 2d 161, 165 (D. Mass. 2018). Unjust enrichment serves as an “equitable stopgap for

inadequacies in contractual remedies at law.” Mass. Eye and Ear Infirmary v. QLT

Phototherapeutics, Inc., 412 F.3d 215, 234 (1st Cir. 2009) (citing Fox v. F & J Gattozzi Corp.,

41 Mass. App. Ct. 581, 672 N.E.2d 547, 552 (1996)). Accordingly, the First Circuit has held that

“a party with an adequate remedy at law cannot claim unjust enrichment.” Shaulis v. Nordstrom,

Inc., 865 F.3d 1, 16 (1st Cir. 2017) (citing ARE-Tech Square, LLC v. Galenea Corp., 91

Mass.App.Ct. 1106, 2017 WL 634771 (Mass. App. Ct. 2017)).

The Corporate Defendants claim that KPM has failed to state a claim for unjust

enrichment for two reasons. First, they argue that the claim fails because Massachusetts law

prohibits plaintiffs with an adequate remedy at law from maintaining a parallel unjust enrichment

claim. Alternatively, the Corporate Defendants assert that KPM has not sufficiently alleged that

it conferred a benefit on Blue Sun.

I find that the second ground for dismissal is sufficient. Unlike trade secrets law, which

will allow recovery against a defendant who received the plaintiff’s trade secret from a third

party, unjust enrichment requires that the plaintiff directly bestowed a benefit on the defendant.

No cause of action lies where a plaintiff discloses the trade secret to a third party, who then

disclosed the trade secret to defendant. See Blake at 391 (rejecting plaintiff’s unjust enrichment

claim against Professional Coin Grading Inc., which had received plaintiff’s trade secrets from

Numismatic and used them, while upholding plaintiff’s unjust enrichment claim against

Numismatic).

Corporate Defendants’ Motion to Dismiss Count IX is granted.

5.. Massachusetts General Laws Chapter 93A § 11 (Count X)

The Corporate Defendants argue that KPM’s 93A claim for unfair or deceptive business

practices should be dismissed for failure to allege that the disputed conduct occurred primarily

and substantially within Massachusetts, as the statute requires. KPM replies that it is improper to

make the factual determination about where the complained-of conduct occurred at the Rule

12(b)(6) stage. This Court agrees.

M.G.L. c. 93A § 11 requires that “the actions and transactions constituting the alleged

unfair method of competition or the unfair or deceptive act or practice occurred primarily and

substantially within the Commonwealth.” It further provides that “the burden of proof shall be

upon the person claiming that such transactions and actions did not occur primarily and

substantially within the commonwealth.” Id. The Supreme Judicial Court has explained:

“Section 11 suggests an approach in which a judge should, after making findings

of fact, and after considering those findings in the context of the entire § 11 claim,

determine whether the center of gravity of the circumstances that give rise to the

claim is primarily and substantially within the Commonwealth.”

Kuwaiti Danish Computer Co. v. Digital Equip. Corp., 781 N.E.2d 787,

799 (Mass. 2003).

In accordance with Kuwaiti, courts commonly decline to dismiss § 11 claims on center of

gravity grounds. See, e.g., Sentient Jet, LLC, 2014 WL 1004112, at *13; Back Bay Farm,

LLC. v. Collucio, 230 F. Supp. 2d 176, 179 (D. Mass. 2002); Workgroup Tech. Corp. v.

MGM Grand Hotel, LLC, 246 F. Supp. 2d 102, 118 (D. Mass. 2003). Further, courts

have concluded that a § 11 cause of action should survive a center of gravity challenge at

the motion to dismiss stage if the complaint alleges that the plaintiff is located and claims

an injury within Massachusetts. Sentient Jet at *12 (quoting Back Bay Farm at 179 (D.

Mass. 2002).

KPM has sufficiently alleged that it is based in Massachusetts and that its injury

occurred within the Commonwealth, where the disputed trade secrets are electronically

stored. Corporate Defendants’ motion to dismiss Count X is denied.

II. Individual Defendants

A. Robert Gajewski

1. Defend Trade Secrets Act (Count I) and Misappropriation of Trade Secrets (Count II)

To establish a claim for misappropriation of trade secrets, a plaintiff must show that: (1)

the information at issue qualifies as a trade secret, (2) it “took reasonable steps to preserve the

secrecy of the information,” and (3) “the defendant used improper means, in breach of a

confidential relationship, to acquire and use the trade secret.” Incase Inc. v. Timex Corp., 488

F.3d 46, 52 (1st Cir. 2007). The DTSA also requires that the trade secret be “used in, or intended

for use in, interstate or foreign commerce.” 18 U.S.C. §1836(b)(1).

KPM’s allegations that Robert Gajewski misappropriated its trade secrets are substantial:

KPM has plausibly alleged that while was employed by KPM, Gajewski used the calibration data

sets from KPM’s database and KPM’s UCAL software to produce at least 13 of the 34

application notes published on Blue Sun’s website to attract new customers, and that he serviced

KPM equipment on behalf of Blue Sun, which would have required him to use KPM’s

proprietary technology on Blue Sun’s behalf. As discussed in the context of the Corporate

Defendants’ motion to dismiss, see supra Part I.B.1(a), the calibration datasets and KPM’s

UCAL software are clearly protected trade secrets. KPM also took reasonable steps to prevent

Gajewski from disclosing this confidential information: on September 25, 2008, at KPM’s

request Gajewski executed a Confidentiality and Non-Competition Agreement in which he

committed not to disclose, make use of, or copy any KPM company or client confidential

information during or after his employment with KPM without KPM’s express, written consent.

(Docket No. 1-6 at 8-9). Because Gajewski used KPM’s calibration datasets and UCAL

software to benefit another company at the expense of his unwitting employer, the allegations

also show an improper purpose.

Gajewski objects that KPM’s allegations against him are innuendo because there are no

allegations about “when or how” he misappropriated the application notes. However, KPM’s

internal investigation revealed the specific date and time that Gajewski accessed and modified

the same KPM skim milk data replicated in Blue Sun’s application note on his KPM laptop, and

that he had accessed that data on the same date that Blue Sun published its skim milk application

note. Because KPM’s calibration datasets are not publicly available and KPM can track which

users access them (and when), it has more than sufficiently stated a claim for trade secret

misappropriation against Gajewski based on the data used to assemble the Blue Sun application

notes attributed to “robga” alone.

Gajewski’s motion to dismiss Counts I and II is denied.

2. Breach of Contract (Count III)

To succeed on a breach of contract claim, a plaintiff must “show that (1) a valid contract

between the parties existed, (2) the plaintiff was ready, willing, and able to perform, (3) the

defendant was in breach of the contract, and (4) the plaintiff sustained damages as a result.”

Bose Corp. v. Ejaz, 732 F.3d 17, 21 (1st Cir. 2013).

The parties dispute whether the KPM Confidentiality and Non-Competition Agreement

that Gajewski signed on September 25, 2008 still bound Gajewski at the time of his alleged

misconduct, which occurred between July 18, 2019 and April 5, 2021. Under that contract,

Gajewski agreed, during and after his employment with KPM, to maintain the confidentiality of

KPM’s corporate and client information. (Docket No. 1-6 at 1-9). However, Gajewski points

out that he left KPM in February 2019 to work as an independent contractor, and when he

returned to KPM as an employee in May 2019, he did not sign a new confidentiality agreement.

I find that KPM has sufficiently pled that the 2008 contract binding Gajewski to maintain

company and client confidentiality with KPM (whether KPM was his current or former

employer) remained in force during the events set out in the complaint, and that KPM has also

alleged that Gajewski breached that contract to KPM’s detriment. KPM provided an executed

contract which contains a confidentiality clause and alleged that that contract remained in force

after Gajewski left KPM, and when he returned. (Compl. ¶ 37; Docket No. 1-6). It has also

credibly alleged that Gajewski breached the 2008 Agreement by, among other acts, using KPM’s

client data to produce application notes to sell Blue Sun analyzers without KPM’s consent.

