SCHABACKER v. FERENS

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

MARCUS SCHABACKER and :

EMERGENCY CARE RESEARCH :

INSTITUTE doing business as ECRI, :

Plaintiffs, :

:

v. : CIVIL NO. 22-3778

:

STEVEN FERENS, :

Defendant. :

MEMORANDUM OPINION

Scott, J. February 21, 2024

Plaintiffs Emergency Care Research Institute d/b/a/ ECRI (“ECRI”) and its CEO and

President, Marcus Schabacker (“Dr. Schabacker”) assert claims against Steven Ferens, a former

ECRI employee for defamation, breach of the non-disparagement and return of property provisions

of Mr. Ferens’s severance agreement, intentional infliction of emotional distress (“IIED”), and for

violations of the Pennsylvania Uniform Trade Secrets Act (“PAUTSA”), the Federal Defense of

Trade Secrets Act (“DTSA”) and the Lanham Act. The plaintiffs allege that Mr. Ferens, who was

fired from his position for insubordination, defamed them on the internet when he posted,

anonymously, that Dr. Schabacker had been accused of “sexual harassment”; sent anonymous,

threatening text messages to several senior officers at ECRI who were involved in his firing, which

threatened physical and emotional harm to them and their children and families; and

misappropriated ECRI’s confidential, proprietary pricing information when he downloaded the

contents of his ECRI-issued laptop onto a flash drive and transferred the contents to his personal

computer.

Mr. Ferens moves for summary judgment on all of the plaintiffs’ claims. For the reasons

that follow, the Court will grant Mr. Ferens’s motion as to the claim brought under the Lanham

Act, and will deny his motion as to the rest of the plaintiffs’ claims.

BACKGROUND

ECRI provides healthcare products and services, including patient safety guidance, price

benchmarking, and value analysis for medical products and equipment, to healthcare providers.

See Am. Compl. (ECF No. 34) ¶ 21. Dr. Schabacker, is the President and CEO of ECRI, and Mr.

Ferens is a former high-level ECRI employee who served as Area Vice President until his

termination effective October 4, 2021. Id. ¶¶ 20, 23.

The plaintiffs allege that Mr. Ferens is a disgruntled, former high-ranking employee of

ECRI who was fired because he “flew off the handle” in disrespectful and unprofessional emails

directed to ECRI’s President and CEO and other members of ECRI’s senior leadership team.

Despite his insubordination, ECRI offered Mr. Ferens a severance agreement, which included clear

and unambiguous terms mandating that he return all ECRI Property, and refrain from disparaging,

criticizing, impugning, damaging, or assailing the reputation of ECRI and its employees and

officers, in exchange for twenty weeks of severance pay. He executed the agreement on October

8, 2021.

The plaintiffs allege that only one month later, on November 5, 2021, Mr. Ferens posted

the following review on Glassdoor.com, a job and recruiting website where current and former

employees anonymously review companies: “Cons -- CEO is now being accused of sexual

harassment. This guy is a train wreck that has destroyed the culture in the 3 years he has been

here. Sales stink. People are leaving.” Am. Compl. ¶ 52; See Pls.’ Memo of Law in Support of

Their Resp. in Opp’n to Def.’s Mot. for Summ. J. (ECF No. 45) (“Pls.’ Br.”) at 22. Although Mr.

Ferens posted it anonymously, he has since acknowledged that he made the post and he voluntarily

took it down four days later. Br. in Support of Def. Steven Ferens’ Mot. for Summ. J. (ECF No.

43-1) (“Def.’s Br.”) at 1.

The plaintiffs further allege that from June 2021 through May 2022, Mr. Ferens sent

anonymous, profanity-filled text messages to Dr. Schabacker, Theresa Tavernier, Chief of Human

Resources, Stuart Morris-Hipkins, Chief of Solutions, and Jim Robertson, Vice President of Sales,

which threatened physical and emotional harm to the ECRI executives and their children and

families. Am. Compl. ¶¶ 85–90. All of the recipients of these texts were directly involved in Mr.

