REL. INS., INC. v. PILOT RISK MGMT. CONSULTING, LLC, 2024 NCBC 46

STATE OF NORTH CAROLINA
GUILFORD COUNTY
IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
22 CVS 4285
RELATION INSURANCE, INC. and
RELATION INSURANCE
SERVICES OF NORTH CAROLINA,
INC.,
Plaintiffs,
v.
PILOT RISK MANAGEMENT
CONSULTING, LLC; PILOT
FINANCIAL BROKERAGE, INC.
d/b/a PILOT BENEFITS; KYLE
SMYTHE; ROBERT CAPPS;
LYNETTE KINNEY; EDWARD
MILES GURLEY; SEAN KELLY;
TYLER CROOKER; MICHELLE
LINTHICUM; LINDA MICHELLE
SNEED; TONI KING; and
JOHNATHAN LANCASTER,
Defendants.
ORDER AND OPINION ON
DEFENDANTS’ MOTION FOR
PARTIAL SUMMARY JUDGMENT,
PLAINTIFFS’ MOTION FOR PARTIAL
SUMMARY JUDGMENT, AND
PLAINTIFFS’ MOTION FOR
ADVERSE INFERENCE AT
SUMMARY JUDGMENT AND TRIAL
BASED ON SPOLIATION OF
EVIDENCE
[PUBLIC]1
THIS 	MATTER 	is before 	the 	Court 	on Defendants’ Motion 	for Partial
Summary 	Judgment 	(ECF 	No. 	187), 	Plaintiffs’ 	Motion 	for 	Partial 	Summary
Judgment (ECF No. 189), and Plaintiffs’ Motion for Adverse Inference at Summary
Judgment and Trial Based on Spoliation of Evidence (“Motion for Adverse Inference,”
ECF No. 213) (collectively, the “Motions”).
THE COURT, having considered the Motions and exhibits, the parties’ briefs,
the arguments of counsel, the applicable law, and all appropriate matters of record,
1 The Court elected to file this Order and Opinion under seal on 12 July 2024. 	The Court
then permitted the parties an opportunity to propose redactions to the public version of this
document. The parties proposed the redactions contained herein, and the Court finds that
those redactions are narrowly and appropriately tailored. Accordingly, the Court now files
the redacted, public version of this Order and Opinion.
Rel. Ins., Inc. v. Pilot Risk Mgmt. Consulting, LLC, 2024 NCBC 46.

CONCLUDES that Defendants’ Motion for Partial Summary Judgment should be
GRANTED in part and DENIED in part, Plaintiffs’ Motion for Partial Summary
Judgment should be GRANTED in part and DENIED in part, and Plaintiffs’ Motion
for Adverse Inference should be GRANTED.
Fox Rothschild LLP, by Kip D. Nelson, Ashley Barton Chandler, Gray I.
Mateo-Harris, and Kelsey Schmidt, for Plaintiffs Relation Insurance,
Inc., and Relation Insurance Services of North Carolina, Inc.
Rossabi Law PLLC, by Amiel J. Rossabi, for Defendants Pilot Risk
Management Consulting, LLC, Pilot Financial Brokerage Inc. d/b/a
Pilot Benefits, Kyle Smythe, Robert Capps, Lynette Kinney, Edward
Miles Gurley, Sean Kelly, Tyler Crooker, Michelle Linthicum, Linda
Michelle Sneed, Toni King, and Johnathan Lancaster.
Davis, Judge.
INTRODUCTION
1. 	This case involves a hotly litigated series of disputes between an
insurance agency, one of its competitors, and a group of employees who left the agency
to join its competitor. 	In a nutshell, the agency primarily contends that its former
employees unlawfully used its confidential information and trade secrets to solicit
employees and clients for the benefit of the competitor—their new employer. 	In
addition, the agency asserts that the former employees intentionally destroyed
evidence relevant to this lawsuit. 	The former employees, in turn, claim that the
agency failed to pay them the correct amount of wages they had earned.
FACTUAL AND PROCEDURAL BACKGROUND
2. 	“The Court does not make findings of fact on motions for summary
judgment; 	rather, 	the 	Court 	summarizes 	material 	facts 	it 	considers 	to 	be

uncontested.” 	McGuire v. Lord Corp., 2021 NCBC LEXIS 4, at **1–2 (N.C. Super.
Ct. Jan. 19, 2021) (cleaned up).
A. 	Background on Relation
3. 	Plaintiff Relation Insurance, Inc. (“Relation Insurance”) was formerly
known as Ascension Insurance, Inc. (“Ascension”).2 (See Lancaster Aff. I, Ex. B, ECF
No. 38.) Plaintiff Relation Insurance Services of North Carolina, Inc. (“Relation NC”),
is a subsidiary of Relation Insurance. 	(R. 562.)3 	Relation Insurance exists as the
holding company for Relation NC, as well as for other similar subsidiaries located in
other states.4 (R. 561.)
4. 	Relation 	serves 	as 	an 	“independent 	insurance 	agency 	and 	broker
engaged in the business of the sale, marketing and provision of various insurance
products and services to individuals and institutional, governmental and business
clients[.]” (Kelly Aff. I, Ex. A, at 1, ECF No. 83.) As an independent insurance agency
and broker, this includes offering property and casualty, risk management, benefits,
and third-party administrator consulting services across the United States. (Cooper
Aff. III ¶ 4, ECF No. 189.1.) 	In sum, “Relation serves as an intermediary between
2 Ascension was founded in July of 2007. (R. 890.)
3 Relation filed a compilation of exhibits cited in its Brief in Opposition to Defendants’ Motion
for Summary Judgment as a single “Record.” 	To enhance readability and eliminate
duplicative citations, the Court will cite to the Record as “R.” followed by the corresponding
page numbers when possible. 	Please refer to Plaintiffs’ Index of Exhibits Submitted with
Plaintiffs’ Brief in Opposition to Defendants’ Motion for Summary Judgment (the “Record
Index”) for more information. 	(See R. Index, ECF No. 226; see also R. Exs. 1–9, ECF Nos.
226.1–226.14.)
4 Throughout this Opinion, Relation Insurance and Relation NC are referred to collectively
as either “Relation” or “Plaintiffs.”

insureds and insurance carriers to identify, negotiate, place, and service the right
coverage best suited to meet the specific needs of each policyholder.” (Cooper Aff. III
¶ 5.)
5. 	Relation—like other insurance agencies—acts as “the ‘Broker of Record’
(‘BOR’) for its clients, which is a term of art in the insurance industry used to
establish 	and/or 	identify 	a 	relationship 	between 	an 	insurance 	broker 	and 	a
policyholder to the insurance company.” 	(Cooper Aff. I ¶ 4, ECF No. 7.1.) 	In other
words, a BOR refers to the broker designated by the policyholder to represent and
manage a policyholder’s insurance policy.5
6. 	Relation’s salespersons are known as “Producers.” 	Producers “are
individuals licensed to sell, service, and negotiate insurance products and services,
including insurance policies.” (Cooper Aff. I ¶ 8.) In addition to Producers, Relation
employs “Account Managers,” who “work alongside producers to manage client
relationships and service accounts in more of a customer service role.” 	(Cooper Aff.
III ¶¶ 9–10.)
B. 	Formation of Pilot Risk and Smythe Lawsuit
7. 	The origins of this lawsuit can be traced to early 2020, when Defendant
Kyle Smythe, who at that time was employed by Relation as a Producer, left Relation
to form a new company, Defendant Pilot Risk Management Consulting, LLC (“Pilot
Risk”), a direct competitor of Relation. 	(Cooper Aff. I ¶¶ 21–22.) 	Pilot Risk was
formed by Smythe on 12 February 2020 and began operating on 5 March 2020. 	(R.
5 In the insurance industry, a BOR is sometimes referred to as the “Agent of Record.”

715.) 	Smythe, as well as Defendants Robert A. Capps III and Lynette Kinney, are
members (collectively, the “Pilot Members”) of Pilot Risk. (R. 830.) Capps and Kinney
are also “part-owners” of a related entity, Defendant Pilot Financial Brokerage, Inc.
d/b/a 	Pilot 	Benefits 	(“Pilot 	Benefits”) 	(collectively 	with 	Pilot 	Risk, 	the 	“Pilot
Entities”).6 (Kinney Aff. I ¶ 6, ECF No. 58; Capps Aff. I ¶ 6, ECF No. 55.)
8. 	Smythe’s formation of Pilot Risk as a competing entity was the subject
of a prior lawsuit, Relation Insurance, Inc. v. Smythe, Case No. 20-CVS-4168, filed on
16 March 2020 in Guilford County Superior Court (the “Smythe Lawsuit”), in which
Relation brought claims against Smythe for breach of his employment agreement,
tortious interference, and unfair and deceptive trade practices (“UDTP”). 	(Smythe
Aff. I, Ex. A, ECF No. 29; Smythe Aff. I, Ex. B, ECF No. 30.)
9. 	On 4 September 2020 the Honorable Susan E. Bray entered an order
dismissing all of Relation’s claims in the Smythe Lawsuit, except for the breach of
employment agreement claim. (Smythe Aff. I, Ex. E, ECF No. 33.)
10. 	The Smythe Lawsuit was subsequently resolved on 11 March 2021
through a settlement agreement (the “Settlement Agreement”) that was entered into
with Relation by Smythe, Capps, Kinney, Pilot Risk, and Pilot Benefits (collectively,
the “Pilot Defendants”). 	(Smythe Aff. I, Ex. F, ECF No. 34.) 	Per the terms of the
Settlement Agreement, the Pilot Defendants agreed to: (a) pay Relation a nominal
6 Smythe, Capps, and Kinney are all listed as managing members of Pilot Risk on its 2022
Limited Liability Company Annual Report that was filed with the North Carolina Secretary
of State on 4 April 2022. (R. 830.) However, Smythe testified at his deposition that he is the
sole managing member of Pilot Risk, and that Kinney and Capps are only members but not
managers of Pilot Risk. (R. 715.)

amount of money; (b) not solicit any customers of Relation through 31 May 2021; (c)
not solicit any employees of Relation through 31 March 2021; (d) not disclose or use
any of Relation’s confidential information through 4 March 2022; and (e) not disclose
or use any of Relation’s trade secrets “for so long as the information qualifies as a
trade secret under North Carolina law.” 	(Smythe Aff. I, Ex. F § 3(a)–(d).) 	In
consideration of these terms, the parties agreed to dismiss with prejudice all claims
and counterclaims in the Smythe Lawsuit. (Smythe Aff. I, Ex. F § 4.) Furthermore,
the parties agreed to “release and discharge” each other and their employees from
“all claims, demands, actions, causes of action, suits, damages, losses, and expenses,
whether known or unknown, of any and every nature whatsoever, as a result of
actions or omissions occurring through the execution date of this [Settlement]
Agreement.” (Smythe Aff. I, Ex. F §§ 4–6.)
11. 	Smythe, Capps, and Kinney are all named as individual defendants in
the present action. (See Compl. ¶¶ 6–8, ECF No. 3.)
C. 	Former Employees’ Employment at Relation
12. 	The remaining individual defendants in this case are Edward Miles
Gurley, Sean Kelly, Tyler Crooker, Michelle Linthicum, Linda Michelle Sneed, Toni
King, and Johnathan Lancaster (collectively, the “Former Employees”), all of whom
previously worked at Relation for varying amounts of time as either Producers or
Account Managers. (Cooper Aff. I ¶ 7.) Gurley, Kelly, Crooker, and Lancaster were
employed by Relation as Producers, while Sneed, King, and Linthicum were employed
as Account Managers. (Butler Aff. ¶¶ 7, 11, 14, 19, 25, ECF No. 189.4.)

13. 	Prior to the beginning of their employment with Relation, each of the
Former Employees executed a written employment agreement. (See Dobens Aff. ¶ 5,
ECF Nos. 189.3 (sealed), 195 (redacted).) 	“Relation maintains a personnel file for
each of the Former Employees, which houses his/her employment agreement, offer
letters, and documentation for any discretionary bonuses or merit increases (i.e.,
raises).” (Butler Aff. ¶¶ 5–6.)
14. 	The employment agreements for the seven Former Employees can be
classified into two categories—those for Producers (“Producer Agreements”) and
those 	for 	Account 	Managers 	(“Invention, 	Confidentiality 	and 	Non-Solicitation
Agreements”; referred to herein as “Account Manager Agreements”, and collectively
with the Producer Agreements as “Employment Agreements”). (See Compl., Exs. I–
O, ECF Nos. 5.9–5.15.)
15. 	All of the Employment Agreements contained non-solicitation clauses
(the “Non-Solicitation Clauses”). (See Compl., Exs. I–O.) While the Non-Solicitation
Clauses 	for 	the 	Former 	Employees 	are 	not 	completely 	identical, 	they 	are 	all
substantially similar in that they each contained provisions that prohibit the
solicitation of Relation’s clients or employees upon an employee’s departure from
Relation.
16. 	Account Managers at Relation are salaried employees and do not rely on
commissions. However, this is not the case for Producers. As set out in the Producer
Agreements, the compensation of Relation’s Producers varies. It can be determined
by “stabilized base pay,” “strictly variable compensation,” or some “combination of the

two.” (Dobens Aff. ¶ 6.) 	“Stabilized base pay” is typically the form of compensation
provided to newly hired Producers because it serves as a salary that “does not depend
on revenue received by Relation” so as to “ensure a steady flow of income” for the new
Producer. (Cooper Aff. III ¶ 7.)
17. 	“After a period of time or once a [P]roducer’s book of business reaches a
certain threshold, a [P]roducer can become eligible for higher compensation in the
form of straight commissions[,]” which is also referred to as “strictly variable
compensation.” (Cooper Aff. III ¶ 8.)
18. 	“For [P]roducers paid via variable compensation, their compensation
comes in the form of commissions classified at typically two different rates—a higher
rate for securing ‘new’ policies, and a lower rate for retaining ‘renewal’ policies.”
(Dobens Aff. ¶ 7.) 	Historically, Relation’s Producer compensation plans offered a
range of renewal commission rates from 23% to 27%. 	(Cooper Aff. III ¶ 12.) 	The
historical tiered commission rate a Producer received depended on the size of the
Producer’s 	book 	of 	business—the 	larger 	the 	book 	of 	business, 	the 	higher 	the
commission rate. (Cooper Aff. III ¶ 12.)
19. 	However, 	by 	2019, 	Relation’s 	historical 	tiered 	commission 	rate
“approach was replaced with a standard 25/40[%] split (i.e., 40% on new business and
25% on renewal)[.]” (Cooper Aff. III ¶ 12–13.) The new 25/40% split commission rate
did not vary based upon the size of a Producer’s book of business. Although Relation
informed some Producers of this change in the commission rate structure, it did not
communicate this change to all of its Producers. (See Defs.’ Br. Opp. Pls.’ Mot. Summ.

J., at 30:3–31:20, ECF Nos. 224.32 (sealed), 237 (public); Kelly Aff. I ¶ 34, ECF No.
81.)
20. 	Relation’s failure to inform all of its Producers of this change caused
some 	degree 	of 	confusion 	and led to 	complaints 	about 	the company’s 	lack 	of
transparency in calculating commissions. 	Complaints about Relation’s lack of
transparency did not end with the Producers. 	At least one Account Manager,
Linthicum, claims she was not given a raise and bonus as she was promised in
exchange 	for 	taking 	on 	more 	responsibilities. 	Several 	Account 	Managers 	and
Producers alike believed their workload at Relation was too heavy. (See Kelly Aff. I
¶¶ 8–10, 52; Crooker Aff. I ¶ 43, ECF No. 74; Lancaster Aff. I ¶¶ 13, 15, 18, 53, ECF
No. 35; Sneed Aff. I ¶ 10, ECF No. 52; Linthicum Aff. I ¶ 16, ECF No. 64; King Aff. I
¶ 5, ECF No. 78.)
21. 	Moreover, Relation instituted a freeze on all pay raises in the spring of
2020 because of the COVID-19 pandemic. (Zewalk Aff. II ¶ 12, ECF No. 189.2; Butler
Aff. ¶ 22.) On 1 April 2020, Relation held a conference call for all employees during
which the employees were presented with written notice of the pay freeze via a
PowerPoint presentation. (Zewalk Aff. II ¶ 13; Butler Aff. ¶ 22; Pls.’ Mot. Summ. J.,
Ex. 23, ECF No. 189.23.) 	The employees were told, however, that this pay freeze
would not affect the payment of 2019 discretionary bonuses. (Zewalk Aff. II ¶ 13.)
D. 	Former Employees Leave Relation for Pilot
22. 	The Former Employees’ dissatisfaction with their positions at Relation
ultimately resulted in their exodus from Relation beginning in the fall of 2021.