Gajewski emphasizes that he never signed a new confidentiality agreement when he was

rehired in 2019, but his opposition does not allege that Gajewski was unable or willing to enter

into the contract in 2008 or explain why the post-termination provisions in the 2008 Agreement

would be presumptively invalid in February 2019 when Gajewski briefly worked as an

independent contractor, or why the current employee provisions would be presumptively invalid

when Gajewski was rehired and resumed working for KPM as an employee in May 2019. In

short, he has provided no reason the Court should discredit the 2008 Agreement at the motion to

dismiss stage.

Gajewski’s motion to dismiss Count III is denied.

3. Violation of Good Faith and Fair Dealing (Count IV)

“To prevail on an implied duty of good faith and fair dealing claim, “a plaintiff must

prove that there existed an enforceable contract between the two parties and that the defendant

did something that had the effect of destroying or injuring the right of [the plaintiff] to receive

the fruits of the contract.” Boyle v. Douglas Dynamics, LLC, 292 F.Supp.2d 198, 209-10 (D.

Mass. 2003). “[T]he implied covenant of good faith and fair dealing governs conduct of parties

after they have entered into a contract; without a contract, there is no covenant to be breached.”

Massachusetts Eye & Ear Infirmary, 412 F.3d at 230. “Conceptually, claims for breach of the

implied covenant of good faith and fair dealing are distinct from simple breach of contract claims

and require additional factual allegations of unfairly leveraging the contract terms for undue

economic advantage.” Christensen v. Kingston Sch. Comm., 360 F.Supp.2d 212, 229 (D. Mass.

2005).

Gajewski has recycled the same arguments to dismiss Count III as he did for the breach

of contract claim: that KPM has not adequately pled that the particulars of how or when

Gajewski actually used or disclosed confidential information, and that KPM has not adequately

alleged that any action he took had the effect of destroying or injuring KPM’s rights under the

contract. I have previously rejected those arguments, and reiterate my prior finding that the 2008

Agreement remained in force and barred Gajewski from using KPM’s confidential client or

company information at the time of his alleged misconduct, including using KPM’s calibration

datasets and UCAL software to prepare application notes for Blue Sun. Furthermore, the fact that

KPM has credibly pled that Gajewski collected a salary from KPM while he diverted business to

Blue Sun (the $900 purchase order that KPM customer Post Consumer Foods placed with Blue

Sun, after Gajewski provided a reference quote) and used KPM’s trade secrets to boost the sales

of KPM’s competitor provides the additional factual allegations that Christensen requires to

plead a good faith and fair dealing claim.

Gajewski’s motion to dismiss Count IV is denied.

4. Breach of Duty of Loyalty (Count V)

KPM further alleges that Gajewski’s disclosure of confidential information breached his

duty of loyalty to KPM.

A duty of loyalty only attaches to employees who occupy positions of trust and

confidence, which includes corporate officers, executives, partners, directors, and extends to

certain rank and file employees who are given access to confidential information, such as law

firm associates. TalentBurst, Inc. v. Collabera, Inc., 567 F.Supp.2d 261, 265-66 (D. Mass.

2008). Here, KPM has alleged that Gajewski owed it a duty of loyalty arising out of the 2008

Agreement, in which he promised to keep KPM’s confidential client and corporate information

secret, and that he breached that duty when he disclosed confidential information on at least two

occasions: using KPM’s trade secrets to generate application notes for Blue Sun, and using

KPM’s client information to steer a $900 purchase order to Blue Sun while employed by KPM.

As KPM’s Business Director working directly under KPM’s North America President and an

employee who could access the calibration datasets on his employer-issued laptop, Gajewski was

clearly an executive with access to confidential information to whom the duty of loyalty attaches.

Gajewski argues that an at-will employee can change employers freely and “may

properly plan to go into competition with his employer . . . while still employed . . . without

violating any duty to his employer.” See Augat, Inc. v. Aegis, Inc., 409 Mass. 165, 172 (1991).

However, the facts alleged against him—actively using KPM trade secrets to help Blue Sun

market its competing products and steering at least one customer towards Blue Sun—go far

beyond the permissible bounds of job hunting or planning to go into competition with one’s

present employer. Gajewski’s motion to dismiss Count V is denied.

5. Conversion (Count VIII)

KPM also alleges that Gajewski converted KPM’s propriety datasets, calibration models,

and software when he disclosed them to Blue Sun by using the information to generate at least

11 of the 34 application notes published on its website, which Blue Sun attributed to “robga.”

Gajewski argues that KPM has not alleged what property he converted or what damage KPM

suffered because of his conduct.

To prevail on a claim for conversion under Massachusetts law, a “plaintiff must show

that (1) the defendant intentionally and wrongfully exercised control or dominion over the

personal property; (2) the plaintiff had an ownership or possessory interest in the property at the

time of the alleged conversion; (3) the plaintiff was damaged by the defendant's conduct; and (4)

if the defendant legitimately acquired possession of the property under a good-faith claim of

right, the plaintiff's demand for its return was refused.” United States v. Peabody Const. Co.,

Inc., 392 F.Supp.2d 36, 37 (D. Mass 2005) (citing Evergreen Marine Corp. v. Six Consignments

of Frozen Scallops, 4 F.3d 90, 95 (1st Cir. 1993)).

Here, KPM has sufficiently alleged that Gajewski had access to KPM’s intellectual

property through his KPM-issued laptop, including data sets, calibration models, and software;

that he accessed that property; and that he used that intellectual property to produce at least 11 of

the application notes attributed to Mr. Gajewski and published on Blue Sun’s website. As

previously articulated, see supra Part I.B.1(a)., KPM’s data sets, calibration models, and

software constitute property that can be converted under the merger doctrine despite their

intangibility, and it is reasonable to assume at the motion to dismiss stage that this intellectual

property was transferred using a physical device, although the manner in which the data was

transmitted must be determined through discovery. Gajewski’s motion to dismiss Count VIII is

denied.

6. Unjust Enrichment (Count IX)

To state a claim for unjust enrichment, a plaintiff must demonstrate: (1) that the plaintiff

conferred a benefit on the defendant; (2) an appreciation or knowledge of the benefit by the

defendant; and (3) the acceptance or retention of the benefit by the defendant under

circumstances which make the acceptance or retention inequitable. Steven v. Thacker, 550 F.

Supp. 2d 161, 165 (D. Mass. 2018).

KPM has failed to state a claim for unjust enrichment against any of the Individual

Defendants. KPM has not clearly stated what benefit any Individual Defendant—including

Robert Gajewski—derived from the disclosure of KPM’s confidential or client information.

(Compl. ¶¶ 127-30). As Gajewski observes, Count IX of the Complaint lumps all the Individual

Defendants together and asserts conclusorily that they “benefitted” from disclosing KPM’s trade

secrets, without saying how. While KPM has alleged that five of the Individual Defendants now

work for Blue Sun, it has not alleged that they earned those positions or any other consideration

from Blue Sun because of any disclosures of KPM confidential information.3 In the absence of

any allegations that any of the Individual Defendants received any kind of benefit for their

disclosures, Count IX fails as to all Individual Defendants.

Gajewski’s motion to dismiss Count IX is granted.

3 KPM filed this Complaint on April 5, 2021, the same date that it terminated Robert and

Michelle Gajewski, so whether or not either Gajewski was subsequently employed by Blue Sun

was not an available fact.

B. Michelle Gajewski

1. Motion to Dismiss for Improper Venue

Michelle Gajewski moves to dismiss all claims against her for improper venue because

KPM brought this case in the District of Massachusetts despite the fact that § 11 of her 2013

Non-Disclosure Agreement with KPM provides that any dispute arising out of the Agreement or

the parties’ relationship “shall be mediated, arbitrated or litigated solely within the state of

Connecticut.” (Docket No. 1-7).

KPM does not dispute that its tort and contract claims against Gajewski arise out of the

Agreement or Gajewski’s relationship with KPM, and so are subject to § 11’s mandatory forum

selection clause. Instead, KPM argues that the Court should not enforce the forum selection

clause in the interest of judicial economy; because of Massachusetts’ strong interest in

adjudicating the case in the Commonwealth, where the alleged injury occurred; and because

severing the claims against a single Defendant and requiring KPM to re-file them in the

designated forum would “dramatically delay and inconvenience KPM’s pursuit of relief,”

especially considering that the Court has already ordered expedited discovery and a hearing on

KPM’s preliminary injunction. (Docket No. 51 at 19-20).