Ferens’s termination and severance determinations.

Additionally, Mr. Ferens sent text messages to a former employee of ECRI that disparaged

ECRI and its employees, stating that ECRI “screwed” him, treated him like “shit,” and that ECRI’s

officers were “bad people” and “idiots.” Am. Compl. ¶¶ 104–105.

According to the amended complaint, just before he left the company, Mr. Ferens

downloaded the contents of his ECRI-issued laptop onto a flash drive and transferred the contents

to his personal computer, which included ECRI’s confidential, proprietary “price calculator.”

STANDARD OF REVIEW

Summary judgment is appropriate “if the movant shows there is no genuine dispute as to

any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a).

Judgment will be entered against a party who fails to sufficiently establish any element essential

to that party’s case and who bears the ultimate burden of proof at trial. See Celotex Corp. v.

Catrett, 477 U.S. 317, 322 (1986).

The initial burden of demonstrating that there are no genuine issues of material fact falls

on the moving party. Fed. R. Civ. P. 56(a). Once the moving party has met its burden, the

nonmoving party must counter with “specific facts showing that there is a genuine issue for trial.”

Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citation omitted).

“A dispute about a material fact is ‘genuine’ only ‘if the evidence is such that a reasonable jury

could return a verdict for the nonmoving party.’” Capps v. Mondelez Glob., LLC, 847 F.3d 144,

151 (3d Cir. 2017) (citation omitted). The nonmovant must show more than the “mere existence

of a scintilla of evidence” for elements on which she bears the burden of production. Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 252 (1986). “[O]nly evidence sufficient to convince a

reasonable factfinder” merits consideration at this stage. Fowler v. AT & T, Inc., 19 F.4th 292,

299 (3d Cir. 2021) (quoting Blunt v. Lower Merion Sch. Dist., 767 F.3d 247, 265 (3d Cir. 2014)).

Bare assertions, conclusory allegations or suspicions are not sufficient to defeat summary

judgment. Fireman’s Ins. Co. v. DuFresne, 676 F.2d 965, 969 (3d Cir. 1982). “Where the record

taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no

‘genuine issue for trial.’” Matsushita, 475 U.S. at 587 (citation omitted).

In considering the motion, we draw all reasonable inferences in the nonmovant’s favor.

SodexoMAGIC, LLC v. Drexel Univ., 24 F.4th 183, 204 (3d Cir. 2022). Disagreements over what

inferences may be drawn from the facts, even undisputed ones, preclude summary judgment. Ideal

Dairy Farms, Inc. v. John Labatt, Ltd., 90 F.3d 737, 744 (3d Cir. 1996) (citation omitted).

Credibility determinations, the drawing of legitimate inferences from facts and the weighing of

evidence are matters left to the jury. Anderson, 477 U.S. at 255.

DISCUSSION

Claim for Unfair Competition Under the Lanham Act

In Count I, ECRI brings a federal unfair competition claim for false advertising under §

1125(a)(1)(B) of the Lanham Act, alleging that Mr. Ferens’s “disparaging review” on

Glassdoor.com was false and misleading regarding the status of ECRI’s “sales, employment, and

company culture;” was used to dissuade existing or potential customers or clients from doing

business with ECRI and “has caused or is likely to cause competitive or commercial injury” to

ECRI. Am. Compl. ¶¶ 97–101.

Claims brought under this provision apply only to commercial speech. Farah v. Esquire

Magazine, 736 F.3d 528, 541 (D.C. Cir. 2013). To determine whether speech is commercial, the

court considers three factors: “(1) is the speech an advertisement; (2) does the speech refer to a

specific product or service; and (3) does the speaker have an economic motivation for the speech.”