23. 	The Former Employees now all work at either Pilot Risk or Pilot
Benefits, “performing comparable, if not identical, roles . . . that they performed at
Relation.” (Cooper Aff. I ¶¶ 27–28.)
24. 	Smythe 	first 	communicated 	with 	Crooker 	about 	the 	possibility 	of
Crooker leaving Relation for Pilot Risk in late August of 2021. 	(R. 581–82, 718.)
Crooker was the first Former Employee to leave Relation when he resigned on 30
November 2021. (Butler Aff. ¶¶ 4, 26.) Crooker was subsequently hired by Pilot Risk
and began working there on 3 December 2021. (R. 717–718, 776, 781.)
25. 	Sneed 	swiftly 	followed 	Crooker 	and 	resigned 	from 	Relation 	on 	1
December 2021. (R. 598.) She began working at Pilot Risk on 6 December 2021. (R.
595, 1648.)
26. 	Pilot Risk first communicated with Kelly about the possibility of him
working at Pilot in September of 2021. (R. 719.) Pilot Risk formally offered Kelly a
job in the middle of January of 2022, which he accepted on 18 February 2022—the
same day he resigned from Relation. (R. 721.) Kelly’s first day of employment with
Pilot Risk was 21 February 2022. (R. 721–722.)
27. 	Like Kelly, Gurley was formally offered a job at Pilot Risk in the middle
of January of 2022. 	(R. 721.) 	Gurley resigned from Relation on 18 February 2022
and accepted a job with Pilot Risk that same day. (R. 721; Butler Aff. ¶ 8.) Gurley’s
first day of employment with Pilot Risk was also 21 February 2022. (R.721–722.)
28. 	Also on 18 February 2022, Linthicum provided Relation with her notice
of resignation. (Butler Aff. ¶ 23.) That same day, Relation relieved Linthicum of all

of her duties and paid her for her time through 4 March 2022. 	(Butler Aff. ¶ 23.)
Linthicum was hired by Pilot Risk on 21 February 2022. (R. 1644.)
29. 	Although King notified Relation of her resignation on 25 February 2022,
she accepted a position with Pilot Benefits eight days earlier on 17 February 2022.
(R. 415, 418.) King began working at Pilot Benefits on 14 March 2022. (R. 1651.)
30. 	Also on 25 February 2022, “Lancaster’s employment with Relation was
terminated.” (Butler Aff. ¶ 15.) Cooper testified at his deposition that Lancaster was
fired for violating “his responsibilities as manager in the company.” 	(R. 531.)
Lancaster was assigned a Pilot Benefits email address that same day. (R. 1655.)
31. 	During this period of time in which the Former Employees were leaving
Relation to begin working at the Pilot Entities, a flurry of communications occurred
between the Former Employees themselves, as well as between certain Former
Employees and Relation clients. 	Additionally, prior to resigning, each Former
Employee forwarded documents from their Relation email account to their personal
email accounts, which, as discussed below, Relation contends was not only a violation
of the Former Employees’ Employment Agreements, but also—in certain instances—
amounted to a misappropriation of Relation’s trade secrets. (See, e.g., R. 612–619.)
32. 	Between 23 February 2022 and 1 March 2022, Relation sent letters to
each of the Former Employees reminding them of their obligations under their
respective Employment Agreements. Relation demanded that the Former Employees
cease 	and 	desist 	from 	engaging 	in 	conduct 	prohibited 	by 	their 	Employment
Agreements 	and 	requested 	that 	they 	immediately 	return 	any 	confidential

information in their possession. 	(See Compl., Ex. FF, ECF No. 5.32.) 	Additionally,
Relation requested that the Former Employees return a signed acknowledgment
verifying that they had not used any of Relation’s confidential information and did
not currently have any in their possession. (See Compl., Ex. FF.)
33. 	In 	this 	action, 	Plaintiffs 	assert 	that 	the 	Former 	Employees 	have
solicited—and continue to solicit—Relation’s clients and employees for the benefit of
Pilot Risk and Pilot Benefits. (See, e.g., Compl., Exs. B–H, P–EE, ECF Nos. 5.2–5.8,
5.16–5.31; Perkins Aff. ¶¶ 4–18, ECF No. 7.3; Zewalk Aff. I ¶¶ 4–7, ECF No. 7.4;
Toran Aff. ¶¶ 4–5, ECF No. 7.2; Cooper Aff. II ¶¶ 7–9, ECF No. 89.) 	For example,
Kathy Perkins, an Employee Benefits Consultant for Relation, learned on 10 March
2022 that Lancaster had unilaterally sent forms to a Relation client in an attempt to
move the client’s business to Pilot. (Perkins Aff. ¶ 14–17.)
34. 	Although Defendants deny that the Former Employees have improperly
solicited 	Relation’s 	clients 	and 	employees, 	they 	have 	acknowledged 	various
communications between them and clients or employees of Relation following their
departure from Relation. 	Crooker admitted that he does not “know which of [his]
clients [he] called after leaving Relation and which ones called [him,]” (Crooker Aff. I
¶ 44); Linthicum stated that “several account managers on [her] former team at
Relation asked [her] to keep them in mind if Pilot Risk needed to hire additional
employees[,]” (Linthicum Aff. I ¶ 19); and multiple Former Employees admit that
they reached out to Relation’s clients to let them know they were leaving Relation,
(see, e.g., Gurley Aff. I ¶ 29, ECF No. 67; Kelly Aff. I ¶ 41; Lancaster Aff. I ¶ 57).

35. 	All of the Former Employees testified that they believed the restrictive
covenants contained in their Employment Agreements were—and continue to be—
unenforceable. (King Aff. I ¶ 48; Sneed Aff. I ¶ 14; Lancaster Aff. I ¶ 58; Linthicum
Aff. I ¶ 37; Gurley Aff. I ¶ 43; Crooker Aff. I ¶ 45; Kelly Aff. I ¶ 53.)
36. 	Relation contends that the acts of Defendants have caused Relation to
lose over 100 accounts to the Pilot Entities, resulting in a steady decline in the
Relation Greensboro office’s annual revenue since December of 2021. (R. 387.)
37. 	Furthermore, Relation claims that it was harmed by Defendants’ actions
because they resulted in a significant decrease in its number of producers within the
span of a few months, which caused Relation to lose its only personal lines producer,
its only employee benefits producer, its only employee benefits manager, and two of
its four commercial lines producers. 	(R. 390.) 	As a result, Relation asserts that
“[m]orale among employees has still not recovered[,]” and that Relation’s “Greensboro
location, and Relation’s Eastern Region more generally, will never be the same.” (R.
397.)
E. 	The Present Lawsuit
38. 	On 11 April 2022, Relation initiated this action by filing a Complaint in
Guilford County Superior Court. (See Compl., ECF No. 3.)
39. 	Plaintiffs asserted the following claims in the Complaint: (a) four breach
of contract claims—one against the Former Employees for breach of confidentiality
provisions in their employment agreements; two against the Former Employees for
breach of non-solicitation clauses in their employment agreements; and one against

the Pilot Defendants for breach of the 11 March 2021 Settlement Agreement; (b) two
misappropriation of trade secrets claims against all Defendants—one under the
Federal Defend Trade Secrets Act, 18 U.S.C. § 1832 et seq., and one under the North
Carolina Trade Secrets Protection Act, N.C.G.S. § 66-152 et seq.; (c) an unjust
enrichment claim against all Defendants; (d) two computer-related claims against the
Former Employees—one for computer trespass under N.C.G.S. § 14-458 and one for
violation of the Computer Fraud and Abuse Act of 1986, 18 U.S.C. § 1030; (e) two
tortious interference claims against all Defendants—one for current “business and
contractual relations” and one for “prospective economic advantage”; and (f) a claim
for UDTP under N.C.G.S. § 75-1.1 et seq. against all Defendants. 	(Compl. ¶¶ 154–
270.)
40. 	On 	5 	July 	2022, 	Defendants 	filed 	various 	counterclaims 	against
Relation. Gurley, Kelly, Lancaster, Linthicum, and Crooker asserted counterclaims
for violation of the North Carolina Wage & Hour Act, breach of contract, and breach
of the implied covenant of good faith and fair dealing.7 (Countercl. ¶¶ 22–47, 55–60,
78–86, ECF No. 117.) 	Additionally, the Pilot Defendants asserted a counterclaim
against Relation for UDTP.8 (Countercl. ¶¶ 68–77.)
7 Originally, Defendants also alleged a counterclaim for tortious interference with prospective
economic advantage, (Countercl. ¶¶ 61–67), and Lancaster brought a counterclaim for
defamation, (Countercl. ¶¶ 48–54). However, Defendants voluntarily dismissed these claims
without prejudice on 23 August 2022. (See Vol. Dismiss., ECF No. 127.)
8 Counsel for Defendants has since informed the Court that the UDTP counterclaim is now
being asserted solely on behalf of Pilot Risk.

41. 	Following the completion of discovery, the parties filed cross-Motions for
Partial Summary Judgment on 28 July 2023, and Plaintiffs filed the Motion for
Adverse Inference on 31 August 2023.
42. 	The Motions have been fully briefed and the Court held a hearing on the
Motions on 18 and 20 December 2023. The Motions are now ripe for resolution.
LEGAL STANDARD
43. 	It is well established that “[s]ummary judgment is proper ‘if the
pleadings, depositions, answers to interrogatories, and admissions on file, together
with the affidavits, if any, show that there is no genuine issue as to any material fact
and that any party is entitled to a judgment as a matter of law.’ ” Morrell v. Hardin
Creek, Inc., 371 N.C. 672, 680 (2018) (quoting N.C. R. Civ. P. 56(c)). 	“[A] genuine
issue is one which can be maintained by substantial evidence.” 	Kessing v. Nat’l
Mortg. Corp., 278 N.C. 523, 534 (1971). 	“Substantial evidence is such relevant
evidence as a reasonable mind might accept as adequate to support a conclusion and
means more than a scintilla or a permissible inference.” 	Daughtridge v. Tanager
Land, LLC, 373 N.C. 182, 187 (2019) (cleaned up).
44. 	On a motion for summary judgment, “[t]he evidence must be considered
‘in a light most favorable to the non-moving party.’ ” McCutchen v. McCutchen, 360
N.C. 280, 286 (2006) (quoting Howerton v. Arai Helmet, Ltd., 358 N.C. 440, 470
(2004)). 	“[T]he party moving for summary judgment ultimately has the burden of
establishing the lack of any triable issue of fact.” 	Pembee Mfg. Corp. v. Cape Fear
Constr. Co., 313 N.C. 488, 491 (1985).

45. 	The party moving for summary judgment may satisfy its burden by
proving that “an essential element of the opposing party’s claim does not exist, cannot
be proven at trial, or would be barred by an affirmative defense . . . or by showing
through discovery that the opposing party cannot produce evidence to support an
essential element of [the] claim[.]” Dobson v. Harris, 352 N.C. 77, 83 (2000). “If the
moving party satisfies its burden of proof, then the burden shifts to the non-moving
party to ‘set forth specific facts showing that there is a genuine issue for trial.’ ” Lowe
v. Bradford, 305 N.C. 366, 369–70 (1982) (quoting N.C. R. Civ. P. 56(e)). 	If the
nonmoving 	party 	does 	not 	satisfy 	its 	burden, 	then 	“summary 	judgment, 	if
appropriate, shall be entered against [the nonmovant].” United Cmty. Bank (Ga.) v.
Wolfe, 369 N.C. 555, 558 (2017) (quoting N.C. R. Civ. P. 56(e)).
ANALYSIS
I. 	Motion for Adverse Inference
46. 	The Court elects to first address Plaintiffs’ Motion for Adverse Inference.
47. 	In this Motion, Plaintiffs argue that each individual Defendant spoliated
evidence and, as a result, “an adverse inference should be drawn against Defendants
when considering their motion for summary judgment and at trial.” (Mot. Adv. Inf.,
at 3.)
48. 	Spoliation occurs when “relevant evidence [i]s lost or destroyed by the
opposing party.” 	Outlaw v. Johnson, 190 N.C. App. 233, 245 (2008). 	In short,
Plaintiffs allege that spoliation occurred because, “after receipt of a preservation

notice and the initiation of this action, every individual Defendant deleted data from
his/her electronic devices.” (Pls.’ Br. Supp. Mot. Adv. Inf., at 1, ECF No. 216.)
49. 	Between 23 February and 1 March 2022—after the Former Employees
left Relation for the Pilot Entities—Relation sent cease-and-desist letters to each
Defendant informing them of Relation’s belief that all of them were acting in violation
of their legal obligations as set out in either the Settlement Agreement or in their
respective Employment Agreements. 	(See Compl., Ex. FF.) 	Each cease-and-desist
letter also included a preservation notice advising each individual Defendant “to
preserve any and all information relevant to the facts surrounding the topics in this
letter.” (See Compl., Ex. FF.)
50. 	After filing the Complaint in this action on 11 April 2022, Relation
subsequently served all Defendants with process over the next several days. 	(See
Service Affs., ECF Nos. 15–26.)
51. 	Two 	days 	after 	filing 	the 	Complaint, 	Relation 	filed 	a 	Motion 	for
Preliminary Injunction (“PI Motion,” ECF No. 6). 	Among other things, Plaintiffs
requested in the PI Motion that the Court order Defendants to
preserve all data currently stored on computers over which they have
possession, custody, or control, including personal digital assistants or
mobile telephones, including any information stored on backup media,
which currently stores, or which has stored, Plaintiffs’ confidential
information, proprietary information, or trade secrets; and . . .
preserve all emails on any computer under their control, including
internet mail servers, personal digital assistants, and other hardware,
that was at any time related to the solicitation or contact of Plaintiffs’
current or former clients or employees[.]
(PI Mot., at 4.)

52. 	On the same day that the PI Motion was filed, Linthicum reset her
cellphone. 	(Shelton Aff. III, Ex. B-5, at 6, ECF No. 217.5.) 	Over the course of the
week following the filing of the PI Motion, Smythe, Lancaster, Capps, King, and
Sneed all did so as well. 	More specifically, Smythe reset his cellphone on 15 April
2022, (Shelton Aff. III, Ex. B-3, at 7, ECF No. 217.3); Lancaster reset his cellphone
on 16 April 2022, (Shelton Aff. III, Ex. B-2, at 3, ECF No. 217.2); Capps reset his
cellphone on 18 April 2022, (Shelton Aff. III, Ex. B-1, at 5, ECF No. 217.1); and King
and Sneed both reset their cellphones on 21 April 2022, (Shelton Aff. III, Ex. B-6, at
4, ECF No. 217.6; Shelton Aff. III, Ex. B-9, at 21, ECF No. 217.9).
53. 	Later, on 5 May 2022, Gurley completely “wiped” his personal computer.
(Shelton Aff. III, Ex. B-7, at Ex. A, ECF No. 217.7.) 	A few days later, Lancaster
switched out the SIM card in his cellphone. (Shelton Aff. III, Ex. B-2, at 2.)
54. 	On 13 May 2022, the parties entered into the following Stipulation
regarding the PI Motion:
Prior to the deletion of any information pursuant to the paragraph
below, the Former Employees will make their electronic devices
available for digital imaging. Plaintiffs will, at their sole expense,
provide an independent third-party company to digitally image the
devices. The digital images will be maintained by the third-party
company and will not be available to Plaintiffs or counsel for
Plaintiffs unless and until counsel agree otherwise or as ordered by
the Court.
As to intangible information obtained from Plaintiffs, not including
names 	and 	contact 	information 	of 	any 	persons 	in 	the 	Former
Employees’ cell phones (whether present or former clients) or the
Former 	Employees’ 	personal 	photos, 	identification 	numbers,
financial information, protected health information, or attorney-
client privileged information, the Former Employees will take all
reasonable steps to locate and, then, permanently delete all such

information from their computers, cell phones, tablets, external
drives, cloud storage platforms, and any and all other places (within
the Former Employees’ possession, custody or control) stored or
accessible within seven days of the completion of the digital imaging
described above.
The Former Employees agree that they will not use or disclose to
others any tangible documents or intangible information obtained
from Plaintiffs, except in connection with the litigation of the [sic]
captioned matter. Further, the Former Employees have not disclosed
to others (except their counsel) tangible documents or intangible
information obtained from Plaintiffs and have not, since receipt of
the “preservation notices” from Plaintiffs’ counsel, destroyed or
permanently deleted any such information.
Each of the Former Employees will file separate acknowledgements,
signed under oath, of their compliance with this stipulation within
seven days of the completion of the digital imaging referred to above.
Other 	than 	the 	documents 	and 	intangible 	information 	that 	is
permanently deleted, all parties will preserve all emails, documents,
data, and other information related to the opposing parties or their
clients, vendors, insurance carriers and/or employees.
(Stipulation, ECF No. 94.)
55. 	Relation retained David Shelton, the owner of Advantage Technology
Investigations, LLC, to conduct the digital imaging of Defendants’ devices as provided
for in the Stipulation.9 (Shelton Aff. III, ECF No. 217.) This round of imaging began
in May of 2022. (Shelton Aff. III ¶ 6.)
56. 	On 18 May 2022, the following was produced to Shelton for imaging
pursuant to the Stipulation: Linthicum’s iPhone 13 Max and Apple MacBook Pro
laptop, (Shelton Aff. III, Ex. B-5, at 1); Sneed’s Apple iPhone 8, (Shelton Aff. III, Ex.
9 Shelton testified that he has over thirty-five years of experience in the field of information
technology and that he has been retained as a forensic expert in nearly one hundred civil and
criminal matters. (Shelton Aff. III ¶¶ 3–4.)