The First Circuit “treat[s] a motion to dismiss based on a forum selection clause as a

motion alleging the failure to state a claim for which relief can be granted under Rule 12(b)(6).”

Rivera v. Centro Medico de Turabo, Inc., 575 F.3d 10, 15 (1st Cir. 2009). Forum selection

clauses “are prima facie valid and should be enforced unless enforcement is shown by the

resisting party to be ‘unreasonable’ under the circumstances.” M/S Bremen v. Zapata Off-Shore

Co., 407 U.S. 1, 10 (1972). There are only four grounds for a court to set aside a mandatory

forum selection clause whose scope covers the plaintiffs’ claims: “(1) the clause was the product

of “fraud or overreaching;” (2) “enforcement would be unreasonable or unjust;” (3) proceedings

“in the contractual forum will be so gravely difficult and inconvenient that [the party challenging

the clause] will for all practical purposes be deprived of his day in court;” or (4) “enforcement

would contravene a strong public policy of the forum in which the suit is brought, whether

declared by statute or by judicial decision.” Claudio-De Leon v. Sistema Universitario Ana G.

Mendez, 775 F.3d 41, 49 (1st Cir. 2014).

KPM has not met its “heavy burden” to show why the forum selection clause should not

be enforced under any of the four grounds set forth in Claudio-De Leon. See Bremen at 17. Its

protests that enforcing the clause would inconvenience KPM by delaying relief and adding to its

litigation costs are inadequate because “[m]ere inconvenience or additional expense is not the

test of unreasonableness since it may be assumed that the plaintiff receive under the contract

consideration for these things.” In re Mercurio, 402 F.3d 62, 66 (1st Cir. 2005) (citation

omitted). Nor has KPM furnished a factual record establishing that dismissing the claims against

Gajewski would effectively deprive KPM of its day in court. See Fireman’s Fund Am. Ins. Cos.

v. Puerto Rican Forwarding Co., 494 F.2d 1294, 1297 (1st Cir. 1974). Furthermore, it has not

identified a strong Massachusetts public policy that would be injured by enforcement other than

the Commonwealth’s general interest in adjudicating claims that arose in Massachusetts and

injured Massachusetts citizens within its borders. The First Circuit has acknowledged that to the

extent the selected forum does not recognize a unique Massachusetts statutory claim, such as a c.

93A or a Massachusetts Wage Act claim, a forum selection clause can be set aside, but KPM has

made no showing that any of its claims against Gajewski cannot be pursued in Connecticut to the

extent that dismissal would violate a strong Massachusetts public policy. See Atlas Glass &

Mirror, Inc. v. Tri-North Builders, Inc., 997 F.3d 367, 377 (1st Cir. 2021) (upholding a

Wisconsin forum selection clause where plaintiff failed to show how enforcement could violate a

Supreme Judicial Court policy against transferring 93A claims to states which do not recognize

such causes of action). Finally, KPM has not cited any authority which allows a federal court to

ignore a valid and mandatory forum selection clause based on judicial economy.

Gajewski’s Rule 12(b)(6) motion to dismiss all claims against her for improper venue in

light of the forum selection clause in her KPM contract is granted. This includes the dismissal of

all remaining counts against Gajewski for misappropriation of trade secrets (Counts I and II);

breach of contract (Count III); breach of the implied covenant of good faith and fair dealing

(Count IV); breach of the duty of loyalty (Count V); conversation (Count VIII); and unjust

enrichment (Count X).

C. Arnold Eilert

KPM has alleged five acts concerning Eilert: 1) that he had access to KPM’s confidential

information and he signed a Non Disclosure Agreement agreeing to maintain confidentiality on

September 24, 2008; 2) that on January 11, 2019, he emailed Michelle Gajewski at her KPM

email address and rob@bluesunscientific.com to inform them that KPM client UC San Diego

Medical Center was dissatisfied with the human breast milk analyzer application that KPM was

planning to “de-emphasize,” that “it might make sense for someone” to contact the client to

discuss how Blue Sun could “continu[e] where Unity left off,” and to provide the client’s name

and phone number; 3) that on January 20, 2020, another KPM client, A&L Canada, forwarded

Eilert a long email with its plan to transition from KPM analyzers to Blue Sun analyzers, and

Eilert did nothing to alert KPM or prevent the loss of business; 4) that he forwarded the A&L

Canada email from his KPM work email account to his personal email account on January 21,

2020; and 5) that he left KPM on December 31, 2020, and is now an employee of Blue Sun.

(Docket Nos. 1-8, 1-13, 1-14).4

1. Defend Trade Secrets Act (Count I) and Misappropriation of Trade Secrets (Count II)

To establish a claim for misappropriation of trade secrets, a plaintiff must show that: (1)

the information at issue qualifies as a trade secret, (2) it “took reasonable steps to preserve the

secrecy of the information,” and (3) “the defendant used improper means, in breach of a

confidential relationship, to acquire and use the trade secret.” Incase Inc. v. Timex Corp., 488

F.3d 46, 52 (1st Cir. 2007).

KPM has stated a claim for trade secret misappropriation based on the 2019 email to Blue

Sun regarding UC San Diego Medical Center, but not the 2020 email regarding A&L. Eilert was

a passive recipient of the 2020 email and there are no allegations that he provided any KPM

trade secrets to Blue Sun or A&L which would facilitate A&L’s transition plan from KPM

analyzers to Blue Sun analyzers. Therefore, Eilert cannot be said to have “acquire[d]” or

“use[d]” KPM’s trade secrets, as required under the DTSA and MUTSA. The 2019 email, when

read in the light most favorable to KPM, suggests that Eilert reached out to Blue Sun by emailing

4 On May 19, 2021, KPM submitted a letter informing the Court that after the hearing on its

motion for expedited discovery, it learned that in August 2020 Eilert and Michelle Gajewski

arranged for KPM client Disney to renew its NIR spectroscopy contract with Blue Sun instead of

KPM by misrepresenting that KPM had changed its name to “Blue Sun.” (Docket No. 43). The

attached documentation included emails between a Disney representative and Eilert, as well as

internal corporate emails within KPM discussing their very recent phone call with Disney. KPM

asks that we consider the additional allegations contained therein against Eilert and Michelle

Gajewski. Courts may not consider any documents that fall outside of the complaint, or which

are not expressly incorporated into a complaint, except “for documents the authenticity of which

are not disputed by the parties; for official public records; for documents central to plaintiff’s

claim; or for documents sufficiently referred to in the complaint” when deciding a motion to

dismiss. Alternative Energy, Inc. v. St. Paul Fire and Marine Ins. Co., 267 F.3d 30, 33-34 (1st

Cir. 2001). Because Disney was not referenced in the complaint and none of the documents fall

under any of the exceptions set forth in Alternative Energy, the new evidence concerning Disney

does not form part of the record for the pending motions to dismiss.

rob@bluesunscientific.com to inform KPM’s competitor that there was an opportunity to poach

UC San Diego Medical Center because KPM had decided to stop investing resources into its

human breast milk application.

Under Massachusetts law, non-technical confidential information such as customer or

supplier lists can qualify as a protected trade secret. FrontRunner HC, Inc. v. Waveland RCM,

LLC, 202 WL 7321161 at *9 (D. Mass. Dec. 11., 2020) (citing Jet Spray Cooler, Inc. v.

Crampton, 361 Mass 835, 840 (1972)). Massachusetts courts consider six relevant factors when

determining whether the information sought to be protected is confidential: “(1) the extent to

which the information is known outside the business; (2) the extent to which it is known by

employees and others involved in the business; (3) the extent of measures taken by the employer

to guard the secrecy of the information; (4) the value of the information to the employer and to

his competitors; (5) the amount of effort or money expended by the employer in developing the

information; and (6) the ease or difficulty with which the information could be properly acquired

or duplicated by others.” Jet Spray at 840 (citing RESTATEMENT OF TORTS § 757).

The scope of information defined as confidential in the Agreement implies that the

information Eilert shared constitutes a trade secret, and that KPM had made substantial efforts to

protect it. At the time that he emailed rob@bluesunscientific.com to provide the name, phone

number, and reason why KPM’s client might be open to an overture from Blue Sun, Eilert’s

Non-Disclosure Agreement was still in force and specifically barred him from disclosing

confidential information, including the names and contact persons of KPM’s clients and

technologies and developments or any information relating to the KPM’s business. (Docket No.