Facenda v. N.F.L. Films, Inc., 542 F.3d 1007, 1017 (3d Cir. 2008) (quoting U.S. Healthcare, Inc.

v. Blue Cross of Greater Philadelphia, 898 F.2d 914, 933 (3d Cir. 1990)). At its “core,”

commercial speech “proposes a commercial transaction.” Bolger v. Youngs Drug Prods. Corp.,

463 U.S. 60, 66 (1983) (citation omitted).

Here, the Glassdoor.com post was not an advertisement, did not promote a product, and

was not part of a proposed commercial transaction. At most, it was a review or rating of ECRI.

Reviews and ratings are not usually considered to be commercial speech actionable under the

Lanham Act. See GOLO, LLC v. HighYa, LLC, 310 F. Supp. 3d 499, 507 (E.D. Pa. 2018) (editorial

reviews of diet product by consumer review companies did not qualify as commercial speech for

a Lanham Act claim); Crash Proof Ret., LLC v. Price, 533 F.Supp.3d 227 (E.D. Pa. 2021) (article

critical of investment strategy was not commercial speech). Therefore, Mr. Ferens’s post on

Glassdoor.com does not qualify as commercial speech, and ECRI’s claim under the Lanham Act

is dismissed with prejudice.

Claim for Intentional Infliction of Emotional Distress

Dr. Schabacker asserts a claim for intentional infliction of emotional distress (“IIED”) in

Count VII. To state an IIED claim, “(1) the conduct must be extreme and outrageous; (2) it must

be intentional or reckless; (3) it must cause emotional distress; [and] (4) that distress must be

severe.” Hoy v. Angelone, 720 A.2d 745, 754 (Pa. 1998). Mr. Ferens argues that Dr. Schabacker

cannot meet his burden to prove the elements of this claim because he has not presented evidence

establishing that Mr. Ferens engaged in the alleged conduct or that the conduct was outrageous

and extreme. He also contends that to be able to recover for emotional distress, Dr. Schabacker is

required to seek medical treatment for the severe emotional distress he claims to have experienced.

The Court disagrees. There is ample evidence from which a jury could find that Mr. Ferens

sent the text messages that threatened Dr. Schabacker and his son, along with other ECRI

executives and their families. A jury could also find that this conduct was “extreme and

outrageous” under Pennsylvania law. Additionally, Dr. Schabacker is not required to seek medical

treatment for his emotional distress as long as he provides competent expert testimony as to his

condition. He has submitted an expert report on his severe emotional distress. Thus, the IIED

claim survives summary judgment, and the defendant’s motion is denied as to this count.

Claim for Defamation

Dr. Schabacker and ECRI assert a claim for defamation in Count IV based on the statement

Mr. Ferens posted on Glassdoor.com, “Cons – CEO is now being accused of sexual harassment”

in November 2021. They allege that the statement was false, and “injured Dr. Schabacker in his

personal, professional, and/or business reputation, and ECRI in its business reputation.” Am.

Compl. ¶¶ 120.

To state a claim for defamation in Pennsylvania, a plaintiff must meet seven elements: “(1)

The defamatory character of the communication. (2) Its publication by the defendant. (3) Its

application to the plaintiff. (4) The understanding by the recipient of its defamatory meaning. (5)

The understanding by the recipient of it as intended to be applied to the plaintiff. (6) Special harm

resulting to the plaintiff from its publication. (7) Abuse of a conditionally privileged occasion.”

Joseph v. Scranton Times L.P., 129 A.3d 404, 424 (Pa. 2015) (quoting 42 Pa. C.S. § 8343(a));

Graboff v. Colleran Firm, 744 F.3d 128, 135 (3d Cir. 2014) (citations omitted).

In an action for defamation libel, i.e., where the defamatory statement was made in writing,

a plaintiff is not required to show “economic harm” or “pecuniary loss” to meet the “special harm”

element in § 8343(a). Joseph, 129 A.3d at 429 n.10 (“Consistent with Restatement (Second) of

Torts § 569, Pennsylvania case law holds that proof of special harm, i.e., monetary damages, is

not a prerequisite to recovery in a defamation libel matter.”). However, to meet the “special harm”

element, a plaintiff must show “actual harm” to his reputation, such as lowering his standing in the

community or deterring third parties from associating or dealing with him. Joseph, 129 A.3d at

429-30. Once the plaintiff shows proof of actual reputational injury, he is then permitted to seek

recovery of damages for other actual injuries, including mental anguish and suffering, and personal

humiliation, and mental anguish and suffering. Id. at 429.