B-6, at 1); Gurley’s Chromebook laptop, (Shelton Aff. III, Ex. B-7, at Ex. A); and
Crooker’s Motorola One cellphone, (Shelton Aff. III, Ex B-10, at 1, ECF No. 217.10).
57. 	Less than a month after the Stipulation was executed, Kinney reset her
phone on 1 June 2022. (Shelton Aff. III, Ex. B-4, at 5–6, ECF No. 217.4.)
58. 	On 	27 	June 	2022, 	the 	Court 	entered a 	Case 	Management 	Order
(“CMO”), which “reminded [the parties] of their obligations to preserve and retain all
potentially relevant documents, including but not limited to documents stored
electronically, 	and 	the 	need 	to 	suspend 	all 	automatic 	deletions 	of 	electronic
documents or overwriting of backup tapes that may contain potentially relevant
information.” (CMO, at 6, ECF No. 114.)
59. 	Pursuant to Business Court Rule (“BCR”) 10.9, Relation emailed the
Court 	on 	3 	October 	2022 	regarding 	an 	ongoing 	discovery 	dispute 	related 	to
Defendants’ responses to Relation’s first set of interrogatories and requests for
production of documents, which included, among other issues, Plaintiffs’ access to the
previously conducted forensic imaging of Defendants’ devices (the “3 October Email”).
(Mot. Adv. Inf., Ex A., ECF No. 213.1.)
60. 	On 30 September 2022, prior to emailing the Court, counsel for the
parties participated in a phone call to address the dispute, which they failed to resolve
at that time. 	Relation’s email to the Court described the nature of the dispute, in
pertinent part, as follows:
On that September 30, 2022, call, Defendants would only agree to
supplement their response to Global Interrogatory No. 1 and any other
responses for which Defendants may deem supplementation necessary.
Defendants also admitted that they did not even look for responsive

information and documents. Nor did they provide any search terms or
culling criteria in accordance with the ESI Protocol.
Further, 	many 	of 	Defendants’ 	discovery 	responses 	referred 	to
information contained within devices that were digitally imaged at
Plaintiffs’ 	expense 	pursuant 	to 	the 	Stipulation. 	Yet, 	on 	the 	call
Defendants would only agree to allow Plaintiffs to “access” the devices
to the extent they expressly mention Plaintiffs, Plaintiffs’ clients, or
Alleged Confidential Information. This limitation is unreasonable and
inconsistent with the ESI Protocol. Defendants should search for all
relevant information and ESI, including on the imaged devices, and
allow Plaintiffs to obtain all responsive information on the imaged
devices 	(excluding 	any 	privileged 	communications). 	In 	addition,
Defendants have refused to search their Pilot-issued devices or provide
those devices to Plaintiffs.
During the call, Defendants also reiterated that they would not identify
or produce communications between themselves, claiming that anything
from before they left Plaintiffs’ employment would be captured on
Plaintiffs’ 	devices, 	and 	that 	anything 	after 	they 	left 	Plaintiffs’
employment would be per se privileged because they “all” would have
involved Defendants’ counsel or been at the direction of Defendants’
counsel. Again, Defendants take this position without performing any
ESI search.
Given Defendants’ recalcitrance, Plaintiffs are forced bring this dispute
to the Court. Plaintiffs respectfully request that the Court compel
Defendants to provide full and complete responses to all interrogatories,
produce the requested documents and tangible things (in accordance
with the ESI Protocol), and allow Plaintiffs to search the imaged devices
in accordance with the discovery requests, as well as award Plaintiffs
their costs and fees associated with this dispute and grant such other
relief as the Court deems just and proper.
(Mot. Adv. Inf., Ex. A (emphasis in original).)
61. 	On 13 October 2022, the Court conducted a BCR 10.9 conference (the
“13 October Conference”) to address the issues raised by Relation in the 3 October
Email. 	During the 13 October Conference, the Court informed the parties that it
would permit Shelton (on behalf of Relation) to conduct digital imaging of certain of

Defendants’ electronic devices, which was then scheduled to begin on 25 October
2022. (Mot. Adv. Inf., Ex. E, ECF No. 213.5.)
62. 	This impending digital imaging of Defendants’ devices appears to have
set off another round of deletions by Defendants, beginning with Gurley resetting his
phone on the very same day on which the 13 October Conference was conducted.
(Shelton Aff. III, Ex. B-7.)
63. 	The day after the 13 October Conference, Smythe and Crooker deleted
cell phone data files from their laptop computers. 	(Shelton Aff. III, Ex. B-3, at 6;
Shelton Aff. III, Ex. B-10, at 6.)
64. 	Further, between 17 and 24 October 2022, Sneed reset her laptop
computer, (Shelton Aff. III, Ex. B-6, at 11); Kelly reset his cell phone, (Shelton Aff.
III, Ex. B-8, at 2, ECF No. 217.8); Linthicum installed a new SIM card on her phone,
(Shelton Aff. III, Ex. B-5, at 2); and files were deleted from Gurley’s laptop on two
separate occasions, (Shelton Aff. III, Ex. B-7, at 11).
65. 	On 25 and 26 October 2022, the following electronic devices were
produced to Shelton for digital imaging: Lancaster’s iPhone 12 and Dell laptop,
(Shelton Aff. III, Ex. B-2, at 1); Kinney’s Apple iPhone XR, (Shelton Aff. III, Ex. B-4,
at 1); Linthicum’s Lenovo laptop, (Shelton Aff. III, Ex. B-5, at 1); Sneed’s Apple
iPhone 8 and HP laptop, (Shelton Aff. III, Ex. B-6, at 1, 7); Gurley’s iPhone 14 Max
and a Lenovo ThinkPad laptop, (Shelton Aff. III, Ex. B-7, at 1); Kelly’s iPhone 14 Pro
Max, HP laptop, and iPad Air, (Shelton Aff. III, Ex. B-8, at 1, 14); King’s Dell desktop

computer, (Shelton Aff. III, Ex. B-9, at 1); Crooker’s Motorola One cellphone, (Shelton
Aff. III, Ex B-10, at 1); and Crooker’s HP laptop, (Shelton Aff. III, Ex B-10, at 5).
66. 	Finally, on 3 November 2022, Capps’ iPhone and MacBook laptop, as
well as Smythe’s iPhone 12 and HP laptop, were produced to Shelton for examination.
(See Shelton Aff. III, Ex. B-1, at 1; Shelton Aff. III, Ex. B-3, at 1.)
67. 	Upon completing his analysis of the digitally imaged devices, on 30
November and 16 December 2022, Shelton “provided to counsel for Defendants
external drives containing the data captured on the devices successfully imaged to
that point.” (Shelton Aff. III ¶ 23.) Shelton has testified that “[t]he data was provided
in the form of searchable HTML reports[,]” which “included information about the
documents and files contained on the imaged devices and their properties.” (Shelton
Aff. III ¶ 23.)
68. 	On 30 December 2022, Shelton “provided copies of the HTML reports to
counsel for Plaintiffs, but without items that [he] deemed potentially privileged or
personal.” (Shelton Aff. III ¶ 25.) 	Shelton explained the scope of data included in
these HTML reports as follows:
The HTML reports from the Defendants’ cell phones captured all
message data, whether it was from an Android phone or an iPhone, that
existed on each device. Any messages that were sent or received on that
device would show up in the HTML report unless they were deleted—
either as a part of the device’s automatic deletion settings or through
manual deletion.
. . .
Text messages sent from an iPhone to an iPhone (iMessages) do not
always show up on a call log from a phone provider like Verizon or AT&T
because they are sent directly through Apple’s proprietary system as

internet data, rather than through a wireless carrier. Depending on the
service 	signal 	strength 	that 	is 	available, 	some 	iPhone-to-iPhone
messages (iMessages) may show up on a call log. Thus, a phone provider
call log for an iPhone user does not contain the majority of text messages
sent to another iPhone user.
(Shelton Aff. III ¶¶ 24, 26.)
69. 	Following several delays resulting from discovery disputes between the
parties, discovery in this matter finally closed on 2 June 2023. 	(See 24 April 2023
Order, ECF No. 176.)
70. 	In their Motion for Adverse Inference, Relation essentially contends that
the above-described series of events shows that “Defendants engaged in systematic
spoliation of evidence on at least 20 electronic devices and failed to preserve
potentially relevant evidence once they were on notice of their duty.” (Pls.’ Br. Supp.
Mot. Adv. Inf., at 13.)
71. 	Relation filed an affidavit of Shelton in support of the Motion for Adverse
Inference, which summarized his conclusions drawn from the forensic analysis and
digital imaging of Defendants’ devices. 	(See Shelton Aff. III.) 	Shelton attached as
exhibits to his affidavit the Cell Phone and Computer Summary Analyses for Capps,
Lancaster, Smythe, Kinney, Linthicum, Sneed, Gurley, Kelly, King, and Crooker’s
devices. 	(See Shelton Aff. III, Exs. B-1–B-13.) 	In his affidavit, Shelton opined that
“[i]n 	[his] 	35+ 	years 	of 	experience, 	[he] 	ha[s] 	never 	seen 	such 	extensive 	and
coordinated deletions of evidence across so many electronic devices as [he] discovered
in [his] forensic examination in this matter. The deletions have destroyed what the
full picture of data would have been in this case.” (Shelton Aff. III ¶ 22.)

72. 	“Evidence of spoliation by a party allows the trier of fact to make an
inference that the spoliated evidence was detrimental to that party’s case.” 	Sunset
Beach Dev., LLC v. Amec, Inc., 196 N.C. App. 202, 220 (2009). 	Our Supreme Court
over a century ago explained the nature of an inference premised on spoliation as
follows:
It is therefore laid down in the books as a well settled principle that
where a party fails to introduce in evidence documents that are relevant
to the matter in question and within his control, and offers in lieu of
their production secondary or other evidence of inferior value, there is a
presumption or at least an inference that the evidence withheld, if
forthcoming, would injure his case.
. . .
“If a man by his own tortious act withhold evidence by which the nature
of his case would be manifested, every presumption to his disadvantage
will be adopted, for where a party has the means in his power of
rebutting and explaining the evidence adduced against him, if it does
not tend to the truth, the omission to do so furnishes a strong inference
against him.”
Yarborough v. Hughes, 139 N.C. 199, 209 (1905) (internal citation omitted).
73. 	To 	prevail 	on 	their 	assertion 	that 	Defendants 	spoliated 	evidence,
Plaintiffs must show that Defendants “(1) intentionally destroyed or failed to preserve
(2) 	potentially 	relevant 	materials 	(3) 	while 	aware 	of 	the 	possibility 	of 	future
litigation.” 	SCR-Tech LLC v. Evonik Energy Servs. LLC, 2014 NCBC LEXIS 72, at
**14 (N.C. Super. Ct. Dec. 31, 2014).
74. 	“If, however, the evidence withheld or destroyed was equally accessible
to both parties or there was a fair, frank, and satisfactory explanation for the
nonproduction of the evidence, the principle is inapplicable and no inference arises.”
Holloway v. Tyson Foods, Inc., 193 N.C. App. 542, 547 (2008) (cleaned up). 	“On the

other hand, if no satisfactory explanation is forthcoming, the maxim of the law will
apply, and the jury must pass upon the case, aided by the inference, giving to it such
force and effect as they may think it should have under all of the facts and
circumstances.” 	McLain v. Taco Bell Corp., 137 N.C. App. 179, 184 (2000) (cleaned
up).
75. 	This Court has provided the following guidance on how a claim of
spoliation should be analyzed:
This 	rule 	of evidence 	is based on 	the common 	sense 	notion that
individuals do not normally withhold or destroy evidence useful to their
case. See Kronisch, 150 F.3d at 126. The inference serves to restore the
prejudiced party to the same position he would have been in had the
destruction of relevant documents not occurred. See id.
The standard for applying the spoliation inference is evidence that the
party 	intentionally 	destroyed 	potentially 	relevant 	materials 	while
aware of the possibility of future litigation. See McClain, 137 N.C. App.
at 716, 527 S.E.2d at 716. 	Whether materials were intentionally
destroyed depends on the awareness of the party in possession of the
documents. Therefore, a party is entitled to the spoliation inference, if
he shows that the party having control over the evidence had an
obligation to preserve it at the time it was destroyed. 	See 150 F.3d at
126. 	Such an obligation arises when the party in possession of the
evidence is on notice that the evidence may be relevant to future
litigation. See id. 	Thus, where the party was “aware of circumstances
that were likely to give rise to future litigation” but nevertheless
destroyed potentially relevant documents, the jury may draw an adverse
inference against such party. McClain, 137 N.C. App. at 187, 527 S.E.2d
at 718. A showing of such awareness satisfies the requirement that the
evidence was intentionally destroyed; bad faith or even awareness of
impending trial need not be shown. Id. at 8–9.
Furthermore, “the prejudiced party may be permitted an inference in
his favor so long as he has produced some evidence suggesting that a
document or documents relevant to substantiating his claim would have
been included among the destroyed files.” 	Kronisch, 150 F.3d at 128.
Stated simply, the material destroyed must be potentially relevant to
the issues presented at trial. See id. To ascertain relevancy, the party
seeking the spoliation inference must show that “there is [a] likelihood

that the destroyed evidence would have been of the nature alleged by
the party affected by its destruction.” See id[.] at 127. Therefore, while
it is often difficult to ascertain the relevancy of the materials destroyed,
evidence identifying the types of documents destroyed may provide the
court with sufficient information to make the relevancy determination.
Praxair, Inc. v. Airgas, Inc., 2000 NCBC LEXIS 5, at **57–58 (N.C. Super. Ct. Aug.
14, 2000).
76. 	This Court addressed a similar spoliation issue in Kixsports, LLC v.
Munn, 2019 NCBC LEXIS 62 (N.C. Super. Ct. Sept. 30, 2019). Discovery in Kixsports,
as in the present matter, “proved to be contentious[,]” which resulted in the
defendants bringing a motion that sought sanctions for discovery abuses that were
discovered after the plaintiffs “were ordered to produce their electronic devices for
inspection by a forensic expert[.]” 	Kixsports, 2019 NCBC LEXIS 62, at *1, *3. 	The
defendants “contend[ed] that the forensic expert retrieved highly relevant evidence
and also detected intentional deletion of evidence by” two of the plaintiffs. Id. at *2.
77. 	First, the Kixsports forensic expert determined that potentially relevant
files located on one plaintiff’s computer, which were “associated with the process of
backing up a mobile device through Apple’s iTunes software[,]” were intentionally
deleted after the lawsuit was initiated. 	Id. at *14–15. 	This Court agreed with the
forensic expert’s findings and concluded that it was “more likely than not that
[plaintiff] intentionally deleted backup files for his mobile device during the pendency
of th[e] lawsuit.” Id. at *15. In reaching this conclusion, the Court emphasized that
all of the forensic expert’s testimony as to this issue was unrebutted. 	The plaintiffs
did not address the issue in their opposition brief or file an affidavit denying or

explaining the deletion, or hire their own expert to rebut or comment upon the
forensic expert’s analysis. Id.
78. 	Next, 	the 	Kixsports 	forensic 	analysis 	revealed 	that 	the 	plaintiffs
“frequently sent and received text messages, yet scores of these messages [we]re
missing.” 	Id. at *15–16. 	Moreover, some text messages between the parties
appeared on the defendant’s phone, but did not appear on the plaintiffs’ phones,
which the forensic expert concluded “shows intentional deletion” by the plaintiffs. Id.
at *16. In response, the plaintiffs argued that the forensic expert “failed to consider
alternatives to intentional deletion, such as software settings that automate deletion
of text messages.” Id.
79. 	This Court in Kixsports was not persuaded by the plaintiffs’ argument
because the evidence was “consistent with intentional deletion[,]” and the plaintiffs
did not proffer any expert testimony in support of their position. 	Id. at *17. 	The
Court’s reasoning underlying this conclusion was as follows:
For one thing, the default setting for these devices is to retain text
messages forever. 	Automated deletion requires action by the user to
alter the setting. (3d Walton Aff. ¶ 13.) In addition, automated deletion
works by scheduling the deletion of all text messages over a certain age
(one year, for example), not by selecting and deleting messages with a
specific user. (3d Walton Aff. ¶ 19.a.)
The 	evidence 	here 	is 	consistent 	with 	intentional 	deletion. Pye’s
smartphones contained thousands of messages from 2017 but none
exchanged with Carr, even though it is undisputed that such messages
once existed. This cannot be explained by a theory of automated
deletion; it is strong evidence of selective deletion of messages between
Pye and Carr. Likewise, Pye and Carr altered their smartphones’
default settings so that they would delete text messages more than one
year old. (See 3d Walton Aff. ¶¶ 15, 19.b.) These were intentional acts,
resulting in the deletion of an unknown number of text messages sent
and received before May 22, 2017.

Walton notes that the relevant devices do not record and store the exact
dates of these deletions. (3d Walton Aff. ¶ 17; see also 3d Walton Aff. ¶
19.b.) Thus, it is possible that Carr or Pye changed the default settings
before litigation began. 	Even so, that would not excuse their failure to
preserve evidence after litigation became likely. 	See Tumlin v. Tuggle
Duggins P.A., 2018 NCBC LEXIS 51, at *33 (N.C. Super. Ct. May 22,
2018) (“The obligation to preserve evidence begins when ‘a party is
aware of circumstances that are likely to give rise to future litigation.’ ”
(quoting McLain v. Taco Bell Corp., 137 N.C. App. 179, 187, 527 S.E.2d
712, 	718 	(2000))). 	Carr 	and 	Pye 	either 	caused 	or 	allowed 	their
smartphones to delete messages after the complaint was filed (in
September 2017), after Defendants requested the communications (in
November 2017), after Defendants filed their motion to compel (in
March 2018), and even after Judge Lewis issued his ruling (in April
2018). 	As to Pye, the evidence is even more clear: a comparison with
Carr’s device shows that Pye deleted messages that were exchanged
with Carr while the litigation was pending, even as late as February
2018 when the discovery dispute was coming to the fore. (See 2d Walton
Aff. ¶ 12.)
Id. at *17–18.
80. 	In the present case, as in Kixsport, the Court concludes that the evidence
supports 	Relation’s 	contention 	that 	the 	Individual 	Defendants 	intentionally
destroyed or failed to preserve potentially relevant materials while aware of the
possibility of future litigation. 	Therefore, given the mass of deleted text messages
and emails, as well as the circumstances in which such deletions occurred, it may be
inferred that the deleted documents were harmful to Defendants.
81. 	First, when considering the timeline of the deletions, Defendants cannot
seriously dispute that they were aware of the possibility of future litigation. Relation
sent each Defendant a preservation notice between 23 February and 1 March 2022.
Indeed, most of the deletions occurred after the Complaint was filed on 11 April 2022.
Moreover, with respect to any deletions occurring before litigation commenced,
“[w]here there has been improper destruction of documents even without notice of a

claim, 	there 	can 	exist 	spoliation, 	particularly 	when 	the 	wholesale 	document
destruction flies in the face of legal standards for document retention.” Clark v. Alan
Vester Auto Group, Inc., 2009 NCBC LEXIS 13, at **24 (N.C. Super. Ct. July 17,
2009). As shown above, Defendants were certainly aware of the possibility of future
litigation prior to the actual filing of the Complaint.
82. 	Defendants—at worst—intentionally destroyed relevant evidence or—
at best—failed to preserve it. However, the method of spoliation does not affect the
outcome because “[i]n attempting to meet their burden of establishing spoliation,
Plaintiffs 	need 	not 	show 	intentional 	misconduct[.] 	Whether 	the 	evidence 	was
destroyed or lost accidentally or in bad faith is irrelevant, because the opposing party
suffered the same prejudice.” Id. at **24–25. As explained above, there are multiple
instances in the record of Defendants deleting materials from their devices or
completely “wiping” their devices. 	Accordingly, Defendants—at a minimum—failed
to preserve evidence.
83. 	Moreover, the evidence Defendants failed to preserve is pertinent, or
potentially relevant, because the subject matter of at least some of the text messages
and email communications directly address issues raised in this case.
84. 	Finally, the parties did not have equal access to the spoliated evidence
because the evidence was deleted from Defendants’ devices before the applicable
round of digital imaging occurred. Notably, Defendants do not deny the deletions and
have failed to offer any credible explanation for them.