1-1 at 3).

Eilert objects that he was “simply trying to help an existing customer” and that he was

not diverting business from KPM because KPM no longer planned to support the product

application that its customer was interested in. That argument is a fact issue which cannot be

resolved here at the motion to dismiss stage.

Eilert’s motion to dismiss Counts 1 and II is denied.

2. Breach of Contract (Count III)

To succeed on a breach of contract claim, a plaintiff must “show that (1) a valid contract

between the parties existed, (2) the plaintiff was ready, willing, and able to perform, (3) the

defendant was in breach of the contract, and (4) the plaintiff sustained damages as a result.”

Bose Corp. v. Ejaz, 732 F.3d 17, 21 (1st Cir. 2013).

KPM alleges that Eilert violated his 2008 Confidentiality and Non-Competition

Agreement by disclosing KPM’s confidential information. Eilert raises no argument that the

Agreement is unenforceable. The 2008 Agreement defines confidential information broadly as,

among other information, “names, addresses, contact persons, purchasing histories and prices,

credit standing and other information relating to [KPM’s] clients or prospective personnel;” and

“business expansion plans, including business development;” “technologies, developments,

inventions, or improvements; and any other information relating to the business of [KPM] or its

clients . . .” (Docket No. 1-1 at 3). While KPM did not allege that its decision to “de-

emphasize” the human breast milk application was a trade secret, a term which carries a specific

legal definition, that information appears to be confidential under the terms of the Agreement.

By alleging that Eilert disclosed that information to a Blue Sun email address, KPM has stated a

claim for breach of contract. Furthermore, providing Blue Sun with the client’s phone number is

also a breach of the contractual provision protecting the identities and contact information of

KPM’s clients. Eilert objects that he was merely trying to assist a customer obtain a service that

KPM could not provide, but on a motion to dismiss, the Court construes the evidence in the light

most favorable to the nonmovant.

Eilert’s motion to dismiss Count III is denied.

3. Violation of the Implied Covenant of Good Faith and Fair Dealing (Count IV)

“To prevail on an implied duty of good faith and fair dealing claim, “a plaintiff must

prove that there existed an enforceable contract between the two parties and that the defendant

did something that had the effect of destroying or injuring the right of [the plaintiff] to receive

the fruits of the contract.” Boyle v. Douglas Dynamics, LLC, 292 F.Supp.2d 198, 209-10 (D.

Mass. 2003). “Conceptually, claims for breach of the implied covenant of good faith and fair

dealing are distinct from simple breach of contract claims and require additional factual

allegations of unfairly leveraging the contract terms for undue economic advantage.” Christensen

v. Kingston Sch. Comm., 360 F.Supp.2d 212, 229 (D. Mass. 2005).

As discussed above in the context of the breach of contract claim against Eilert, Eilert’s

January 11, 2019 disclosure to Blue Sun that KPM planned to discontinue or stop developing a

certain application that a KPM client wanted, as well as that client’s name and contact

information, violated Eilert’s 2008 Confidentiality and Nondisclosure Agreement. KPM has also

alleged that Eilert leveraged the violation for undue economic advantage by gaining employment

with Blue Sun sometime after December 31, 2020. Eilert’s act of forwarding the 2020 email

memorializing A&L’s plan to transition from KPM to Blue Sun analyzers reinforces the theory

that Eilert was collecting clients for an eventual move to Blue Sun. Two years passed between

the January 2019 Email and Eilert’s subsequent employment with Blue Sun and Eilert’s hiring

could be wholly unconnected to the 2019 email, but at the motion to dismiss stage KPM has

scraped together enough plausible allegations to move the claim forward.

Eilert’s motion to dismiss Count IV is denied.

4. Breach of Duty of Loyalty (Count V)

A duty of loyalty only attaches to employees who occupy positions of trust and

confidence, which includes corporate officers, executives, partners, directors, and extends to

certain rank and file employees who are given access to confidential information, such as law

firm associates. TalentBurst, Inc. v. Collabera, Inc., 567 F.Supp.2d 261, 265-66 (D. Mass.

2008). As an Applied Technology Manager whose position involved “designing software and

programming,” Eilert’s work provided him access to enough of KPM’s prized confidential

information—particularly its calibration database—for the duty of loyalty to attach. (Docket No.

1-1 at 1). Eilert promised to keep KPM’s confidential client and corporate information secret,

and KPM has plausibly alleged that he breached that duty on January 11, 2019, as discussed

previously.

Eilert’s motion to dismiss Count V is denied.

5. Conversion (Count VIII)

To prevail on a claim for conversion under Massachusetts law, a “plaintiff must show

that (1) the defendant intentionally and wrongfully exercised control or dominion over the

personal property; (2) the plaintiff had an ownership or possessory interest in the property at the

time of the alleged conversion; (3) the plaintiff was damaged by the defendant's conduct; and (4)

if the defendant legitimately acquired possession of the property under a good-faith claim of

right, the plaintiff's demand for its return was refused.” United States v. Peabody Const. Co.,

Inc., 392 F.Supp.2d 36, 37 (D. Mass 2005) (citing Evergreen Marine Corp. v. Six Consignments

of Frozen Scallops, 4 F.3d 90, 95 (1st Cir. 1993)).

The 2019 and 2020 email exchanges show that Eilert was in possession of KPM customer

information. (Compl. ¶¶ 42, 49). Additionally, the January 11, 2019 email to

rob@bluesunscientific.com credibly alleges that he used confidential customer information to

lure KPM customers to Blue Sun while employed by KPM. However, KPM fails to allege that

Eilert’s conduct harmed KPM. Unlike the allegations against Rachael Glenister, KPM has no

allegations that it lost sales or business opportunities with either UC San Diego Medical Center

or A&L, the two clients connected to Eilert, due to any action of Eilert’s. See infra Sec. II.d.vi.

Without pleading damages resulting from Mr. Eilert’s use of customer information, KPM has

failed to plausibly establish a conversion claim. See Peabody, 392 F.Supp.2d at 37.

Eilert’s motion to dismiss Count VIII is granted.

6. Unjust Enrichment (Count IX)

Eilert’s motion to dismiss Count IX is granted.

D. Rachael Glenister

KPM alleges that Glenister diverted three sales to Blue Sun while she was employed by

KPM, and that her current employment violates the terms of her August 23, 2015 Confidentiality

and Non-Competition Agreement. (Docket No. 1-2).

On September 4, 2019, Glenister generated a $61,000 sales opportunity from Texas

A&M AgriLife, but she closed the opportunity on June 9, 2020, reporting that the customer had

“No Budget/Lost Funding.” (¶ 83). KPM has learned that Blue Sun received an order from

Texas A&M AgriLife on April 20, 2020 and amended it on July 20, 2020, either on the day that

Glenister left KPM, or ten days later.5 (Id.). Glenister also created a sales opportunity with

Panhandle Milling while employed by KPM, but after Glenister left KPM, Panhandle placed an

order with Blue Sun in late 2020. (¶ 84). Finally, Glenister created a sales opportunity with

Agri-King, Inc. before she left KPM, but Agri-King Inc. ultimately placed an order with Blue

Sun. (¶ 85).

1. Defend Trade Secrets Act (Count I) and Misappropriation of Trade Secrets (Count II)

To establish a claim for misappropriation of trade secrets, a plaintiff must show that: (1)

the information at issue qualifies as a trade secret, (2) it “took reasonable steps to preserve the

secrecy of the information,” and (3) “the defendant used improper means, in breach of a

confidential relationship, to acquire and use the trade secret.” Incase Inc. v. Timex Corp., 488

F.3d 46, 52 (1st Cir. 2007).

Weighing the six Jet Spray factors, I find that KPM has stated a claim that Glenister’s

diversion of the three sales from KPM to Blue Sun violated the DTSA and the MUTSA by

disclosing confidential information. See Jet Spray Cooler, Inc. v. Crampton, 361 Mass 835, 840

(1972). Glenister’s Confidentiality and Non-Competition Agreement barred her from disclosing

any information relating to KPM’s prospective clients, including potential or prospective prices

or products during or after her employment with KPM. (Docket No. 1-2). According to the

allegations against her, three prospective clients that she unsuccessfully solicited for KPM—

AgriLife, AgriKing, and Panhandle Milling, became Blue Sun clients shortly before or after she

left KPM for Blue Sun on July 10 or 20, 2020. KPM and Blue Sun sell similar types of NIR

analyzers. Taking the facts alleged in the light most favorable to KPM, it is plausible that

5 The Complaint provides that two different end dates for Glenister’s employment at KPM: July

10, 2015 (¶ 33) and July 20, 2020 (¶ 83). Therefore, Blue Sun either amended its purchase order

from AgriLife the day that Glenister left KPM, or ten days later.