Mr. Ferens contends that the plaintiffs have failed to make out a prima facie case of

defamation because they have adduced no evidence of special harm suffered by the plaintiffs from

the publication. In support of this contention, he disputes the reliability of the Glassdoor.com

View Chart on which plaintiffs rely to claim that 3500 individuals viewed his post as showing how

many people actually viewed the post. Additionally, he points to the plaintiffs’ inability to identify

specific individuals whose perception of ECRI and/or Dr. Schabacker were negatively affected by

viewing the post.

The plaintiffs counter that the large number of views reflected on the View Chart supports

their claim that their reputation was impaired by the post. Additionally, they note that the very

point of the Glassdoor website is to establish a reputation for a work place.

The Court concludes that the plaintiffs have established that there is a genuine dispute of

material fact as to whether Ferens’s post on Glassdoor.com caused damage to their reputation.

Therefore, the plaintiffs have made out a prima facie case of defamation.

Mr. Ferens argues that even if the plaintiffs have established the elements of their

defamation claim, he has an absolute defense because the statement that he posted on

Glassdoor.com was “substantially true.” Def.’s Br. at 16-20. Under 42 Pa. C.S. § 8343(b), if the

plaintiff establishes the elements for a defamation claim, the defendant then has the burden of

proving:

(1) The truth of the defamatory communication;

(2) The privileged character of the occasion on which it was

published; or

(3) The character of the subject matter of defamatory comment as

of public concern.

42 Pa. C.S. § 8343(b). “A defendant may avoid liability for defamation if it shows that its

statements were “substantially true.” Graboff v. Colleran Firm, 744 F.3d 128, 136 (3d Cir. 2014)

(citations omitted).

Mr. Ferens contends that Dr. Schabacker acknowledged at his deposition that Ms.

O’Rourke had accused him of misconduct, which shows that the statement was true. Def.’s Br. at

17. However, the testimony cited by Mr. Ferens1 does not clearly show when she made the

purported “accusations,” nor what the “accusations” were. Thus, the court cannot determine if

they were accusations of sexual harassment.

Mr. Ferens also relies on evidence that Kate O’Rourke, a former ECRI salesperson, was

“considering” filing a sexual harassment claim against Dr. Schabacker before Mr. Ferens posted

his statement on Glassdoor.com. He points to Ms. O’Rourke’s testimony that she consulted with

her lawyers, whom she had hired to negotiate a severance agreement for her,2 about whether she

could pursue a sexual harassment claim against Dr. Schabacker based on instances where he had

made her feel uncomfortable.3 Def.’s Br. at 18. He also points to what he heard from third parties,

including that Ms. O’Rourke was “contemplating” filing sexual harassment charges against Dr.

Schabacker. Def.’s Br. at 18-19.

Plaintiffs counter that Dr. Schabacker was never “accused” of sexual harassment by Ms.

O’Rourke (or anyone else) because “contemplating” filing a charge against someone or telling

others that you’re considering filing a charge is not the same as accusing someone of the act.

Because Ms. O’Rourke never made a claim alleging that Dr. Schabacker had sexually harassed

her, either directly to ECRI in writing or in a court or administrative tribunal, they argue that the

Glassdoor.com statement was not “substantially true.” Pls.’ Br. at 17-18.

1 Dr. Schabacker’s specific testimony cited is as follows: “I don’t know if she mentioned that at

that point, but I think her intimation was that she had to face me with accusations which she knew weren’t

true.” See Def.’s Proposed Statement of Undisputed Material Facts (ECF No. 43-2) ¶ 151 (quoting

Schabacker dep. at 134:10-135:16).