85. 	Instead, Defendants argue that Relation is impermissibly asking the
Court to effectively consider the spoliated evidence as the sole evidence of wrongdoing
on the part of Defendants for purposes of deciding whether to grant or deny
Defendants’ Motion for Partial Summary Judgment.10 (Defs.’ Br. Opp. Mot. Adv. Inf.,
at 1–3, ECF No. 254.)
86. 	Our Court of Appeals has held that “it is improper to base the grant or
denial of a motion for summary judgment on evidence of spoliation[,]” because “[i]t is
not an issue to be decided as a matter of law, and cannot, by its mere existence, be
determinative of a claim.” Sunset Beach Dev., 196 N.C. App. at 220. “[T]he inference
does not supply the place of evidence of material facts and does not shift the burden
of proof so as to relieve the party upon whom it rests of the necessity of establishing
a prima facie case, although it may turn the scale when the evidence is closely
balanced.” McLain, 137 N.C. App. at 184.
87. 	Put differently, “[a]lthough the destruction of evidence, standing alone,
is insufficient to allow a party producing such evidence to support a summary
judgment claim, such destruction may push a claim that might not otherwise survive
summary judgment over the line.” 	Praxair, 2000 NCBC LEXIS 5, at **61 (internal
quotation omitted).
88. 	Defendants’ argument is based on an incorrect understanding of the
above-quoted 	cases. 	Defendants 	contend 	that 	the 	above-quoted 	language 	from
10 The deleted evidence relates solely to Plaintiffs’ claims (rather than Defendants’
counterclaims) and thus only implicates Defendants’ Motion for Partial Summary Judgment
as to Plaintiffs’ claims.

McLain and Sunset Beach categorically precludes the use of an adverse inference at
the summary judgment stage in this case. But Plaintiffs are not arguing that
Defendants’ summary judgment motion should be denied on that ground alone.
Rather, as discussed below in detail, with regard to those claims asserted by Plaintiffs
as to which the Court is denying Defendants’ Motion for Partial Summary Judgment,
Plaintiffs have offered extensive evidence (separate and apart from their evidence of
Defendants’ spoliation) as to why those claims should survive Defendants’ summary
judgment motion.
89. 	Accordingly, for the reasons set out above, Plaintiffs have met their
burden of establishing that the Individual Defendants intentionally destroyed or
failed to preserve potentially relevant evidence despite being aware of either actual
litigation or the possibility of future litigation. 	Therefore, Plaintiffs’ Motion for
Adverse Inference is GRANTED.11
II. 	Defendants’ Motion for Partial Summary Judgment
90. 	Defendants argue that summary judgment in their favor is appropriate
on all claims brought against them by Relation. The Court will address each of these
claims below.
A. Misappropriation of Trade Secrets
91. 	Relation claims that each Defendant misappropriated its trade secrets
in violation of both the federal Defend Trade Secrets Act (“DTSA”), 18 U.S.C. §§ 1832–
11 Moreover, Plaintiffs shall be entitled to an adverse inference jury instruction at trial.

1839, and the North Carolina Trade Secrets Protection Act (“NCTSPA”), N.C.G.S.
§§ 66-152–66-157.
92. 	In broad strokes, Relation describes the nature of its claimed trade
secrets as being a combination of “information about clients, carriers, and internal
processes” that Relation claims is protectable under both the DTSA and NCTSPA.
(Pls.’ Br. Opp. Defs.’ Mot. Summ. J., at 23, ECF No. 223.)
93. 	In response, Defendants generally contend that Relation’s claims under
both statutes “should be dismissed because [Relation] failed to adduce competent
evidence: (1) of the existence of any trade secrets or (2) that any Defendant
misappropriated any such alleged trade secret.” (Defs.’ Br. Supp. Mot. Summ. J., at
14, ECF No. 188.)
94. 	Under the NCTSPA, “[t]he owner of a trade secret shall have remedy by
civil action for misappropriation of his trade secret.” 	N.C.G.S. § 66-153. 	Like the
NCTSPA, the DTSA permits “[a]n owner of a trade secret that is misappropriated [to]
bring a civil action under [the DTSA] if the trade secret is related to a product or
service used in, or intended for use in, interstate or foreign commerce.” 	18 U.S.C.
§ 1836(b).
95. 	At the outset, the Court notes that the parties have not identified any
differences in the analysis to be applied to a claim under the DTSA as compared to
one under the NCTSPA. 	Nor has the Court been able to discern any material
differences between the two statutes for the purposes of analyzing Relation’s claims,
except with regard to the requirement under the DTSA that the trade secret at issue

be related to a product or service used in, or intended for use in, interstate or foreign
commerce.12 “Therefore the Court addresses [Relation]’s claims pursuant to the
NCTSPA and the DTSA in tandem.” Power Home Solar, LLC v. Sigora Solar, LLC,
2021 NCBC LEXIS 55, at *30 (N.C. Super. Ct. June 18, 2021); see also Herrmann
Int’l, Inc. v. Herrmann Int’l Eur., 2021 U.S. Dist. LEXIS 42277, at *34–38 (W.D.N.C.
Mar. 6, 2021) (analyzing claims pursuant to the DTSA and the NCTSPA together).
96. 	As an initial matter, “a plaintiff must identify a trade secret with
sufficient particularity so as to enable a defendant to delineate that which he is
accused of misappropriating and a court to determine whether misappropriation has
or is threatened to occur.” Krawiec v. Manly, 370 N.C. 602, 609 (2018) (cleaned up).
This means that a plaintiff must do more than make “general allegations in sweeping
and conclusory statements, without specifically identifying the trade secrets allegedly
misappropriated[.]” Washburn v. Yadkin Valley Bank & Tr. Co., 190 N.C. App. 315,
327 (2008).
97. 	Following the identification of the alleged trade secrets, “[a] threshold
question in any action involving allegations of misappropriation of trade secrets is
whether the information in question constitutes a trade secret[.]” Koch Measurement
Devices, Inc. v. Armke, 2015 NCBC LEXIS 45, at *10 (N.C. Super. Ct. May 1, 2015)
(citing Combs & Assocs. v. Kennedy, 147 N.C. App. 362, 369 (2001)).
12 Defendants make no argument that this element of a DTSA claim has not been met.
Moreover, there is evidence in the record that the trade secrets Defendants allegedly
misappropriated were related to services used, or intended for use, in interstate commerce.
(See e.g., R. 663, 672, 1062.)

98. 	The DTSA defines a trade secret as
all forms and types of financial, business, scientific, technical, economic,
or engineering information, including patterns, plans, compilations,
program devices, formulas, designs, prototypes, methods, techniques,
processes, 	procedures, 	programs, 	or 	codes 	whether 	tangible 	or
intangible, and whether or how stored, compiled, or memorialized
physically, electronically, graphically, photographically, or in writing
if —
(A) the owner thereof has taken reasonable measures to keep
information secret; and
(B) the information derives independent economic value, actual
or potential, from not being generally known to, and not being
readily ascertainable through proper means by, another person
who can obtain economic value from the disclosure or use of the
information[.]
18 U.S.C. § 1839(3).
99. 	In turn, the NCTSPA defines a trade secret as
business or technical information, including but not limited to a formula,
pattern, 	program, 	device, 	compilation 	of 	information, 	method,
technique, or process that:
a. Derives independent actual or potential commercial value from
not 	being 	generally known 	or readily 	ascertainable through
independent development or reverse engineering by persons who
can obtain economic value for its disclosure or use; and
b. 	Is 	the 	subject 	of 	efforts 	that 	are 	reasonable 	under 	the
circumstances to maintain its secrecy.
N.C.G.S. § 66-152(3).
100. 	In applying the definition provided in N.C.G.S. § 66-152(3), North
Carolina courts consider the following six factors:
(1) the extent to which the information is known outside the business;
(2) the extent to which it is known to employees and others involved in
the business;

(3) the extent of measures taken to guard secrecy of the information;
(4) the value of the information to business and its competitors;
(5) 	the 	amount 	of 	effort 	or 	money 	expended 	in 	developing 	the
information; and
(6) the ease or difficulty with which the information could properly be
acquired or duplicated by others.
TSG Finishing, LLC v. Bollinger, 238 N.C. App. 586, 591–92 (2014). 	“The factors
overlap, and courts considering these factors do not always examine them separately
and individually.” Comp. Design & Integration, LLC v. Brown, 2017 NCBC LEXIS 8,
at *23 (N.C. Super. Ct. Jan. 27, 2017).
101. 	Essentially, 	Relation 	argues 	that 	its 	claimed 	trade 	secrets 	are
protectable under both the DTSA and NCTSPA because “in the insurance brokerage
industry, [the combination of] information about clients, carriers, and internal
processes is the secret formula.” (Pls.’ Br. Opp. Defs.’ Mot. Summ. J., at 23 (emphasis
in original).)
102. 	Generally, “[i]nformation will not merit trade secret protection where
the 	information 	is 	‘either 	generally 	known 	in 	the 	industry . . . or 	[is] 	readily
ascertainable by reverse engineering.’ ” 	Sterling Title Co. v. Martin, 266 N.C. App.
593, 601 (2019) (citing Analog Devices, Inc. v. Michalski, 157 N.C. App. 462, 470
(2003)).
103. 	However, compilations of data may be protectable as trade secrets if
certain criteria are met. See Safety Test & Equip. Co. v. Am. Safety Util. Corp., 2015
NCBC LEXIS 40, at *25–27 (N.C. Super. Ct. Apr. 23, 2015). In Safety Test & Equip.

Co. v. Am. Safety Util. Corp., this Court explained what types of data compilations
deserve protection as trade secrets:
[C]ompilations comprised solely of publicly available information are
generally not recognized as trade secrets. 	See Combs & Assocs. v.
Kennedy, 	147 	N.C. 	App. 	362, 	370–71 	(2001) (citing Glaxo 	Inc. 	v.
Novopharm Ltd., 931 F. Supp. 1280 (E.D.N.C. 1996), aff’d, 110 F.3d
1562 (4th Cir. 1997)). 	A compilation of publicly available information
may, however, 	receive 	trade 	secret 	protection 	where 	the 	claimant
encountered 	some 	difficulty 	in 	assembling 	each 	of 	the 	public
components. SCR-Tech LLC v. Evonik Energy Servs., LLC, 2011 NCBC
LEXIS 27, at *47 (N.C. Super. Ct. July 22, 2011) (“[A] process comprised
of published components turns on how easy or difficult it is to assemble
the relevant elements into the secret combination.” (internal quotations
omitted)). To qualify for trade secret protection, any such compilation
must have independent commercial value to the claimant and be subject
to reasonable efforts to maintain its secrecy. Market Am., Inc. v. Rossi,
No. 1:97CV00891, 1999 U.S. Dist. LEXIS 9793, at *43 (M.D.N.C. Apr.
15, 1999).
Id. at *26.
104. 	In Krawiec, our Supreme Court addressed the specific issue of whether
“customer lists and contact information are protectable trade secrets as a matter of
law.” Krawiec, 370 N.C. at 608.
105. 	The Supreme Court stated that “[p]rovided that the information meets
the two requirements for a trade secret as defined in subsection 66-152(3), we agree
with 	the 	determination 	of 	the 	Court 	of 	Appeals 	that 	‘[i]nformation 	regarding
customer lists, pricing formulas and bidding formulas can qualify as a trade secret
under G.S. § 66-152(3).’ ” 	Id. at 610 (emphasis added) (citing Area Landscaping,
L.L.C. v. Glaxo-Wellcome, Inc., 160 N.C. App. 520, 525 (2003)).

106. 	However, the Supreme Court ultimately concluded that the complaint
in that case failed to sufficiently allege that the plaintiff employer’s customer lists
met the two requirements of N.C.G.S. § 66-152(3), reasoning as follows:
In their amended complaint, plaintiffs described their trade secrets only
as their “original ideas and concepts for dance productions, marketing
strategies and tactics, as well as student, client and customer lists and
their contact information.” 	Plaintiffs provided no further detail about
these ideas, concepts, strategies, and tactics sufficient to put defendants
on notice as to the precise information allegedly misappropriated. 	In
addition, plaintiffs’ failure to describe a specific idea, concept, strategy,
or tactic with respect to their marketing plan or to provide any detail
about their dance productions renders their claim too general for this
Court to determine—even taking plaintiffs’ factual allegations as true—
whether there is a “formula, pattern, program, device, compilation of
information, method, technique, or process” at issue that “[d]erives
independent 	actual 	or 	potential 	commercial 	value 	from 	not 	being
generally 	known 	or 	readily 	ascertainable 	through 	independent
development 	or 	reverse 	engineering.” 	N.C.G.S. 	§ 66-152(3)(a).
Similarly, plaintiffs’ amended complaint, on its face, does not show that
plaintiffs’ customer lists constituted a protected trade secret because
plaintiffs failed to allege that the lists contained any information that
would not be readily accessible to defendants. 	Like the Ohio Court of
Common Pleas in an often cited case involving a dispute between a
dance studio and its former employee, we recognize that “[t]here is no
presumption that a thing is a secret,” and emphasize the shortcomings
of “general allegations” in making a case for misappropriation of trade
secrets. Arthur Murray Dance Studios of Cleveland, Inc. v. Witter, 105
N.E.2d 685, 709-10 (Ohio Ct. Com. Pl. 1952) (citing Super Maid Cook-
Ware Corp. v. Hamil, 50 F.2d 830, 832 (5th Cir. 1931)).
Id. at 611.
107. 	More recently, our Court of Appeals, citing Krawiec, held that a guest
list composed of 51 names of the plaintiff’s “contacts” was not a trade secret. 	See
Sterling Title Co., 266 N.C. App. at 602. In that case, the plaintiffs alleged that the
defendant, a former employee of the plaintiff, “saved to her personal Dropbox folder
a document titled ‘Happy_Hour_with_Carolina_Bank_Sterling_-guest_list-03-22-12

(1).xlsx,’ which is purportedly ‘a list of 51 names and email addresses and is
consistent with being a contact list for [the plaintiff].’ ” 	Id. 	The Court of Appeals
determined that this guest list was not a trade secret because nothing in the
complaint supported the proposition that such information would not have been
readily accessible to the defendant-former employee but for her employment with the
plaintiff-employer. Id.
108. 	Notably, however, North Carolina courts have held “that ‘sprawling
lists’ of information can form trade secrets in the aggregate, even if some pieces of
information do not qualify as trade secrets in isolation.” New Restoration & Recovery
Servs., LLC v. Dragonfly Pond Works, LLC, 2023 NCBC LEXIS 80, at **9 (N.C.
Super. Ct. June 15, 2023). For example, in Sunbelt Rentals, Inc. v. Head & Engquist
Equip., L.L.C., 174 N.C. App. 49 (2005), the Court of Appeals affirmed the trial court’s
conclusion that the plaintiff’s “compilation of information, including its special
pricing information, customer information (identity, contacts and requirements of its
rental 	customers), 	personnel 	and 	salary 	information, 	organizational 	structure,
financial projections and forecasts, utilization rates, fleet mix by market, capital and
branch budget information, and cost information, when taken together constitute[]
trade secrets[.]” Sunbelt Rentals, Inc., 174 N.C. App. at 56.
109. 	Conversely, this Court has ruled that a plaintiff-logistic company’s
freight carrier files, rate information, and customer files did not constitute trade
secrets based, in part, on the fact that the “information contained therein is such that
[it] can be learned directly from carriers and customers of” the plaintiff-logistic

company. 	Edgewater Servs. v. Epic Logistics, Inc., 2009 NCBC LEXIS 21, at **14
(N.C. Super. Ct. Aug. 11, 2009). See also Combs, 147 N.C. App. at 370 (“[R]egarding
the customer database stored on [defendant]’s computer, the record shows that
defendants could have compiled a similar database through public listings such as
trade show and seminar attendance lists.”); Novacare Orthotics & Prosthetics E., Inc.
v. Speelman, 137 N.C. App. 471, 478 (2000) (holding that customer lists were not
considered “trade secrets” where information would have been easily accessible
through a local telephone book).
110. 	The above-referenced cases demonstrate that this issue is highly fact-
specific based on the specific evidence existing in a particular case. 	Moreover, they
make clear that compilations such as customer lists and contact information can be
protectable as trade secrets if those compilations have independent commercial value
to the claimant and are subject to reasonable efforts to maintain their secrecy. 	See
Krawiec, 370 N.C. at 610.
111. 	The documents identified by Relation that form the basis for its trade
secrets 	include 	the 	following: 	(i) 	an 	Excel 	spreadsheet 	titled 	“Customer 	List
2020.xlsx” (“Gurley’s Customer List”); (ii) an Excel spreadsheet identified as “JL
Client Renewal List for TK Accts.xlsx” (“Client Renewal List”); (iii) an Excel
spreadsheet called “Carrier Contacts List 7.28.2020.xlsx” (“King’s Carrier Contact
List”); (iv) an Excel spreadsheet called “FS-1 Codes.xls” (“Linthicum’s FS-1 List”); (v)
an Excel spreadsheet titled “Net rate calculations.xlsx” (“Linthicum’s Net Rate
Calculation Spreadsheet”); (vi) a PDF document identified as “Lancaster new.pdf”