Glenister used the confidential information she learned during her solicitation of the three

companies at KPM to diver their business to Blue Sun, especially given KPM’s allegations that

Glenister left KPM for Blue Sun. While KPM has not identified any specific instances of

solicitation, there is no requirement to do so without the benefit of discovery at such an early

stage of the litigation.

Glenister’s motion to dismiss Counts I and II is denied.

2. Breach of Contract (Count III)

KPM’s first breach of contract claim against Glenister alleges that she violated the terms

of her 2015 Confidentiality and Non-Competition Agreement with KPM by disclosing

confidential information. To succeed on a breach of contract claim, a plaintiff must “show that

(1) a valid contract between the parties existed, (2) the plaintiff was ready, willing, and able to

perform, (3) the defendant was in breach of the contract, and (4) the plaintiff sustained damages

as a result.” Bose Corp. v. Ejaz, 732 F.3d 17, 21 (1st Cir. 2013).

For the same grounds provided in my decision concerning the trade secret claims (Counts

I and II) against Glenister, I decline to dismiss the breach of contract claim. Glenister has argued

that the Agreement’s restrictive covenant is invalid, see supra Part II.D.5, but not that the

remainder of the Agreement between her and KPM is unenforceable. Therefore, where KPM has

plausible pled that a valid contract existed, and Glenister breached the confidentiality

requirement of that contract to divert sales away from KPM to Blue Sun, and KPM was injured,

KPM has sufficiently pled breach of contract. In particular, KPM’s allegation that Glenister

informed KPM in July 2020 that the $61,000 sales opportunity to AgriKing she had been

pursuing for the past ten months had lapsed because AgriKing had lost funding or had no budget

is curious, for if Glenister had truly been courting AgriKing on KPM’s behalf for ten months it

seems likely she would be aware of AgriKing’s April order with Blue Sun, and would have

informed KPM.

Glenister’s motion to dismiss Count III is denied.

3. Violation of Good Faith and Fair Dealing (Count IV)

Under Massachusetts law, “the covenant of good faith and fair dealing is implied in every

contract,” UNO Rests., Inc. v. Boston Kenmore Realty Corp., 441 Mass. 376, 385 (2004), and

provides that “neither party shall do anything that will have the effect of destroying or injuring

the rights of the other party to receive the fruits of the contract.” Anthony's Pier Four, Inc. v.

HBC Associates, 411 Mass. 451, 471–72 (1991).

While there are other explanations for AgriKing, AgriLife, and Panhandle Milling’s

decisions to purchase analyzers from KPM rather than BlueSun, the coinciding timing of their

decisions with Glenister’s transition from KPM to Blue Sun, and the fact that Glenister had

solicited all three on behalf of KPM, creates a plausible allegation that Glenister used the

confidential information she was barred from disclosing for Blue Sun’s benefit to poach those

three customers. At the motion to dismiss stage, KPM has pleaded, albeit barely, enough to state

a claim.

Glenister’s motion to dismiss Count IV is denied.

4. Breach of Duty of Loyalty (Count V)

A duty of loyalty only attaches to employees who occupy positions of trust and

confidence, which includes corporate officers, executives, partners, directors, and extends to

certain rank and file employees who are given access to confidential information, such as law

firm associates. TalentBurst, Inc. v. Collabera, Inc., 567 F.Supp.2d 261, 265-66 (D. Mass.

2008).

Glenister joined KPM as an entry level field sales representative. (Docket No. 1-2 at 2).

Because she was not an executive, officer, or director of KPM, an employee’s duty of loyalty

does not apply unless she occupied “a position of trust and confidence.” Advanced Micro

Devices, Inc. v. Feldstein, 951 F.Supp.2d 212, 220 (D. Mass. 2013). Nevertheless, as a sales

representative, it is likely that Glenister had access to KPM’s confidential information, including

customer lists and product information, which is supported by the fact that the Confidentiality

and Non-Competition Agreement that KPM required her to sign as a condition of her

employment barred her from disclosing any customer information. (Docket No. 1-2 at 5). Since

KPM is “a high-tech business that generates much of its revenue from intellectual property” it is

likely that Glenister, who was tasked with selling this equipment, “had access to confidential

information of substantial value.” Feldstein at 220. While at summary judgment KPM will have

to prove that a fiduciary duty did attach to Glenister, Count V survives the motion to dismiss.

Glenister’s motion to dismiss Count V is denied.

5. Breach of Contract (Count VI)

KPM’s second breach of contract claim against Glenister alleges that she violated the

restrictive covenant in her 2015 Non-Disclosure and Non-Competition Agreement by competing

with her former employer. Glenister argues that the restrictive covenant is invalid under

Connecticut law, which governs the Agreement, because it prevents her from practicing her

occupation, is impermissibly overbroad in temporal and geographic scope, and exceeds what is

necessary to protect KPM’s legitimate interests.

For a period of two years following the end of her employment with KPM, § 2 of the

Agreement bars Glenister from, directly or indirectly: 1) competing with KPM or its affiliates; 2)

consulting or advising, owning, managing, operating, financing, joining, controlling, or having

any connection, in any manner, with any business related to KPM’s NIR spectroscopy business;

3) any contact, solicitation, or consulting business with any KPM client or affiliate she worked

with or solicited, including any active KPM prospects that she worked with or solicited in the 12

months prior to her departure from KPM; 4) inducing any KPM customer or employee to leave

KPM; and 4) interfering with any KPM contracts or relationships with KPM’s customers or

suppliers. (Docket No. 1-2 at 6) (emphasis added). These restrictions apply within any

geographic area in which KPM and its affiliates conduct business, though the contract does not

define the scale of a geographic area or list the geographical areas where KPM operates. (Id.).

Significantly, the provision permits Glenister to work in the NIR industry in a role which would

not directly or indirectly compete with KPM’s NIR business. (Id.).

The Connecticut Supreme Court has specified five criteria for evaluating the

reasonableness of a restrictive covenant:

“(1) the length of time the restriction is to be in effect; (2) the geographical area

covered by the restriction; (3) the degree of protection afforded to the interest of

the party in whose favor the covenant is made; (4) the restrictions imposed on the

employee’s ability to pursue his occupation; and (5) the potential for undue

interference with the interests of the public.”

Scott v. General Iron & Welding Co., 368 A.2d 111, 114–15 (Conn. 1976). This five-prong test

is disjunctive, meaning that a finding of unreasonableness in any one of the criteria is enough to

render the covenant unenforceable. New Haven Tobacco Co., Inc. v. Perrelli, 528 A.2d 865, 867

(Conn. App. Ct. 1989). The party challenging the covenant bears the burden of proving that the

restriction is not enforceable. Fairfield County Bariatrics and Surgical Associates, P.C. v.

Ehrlich, 2010 WL 1375397 (Conn. Super. Ct. 2010).

(a) Temporal and Geographic Restrictions

Time and geographic restrictions in a covenant not to compete are enforceable if they are

“reasonably limited and fairly protect the interests of both parties.” Robert S. Weiss &

Associates, Inc. v. Weiderlight, 546 A.2d 216, 220 (Conn. 1988). “[T]ime and geographical

restrictions are to be reviewed as intertwined considerations when a determination is made on the

reasonableness of the limitations of an employee's post-termination activities.” Van Dyck

Printing Co. v. DiNicola, 648 A.2d 898, 902 (Conn. Sup. Ct. 1993) (citing Weiderlight, 546 A.2d

at 546). A restriction with a large geographic scope with a short duration may be reasonable,

while one that covers a small area for a longer duration may be reasonable. Id. Generally, the

application of a restrictive covenant must be confined to a geographical area and length of time

which are reasonable in view of the particular situation. See Scott, 368 A.2d at 115 (emphasis

added). Often facts beyond what are available at the motion to dismiss stage are required to

determine the reasonableness of time and geographic limitations. See, e.g., Southern Home Care

Servs., Inc. v. Visiting Nurse Servs., Inc. of Southern Connecticut, 2014 WL 12756150 at *3 (D.