2 Ms. O’Rourke hired lawyers after she was terminated from ECRI in June 2021.

3 Ms. O’Rourke never submitted a written statement or claim of sexual harassment against Dr.

Schabacker to ECRI or Dr. Schabacker directly.

In short, Mr. Ferens contends that Ms. O’Rourke had “accused” Dr. Schabacker of sexual

harassment to multiple people, including her counsel, at the time of Mr. Ferens’s post, and at the

same time was contemplating whether to formally act on her belief and accusation by filing a claim

or putting it in writing to ECRI. The plaintiffs, on the other hand, contend that “contemplating”

whether to formally act on her belief by filing charges and talking to other people about this

decision is not the same thing as making an “accusation.” Pls.’ Br. at 17.

The court finds that there are genuine issues of material fact in dispute as to whether Ms.

O’Rourke “accused” Dr. Schabacker of sexual harassment at the time of Mr. Ferens’s post on

Glassdoor.com. Thus, it will be up to a jury to decide whether the statement posted on

Glassdoor.com was “substantially true,” and Mr. Ferens’s motion for summary judgment on the

plaintiffs’ defamation claim is denied.

Claim for Breach of Contract – Non-Disparagement Clause

In Count II, the plaintiffs assert a claim for breach of contract based on the breach of the

non-disparagement clause in Mr. Ferens’s severance agreement with ECRI, where he agreed not

to disparage ECRI or its officers to any third party by any medium. Am. Compl. ¶ 103. The

plaintiffs point to several statements made by Mr. Ferens that were in violation of the non-

disparagement clause: Ferens’s post on Glassdoor.com post, which stated: “Cons -- CEO is now

being accused of sexual harassment. This guy is a train wreck that has destroyed the culture in the

3 years he has been here. Sales stink. People are leaving;” and text messages Ferens sent to a

former employee of ECRI, stating that ECRI “screwed” him, treated him like “shit,” and that

ECRI’s officers were “bad people” and “idiots.” Am. Compl. ¶¶ 104–105.

The non-disparagement clause in the severance agreement provided as follows:

Non-disparagement Obligation. You will not at any time make any

statements, or cause or encourage others to make any statements,

that (i) are calculated to or which may tend to disparage, defame,

criticize, impugn, damage, or assail the reputation of any Released

Party or any of the products, services, or business practices of any

Released Party, or (ii) cause or may tend to cause the recipient of

the communication to question the integrity or character of any

Released Party or any of the products, services, or business practices

of any Released Party. Statements prohibited by this Section include

both verbal and written statements made to any third party and

through any medium including letters, e-mails, television, radio,

computer networks, blogs, social media, or any other form of

communication. Nothing in this Section is to be construed to

prohibit you from making such statements if your required to do so

by law or subpoena.

Severance Agreement, § (8)(c), Am. Compl. ¶ 49.

Mr. Ferens proffers several reasons why the plaintiffs have not met their burden of showing

that he breached the non-disparagement clause. First, he contends that because “disparage” is not

defined in the severance agreement, but it “precedes the word ‘defame,’” “disparage” has the same

meaning as “defame.” He then reasons that because truth is an absolute defense to a defamation

claim, and his Glassdoor post was substantially true,4 he did not breach the non-disparagement

clause. Def.’s Br. at 10–11.

Mr. Ferens’s interpretation of the non-disparagement clause is incorrect. A plain reading

of the clause prohibits Ferens from disparaging or defaming or criticizing or assailing the

reputation of any of ECRI’s officers or any of its products, services or business practices. He is

not just precluded from defaming them. Consequently, Mr. Ferens is in breach of the non-

disparagement clause if he says anything critical of ECRI or its officers. Because “criticism” is

still “criticism,” even if the critical statement is true and accurate, its truth is not a defense to the

4 Mr. Ferens refers to the arguments he makes that the Glassdoor post was true in the section of his

brief discussing the defamation claim. See Def.’s Br. at 11.

breach of the non-disparagement clause. It is clear that Mr. Ferens’s statements on Glassdoor.com

-- that ECRI’s “CEO is now being accused of sexual harassment,” and that he “is a train wreck

that has destroyed the culture in the 3 years he has been here” -- as well as the text messages Mr.