(“Lancaster’s Production Analysis”); (vii) a PDF document titled “Lancaster.pdf”
(“Lancaster’s Production Report”); and (viii) a PDF document titled “Production
Analysis Report – Production-Crooker” (“Crooker’s Production Analysis”).
112. 	Relation asserts that the information contained in these documents
“would allow a competitor to contact Relation’s clients, analyze their contractual data,
renewal history, and cost pricing and provide them with a quote to undercut and
outright steal Relation’s business.” 	(Cooper Aff. I ¶ 34.) 	Furthermore, Relation
contends that “[s]uch information, if used in competition with Relation, would create
an unfair and unwarranted advantage for a competitor at the expense of Relation
and/or would place Relation at a significant competitive disadvantage.” (Cooper Aff.
I ¶ 33.)
113. 	Relation argues that competition in the insurance brokerage industry
requires it to “invest[ ] a significant amount of time, money, and resources [in]
developing its client base and identifying the needs and preferences of its clients.” (R.
396.) Relation further contends that
[m]uch of this information is gathered by the [P]roducers and [A]ccount
[M]anagers themselves, as the client-facing employees of Relation who
engage directly with clients to learn the clients’ unique needs and
preferences. 	Relation relies upon and invests in its employees—with
competitive salaries, bonuses, trainings, expense reimbursements, sales
meetings, and similar initiatives—to develop and maintain its client
base.
(R. 396.)
114. 	Defendants contend that Relation has failed to offer evidence that any
of the above-described documents actually contain trade secrets. Defendants assert
that the first five documents are not trade secrets because they were created by

certain Defendants for their own personal use and contain only publicly available
information 	that 	can 	be 	easily 	duplicated, 	thereby 	lacking 	any 	significant
independent value. With respect to the last three documents, Defendants argue that
they are not trade secrets because they merely contain information about Crooker’s
and Lancaster’s personal compensation and that these documents were provided to
them by Relation (and not kept confidential by Relation).
115. 	Defendants’ arguments can be summarized as follows: (i) the client
information in the documents is publicly available; (ii) Relation has failed to show
any 	actual 	value 	that 	could 	be 	derived 	by 	Relation’s 	competitors 	from 	this
information; (iii) there is no evidence in the record of effort or money expended by
Relation in developing the information; (iv) client, policy, and insurer information can
be easily ascertained by others in the insurance agency industry; and (v) Relation did
not undertake adequate secrecy measures to protect its claimed trade secrets. 	(See
Defs.’ Br. Supp. Mot. Summ. J., at 12, ECF No. 188.)
116. 	Based on the legal principles set forth above, the Court must consider
each of these eight documents to determine whether a jury could reasonably find that
they qualify as trade secrets. The Court will first determine whether a genuine issue
of material fact exists as to whether the nature of the information contained in each
document 	is 	of 	a 	type 	previously 	recognized by 	our courts 	as 	possessing 	the
characteristics of a trade secret. 	With regard to any of the documents that satisfy
this test, the Court will then address the issues of (1) whether a factual dispute exists
as to the reasonableness of the measures taken by Relation to protect the secrecy of

these 	documents; 	and 	(2) 	whether 	Relation 	has 	offered 	sufficient 	evidence 	of
Defendants’ misappropriation of such trade secrets to survive summary judgment.
1. 	Nature of Information Contained
a. Gurley’s Customer List
117. 	The document referred to as “Gurley’s Customer List,” (ECF Nos. 187.3
(sealed), 200 (redacted)), is an Excel spreadsheet, which contains the names and
mailing addresses of 98 customers. 	Gurley is the only Producer listed on this
document.
118. 	The first two rows in the spreadsheet contain the following information:
“Customers - Active Status”; “Department: Commercial Lines”; and “Division - North
Carolina.” 	The third row reads as follows: “*Please only mark the customers that
EXPECT AND USES Relation Wall Calendars.” The fourth row of Gurley’s Customer
List contains the following column headers: “Producer”; “QUANTITY”; “Customer –
Firm Name”; “Customer – DBA Name”; “Customer – Last name, First Name”;
“Address 1”; “Address 2”; “City”; “State”; and “Zip.” 	The bottom of the spreadsheet
contains a tallied “Calendar Count” of 93.
119. 	Relation contends that Gurley’s Customer List qualifies as a trade secret
because it is a compilation of client information, arguing that “[a] list of Relation’s
clients is not broadly accessible companywide, nor can it be found from any public
source such as the internet.” 	(R. 393.) 	Relation further asserts that “[t]he same is
true for each [P]roducer’s specific list of clients.” (R. 393.)

120. 	In attempting to rebut Relation’s contentions regarding the value of
such information, Smythe testified that it “would have little or no value to [him] or
another agent[,]” because “it would be nothing more than a prospect list.” 	(Smythe
Aff. I ¶ 18.) Smythe further stated that similar lists of business owners’ information
can be purchased from third-party companies. (Smythe Aff. I ¶ 19.)
121. 	In addition, Lancaster testified that the client information contained in
this type of document is outdated and that some of the clients listed may not even be
in business anymore. (Lancaster Aff. I ¶ 39.)
122. 	The Court is unpersuaded that Gurley’s Customer List should be
characterized as a trade secret. 	Based on Krawiec and its progeny, the basic
compilation of client information found in Gurley’s Customer List is not the type of
compilation that is deserving of trade secret protection.
123. 	Therefore, the Court CONCLUDES that Gurley’s Customer List cannot
properly be characterized as a trade secret.
b. Client Renewal List
124. 	The Client Renewal List, (ECF Nos. 187.5 (sealed), 202 (redacted)), is an
Excel spreadsheet containing a table that includes the account names of 37 clients
and four associated insurance policy renewal dates titled “Medical,” “Early Renew,”
“Dental,” and “Ancillary.”
125. 	As with Gurley’s Customer List, Relation contends that the Client
Renewal List is a trade secret because it is a compilation of client information, which
includes 	business 	line 	and 	client 	renewal 	dates. 	Relation 	asserts 	that 	“[a]

consolidated 	client 	list 	which 	contains 	the 	respective 	renewal 	information 	is
imperative 	for 	the 	renewal 	process 	and 	enables 	[its] 	employees 	to 	prioritize
accordingly and ensure each client’s renewal is timely handled and managed.” 	(R.
394.) 	Relation further represents that a “compilation of [renewal dates] is not
generally known and cannot be found from any public source such as the internet.”
(R. 394.)
126. 	Once again, however, Relation has failed to demonstrate—based on the
case law discussed above—that the information contained in the Client Renewal List
is sufficient to warrant trade secret protection.
127. 	Therefore, the Court CONCLUDES that the Client Renewal List is not
a protectable trade secret.
c. King’s Carrier Contact List
128. 	King’s Carrier Contact List, (ECF Nos. 187.4 (sealed), 201 (redacted)),
is 	an 	Excel 	spreadsheet 	that 	contains 	insurance 	“carrier 	name 	and 	contact
information, 	group 	numbers 	and 	online 	access 	information, 	client 	contact
information, seventeen prospects with contact information, and group plan codes.”
(Defs.’ Br. Supp. Mot. Summ. J., at 16; see also Pls.’ Br. Opp. Defs.’ Mot. Summ. J., at
27.) 	Relation contends that “Relation’s Employee Benefits service team (including
King while she was employed by Relation) has used a document known as a carrier
contact list that includes a compilation of information about insurance carriers with
whom Relation does business[,]” and “[t]he information includes group numbers, plan
codes, and online access information.” (R. 394.)

129. 	Specifically, King's Carrier Contact List has ten different tabs. The first
tab is titled " Carrier Contacts " and contains the names of insurance carriers , as well
as the names , phone numbers (including some mobile numbers) , fax numbers , and
email addresses of contacts associated with the insurance carrier. 	Many of the
insurance carriers have multiple individual contacts listed. Additionally, the Carrier
Contacts tab of King 's Carrier Contact List includes some producer login information
for the insurance carriers' websites .
130. 	The second tab of King's Carrier Contact List is named "Broker Online
Access" and includes the following data fields: client names, group numbers of clients,
Group 	EIN 	numbers , 	information 	concermng 	a 	client's 	' 	"
information concerning a client 's '' 	," the client's "Cobra Admin," the
name of the Relation producer working with th e client , Relation producer login
information for carrier websites, the names of cauiers , and links to the carriers '
websites. 	The third tab is named " Clients-EEs Contact Info" and contains client
contact information. 	Some of the se client contacts have their spouses listed as
alternate contact s.
131. 	The fourth tab is titled "Prospects-Leads" and contains the names of 16
companies and contains contact information listed for eight of those companies. 	The
fifth tab is named "Group Plan Codes" and lists client names, the insurance carrier
with whom the client is insured, the client's group number , and the various plans the
client posses ses-such as a

132. 	The next tab of King’s Carrier Contact List is named “Renewals Listing”
and includes hundreds of client names, the number of employees that certain clients
have, the carriers that insure the clients, the type of insurance the clients purchase,
and the renewal dates for those insurance policies. The seventh tab is titled “COBRA
Calc” and includes miscellaneous mathematical formulas. 	The eighth and final tab
of 	King’s 	Carrier 	Contact 	List 	is 	named 	“VF 	Passwords” 	and 	includes 	login
information for carrier portals.
133. 	Relation contends that King’s Carrier Contact List is properly classified
as a trade secret because it is a compilation of detailed and confidential data about
clients and carriers with whom they worked and that “[t]hese group and customer
codes and identifying numbers are not available online or available for purchase.” (R.
394; see also Pls.’ Br. Opp. Defs.’ Mot. Summ. J., at 27.) Relation asserts that “[e]ven
if someone could gather pieces of carrier information one by one, this compilation of
information cannot be gathered or compiled without substantial time and expense.
In other words, nobody could easily acquire or duplicate the information.” (R. 395.)
134. 	In response, Defendants argue that King’s Carrier Contact List was
merely “derived from publicly available information as a convenience to King.” (Defs.’
Br. Opp. Pls.’ Mot. Sanctions, Ex. B, at 108:17–109:1, ECF No. 160.22.)
135. 	Based on its careful review of King’s Carrier Contact List, the Court is
unable to say that it does not deserve trade secret protection as a matter of law. This
document contains significantly more detailed information than either Gurley’s

Customer List or the Client Renewal List and could reasonably be found by a jury to
merit trade secret status in accordance with the cases discussed above.
136. 	Accordingly, the Court CONCLUDES that a genuine issue of material
fact exists as to whether the compilation of information contained in King’s Carrier
Contact List constitutes a trade secret.
d. Linthicum’s FS-1 List
137. 	Linthicum’s FS-1 List, (ECF Nos. 187.6 (sealed), 203 (redacted)), is an
Excel spreadsheet comprised of FS-1 codes for 67 insurance companies. At the bottom
of the document, there is a notation that states: “Revised 5/17/07 C. Jones.” Relation
claims that Linthicum’s FS-1 List was compiled by multiple account managers, while
they were employed by Relation. (R. 395.)
138. 	Relation asserts that Linthicum’s FS-1 List is a trade secret because it
is a compilation of data about insurance carriers with whom the Former Employees
worked at Relation and that “[t]his compilation of information is not generally known
and cannot be found from any public source such as the internet.” 	(R. 395; see also
Pls.’ Br. Opp. Defs.’ Mot. Summ. J., at 27.)
139. 	Moreover, Relation contends that this information is valuable because
“it makes it much easier to issue FS-1s if you have it rather than having to call the
carrier and get the actual code.” 	In support of its argument, Relation notes that
Linthicum utilized the FS-1 List daily while working for Relation and has also used
this document at Pilot. Furthermore, Relation states that such information could not
be easily acquired or duplicated because “[e]ven if someone could gather an FS-1 code

one by one, this compilation of information cannot be gathered or compiled without
substantial time and expense.” (R. 395.)
140. 	Defendants argue that Relation has offered no evidence that there is
anything proprietary about FS-1 codes and that, to the contrary, these codes are
issued by the North Carolina Department of Insurance. As such, Defendants contend,
this 	document 	merely 	contains 	information 	that 	is 	publicly 	available, 	easily
duplicated and lacking in significant independent value.
141. 	Defendants are correct that FS-1 codes are assigned to insurance
companies by a North Carolina state agency and are utilized to identify such
companies on a “[p]roof of insurance Form FS-1” regarding vehicle liability insurance
in North Carolina. See 19A NCAC 03D.0221(a)(4).
Form FS-1 is provided by insurance companies in the State and requires
the following: (A) vehicle year, make and identification number; (B)
insurance company name and company code; (C) insurance policy
number; (D) registered owner’s name and effective date of insurance; (E)
owner’s driver license number and date of birth; (F) owner’s address; (G)
preparation 	date 	and 	authorized 	signature 	of 	insurance 	company
representative.
Id.
142. 	The Court does not believe that Linthicum’s FS-1 List contains the kind
of information that is protectable as a trade secret because this document simply
consists of information that can be easily obtained and duplicated and has no
significant independent value.
143. 	Therefore, the Court CONCLUDES that Linthicum’s FS-1 List is not a
protectable trade secret.

e. Linthicum’s Net Rate Calculations Spreadsheet
144. 	Linthicum’s 	Net 	Rate 	Calculations 	Spreadsheet, 	(ECF 	Nos. 	187.7
(sealed), 204 (redacted)), is an Excel spreadsheet containing various mathematical
formulas and calculations. 	Relation asserts that this spreadsheet was created by a
Relation employee (who is not named in this litigation) and “is used in connection
with Relation’s quotes and proposals.” (R. 395.) Relation further contends that client
information can be plugged into Linthicum’s Net Rate Calculations Spreadsheet to
generate insurance proposals and quotes.
145. 	Relation argues that such information constitutes a trade secret because
it involves the kind of “pricing policies, formulas, and information” that North
Carolina courts have protected as trade secrets. 	Relation further contends that
Linthicum’s Net Rate Calculation Spreadsheet was created by an employee at
Relation to “create workers’ compensation quotes and proposals.” (Cooper Aff. II, at
Ex. 19.) 	Moreover, Relation represents that Linthicum’s Net Rate Calculations
Spreadsheet is “replete with formulas, [that] cannot be found from any public source
such as the internet.” (R. 395.)
146. 	In response, Defendants contend that this document simply consists of
“formulas to do the basic mathematical calculations to determine a ‘Total Estimated
Premium.’ ” (Defs.’ Br. Supp. Mot. Summ. J., at 17.)
147. 	It is clear that a factual dispute exists as to the purpose of the
information contained in Linthicum’s Net Rate Calculations Spreadsheet as well as
the nature (and value) of the mathematical calculations and formulas contained

therein. 	At the summary judgment stage, the Court cannot resolve such a factual
dispute.
148. 	The Court therefore CONCLUDES that the determination of whether
the 	information 	contained 	in 	Linthicum’s 	Net 	Rate 	Calculations 	Spreadsheet
qualifies as a trade secret must be made by the finder of fact at trial.
f. Lancaster’s Production Analysis and Lancaster’s
Production Report
149. 	The parties make overlapping arguments with respect to the trade
secret status of Lancaster’s Production Analysis, (ECF Nos. 187.8 (sealed), 205
(redacted)), 	and Lancaster’s 	Production 	Report, 	(ECF 	Nos. 187.9 	(sealed), 206
(redacted)), (collectively, “Lancaster’s Reports”). 	Accordingly, the Court elects to
address both documents together.
150. 	Lancaster’s Reports “were emailed by Plaintiffs to Lancaster monthly
for his use in reviewing and determining his compensation.” 	(Defs. Br. Supp. Mot.
Summ. J., at 17.)
151. 	Lancaster’s Production Analysis accounts for the month of December
2021 and is a three-page document containing eleven data fields, which are titled as
follows: 	“Exec/Cust/LOB,” 	“Premium 	Volume,” 	“NonPrem 	Comm 	Vol,” 	“Total
Volume,” 	“% 	Tot 	Vol,” 	“Agency 	Comm,” 	“% 	Comm/Vol,” 	“ProdComm 	Prem,”
“ProdComm NonPrem,” “Broker Comm,” and “Gross Profit.” 	The column titled
“Exec/Cust/LOB” identifies Lancaster’s clients and the types of insurance those
clients have acquired through him. 	The “Premium Volume” comes “from the actual
policy of record itself” and is determined by looking at customer invoices. (Defs.’ Br.