Conn. 2014) (“[F]uther factual development is required to determine the import of the lack of

express time and geographical limitation in the Agreement.”). I find that to be the case here.

The Agreement prohibits Glenister from competing with KPM or its affiliates within

“any geographic area” in which KPM and its affiliates do business. (Docket No. 1-2 at 6). In the

absence of information that more precisely defines that geographic area, its breadth cannot be

determined. Given the interconnectedness of the geographic and temporal restrictions, the

validity of the two-year restriction is also an open question. Accordingly, further fact finding is

required to reach a conclusion on the reasonableness of the Agreement’s geographic and

temporal restrictions.

(b) Protection of KPM’s Legitimate Interests

Connecticut courts have invalidated restrictive covenants that bar former employees from

having any connection to businesses that may compete with their former employer. See, e.g.,

DeLeo v. Equale & Cirone, LLP, 202 Conn.App. 650, 679-83, n.15 (Conn. App. Ct. Feb. 23,

2021); (Sylvan R. Shemitz Designs, Inc. v. Brown, 2013 WL 6038263, at *8 (Conn. Super. Ct.

Oct. 23, 2013) (“The court finds particularly problematic that the noncompetition clause

specifically prohibits any employment by a “Specialized Lighting Business,” regardless of the

importance of the position or its relatedness to those duties which the employee held with the

plaintiff.”).

§ 2 effectively precludes Glenister from working as a sales representative in the NIR

spectroscopy industry, which has been her occupation for the past five years. Under § 2, she

cannot work for any NIR spectroscopy company in any capacity if that company competes

indirectly or directly with KPM, even if she only solicits clients that she had no contact with

during her time at KPM. Because the Scott factors are disjunctive, the unreasonableness of the

protection afforded to KPM by this provision is sufficient to render the restrictive covenant of

the Agreement unenforceable. Perrelli, 528 A.2d at 867.

Glenister’s motion to dismiss Count VI is granted.

6. Conversion (Count VIII)

To prevail on a claim for conversion under Massachusetts law, a “plaintiff must show

that (1) the defendant intentionally and wrongfully exercised control or dominion over the

personal property; (2) the plaintiff had an ownership or possessory interest in the property at the

time of the alleged conversion; (3) the plaintiff was damaged by the defendant's conduct; and (4)

if the defendant legitimately acquired possession of the property under a good-faith claim of

right, the plaintiff's demand for its return was refused.” United States v. Peabody Const. Co.,

Inc., 392 F.Supp.2d 36, 37 (D. Mass 2005) (citing Evergreen Marine Corp. v. Six Consignments

of Frozen Scallops, 4 F.3d 90, 95 (1st Cir. 1993)). Following the legal analysis in Sentient Jet,

LLC v. Apollo Jets, LLC, 2014 WL 1004112 at *2 (D. Mass. March 17, 2014), I decline to

dismiss KPM’s conversion claim that Glenister misappropriated KPM’s confidential information

under the merger doctrine. KPM did not allege the specific means by which Glenister

transmitted this customer information to Blue Sun. Because discovery will reveal how any

confidential information was transmitted to Blue Sun, dismissing the claim now would be

premature. Id.

Glenister’s Motion to Dismiss Count VIII is denied.

7. Unjust Enrichment (Count IX)

Glenister’s motion to dismiss Count IX is granted.

E. Gregory Israelson

KPM has alleged scant facts about Israelson. In sum, Israelson: 1) worked for KPM as a

Sales Engineer from March 2016 to March 2021 (Compl. ¶ 34); 2) had access to KPM’s

confidential information and trade secrets, including its valuable datasets, source code and/or

customer files (Id.); 3) is now employed by Blue Sun (Id.); and 4) sent an email from a Blue Sun

email address bearing his first name (greg@bluesunscientific.com) to his KPM email address on

July 29, 2020 containing a link to a software tool used for remote copying of files, with a request

“to join a session.” (Docket No. 1-9). Per KPM, Israelson’s “sole purpose in sending this

software copying tool to himself at his kpmanalytics.com email address was to permit the

copying of files from KPM to Blue Sun without KPM’s authorization.” (¶ 43).

1. Defend Trade Secrets Act (Count I) and Misappropriation of Trade Secrets (Count II)

To establish a claim for misappropriation of trade secrets, a plaintiff must show that: (1)

the information at issue qualifies as a trade secret, (2) it “took reasonable steps to preserve the

secrecy of the information,” and (3) “the defendant used improper means, in breach of a

confidential relationship, to acquire and use the trade secret.” Incase Inc. v. Timex Corp., 488

F.3d 46, 52 (1st Cir. 2007).

KPM has plausibly alleged that Israelson had access to its confidential information or

trade secrets, but it has not alleged that Israelson ever actually acquired and used any trade

secrets. It has not alleged that Israelson responded to the greg@bluesunscientific.com email or

used the copying tool to take files without KPM’s knowledge or connected any information Blue

Sun now possesses to information that within Israelson’s reach in July 2020.

Moreover, KPM’s report of its internal investigation into Robert Gajewski shows that

KPM has the ability to digitally track whenever its employees access or modify electronic files

within its calibration database. (See Compl. ¶¶ 70, 72). If KPM knows the date that Israelson

received the invitation to “join a session” of the software copying tool, then the Court presumes

based on the pleadings that KPM should also know whether Israelson accessed or modified any

confidential files related to its calibration database on that same date. If Israelson worked in a

sales capacity like Glenister rather than in a technical capacity with the calibration database like

Robert Gajewski, then there should be allegations about his contacts with KPM clients to

substantiate the trade secrets claim, as there were with Glenister. The offer letter he received

from KPM indicates that he might have done both technical and sales-oriented work. (Docket

No. 1-3 at 2). KPM’s silence in both regards is conspicuous.

The additional fact that an individual with the same first name as Israelson possessed a

Blue Sun email address while Israelson was employed by KPM does not compensate for the lack

of evidence that Israelson ever acquired and used a KPM trade secret.

Israelson’s motion to dismiss Counts I and II is granted.

2. Breach of Contract (Count III)

Just as the Complaint contains no allegations that Israelson used and acquired a KPM

trade secret, it contains no allegations no allegations that Israelson committed any conduct which

breached the terms of his March 2016 Confidentiality and Non-Competition Agreement.

Israelson’s motion to dismiss Count III is granted.

3. Violation of Good Faith and Fair Dealing (Count IV)

For the reasons previously provided, Israelson’s motion to dismiss Count IV is granted.

4. Breach of Duty of Loyalty (Count V)

For the reasons previously provided, Israelson’s motion to dismiss Count V is granted.

5. Breach of Contract (Count VI)

KPM also claims that Israelson’s current employment with Blue Sun violates the

restrictive covenant in his 2016 Confidentiality and Non-Competition Agreement with KPM.

Israelson’s noncompete agreement is identical to the provision in Glenister’s agreement, which I

have already held is invalid under Connecticut law. See supra Part II.D.5. Accordingly,

Israelson’s Motion to Dismiss Count VI is granted.

6. Conversion (Count VIII)

For the reasons previously provided, Israelson’s motion to dismiss Count V is granted.

7. Unjust Enrichment (Count IX)

Israelson’s motion to dismiss Count IX is granted.

F. Irvin Lucas

KPM alleges that Lucas disclosed KPM’s confidential information after he left KPM in

May 2019 and began working for Blue Sun..

Lucas worked for KPM in an undefined capacity from January 5, 2015, to May 7, 2019,

during which time he had access to KPM’s trade secrets and confidential information; he became

employed by Blue Sun at some point between May 2019 and January 2020 and is now Blue

Sun’s President. (Compl. ¶ 35; Docket No. 1-4). When Lucas left KPM, he “wiped clean” his

company-issued computer. (Id.).