Ferens sent to a former employee stating that ECRI “screwed” him, treated him like “shit,” and

that ECRI’s officers were “bad people” and “idiots,” constitute criticism of both ECRI and Dr.

Schabacker.

Additionally, as explained supra in the section discussing the defamation claim, even if

truth of the Glassdoor post was a defense to the claim for breach of the non-disparagement clause,

the court has previously found that there are facts in dispute as to whether the statement posted on

Glassdoor.com was “substantially true.” Thus, this defense is not available to Mr. Ferens at this

time.

Mr. Ferens also argues that because his Glassdoor.com post did not attack “the quality” of

ECRI’s goods or “reduce their marketability,” it did not constitute “commercial disparagement.”

He further argues that even if it constituted commercial disparagement, a claim for commercial

disparagement requires proof of actual pecuniary loss, which the plaintiffs have not shown they

suffered. For example, he contends that they have not provided evidence of loss of revenue, sales

or employees, or difficulty hiring employees, or pecuniary loss due to reputational harm.5 Def.’s

Br. at 11–12.

This argument does not apply to the clause at issue. The language of the disparagement

clause does not require that the statement be “commercial” in nature. Mr. Ferens is prohibited

from disparaging, defaming, criticizing, impugning, damaging or assailing the reputation of any

5 Mr. Ferens refers to the arguments he makes that the plaintiffs failed to show reputational damage

resulting from the Glassdoor post in the section of his brief discussing the defamation claim. See Def.’s

Br. at 12. ant

of ECRI’s officers or any of its products, services or business practices. Consequently, Mr.

Ferens’s contention that a claim for commercial disparagement requires proof of actual pecuniary

loss is not applicable. Additionally, as explained supra in the section discussing the defamation

claim, the court has previously found that there are facts in dispute as to whether the Glassdoor.com

post caused damage to the plaintiffs’ reputation.

Finally, Mr. Ferens argues that the plaintiffs are not entitled to recover money damages,

including attorney’s fees, for breach of the non-disparagement clause because the severance

agreement does not provide for damages. Def.’s Br. at 12.

Under Pennsylvania law, a plaintiff seeking to proceed with a breach of contract action

must establish: “(1) the existence of a contract, including its essential terms, (2) a breach of a duty

imposed by the contract and (3) resultant damages.” Ocasio v. Prison Health Servs., 979 A.2d

352, 355 (Pa. Super. Ct. 2009) (quoting CoreStates Bank, N.A. v. Cutillo, 723 A.2d 1053, 1058

(Pa. Super. Ct. 1999)).

The provision for remedies in the severance agreement provides as follows:

Remedies. If you breach or threaten to breach the restrictions in this

[Non-Disparagement] Section, ECRI may seek a temporary

restraining order and injunctive relief restraining you from

breaching or continuing to breach this Agreement. This is not to be

construed as prohibiting ECRI from pursuing any other remedies,

including the recovery of money damages.

Severance Agreement, § (8)(f), Am. Compl. ¶ 108.

For a plaintiff to recover money damages based on a breach of a contract, the contract need

not state that money damages are available in the event of a breach. The plaintiff only needs to

show that his damages resulted from the breach to recover them. Corner Pocket, Inc. v. Travelers

Ins., No. CIV.A. 12-288, 2013 WL 4766293, at *4 (W.D. Pa. Sept. 4, 2013) (“It is hornbook law

that the remedy for a breach of contract is the compensatory damages that put the non-breaching

party in the position he would have been in had the breaching party performed on the contract.”)

(citing Joseph M. Perillo, Calamari and Perillo on Contracts § 14.5 (6th ed.2009); UCC § 1–106;

revision § 1–305; Corbin § 55.3.)).