Opp. Pls.’ Mot. Summ. J., Ex. 39, at 100:7–14, ECF No. 224.47.) 	“Agency Comm”
represents the amount of money received by Relation from that policy. 	The column
named 	“ProdComm 	Prem” 	“is 	the 	commission 	generated 	from 	the 	premium
commission lines” and goes to the producer listed on the report. (Kopp Dep. 28:9–15,
ECF No. 224.45.)13
152. 	Lancaster’s Production Report is a 31-page document that likewise
covers the month of December 2021, but also contains some different information
than 	that 	set 	out 	in 	Lancaster’s 	Production 	Analysis. 	Among 	other 	things,
Lancaster’s Production Report includes the names of clients, the types of insurance
purchased by the client, the name of the servicing insurance carrier, and the policy
or group number. 	Additionally, Lancaster’s Production Report includes Relation’s
agency revenue, the producer split percentage, and the amount of commission
received by the Producer. Lancaster’s Production Report also specifies the month for
which a commission should be applied and the date the amount is posted.
153. 	Relation 	asserts 	that 	Lancaster’s 	Reports 	constitute 	trade 	secrets
because they contain compilations of various types of proprietary information,
including policy numbers, business lines, commission amounts, financial data, and
client renewal dates.
154. 	Ray Dobens, Relation’s Vice President of Finance and Sales Operations,
explained the nature and purpose of producer reports as follows:
Each month, producers receive an email with reports that detail the
commissions they received for the previous month’s pay period. This
13 With regard to the remaining columns, Relation’s counsel has represented that they are
not material to the resolution of this issue.

information allows producers to verify that their commissions are
accurate.
The monthly email contains the following documents:
a. A “Total” Production Analysis that includes: each client
name, the type of coverage the client receives, the premium volume
amount, the commission amount (in dollars) received by Relation, the
commission amount (in dollars) attributed to the producer as part of his
or her wages, and the gross profit Relation received (which is the
commission received by the agency minus the commission amount that
the producer receives);
b. A “New” Production Analysis, which is targeted toward new
business. 	This report contains similar information as the “Total”
Production Analysis but is limited to accounts for new business;
c. A Producer Account Balances & Trends spreadsheet that
provides the producer’s year-to-date balance snapshot, including how
much 	commission 	the 	producer 	has 	earned, 	any 	compensation
adjustments, any draws (advancements) he or she has requested, the
amount of compensation that has been paid, and any remaining balance.
This spreadsheet also includes Relation’s agency revenue, which is
provided to the producer for “information purposes only”; and
d. A Producer Account Disbursement Request, which is a
blank form that allows a producer to request money from any balance in
addition to the predetermined draw, as explained above.
(Dobens Aff. ¶¶ 15–16 (emphasis in original).)
155. 	Based upon the evidence in the record, the Court cannot say as a matter
of law that the compilation of information in Lancaster’s Reports does not deserve
protection as trade secrets. Therefore, the Court CONCLUDES that this issue must
be decided by a jury.
g. Crooker’s Production Analysis
156. 	Crooker’s Production Analysis, (ECF No. 187.10), is a thirteen-page
document, which accounts for the month of November 2021. 	Relation emailed

Crooker’s Production Analysis to Crooker after he resigned from Relation. 	(See
Landacre Aff., ECF No. 253; Landacre Aff., Ex. A, ECF Nos. 253.1 (sealed), 260
(public).)
157. 	Crooker’s Production Report reflects his final commission earned at
Relation. 	Like Lancaster’s Production Analysis, Crooker’s Production Analysis
contains eleven data fields, which are also titled as follows: “Exec/Cust/LOB,”
“Premium Volume,” “NonPrem Comm Vol,” “Total Volume,” “% Tot Vol,” “Agency
Comm,” “% Comm/Vol,” “ProdComm Prem,” “ProdComm NonPrem,” “Broker Comm,”
and “Gross Profit.”
158. 	Relation argues Crooker’s Production Report is a trade secret because it
is a compilation of client information, including policy numbers, business lines,
commission amounts, financial data, and client renewal dates.
159. 	Once again, the Court CONCLUDES that a reasonable jury could find
that the compilation of information contained in Crooker’s Production Analysis
qualifies as a trade secret.
160. 	Therefore, for the reasons set forth above, the Court concludes as a
matter of law that Gurley’s Customer List, the Client Renewal List, and Linthicum’s
FS-1 List are not protectable as trade secrets. Conversely, the Court concludes that
a genuine issue of material fact exists concerning whether King’s Carrier Contact
List, 	Linthicum’s 	Net 	Rate 	Calculations 	Spreadsheet, 	Lancaster’s 	Production

Analysis, Lancaster’s Production Report, and Crooker’s Production Analysis qualify
as trade secrets under the NCTSPA and the DTSA.14
2. 	Reasonableness of Security Measures
161. 	Next, Defendants argue that none of the documents that Relation
characterizes as trade secrets were the “subject of efforts that are reasonable under
the circumstances to maintain [their] secrecy.” 	N.C.G.S. § 66-152(3)(b); see also 18
U.S.C. § 1839(3)(A).
162. 	It is well established that “[n]o trade secret will be found if . . . there is
no evidence indicating that the plaintiff undertook efforts to ensure the information’s
secrecy.” 	Safety Test, 2015 NCBC LEXIS 40, at *26 (citing Bank Travel Bank v.
McCoy, 802 F. Supp. 1358, 1360 (E.D.N.C. 1992)). 	Accordingly, Defendants are
correct that “[e]ven if information was initially secret and the claimant intended that
trade secret information be confidential, trade secret protection can be lost if
adequate measures were not taken to insure that the information was, in fact, kept
confidential.” Id. at *27.
163. 	In Encompass Servs., PLLC v. Maser Consulting P.A., this Court
reviewed 	the 	analysis 	utilized 	by 	North 	Carolina 	courts 	in 	evaluating 	the
reasonableness of efforts undertaken to protect the secrecy of an alleged trade secret.
In assessing whether information that would otherwise qualify as a
purported trade secret “is the subject of efforts that are reasonable . . . to
maintain its secrecy,” our courts have recognized that the “inquiry is
fact-specific, and ‘courts that have addressed it closely examine the
circumstances 	surrounding 	the 	trade 	secret 	to 	determine 	what
14 However, as discussed below, the Court finds that Relation has failed to show sufficient
evidence of misappropriation with regard to Crooker’s Production Analysis so as to withstand
Defendants’ summary judgment motion as to that claim.

measures are reasonable.’ ” 	Comput. Design & Integration, LLC v.
Brown, 2018 NCBC LEXIS 216, at *46 (N.C. Super. Ct. Dec. 10,
2018) (quoting Koch Measurement Devices Inc. v. Armke, 2015 NCBC
LEXIS 45, at *15 (N.C. Super. Ct. May 1, 2015)). “The critical question
in deciding this issue on summary judgment is ‘whether [plaintiffs are]
entitled to ask the jury to undertake an analysis of the reasonableness
of 	[plaintiffs’] 	efforts 	to 	maintain 	the 	confidentiality 	of 	the
information.’ ” Id. at *48–49 (citation omitted).
As cited by the parties in their briefs, this Court has, on numerous
occasions, 	addressed 	on 	summary 	judgment 	a 	defendant’s
argument that plaintiffs failed to make reasonable efforts to maintain
the secrecy of its information. 	See, e.g., Hopkins v. MWR Mgmt. Co.,
2017 NCBC LEXIS 47, at *73 (N.C. Super. Ct. May 31, 2017) (holding
plaintiff’s efforts sufficient to create jury issue and denying summary
judgment where confidential documents were stored on a community
computer with generic login information written down on a sticky note
attached to the screen, access was restricted to only certain employees,
and employees executed employment agreements detailing the handling
of confidential data); TaiDoc Tech. Corp. v. OK Biotech Co., 2016 NCBC
LEXIS 26, at *21–25 (N.C. Super. Ct. Mar. 28, 2016) (denying summary
judgment 	where 	there 	were 	multiple 	measures 	to 	protect 	the
confidentiality 	of 	the 	information, 	including 	confidentiality
acknowledgements on every page, confidentiality labels on disclosed
documents, 	a 	draft 	confidentiality 	agreement 	to 	be 	executed, 	and
restricted access to full disclosure); Koch Measurement Devices, Inc,
2015 NCBC LEXIS 45, at *16 (denying summary judgment where
plaintiff kept its confidential material in locked facilities and included a
nondisclosure provision in its employment agreements); Safety Test &
Equip. Co., Inc. v. Am. Safety Util. Corp., 2015 NCBC LEXIS 40, at *32–
33 (N.C. Super. Ct. Apr. 23, 2015) (denying summary judgment where
plaintiff kept its confidential material in locked facilities under video
surveillance, 	maintained 	a 	password-protected 	database, 	included
confidentiality 	agreements 	with 	some 	suppliers, 	and 	included 	a
nondisclosure provision 	in 	its 	employment 	agreements); Edgewater
Servs. v. Epic Logistics, Inc., 2009 NCBC LEXIS 21, at *11–15 (N.C.
Super. Ct. Aug. 11, 2009), aff’d, 217 N.C. App. 399, 720 S.E.2d 30 (2011)
(holding plaintiff’s efforts not reasonable as a matter of law and granting
summary 	judgment 	for 	defendant 	where 	plaintiff 	maintained
confidential files in an “unlocked file room, accessible to anyone” without
safeguards to ensure security).
Notably, the only case cited by Defendants in which this Court granted
summary judgment on the grounds that the plaintiff failed to take
reasonable 	measures 	to 	protect 	the 	secrecy 	of 	a 	trade 	secret

is Edgewater. In their briefs, both Defendants attempt to analogize the
facts of this case to those in Edgewater. 	(ECF No. 125, at pp. 17–19;
ECF No. 126 [SEALED], redacted at ECF No. 137, at pp. 13–14.)
However, 	the 	Court 	is 	not 	persuaded 	that 	Encompass’ 	password
protected Egnyte server, coupled with confidentiality provisions in
employment agreements, is tantamount to an “unlocked file room,
accessible to anyone.” Edgewater, 2009 NCBC LEXIS 21, at *12.
Encompass Servs., PLLC v. Maser Consulting P.A., 2021 NCBC LEXIS 59, at **27–
29 (N.C. Super. Ct. June 28, 2021).
164. 	In sum, “[a]lthough the reasonableness of measures taken to protect the
confidentiality of information claimed to be a trade secret is often appropriate for
resolution by a jury, the absence of evidence of such measures can result in the
dismissal of the claim as a matter of law.” 	Campbell Sales Grp., Inc. v. Niroflex by
Jiufeng Furniture, LLC, 2022 NCBC LEXIS 148, **23–24 (N.C. Super. Ct. Dec. 5,
2022).
165. 	Here, Relation has pointed to a series of confidentiality measures it
utilized to protect its confidential information. 	For example, Jon Cooper, the
President of the Eastern Region of Relation NC, testified that “[t]o protect the
Company’s trade secret and confidential information, the Company takes certain
measures including requiring its employees to execute confidentiality agreements
and executing confidentiality agreements with vendors.” (Cooper Aff. I ¶¶ 2, 36.)
166. 	Furthermore, the head of Relation’s IT department, Michael Toran,
explained the following security measures implemented by Relation:
To ensure that the Company’s confidential and trade secret information
remains confidential and secure from unauthorized disclosure, use, or
modification, 	the 	Company 	has 	implemented 	certain 	technical,

administrative, 	and 	physical 	security 	measures 	that 	include 	the
following:
a. Employee-specific unique credentials (username and password)
managed by Microsoft Active Directory;
b. User 	password 	management 	which 	specifies 	password
complexity, length, and change requirements including automatic
password 	suspension 	after 	a 	certain 	number 	of 	failed 	login
attempts;
c. Multi-factor authentication (MFA) required for employees in
order to 	gain access 	to 	the 	Company network 	and systems
including to Company email and its internal agency management
system;
d. Role-based permissions allowing access to Company data only
on a need-to-know basis;
e. Promptly cutting off access to the Company’s network upon an
employee’s resignation and/or termination from the Company;
f. Restrictions on remote user access to the Company’s network
(e.g., requiring access through the Company’s virtual private
network (VPN));
g. Removable media management including restricted use of
external 	hard 	drives 	and 	USB 	drives 	to, 	in 	part, 	prevent
exfiltration of confidential information;
h. Full disk encryption on Company-issued portable devices (e.g.,
laptops);
i. Encryption of Company Data;
j. Audit log records maintained for information systems; and
k. Anti-virus software, patch management, and network firewall
maintenance.
(Toran Aff. ¶ 6.)
167. 	Additionally, Relation’s Employee Handbook states that “employees and
contractors with remote access privileges to Relation’s Group corporate network must
not use non-Relation Group email accounts (i.e., Hotmail, Yahoo, AOL), or other

external resources to conduct Relation Group business, thereby ensuring that official
business is never confused with personal business.” (R. 959–960.)
168. 	Relation’s 	Employee 	Handbook 	also 	contains 	the 	following
confidentiality provision:
Relation Group’s client lists—current, former, and potential; customer
information; medical histories of clients and clients’ members; employee
information; and employee lists are to be treated as highly confidential
in all cases. This information may not be disclosed to any third party or
used for any purpose other than performance of job duties for the
Company, 	either 	during 	employment 	or 	after 	employment.
Unauthorized 	use 	or 	duplication 	of 	this 	confidential 	information,
including copies in electronic form, is expressly forbidden. Please refer
to 	your 	Employment 	Agreement 	and 	Non-solicitation 	for 	detailed
information.
(R. 955.)
169. 	Moreover, telecommuting agreements signed by the Former Employees
require that telecommuting employees ensure that “[w]ork-related materials must be
kept in a locked/secured location while not in use.” (R. 982.)
170. 	Although 	Defendants 	attempt 	to 	downplay 	the 	adequacy 	of 	these
measures, the Court CONCLUDES that Relation has put forth sufficient evidence
from which a jury could find that its security measures were reasonable and adequate
to protect its trade secrets.
3. 	Evidence of Misappropriation
171. 	Finally, Defendants contend that, even if any of the documents at issue
could be properly classified as trade secrets, Plaintiffs have put forth no actual
evidence of misappropriation.

172. 	With respect to those documents the Court has now found that a jury
could reasonably deem to be trade secrets, Defendants argue that the only evidence
proffered by Relation of misappropriation consists of the following: (i) King emailing
the carrier contact list she created to herself; (ii) Lancaster emailing his production
reports to himself after he received them from Relation; and (iii) Crooker’s retention
of a copy of his Production Report that was emailed to him after he left Relation.
173. 	In response, Relation contends that—in addition to the three acts of
misappropriation 	described 	above—it 	has 	proffered 	evidence 	of 	Defendants’
misappropriation through circumstantial evidence. 	Furthermore, Relation asserts
that it is not required to show that Defendants actually disclosed or used Plaintiffs’
trade secrets—only that Defendants had a specific opportunity to do so. 	See, e.g.,
Safety 	Test, 	2015 	NCBC 	LEXIS 	40, 	at 	*41 	(recognizing 	that 	“evidence 	of
misappropriation [was] sufficient where a former employee ha[d] access to pricing
proposals through former employment, move[d] to another company, and cause[d] the
same customers to move their business to the new company”) (discussing Byrd’s Lawn
& Landscaping, Inc. v. Smith, 142 N.C. App. 371, 376–77 (2001)).
174. 	The NCTSPA defines misappropriation as the “acquisition, disclosure,
or use of a trade secret of another without express or implied authority or consent,
unless such trade secret was arrived at by independent development, reverse
engineering, or was obtained from another person with a right to disclose the trade
secret.” N.C.G.S. § 66-152(1). 	For purposes of the DTSA,
the term “misappropriation” means--

(A) 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
(B) disclosure or use of a trade secret of another without express or
implied consent by a person who--
(i) used improper means to acquire knowledge of the trade secret;
(ii) at the time of disclosure or use, knew or had reason to know
that the knowledge of the trade secret was--
(I) 	derived 	from 	or 	through 	a 	person 	who 	had 	used
improper means to acquire the trade secret;
(II) acquired under circumstances giving rise to a duty to
maintain the secrecy of the trade secret or limit the use of
the trade secret; or
(III) derived from or through a person who owed a duty to
the person seeking relief to maintain the secrecy of the
trade secret or limit the use of the trade secret; or
(iii) before a material change of the position of the person, knew
or had reason to know that--
(I) 	the trade secret was a trade secret; and
(II) knowledge of the trade secret had been acquired by
accident or mistake[.]
18 U.S.C. § 1839(5).
175. 	Moreover, the NCTSPA specifically sets out the following regarding the
burden of proof required to prevail on a misappropriation of trade secrets claim:
Misappropriation of a trade secret is prima facie established by the
introduction of substantial evidence that the person against whom relief
is sought both:
(1) Knows or should have known of the trade secret; and

(2) Has had a specific opportunity to acquire it for disclosure or
use or has acquired, disclosed, or used it without the express or
implied consent or authority of the owner.
N.C.G.S. § 66-155.
176. 	This Court has further explained as follows:
Evidence that a former employee had access to, and therefore an
“opportunity to acquire,” an employer’s trade secrets, without more, is
not sufficient to establish a prima facie case of misappropriation.
Rather, the employer must establish either that the former employee
accessed 	its 	trade 	secrets 	without 	authorization 	or 	provide 	other
sufficient evidence of misappropriation to raise an inference of actual
acquisition or use of its trade secrets.
Am. Air Filter Co. v. Price, 2017 NCBC LEXIS 9, at *23 (Feb. 3, 2017).
177. 	Finally, “[o]nce a plaintiff satisfies its burden in this regard, Defendants
may elect to defend by introducing ‘substantial evidence’ that they ‘acquired the
information 	comprising 	the 	trade 	secret 	by 	independent 	development, 	reverse
engineering, or . . . from another person with a right to disclose the trade secret.’ ”
Safety Test, 2015 NCBC LEXIS 40, at *29 (citing N.C.G.S. § 66-155).
178. 	Based on a thorough review of the evidence in the record, the Court is
satisfied that there is sufficient evidence of misappropriation to allow Relation’s trade
secrets claim to go to the jury with respect to King’s alleged misappropriation of the
Carrier Contact List, Lancaster’s alleged misappropriation of his Reports, and
Linthicum’s alleged misappropriation of the Net Rate Calculations spreadsheet.
179. 	On 18 February 2022—the day after accepting a position at Pilot—King
sent multiple emails from her Relation email address to her personal email address.