On January 17, 2020, KPM client Olam sent an email to Robert Gajewski’s KPM email

address (Gajewski was still employed by KPM) and Lucas at irvin@bluesunscientific.com to

troubleshoot an issue with Olam’s KPM analyzer. (Docket No. 1-12 at 8). The Olam contact,

Dr. Fong, noted that he had received Gajewski and Lucas’ contact information from a colleague,

but did not explain why Olam would be reaching out to KPM and an employee of its competitor

for help with a KPM analyzer. Gajewski responded to Dr. Fong privately, removing Lucas from

the ensuing email chain. (Id. at 2-7).

On March 30, 2020, a manager for KPM distributor ProAnalytics emailed Gajewski and

Lucas an order form for $900 worth of analyzer replacement parts. (Docket No. 1-15). The

manager sent the order form directly to Gajewski, but she copied Lucas as a secondary recipient,

and the email salutation reads: “Hi Rob/Irvin, Hope you are both well. Please find attached new

order for lamps . . .” (Id. at 2). The purchase order identifies Blue Sun as the supplier, and lists a

phone number with a Maryland area code and info@bluesunscientific.com as the supplier

contact. (Id.). The order description notes that Rob Gajewski provided the reference quote for

the order. (Id. at 6).

1. Defend Trade Secrets Act (Count I) and Misappropriation of Trade Secrets (Count II)

To establish a claim for misappropriation of trade secrets, a plaintiff must show that: (1)

the information at issue qualifies as a trade secret, (2) it “took reasonable steps to preserve the

secrecy of the information,” and (3) “the defendant used improper means, in breach of a

confidential relationship, to acquire and use the trade secret.” Incase Inc. v. Timex Corp., 488

F.3d 46, 52 (1st Cir. 2007).

The Court is mindful that “trade secret misappropriation may be demonstrated by

circumstantial evidence, such as access to the trade secret by the misappropriating party and

similarity between the secret and the defendant’s design . . .” Contour Design, Inc v. Chance

Mold Steel Co., Ltd., 693 F.3d 102, 109-110 (1st Cir. 2012). To be sure, Lucas’ act of wiping his

KPM-issued company computer blank together with the knowledge that seven months later

Lucas became Blue Sun’s President, raises the Court’s suspicion. But KPM has alleged no

information about what files Lucas had access to on his company computer, and whether

information from any of those files subsequently appears to have ended up in the hands of Blue

Sun.

As to the Olam email, KPM alleges that there is no “legitimate reason” why one of its

customers would email a KPM employee and anyone else at Blue Sun about KPM equipment, as

Dr. Fong did when he emailed Robert Gajewski and Irvin Lucas at irvan@bluesunscientific.com

to ask for help with his KPM analyzer, implying that Lucas had been working behind the scenes

to poach Olam from Blue Sun, and that work must necessarily have involved Lucas’ disclosure

of KPM trade secrets. But Lucas never responded, and there is no evidence in the email itself

which indicates any bad acts on Lucas’ part.

Wiping his KPM computer and his subsequent employment at Blue Sun alone do not

state a claim for trade secret misappropriation, but the March 2020 email from a KPM customer

to Gajewski and Lucas submitting an order for Blue Sun equipment is evidence that Lucas used

confidential KPM information he learned from Gajewski or during his time at KPM for an

improper purpose—here, to divert a $900 sale that would otherwise go to KPM to Blue Sun.

In a somewhat similar case, another court in this District denied injunctive relief for trade

secret misappropriation against the plaintiff’s consultant, who had downloaded what the court

determined were likely trade secrets from the plaintiff’s cloud-based DropBox electronic storage

system onto his personal computer and then “delinked” his personal computer so that the

plaintiff could not retrieve the client files that the consultant had downloaded. Maine Pointe,

LLC v. Collins, 2018 WL 5303038 at *5-6 (D. Mass. Oct. 25, 2018). The plaintiff argued that

the act of “delinking” was overwhelming circumstantial evidence that the consultant intended to

use its trade secrets for the benefit of his new employer and merited injunctive relief, just as

KPM has emphasized Lucas’ act of wiping his KMP computer. Id. In Maine Pointe the district

court denied injunctive relief, noting that the plaintiff had not established a likelihood of success

in proving that the consultant intended to convert the trade secrets for his own use where there

was no evidence that the consultant had made copies or used the files beyond the scope of his

consultancy agreement. Id. at 6. Not only does KPM have a lower burden to proof opposing a

motion to dismiss than the aggrieved corporation in Maine Pointe, it has evidence through the

ProAnalytics correspondence and the order that the defendant seeking dismissal actually used the

confidential information he had access to.

Construing the ProAnalytics email, Lucas’ act of wiping his computer clean before

leaving KPM to obscure the transfer or taking of any confidential information, and his

subsequent employment with Blue Sun in the most favorable light possible to KPM, there is

enough circumstantial evidence to state a claim for misappropriation.

Lucas’ motion to dismiss Counts I and II is denied.

2. Breach of Contract (Count III)

KPM alleges that Lucas breached the confidentiality terms of his January 2015

Confidentiality and Non-Competition Agreement (Docket No. 1-4) with KPM by disclosing its

trade secrets or confidential information, as confidential information is defined within the

Agreement. To succeed on a breach of contract claim, a plaintiff must “show that (1) a valid

contract between the parties existed, (2) the plaintiff was ready, willing, and able to perform, (3)

the defendant was in breach of the contract, and (4) the plaintiff sustained damages as a result.”

Bose Corp. v. Ejaz, 732 F.3d 17, 21 (1st Cir. 2013).

Lucas has not argued that the Agreement is invalid, but instead objects that KPM has not

alleged the circumstances of the alleged breach. I find that the 2015 Agreement was still in place

in March 2020, when KPM has credibly alleged that Lucas was involved in diverting a sale of

replacement parts or equipment from a KPM customer to Blue Sun. KPM has credibly alleged

that to divert the sale, Lucas would have needed to use confidential information shielded by the

Agreement, including information about KPM’s customers, prices, and technology.

Lucas’ motion to dismiss Count III is denied.

3. Violation of Good Faith and Fair Dealing (Count IV)

“To prevail on an implied duty of good faith and fair dealing claim, “a plaintiff must

prove that there existed an enforceable contract between the two parties and that the defendant

did something that had the effect of destroying or injuring the right of [the plaintiff] to receive

the fruits of the contract.” Boyle v. Douglas Dynamics, LLC, 292 F.Supp.2d 198, 209-10 (D.

Mass. 2003). “[T]he implied covenant of good faith and fair dealing governs conduct of parties

after they have entered into a contract; without a contract, there is no covenant to be breached.”

Massachusetts Eye & Ear Infirmary, 412 F.3d at 230. “Conceptually, claims for breach of the

implied covenant of good faith and fair dealing are distinct from simple breach of contract claims

and require additional factual allegations of unfairly leveraging the contract terms for undue

economic advantage.” Christensen v. Kingston Sch. Comm., 360 F.Supp.2d 212, 229 (D. Mass.

2005).

As with the breach of contract claim (Count III), I find that the March 2020 emails do

state a claim that Lucas violated the duty of good faith and fair dealing which he owed to KPM,

his former employer, under the 2015 Agreement. That he (together with Robert Gajewski)

successfully diverted the ProAnalytics order to Blue Sun shows that he leveraged the

confidentiality terms of his agreement for undue economic advantage by causing the exact harm

that KPM sought to prevent when it attained his consent to enter into the agreement in 2015.

Lucas’ motion to dismiss Count IV is denied.

4. Breach of Duty of Loyalty (Count V)

Because KPM did not provide Lucas’ title or scope of work, it is unclear whether he was

an executive, officer, or director to which a fiduciary duty attaches. However, the fact that KPM

required Lucas to enter into a Confidentiality and Non-Competition Agreement demonstrates

that he likely occupied “a position of trust and confidence” or had such access to confidential

information that the duty does attach. See Advanced Micro Devices, Inc. v. Feldstein, 951

F.Supp.2d 212, 220 (D. Mass. 2013). Since KPM is “a high-tech business that generates much

of its revenue from intellectual property” it is likely that like the other Individual Defendants,

Lucas “had access to confidential information of substantial value.” Feldstein at 220. While at

summary judgment KPM will have to prove that a fiduciary duty did attach to Lucas, KPM has

alleged enough to allow the claim to move forward.

Lucas’ motion to dismiss Count V is denied.