Thus, the plaintiffs can seek compensatory damages from Mr. Ferens that resulted from his

breach of the non-disparagement clause. Additionally, under a plain reading of the remedies

clause, the plaintiffs may seek the recovery of money damages, as well as injunctive relief.

Therefore, Mr. Ferens is not entitled to summary judgment on the plaintiffs’ a claim for breach of

contract based on the breach of the non-disparagement clause.

Claim for Breach of Contract – Failure to Return ECRI Property

In Count III, ECRI asserts a claim for breach of the severance contract based on Mr.

Ferens’s failure to return all paper and electronic files and flash drives that contained any

information compiled by him or furnished to him by ECRI while he was employed at ECRI. Am.

Compl. §§ 109–113. ECRI alleges that he transferred its information, including ECRI’s “price

calculator,” from his ECRI issued laptop to a flash drive and then to his personal laptop. It further

alleges that Mr. Ferens’s breach of his contractual obligation to return ECRI Property has damaged

ECRI by “exposing the public disclosure of ECRI’s highly proprietary information, including to

ECRI’s competitors such as Curvo Labs (Ferens’ employer) and ECRI’s former employee with

whom Ferens promised to share ECRI’s confidential information.” Am. Compl. ¶ 113.

Mr. Ferens does not dispute that he retained ECRI’s information on his laptop. He

contends, however, that after a neutral third-party vendor was hired to audit, capture and remediate

the ECRI information on his laptop, it is undisputed that Mr. Ferens did not actually disclose any

of ECRI’s proprietary information to any third parties. Consequently, he argues, ECRI has failed

to show that it sustained any harm by Mr. Ferens retaining this information on his laptop. Because

the severance agreement does not expressly provide for specific damages as a result of his failure

to return ECRI’s information, and because ECRI has suffered no damages, he argues that ECRI

has not established a claim for breach of the severance agreement for failure to return property.

Def.’s Br. at 13–14.

ECRI has put forth evidence of actual damages resulting from Mr. Ferens’s retention of its

property on his laptop and his promises to send the information to a former ECRI employee and

to a competitor. ECRI initially paid the third-party vendor $2,500.00, but will likely have to pay

him an additional $16,000.00. See Pls.’ Br. at 20. In addition to money damages, ECRI seeks

injunctive relief, requiring Mr. Ferens to fully and completely return the confidential, proprietary

information. ECRI has shown that there are genuine issues of material fact in dispute as to whether

it sustained damages as a result of Mr. Ferens’s retention of ECRI’s property on his laptop and his

promises to send the information to a former ECRI employee and to a competitor. Therefore, Mr.

Ferens’s motion for summary judgment on the plaintiffs’ claim for breach of the severance contract

based on his failure to return ECRI’s property is denied.

Claims for Violations of the Federal Defense of Trade Secrets Act

and the Pennsylvania Uniform Trade Secrets Act

In Counts V and VI, the plaintiffs assert a claim for violation of the Federal Defense of

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

Secrets Act (“PAUTSA”), 12 Pa. C.S. § 5301, et seq., respectively. The plaintiffs allege that

ECRI’s price calculator was a “trade secret,” as defined under the DTSA and PAUTSA, which Mr.

Ferens misappropriated when he transferred the calculator and related information to his personal

laptop.

To establish a claim for trade secret misappropriation claim under the DTSA, a plaintiff

must demonstrate

(1) the existence of a trade secret, defined generally as information

with independent economic value that the owner has taken

reasonable measures to keep secret;

(2) that is related to a product or service used in, or intended for use

in, interstate or foreign commerce, and

(3) the misappropriation of that trade secret, defined broadly as the

knowing improper acquisition, or use or disclosure of the secret.

Oakwood Lab’ys LLC v. Thanoo, 999 F.3d 892, 905 (3d Cir. 2021) (citing 18 U.S.C. §§ 1839(3);

1836(b)(1), (3); 1839(5)). The PAUTSA defines “misappropriation” essentially the same way.