These emails attached a copy of the Carrier Contact List. 	(Compl., Ex. Z, ECF No.
5.26; R. 382, 436.)
180. 	Subsequently, on 10 March 2022, King sent the Carrier Contact List
from her personal email address to her Pilot email address and to another Pilot
employee’s 	Pilot 	email 	address. 	(Pls.’ 	Mot. 	Sanctions, 	Ex. 	2, 	ECF 	No. 	141.)
Examination of the metadata associated with the Carrier Contact List revealed that
“this document was last modified on March 10, 2022, and last accessed on March 15,
2022.” (R. 382.) King also admitted to using this document in her work at Pilot.
181. 	On 7 February 2022, Lancaster emailed the Lancaster Reports for
December 2021 and January 2022 to his personal email address. (Compl., Ex. V, ECF
No. 5.22.) 	He states that his reason for doing so was to verify that he was paid
correctly for the month and to compare his “year over year annual income against
[his] W2[.]” 	(Lancaster Aff. I ¶ 30.) 	He contends that he has not used any of the
Relation information he sent to his personal account since working at Pilot, including
the Relation commission reports. 	(Lancaster Aff. I ¶ 36; R. 526.) 	Despite these
assertions, however, the forensic analysis of Lancaster’s laptop revealed that on 19
May 2022, Lancaster attached these documents to an email to himself where both the
sender and recipient address were Lancaster’s personal email address. (See Shelton
Aff. I ¶¶ 20–21.)
182. 	On 17 February 2022, Linthicum emailed the Net Rate Calculations
spreadsheet to her personal email address. 	(Cooper Aff. II ¶ 8.) 	On 5 April 2022,
Linthicum sent the Net Rate Calculations spreadsheet from her personal email

account to her Pilot email account. 	(R. 382.) 	The HTML report for Linthicum’s
imaged laptop “showed that this file was accessed from an Outlook exchange server
account in offline mode.” (R. 382.)
183. 	The Court reaches a different conclusion as to Crooker. 	Relation
appears to contend that he remained in possession of a paper copy of Crooker’s
Production Analysis. (See Landacre Aff. ¶ 15; Landacre Aff., Ex. A.) However, there
is no evidence that he ever forwarded, printed or accessed the document following his
termination. (Landacre Aff. ¶ 15.) Therefore, the Court CONCLUDES that Relation
failed to put forth sufficient evidence from which a jury could reasonably find
misappropriation on the part of Crooker. Nor is there adequate evidence of any other
Individual Defendant’s misappropriation of Crooker’s Production Analysis.
184. 	Therefore, the Court CONCLUDES that Defendants’ Motion for Partial
Summary Judgment regarding Relation’s trade secrets claim is GRANTED in part
and DENIED in part. 	Summary judgment on this claim is GRANTED as to all of
the Former Employees, except for King, Lancaster, and Linthicum. As to those three,
summary judgment is DENIED. The four documents that the jury may consider at
trial as potential trade secrets are King’s Carrier Contact List, Linthicum’s Net Rate
Calculations 	Spreadsheet, 	Lancaster’s 	Production 	Analysis, 	and 	Lancaster’s
Production Report.
B. Breach of Non-Solicitation Clauses of Employment Agreements
185. 	The Former Employees next seek summary judgment on Relation’s
claims for breach of the non-solicitation provisions in their respective employment

agreements (the “Non-Solicitation Clauses”), arguing that the “unenforceability of the
Non-Solicitation provisions is established as a matter of law” because the provisions
are “legally overbroad[.]” (Defs.’ Br. Supp. Mot. Summ. J., at 13.)
186. 	The 	Former 	Employees 	contend 	that 	“this 	Court 	independently
demonstrated 	the 	legal 	infirmity 	of 	those 	non-solicitation 	provisions 	of 	the
Employment Agreements” in its Amended Preliminary Injunction Order (“Amended
PI Order,” ECF No. 116).
187. 	In response, Relation asserts that “as the Court has already told
Defendants, rulings made at the preliminary injunction stage have no bearing on the
rest of the litigation[,]” and “[t]he preliminary injunction decision was based on
limited information and incomplete evidence, prior to discovery.” (Pls.’ Br. Opp. Defs.’
Mot. Summ. J., at 36.)
188. 	Relation is correct that a ruling on a motion for preliminary injunction
is not a final ruling on the issues addressed therein. 	USConnect, LLC v. Sprout
Retail, Inc., 2017 NCBC LEXIS 71, at *4 (N.C. Super. Ct. Aug. 10, 2017) (noting that
a “preliminary-injunction order is not a final judgment on the merits”).
189. 	Here, however, the Court finds that the analysis contained in its
Amended PI Order remains legally correct and is not altered by the additional
information that has been obtained during discovery in this case and made a part of
the record.
190. 	In the Amended PI Order, this Court determined that Relation had not
established a likelihood of success on its breach of contract claims pertaining to the

Non-Solicitation Clauses based on the likely unenforceability of those provisions.
(Am. PI Order ¶¶ 34–46.) In reaching this conclusion, the Court summarized the key
portions of those Non-Solicitation Clauses as follows:
Here, the Non-Solicitation Clauses preclude the Former Employees from
(a) soliciting “Clients” or “Prospective Clients” of Relation “with whom
[the Former Employees] had material contact or about whom [the
Former Employees] obtained Confidential Information during the last
(12) 	months” 	(hereinafter, 	the 	“Customers 	Restriction”); 	and 	(b)
soliciting employees of Relation “or any other member of the Ascension
Group” that the Former Employees “came into contact [with] during
Employee’s last (12) months of employment . . . or about whom [the
Former Employees] obtained Confidential Information” and “who [are]
known 	by 	[the 	Former 	Employees] 	at 	the 	time 	of
such . . . solicitation . . . to then be employed by [Relation] or any other
member 	of 	the 	Ascension 	Group” 	(hereinafter, 	the 	“Employees
Restriction”). (See, e.g., ECF No. 5.12, at § 8(a); ECF No. 5.14, at § 4(b).)
(Am. PI Order ¶ 37.)
191. 	The 	Court 	then 	analyzed 	the 	Non-Solicitation 	Clauses 	under 	the
framework set out in Wells Fargo Ins. Servs. USA v. Link, 2018 NCBC LEXIS 42
(N.C. Super. Ct. May 8, 2018), aff’d per curiam, 372 N.C. 261 (2019), which this Court
deemed “to be particularly instructive.” (Am. PI Order ¶ 38.)
192. 	Relying on Wells Fargo, this Court ultimately “reache[d] a similar
conclusion with respect to the Non-Solicitation Clauses at issue here[,]” and stated
the following:
First, with respect to the Customers Restriction, the Former Employees
are not only prohibited from soliciting the clients or prospective clients
“with whom [they] had material contact,” but also “about whom [they]
obtained Confidential Information.” 	The definition of “Confidential
Information” 	includes 	identifying 	information 	of 	“Clients” 	and
“Prospective Clients.” 	In effect, the Customers Restriction could apply
to preclude the Former Employees from soliciting clients or prospective
clients of Relation with whom they were shown contact information, but
never actually had any contact. Such restrictions fail as unnecessary to

protect the legitimate business interests of the employer. See Link, 2018
NCBC LEXIS 42, at *19; see also Aesthetic Facial & Ocular Plastic
Surgery Ctr., P.A. v. Zaldivar, 264 N.C. App. 260, 272 (2019) (holding
that 	non-solicitation 	clause 	in 	employment 	agreement 	was
unreasonable where it foreclosed solicitation of potential clients “with
whom [former employee] had no relationship”); Akzo Nobel Coatings,
Inc. v. Rogers, 2011 NCBC LEXIS 42, at **33 (N.C. Super. Ct. Nov. 3,
2011) (“Generally, covenants which seek to restrict a former employee
from competing with future or prospective customers with whom they
had no personal contact during employment fail as unnecessary to
protect the legitimate business interests of the employer.”); Laboratory
Corp. of America Holdings v. Kearns, 84 F. Supp. 3d 447, 459 (M.D.N.C.
2015) (“In North Carolina, covenants prohibiting competition for a
former employer’s customers are only enforceable when they prohibit
the employee from contacting customers with whom the employee
actually had contact during his former employment.”).
Second, 	with 	regard 	to 	the 	Employees 	Restriction, 	the 	Former
Employees are similarly not only prohibited from soliciting employees
“with whom [they] had material contact,” but also “about whom [they]
obtained Confidential Information.” 	The definition of “Confidential
Information” 	includes 	“information 	about 	and 	personnel 	files 	of
employees.” Further, the Employees Restriction does not only apply to
employees of Relation, but also to employees of “any other member of
the Ascension Group.” Plaintiffs argue that the Employees Restriction
is tailored to only restrict the solicitation of employees that are “known
by [the Former Employees] at the time of such . . . solicitation . . . to then
be employed by the Company or any other member of the Ascension
Group.” Nevertheless, as noted above, the Employment Agreements do
not identify the members of the Ascension Group. 	In effect, the
Employees Restriction would foreclose the solicitation of an employee of
any of Plaintiffs’ unnamed affiliate companies, potentially precluding
solicitation of employees who are engaged in business activities wholly
distinct 	from 	those 	as 	to 	which 	the 	Former Employees 	had been
engaged. 	Again, 	such 	broad 	restrictions 	have 	been 	found 	to 	be
unenforceable in that they do not protect the legitimate business
interests of the employer. 	See Link, 2018 NCBC LEXIS 42, at *26–30;
Medical Staffing Network, Inc., 194 N.C. App. at 656–57.
(Am. PI Order ¶¶ 45–46.)
193. 	The Court has carefully considered Relation’s arguments that the
analysis in the Amended PI Order is no longer correct based on new information that

has been obtained during discovery. For the sake of brevity, the Court will not recite
the details of that argument. 	Instead, it suffices to say that the Court continues to
have the same concerns about the enforceability of the Non-Solicitation Clauses that
existed at the preliminary injunction stage. 	Guided by the principles espoused in
Wells Fargo, the Court CONCLUDES that the Non-Solicitation Clauses in the
Employment Agreements here are unenforceable as a matter of law.
194. 	In an alternative argument, Relation asks the Court to use the “blue
pencil” doctrine to allow the unobjectionable portions of the covenants to be enforced.
195. 	Our Supreme Court has stated the following regarding this doctrine:
[T]he Court of Appeals, citing Welcome Wagon Int’l, Inc. v. Pender, 255
N.C. 244, 248, 120 S.E.2d 739, 742 (1961), acknowledged that North
Carolina has adopted the “strict blue pencil doctrine” under which a
court cannot rewrite a faulty covenant not to compete but may enforce
divisible and reasonable portions of the covenant while striking the
unenforceable portions. Beverage Sys., 235 N.C. App. at 443, 762 S.E.2d
at 321.
. . .
[B]lue-penciling is the process by which “a court of equity will take notice
of the divisions the parties themselves have made [in a restrictive
covenant] and enforce the restrictions in the territorial divisions deemed
reasonable 	and 	refuse 	to 	enforce 	them 	in 	the 	divisions 	deemed
unreasonable.” 	Welcome Wagon, 255 N.C. at 248, 120 S.E.2d at 742
(majority opinion).
Beverage Sys. of the Carolinas, LLC v. Associated Bev. Repair, LLC, 368 N.C. 693,
696, 699 (2016).
196. 	In the present case, the Court declines to consider application of the
“blue pencil” doctrine because Relation (as the party seeking application of the
doctrine) has not met its burden of demonstrating precisely how it can, or should, be

applied on these facts. 	It is the duty of a litigant—not the Court—to show with
specificity how the application of the blue pencil doctrine on a particular set of facts
is warranted.
197. 	Therefore, the Court CONCLUDES that Defendants are entitled to
summary judgment on Relation’s claims for breach of the Non-Solicitation Clauses
contained in the Former Employees’ Employment Agreements.
C. Breach of Confidentiality Provisions of Employment Agreements
198. 	Relation also asserts that the Former Employees disclosed or used its
confidential 	information 	in 	their 	employment 	with 	Pilot 	in 	violation 	of 	the
confidentiality 	provisions 	(the 	“Confidentiality 	Provisions”) 	contained 	in 	their
respective Employment Agreements. (Compl. ¶¶ 154–61.)
199. 	The 	Former 	Employees 	seek 	summary 	judgment 	on 	this 	claim,
contending that this Court’s analysis in the Amended PI Order likewise demonstrates
that the “confidentiality provisions of the Employment Agreements are unenforceable
as a matter of law.” (Defs.’ Br. Supp. Mot. Summ. J., at 6.)
200. 	A claim for breach of an employment agreement provision is a species of
breach of contract. 	Breach of contract claims require the “(1) existence of a valid
contract and (2) breach of that contract.” Poor v. Hill, 138 N.C. App. 19, 26 (2000).
201. 	Importantly, when assessing the validity of an employment agreement,
North Carolina law distinguishes between restrictive covenants (which restrain
trade) and confidentiality agreements (which are only meant to prevent the disclosure

or use of confidential information). See Amerigas Propane, L.P. v. Coffey, 2015 NCBC
LEXIS 98, at **10 (N.C. Super. Ct. Oct. 15, 2015).
202. 	“Unlike 	non-competition 	and 	non-solicitation 	provisions, 	a
nondisclosure provision is generally not considered to be a restraint on trade.”
Prometheus Grp. Enters., LLC v. Gibson, 2023 NCBC LEXIS 42, at **24 (N.C. Super.
Ct. Mar. 21, 2023). 	Accordingly, a “nondisclosure provision is not subjected to the
same level of scrutiny as the non-competition and non-solicitation provisions.” Id. at
**25. For this reason, “[s]uch agreements may, therefore, be upheld even though the
agreement is unlimited as to time and area[.]” 	Akzo Nobel Coatings, Inc. v. Rogers,
2011 NCBC LEXIS 42, at **31 (N.C. Super. Ct. Nov. 3, 2011).
203. 	Nevertheless, 	“North 	Carolina 	courts 	will 	treat 	a 	non-disclosure
agreement 	as 	a 	contract 	in 	restraint 	of 	trade 	in 	appropriate 	circumstances.”
Amerigas 	Propane, 	L.P., 	2015 	NCBC 	LEXIS 	98, 	at 	**23 	(citing 	Chemimetals
Processing v. McEneny, 124 N.C. App. 194, 197 (1996)). 	This Court has explained
that
[a] non-disclosure provision equates to a restrictive covenant in restraint
of trade and is subject to the same analysis as a covenant not to compete
if 	“the 	anticipated 	and 	intended 	effect 	of 	the 	prohibition 	on 	[an
employee’s] disclosure . . . is not to protect [the company’s] confidential
business information” but rather to prevent a former employee from
competing with the former employer. See Amerigas Propane, L.P., 2015
NCBC LEXIS 98, at *24–25 (compiling cases).
Cty. of Wake PDF Elec. & Supply Co., LLC v. Jacobsen, 2020 NCBC LEXIS 103, at
*19 (N.C. Super. Ct. Sept. 9, 2020).
204. 	It therefore follows that

[a] non-disclosure provision in an employment agreement is enforceable
“if it does not seek to prevent a party from engaging in a similar business
in competition with the [employer], but instead seeks to prevent the
disclosure or use of confidential information.” 	Chemimetals Processing
v. McEneny, 124 N.C. App. 194, 197, 476 S.E.2d 374, 376 (1996). To be
enforceable, such a non-disclosure agreement requires only “a showing
that it protects a legitimate business interest of the [employer]”; time
and durational limitations are irrelevant. Id. at 197, 476 S.E.2d. at 377;
Eye Dialogue LLC v. Party Reflections, Inc., 2020 NCBC LEXIS 90, at
*14–19 (N.C. Super. Ct. July 28, 2020).
Id. at *20–21.
205. 	Under North Carolina law, the “protection of customer relationships and
goodwill against misappropriation by departing employees is well recognized as a
legitimate protectable interest of the employer.” United Lab., Inc. v. Kuykendall, 322
N.C. 643, 651 (1988); see also S. Fastening Sys. v. Grabber Constr. Prods., 2015 NCBC
LEXIS 42, at *19 (N.C. Super. Ct. Apr. 28, 2015) (holding that requiring employees
to sign confidentiality agreements for the purpose of protecting both the company’s
and the customer’s confidential information protected a legitimate business interest
of the company).
206. 	Each of the seven Employment Agreements at issue here contained
Confidentiality Provisions. 	While not all of the Confidentiality Provisions at issue
are completely identical, they are all substantially similar. (See Compl., Exs. I–L.)
207. 	For 	example, 	the 	Confidentiality 	Provision 	in 	Crooker’s 	Producer
Agreement provided as follows:
Employee 	agrees 	that 	during 	Employee’s 	employment 	with 	the
Company and thereafter, Employee shall not (other than as required by
Employee’s job duties) reveal to anyone any Trade Secrets or other
Confidential Information, and Employee further agrees that Employee
will not use in any way any Trade Secrets or other Confidential

Information, other than as is necessary to perform Employee’s work for
the 	Company 	and 	other 	members 	of 	the 	Ascension 	Group. 	The
obligations of confidentiality and restrictions on use set forth in the
immediately preceding sentence shall remain in effect for the duration
of Employee’s employment with the Company and for a period of thirty-
six (36) months thereafter, provided that as to any item of Confidential
Information that continues to be a Trade Secret under applicable law,
such obligations of confidentiality and restrictions on use shall remain
in effect as to such item for the maximum time allowed by applicable
law. 	Employee agrees to deliver to the Company at the termination of
Employee’s 	employment, 	or 	at 	any 	other 	time 	the 	Company 	may
request, all Confidential Information (including all copies thereof and
any electronic versions of such materials) that Employee may then
possess 	or 	have 	under 	Employee’s 	control 	(including 	all 	such
Confidential Information in electronic form).
(Compl., Ex. I § 7.)
208. 	With respect to the definition of “Confidential Information,” there are
two different iterations that appear in the Employment Agreements. 	For example,
the following definition of “Confidential Information” taken from Crooker’s Producer
Agreement is practically identical to the definitions found in both Kelly and Gurley’s
Producer Agreements:
“Confidential Information” means all information of a confidential or
proprietary nature (whether or not specifically labeled or identified as
“confidential” or “proprietary”), in any form or medium, including,
without limitation, Seller Confidential Information, that relates to or
results from the business of Seller (with respect to the Insurance
Offices), the Company or any member of the Ascension Group, disclosed
to Employee or of which Employee became aware as a consequence of
Employee’s relationship with the Company or Seller, including, without
limitation, all Trade Secrets [sic] any other information developed or
used by Seller (with respect to the Insurance Offices), the Company or
the Ascension Group that is not known generally to the public and that
gives the Company or any member of the Ascension Group an advantage
in the marketplace (or gave Seller an advantage in the marketplace), as
well as all notes memoranda, compilations, reports and other documents
prepared by Employee or other employees of Seller, the Company or of
any member of the Ascension Group containing any such information.