5. Breach of Contract (Count VI)

KPM also claims that Lucas’ current employment with Blue Sun violates his January

2015 Confidentiality and Non-Competition Agreement with KPM. The restrictive covenant in

Lucas’ Agreement is identical to the provisions in Glenister and Israelson’s agreements, which I

have already held are invalid under Connecticut law. See supra Part II.D.5. Accordingly,

Lucas’ motion to dismiss Count VI is granted.

6. Conversion (Count VIII)

To prevail on a claim for conversion under Massachusetts law, a “plaintiff must show

that (1) the defendant intentionally and wrongfully exercised control or dominion over the

personal property; (2) the plaintiff had an ownership or possessory interest in the property at the

time of the alleged conversion; (3) the plaintiff was damaged by the defendant's conduct; and (4)

if the defendant legitimately acquired possession of the property under a good-faith claim of

right, the plaintiff's demand for its return was refused.” United States v. Peabody Const. Co.,

Inc., 392 F.Supp.2d 36, 37 (D. Mass 2005) (citing Evergreen Marine Corp. v. Six Consignments

of Frozen Scallops, 4 F.3d 90, 95 (1st Cir. 1993)).

Pursuant to Sentient Jet, LLC v. Apollo Jets, LLC, 2014 WL 1004112 at *2 (D. Mass.

March 17, 2014), I decline to dismiss KPM’s conversion claim that Lucas misappropriated

KPM’s confidential information concerning its client relationship with ProAnalytics under the

merger doctrine. Although KPM did not allege the specific means by which Lucas transmitted

customer information to Blue Sun, dismissing the claim would be premature before discovery on

the mechanics of the exchange. Id.

For the reasons previously stated, Lucas’ motion to dismiss Count VIII is denied.

7. Unjust Enrichment (Count IX)

Lucas’ motion to dismiss Count IX is granted.

G. Philip Ossowski

KPM has asserted eight claims (Counts I, II, III, IV, V, VI, VIII, and IX) against Philip

Ossowski despite an utter absence of allegations against him. Ossowski began working for KPM

on March 26, 2019, at which time he executed a Non-Competition, Non-Solicitation and

Confidentiality Agreement. (Docket No. 1-5). KPM claims that during Ossowski’s

employment, he had access to KPM’s trade secrets and confidential information. (Compl. ¶ 36).

Finally, KPM states that Ossowski left KPM on January 29, 2021 and now works for Blue Sun.

(Id.). Missing are any claims about any act or omission on the part of Ossowski during or after

his KPM employment connected to Blue Sun or any KPM trade secret, confidential information,

or customer.

1. Counts I, II, III, IV, VI, VIII, and IX

I agree that the facts alleged are entirely insufficient to state any contract or statutory

claims based on Ossowski’s use, disclosure, or misappropriation of KPM’s trade secrets or

confidential information. KPM has not alleged whether or how Ossowski violated his non-

disclosure agreement or acted on behalf of Blue Sun while employed by KPM, or after his

departure from KPM. Ossowski was not party to any of the email communications between

certain Individual Defendants and KPM customers detailed in the Complaint, and there are no

allegations tying him to Blue Sun’s Application Notes published on Blue Sun’s website or lost

customers and sales opportunities. Simply put, there is nothing connecting Ossowski to the use

of KPM’s trade secrets and confidential information by himself or any other party. Accordingly,

Ossowski’s motion to dismiss is granted as to Counts I, II, III, IV, VI, VIII, and IX.

2. Breach of Contract (Count VI)

KPM alleges that Ossowski’s current employment with Blue Sun breaches his April 10,

2019 Non-Competition, Non-Solicitation and Confidentiality Agreement with KPM. (Docket

No. 1-5). Unlike Glenister, Lucas, and Israelson’s agreements, Ossowski’s contract contains

materially different terms and is governed by Massachusetts law.

As KPM appeared to concede at the hearing, Ossowski’s Agreement violates the

Massachusetts Noncompetition Agreement Act, M. G. L. c. 149, § 24L. The Act sets out eight

requirements for a noncompetition agreement to be legally binding: Ossowski’s Agreement

violates the first and seventh conditions. The first requirement mandates that the agreement

“expressly state that the employee has the right to consult with counsel prior to signing.” Id. §

24L(b)(i). The seventh requirement mandates that the agreement be supported by “a garden

leave clause or other mutually-agreed upon consideration between the employer and the

employee.” Id. § 24L(b)(vii). Ossowski’s agreement does not expressly state that Mr. Ossowski

has the right to consult with counsel prior to signing, and it does not contain a garden leave

clause or another mutually agreed upon form of consideration. Id.

Ossowski’s motion to dismiss Count VI is granted.

Conclusion

For the reasons set forth above:

 Corporate Defendants’ motion to dismiss (Docket No. 20) for lack of personal

jurisdiction is denied; their motion to dismiss for failure to state a claim is also

denied except as to the claim for unjust enrichment (Count IX), which is granted.

 Robert Gajewski’s motion to dismiss (Docket No. 27) is denied in part and granted

in part.

 Michelle Gajewski’s motion to dismiss for improper venue (Docket No. 25) is

granted.

 Rachael Glenister’s motion to dismiss (Docket No. 29) is denied in part and

granted in part.

 Arnold Eilert’s motion to dismiss (Docket No. 23) is denied in part and granted in

part.

 Gregory Israelson’s motion to dismiss (Docket No. 31) is granted.

 Irvin Lucas’ motion to dismiss (Docket No. 33) is denied in part and granted in

part.

 Philip Ossowski’s motion to dismiss (Docket No. 35) is granted.

SO ORDERED.

/s/ Timothy S. Hillman

TIMOTHY S. HILLMAN

DISTRICT JUDGE

Appendix

Corporate Defendants

Count Claim Order

12(b)(2) - Personal Jurisdiction Deny

I Defend Trade Secrets Act Deny

II Misappropriation of Trade Secrets Deny

VII Tortious Interference w/ Contr. Rel. Deny

VIII Conversion Deny

IX Unjust Enrichment Grant

X M. G. L. c. 93A, § 11 Deny

Robert Gajewski

Count Claim Order

I Defend Trade Secrets Act Deny

II Misappropriation of Trade Secrets Deny

III Breach of Contract Deny

IV Good Faith and Fair Dealing Deny

V Duty of Loyalty Deny

VIII Conversion Deny

IX Unjust Enrichment Grant

Michelle Gajewski

Count Claim Order

I Defend Trade Secrets Act Grant

II Misappropriation of Trade Secrets Grant

III Breach of Contract Grant

IV Good Faith and Fair Dealing Grant

V Duty of Loyalty Grant

VIII Conversion Grant

IX Unjust Enrichment Grant

Arnold Eilert

Count Claim Order

I Defend Trade Secrets Act Deny

II Misappropriation of Trade Secrets Deny

III Breach of Contract Deny

IV Good Faith and Fair Dealing Deny

V Duty of Loyalty Deny

VIII Conversion Grant

IX Unjust Enrichment Grant

Rachel Glenister

Count Claim Order

I Defend Trade Secrets Act Deny

II Misappropriation of Trade Secrets Deny

III Breach of Contract Deny

IV Good Faith and Fair Dealing Deny

V Duty of Loyalty Deny

VI Breach of Contract Grant

VIII Conversion Deny

IX Unjust Enrichment Grant

Gregory Israelson

Count Claim Order

I Defend Trade Secrets Act Grant

II Misappropriation of Trade Secrets Grant

III Breach of Contract Grant

IV Good Faith and Fair Dealing Grant

V Duty of Loyalty Grant

VI Breach of Contract Grant

VIII Conversion Grant

IX Unjust Enrichment Grant

Irvin Lucas

Count Claim Order

I Defend Trade Secrets Act Deny

II Misappropriation of Trade Secrets Deny

III Breach of Contract Deny

IV Good Faith and Fair Dealing Deny

V Duty of Loyalty Deny

VI Breach of Contract Grant

VIII Conversion Deny

IX Unjust Enrichment Deny

Philip Ossowski

Count Claim Order

I Defend Trade Secrets Act Grant

II Misappropriation of Trade Secrets Grant

III Breach of Contract Grant

IV Good Faith and Fair Dealing Grant

V Duty of Loyalty Grant

VI Breach of Contract Grant

VIII Conversion Grant

IX Unjust Enrichment Grant