See Jazz Pharms., Inc. v. Synchrony Grp., LLC, 343 F. Supp. 3d 434, 445 (E.D. Pa. 2018) (“Under

the DTSA and the PUTSA, ‘misappropriation’ of trade secrets includes the ‘acquisition of a trade

secret of another by a person who knows or has reason to know that the trade secret was acquired

by improper means’ or the ‘disclosure or use of a trade secret of another without express or implied

consent.’”).

Although DTSA and PUTSA do not use the exact same wording to define a trade secret,

both essentially define it as information that: (a) the owner has taken reasonable means to keep

secret; (b) derives independent economic value, actual or potential, from being kept secret; (c) is

not readily ascertainable by proper means; and (d) others who cannot readily access it would obtain

economic value from its disclosure or use. Elmagin Cap., LLC v. Chen, 555 F. Supp. 3d 170, 178

(E.D. Pa. 2021) (citing 18 U.S.C. § 1839(3); 12 Pa. C.S. § 5302)). “Whether a particular piece of

information . . . constitutes a trade secret is generally a question of fact.” Id. at 179 (citing Bro-

Tech Corp. v. Thermax, Inc., 651 F. Supp. 2d 378, 410 (E.D. Pa. 2009)).

Mr. Ferens argues that ECRI cannot establish that its price calculator is a trade secret

because there is “no evidence that ‘the information derived independent economic value’ from

being generally unknown/unattainable through proper means, . . .[or] that ECRI took reasonable

means to ‘keep such information secret.’” Def.’s Br. at 22.

The plaintiffs have put forth evidence that its pricing calculator is the product of using

proprietary data to devise pricing formulas. Because the calculator contains more than just “pure

pricing information,” this is enough to consider it a trade secret. See SI Handling Sys., Inc. v.

Heisley, 753 F.2d 1244, 1260 (3d Cir. 1985) (finding that a company’s proprietary pricing

formulae derived from a “range of data relat[ed] to materials, labor, overhead, and profit margin”

is entitled to trade secret protection); Freedom Med. Inc. v. Whitman, 343 F. Supp. 3d 509, 520

(E.D. Pa. 2018) (finding trade secrets to include a company’s pricing schedules that were the

product of a comprehensive budgeting process) (citing SI Handling Sys., 753 F.2d at 1260).

Additionally, ECRI has offered evidence that the price calculator was not readily accessible to

unauthorized users via proper means.

Mr. Ferens next argues that even if the price calculator is a trade secret, the plaintiffs cannot

establish that he “misappropriated” any trade secrets within the meaning of either the DTSA or the

PAUTSA. To prove misappropriation of a trade secret, the plaintiffs have to prove a “knowing

improper acquisition,” or “use or disclosure of the secret.” Mr. Ferens contends that he did not

acquire the pricing calculator information through improper means, because ECRI provided him

with the information initially, and he just saved a duplicate of the information on his personal

computer. He argues that he did not “use” the pricing calculator information because copying the

information to his personal computer was not a “use” under the statutes. Finally, he notes that he

did not disclose any proprietary information to anyone, as per the third-party vendor who audited

his laptop. Def.’s Br. at 22–23.

A “misappropriation” of trade secrets includes the “acquisition of a trade secret of another

by a person who knows or has reason to know that the trade secret was acquired by improper

means.” Mr. Ferens admits that he copied the pricing calculator onto his personal laptop without

authority from ECRI, that he knew it was wrongful, and that he unlawfully retained it on his

personal laptop. The court concludes that issues of fact exist as to whether ECRI’s price calculator

is a trade secret and whether Mr. Ferens misappropriated it through either improper acquisition,

use or disclosure. Therefore, Mr. Ferens’s motion for summary judgment on the DTSA and

PAUTSA claims is denied.

CONCLUSION

Because Mr. Ferens’ Glassdoor.com post was not commercial speech as defined under the

Lanham Act, summary judgment will be granted as to that claim. Because there are genuine issues

of material fact in dispute as to all of the plaintiffs’ remaining claims, the defendant’s motion is

denied as to those counts.