The term “Confidential Information” shall not include any information
which 	has 	been 	publicly 	disclosed 	without 	any 	active 	or 	passive
assistance or involvement of Employee.
(Compl., Ex. I § 3(d)(iv).)
209. 	Comparatively, Linthicum, Sneed, King, and Lancaster’s Employment
Agreements contain lengthier definitions of “Confidential Information” that are
substantially similar to one another. 	By way of example, Linthicum’s Account
Manager Agreement includes the following definition of “Confidential Information”:
“Confidential Information” shall mean all information of a confidential
or proprietary nature (whether or not specifically labeled or identified
as “confidential” or “proprietary”), in any form or medium, that relates
to or results from the business, historical or projected financial results,
budgets, strategies, know-how, sales products, services, research or
development, 	acquisitions, 	acquisitions 	under 	consideration 	or
acquisition targets, divestitures or divestitures under consideration, or
trade secrets of the Company or of any other member of the Ascension
Group. 	Confidential Information includes, but is not limited to, (i) the
Company’s and other Ascension Group member’s programs, analyses,
sales and marketing strategies, marketing and promotional plans and
practices, pricing, rate structures and profit margins, (ii) Clients and
Prospective Clients of the Company and other members of the Ascension
Group, including, without limitation, Client and Prospective Client lists,
the following information regarding Clients and Prospective Clients:
identifying information, risk characteristics and requirements, identity
and preferences of key personnel, loss and claims histories, financial
data 	and 	performance, 	payroll, 	employee 	information, 	policy 	and
contract renewal and expiration dates and data, policy terms, conditions
and 	rates, 	underwriting 	data, 	and 	specialized 	needs, 	and 	the
confidential 	information 	of 	Clients 	and 	Prospective 	Clients, 	(iii)
information about and personnel files of employees of the Company or
any other member of the Ascension Group, former employees of the
Company or any other member of the Ascension Group, prospective
employees of the Company or any other member of the Ascension Group,
or independent contractors, suppliers, or distributors of the Company or
any other member of the Ascension Group, or other third parties with
whom the Company or any member of the Ascension Group has or had
contractual relationships, and (iii) [sic] any other information developed
or used by the Company or the Ascension Group that is not known

generally to the public and that gives the Company or any member of
the Ascension Group an advantage in the marketplace, as well as all
notes[,] 	memoranda, 	compilations[,] 	reports 	and 	other 	documents
prepared by Employee or other employees of Company or any member
of the Ascension Group containing any such information.
(Compl., Ex. N § 3(b).)
210. 	Having carefully reviewed the Confidentiality Provisions at issue, the
Court is satisfied that they are intended to protect Relation’s confidential business
information as opposed to being restrictive covenants in disguise.
211. 	The Former Employees do not devote much attention to this claim in
their summary judgment briefs. 	To the extent they address this claim at all, they
essentially contend that—as with the Non-Solicitation Clauses— the Court’s analysis
in its Amended PI Order demonstrates the unenforceability of the Confidentiality
Provisions.
212. 	But the Court’s Amended PI Order did not consider the enforceability of
the Confidentiality Provisions. 	Rather, the Court’s analysis was focused on the
reasonableness of the Non-Solicitation Clauses as restraints on trade.
213. 	Thus, Defendants have failed to demonstrate the legal invalidity of this
claim.
214. 	Relation, conversely, has put forward evidence that would permit a jury
to conclude that the Former Employees acted in violation of the Confidentiality
Provisions by using Relation’s confidential information for purposes other than those
related to their employment with Relation.

215. 	The forensic examination of the Former Employees’ devices revealed
multiple 	examples 	of 	them 	forwarding 	documents 	from 	their 	Relation 	email
addresses to their personal email addresses and then to their Pilot email addresses.
(Shelton Aff. I ¶¶ 5–6; see e.g., R. 605–06, 1404, 1485, 1519, 2387–2401, 2403–2533,
2535–63, 2565–89, 2591–94, 2596–2632, 2634–36, 2638–40, 2642–43, 2645–47, 2649–
79, 2987–97, 2999–3426, 3428–44, 3446–71, 3473–3699, 3701–55, 3757–75, 3777–79,
3781–93, 3795–3920, 3927–52, 3954–69, 3971–73, 3975–76.)
216. 	For example, King emailed various documents, including the Carrier
Contact List, from her Relation email address to her personal email address on 18
February 2022. 	(R. 382, 436, 440, 1518.) 	Subsequently, King emailed the Carrier
Contact List from her personal email account to her Pilot email account on 10 March
2022. (Shelton Aff. I ¶ 5.) The applicable metadata showed that the Carrier Contact
List was last modified on 10 March 2022, and last accessed on 15 March 2022. 	(R.
382.)
217. 	Furthermore, the forensic examination revealed that on 21 February
2022, Gurley sent an email from his personal account to his Pilot account attaching
a group of Relation documents. 	(R. 383–84.) 	Gurley admitted to emailing these
documents from his Relation email address to his personal address, although he
denies having used them since emailing them. (R. 705–06.) On 19 and 20 May 2022,
Gurley sent additional emails from his personal email address to his Pilot email
address, attaching other documents that Relation contends are confidential. (Shelton
Aff. I ¶¶ 9–15; R. 1098–1230.) Many of these documents were contained in an email

sent from Gurley’s Relation email account to his personal email account on 11 August
2021. (R. 1230.)
218. 	In another example, Lancaster admitted that he emailed his producer
production reports for December 2021 and January 2022 from his Relation email
address to his personal email address on 7 February 2022. 	(R. 505.) 	Moreover,
Lancaster sent an email from his personal email address to his Pilot email address
with the subject line “Fwd: Print help please!” and attached Relation documents
entitled “NCU UHC Alternate 2 2022.xls,” “NCU UHC Alternate 1 2022.xls,” and
“NCU UHC Renewal 2022.xls.” (R. 383.) The forensic examination also revealed that
on 19 May 2022, Lancaster sent multiple emails to his personal email address, which
attached documents Relation contends are confidential.
219. 	On 19 May 2022, Sneed emailed documents from her Relation email
address to her personal email address and then from her personal email address to
her Pilot email address. 	(R. 1576.) 	Additionally, the examination of Sneed’s laptop
revealed the existence of multiple documents that—according to Relation—contained
confidential information, although, due to various deletions, the source of these
documents is presently unknown. 	(See Shelton Aff. I ¶¶ 22–39.) 	Sneed, however,
admitted in her deposition that she sent some forms and checklists from her Relation
email address to her personal email address. (R. 612–23.) When asked why she sent
such documents to her personal email address, Sneed replied that she “thought [she]
might need it later[.]” (R. 613.)

220. 	In her deposition, Linthicum admitted that she sent the Net Rate
Calculations spreadsheet, among other documents, from her Relation email address
to her personal email address on 17 February 2022. 	(R. 674–81.) 	Moreover, the
forensic examination revealed that Linthicum emailed the Net Rate Calculations
spreadsheet from her personal account to her Pilot email account on 5 April 2022,
and she admitted to having subsequently used the spreadsheet since that time. 	(R.
382, 679.) 	Linthicum testified that she chose to email these documents to herself
“[b]ecause [she] was thinking, if [she] ever left, these are documents [she] might want
to have.” (R. 680.)
221. 	The record also reflects that on 12 March 2021, Kelly forwarded an email
from his Relation account to his personal email account that contained Relation client
information. (R. 2987.)
222. 	Furthermore, Zewalk testified that Crooker took with him “expiration
lists” containing Relation client information that he proceeded to use in his new
employment with Pilot. (R. 474.)
223. 	These examples clearly suffice in and of themselves to create an issue of
fact with regard to this claim.
224. 	Therefore, the Court DENIES Defendants’ Motion for Partial Summary
Judgment as to Relation’s claim for breach of the Confidentiality Provisions of the
Former Employees’ employment agreements.

D. Breach of Settlement Agreement
225. 	Relation also contends that the Pilot Defendants breached the March
2021 Settlement Agreement in the Smythe Lawsuit “by soliciting Relation’s clients
and employees and using Relation’s confidential information during the prohibited
periods.” (Compl. ¶¶ 170–175.)15
226. 	Relation’s claim for breach of the Settlement Agreement is another
iteration of a claim for breach of contract, which, as noted above, requires the “(1)
existence of a valid contract and (2) breach of that contract.” Poor, 138 N.C. App. at
26.
227. 	Defendants do not challenge the validity of the Settlement Agreement
or the fact that Smythe, Capps, Kinney, Pilot Risk, and Pilot Benefits were bound by
the obligations set out therein. Rather they contend that Relation has failed to offer
evidence 	that 	any 	of 	the 	Pilot 	Defendants 	actually 	breached 	the 	Settlement
Agreement. 	In support of their argument, the Pilot Defendants rely on their
testimony that “they did not solicit employees or clients during the covered period or
use, disclose or disseminate Plaintiffs’ confidential information.” 	(Defs.’ Reply Br.
Supp. Mot. Summ. J., at 4, ECF No. 257.)
228. 	As noted earlier in this opinion, the Smythe Lawsuit concluded with the
entry of a Settlement Agreement between Relation, Smythe, Capps, Kinney, Pilot
Risk, and Pilot Benefits. 	The Settlement Agreement provided in pertinent part as
follows:
15 For clarity, this claim lies only against Defendants Smythe, Capps, Kinney, Pilot Risk, and
Pilot Benefits, and not against the Former Employees.

This Confidential Settlement Agreement (“Agreement”) is made and
entered into between Relation Insurance, Inc. and Relation Insurance
Services of North Carolina, Inc. (“Plaintiff” or “Relation”) on the one
hand and Kyle S. Smythe, Robert A. Capps III, Lynette W. Kinney, Pilot
Risk Management Consulting, LLC, and Pilot Financial Brokerage, Inc.
on the other hand (“Defendant” or “Pilot”) (collectively the “Parties”
and each individually a “Party”).
. . .
Therefore, it is agreed Pilot shall not:
(i) 	through and including May 31, 2021, solicit, attempt to
solicit, accept, or attempt to accept as a customer any of the
customers of Relation with whom Smythe or Robin Turner
(“Turner”) 	had 	Material 	Contact 	during 	Smythe’s 	or
Turner’s employment with Relation for the purpose of
selling, offering or providing such customers or prospective
customers any product or service in competition with those
products or services offered or provided by Relation, nor
may Pilot do any of the foregoing on or prior to May 31,
2021 even if the effective date of such efforts would be after
May 31, 2021; nor shall it,
(ii) 	through and including March 31, 2021, solicit, attempt to
solicit, hire, or attempt to hire any employee of Relation or
independent contractor working for or with Relation.
(c) 	Acknowledgement: Pilot acknowledges the restrictions against
solicitation 	in 	this 	Agreement 	apply 	to 	all 	forms 	of 	solicitation,
including, 	without 	limitation, 	written 	communications, 	verbal
communications, email communications, and all forms of electronic
communications through social media websites or applications that may
be broadly disseminated, including, but not limited to, status updates,
posts, 	direct/personal 	messages, 	tweets, 	or 	retweets 	on 	Linkedln,
Twitter, 	Google+, 	Facebook, 	or 	any 	other 	form 	of 	electronic
communication.
(d) 	Confidentiality, 	Return 	and 	Non-Disclosure. 	Pilot 	shall 	not
disclose, publish or disseminate any Company Information to any third
party, or use any Company Information. Pilot represents and warrants
that Pilot has returned to Relation all tangible Company Information in
Pilot’s possession, custody, or control. 	As to intangible Company
Information, Pilot herby certifies to Relation that all such information
has been deleted from all computers, cell phones, tablets, external

drives, cloud storage platforms, and any and all other places stored or
accessible. 	Relation acknowledges that nothing herein shall preclude
Pilot’s use of information held in the mind of Smythe or Turner or
developed by them after March 4, 2020. 	The restrictions contained
herein shall remain in place as to Confidential Information through and
including March 4, 2022, and as to Trade Secrets for so long as the
information qualifies as a trade secret under North Carolina law.
(Smythe Aff. I, Ex. F § 3 (b)–(d) (emphasis in original).)
229. 	In sum, the Settlement Agreement prohibited the Pilot Defendants from
(1) soliciting Relation’s employees, (2) soliciting Relation’s clients, and (3) using
Relation’s confidential information.
230. 	Relation first contends that the following actions of the Pilot Defendants
demonstrate that they did, in fact, solicit Relation’s employees in violation of the
Settlement Agreement:
[W]ithin days of the Settlement Agreement, Pilot had the Former
Employees meet with Pilot’s attorney, refer business to Pilot, and send
themselves Relation information. Although deleted from the computers,
Pilot even had a “Crooker/Kelly SpreadSheet” and a “growth plan” to
guide its efforts to recruit the Former Employees. By April, the Former
Employees were regularly meeting with Pilot—surreptitiously.
(Pls.’ Br. Opp. Defs.’ Mot. Summ. J., at 21 (emphasis in original) (internal citations
omitted).)
231. 	However, the Court’s review of the record fails to reveal any evidence of
solicitations of Relation employees by the Pilot Defendants during the period from 11
March 2021 and 31 March 2021 (the “Employee Solicitation Restriction Period”).
232. 	Despite asserting that “Pilot had the Former Employees meet with
Pilot’s attorney,” Relation has offered no evidence of either of the Pilot Entities doing
so. 	Rather, Relation has merely shown that Crooker, Pilot Risk, and Pilot Benefits

were clients of the same attorney at the same time. 	Moreover, there is no evidence
that either of the Pilot Entities directed the Former Employees to refer business to
Pilot Risk or Pilot Benefits during the Employee Solicitation Restriction Period.
233. 	In addition, although the record reflects several chance encounters
between a Relation employee and one of the Managing Members of the Pilot Entities
in a public place, there is no evidence that any attempts at solicitation occurred on
these occasions.
234. 	Therefore, summary judgment is GRANTED as to all Pilot Defendants
on Relation’s claim for breach of the Employee Solicitation Restriction Period of the
Settlement Agreement.
235. 	Next, Relation asserts that the Pilot Defendants solicited Relation’s
clients in violation of the Settlement Agreement, contending that “Smythe was
‘quoting’ these clients soon after the Settlement Agreement was executed[,]” and that
“Pilot solicited numerous clients from Relation during the restricted period.” 	(Pls.’
Br. Opp. Defs.’ Mot. Summ. J., at 20–21.)
236. 	As quoted above, the Settlement Agreement provided that between 11
March 2021 and 31 May 2021, the Pilot Defendants were prohibited from soliciting,
attempting to solicit, accepting, or attempting to accept as a customer any of the
customers of Relation with whom Smythe or Robin Turner had Material Contact
during their employment with Relation for the purpose of selling, offering or
providing 	such 	customers 	or 	prospective 	customers 	any 	product 	or 	service 	in
competition with those products or services offered or provided by Relation. 	(See

Smythe Aff. I, Ex. F § 3(b)(ii).)16 	The Settlement Agreement also restricted Pilot
Benefits from doing “any of the foregoing on or prior to May 31, 2021 even if the
effective date of such efforts would be after May 31, 2021[.]” (Smythe Aff. I, Ex. F §
3(b)(ii).)
237. 	For 	purposes 	of 	the 	Settlement 	Agreement, 	“Material 	Contact” 	is
defined as “contact or interaction that was intended (at least in part) to further the
business interests of Relation with or to facilitate the sale of products or the
performance of services by Relation for such Person.” (Smythe Aff. I, Ex. F § 2(b).)
238. 	There is no evidence in the record of Kinney, Capps, or Pilot Benefits
soliciting any Relation clients during the Client Solicitation Restriction Period.
239. 	However, Relation has put forth evidence of three of its customers who
terminated their relationship with Relation and obtained new insurance policies
through Pilot Risk the very same day, raising an inference that Smythe was
responsible.
240. 	First, Relation “lost” Company A17 as a client on 14 March 2021. Smythe
had serviced Company A during his employment with Relation. (R. 397.) Company
A was shown as a client of Pilot Risk’s in its 2021 Book of Business Report, which
reflects that Company A had “[n]ew” policies go into effect on 14 March 2021. Smythe
16 The Court will refer to the period of time from 11 March 2021 and 31 May 2021 as the
Client Solicitation Restriction Period.
17 Pursuant to the parties’ request, the Court will avoid listing these clients by name in order
to preserve their confidentiality.

is listed as the associated producer on these “[n]ew” policies. 	(R. 1732.) 	14 March
2021 is within the Client Solicitation Restriction Period.
241. 	Second, 	Relation 	“lost” 	Client 	B 	(another 	client 	who 	Smythe 	had
serviced during his employment with Relation) on 20 March 2021. Pilot’s 2021 Book
of Business Report lists Client B as a client (along with Smythe as the associated
producer) and states that Client B had “[n]ew” policies go into effect on 20 March
2021—which falls within the Client Solicitation Restriction Period. (R. 397, 1760.)
242. 	As a third example, Relation “lost” Company C as a client on 17 April
2021. 	Once again, Smythe had serviced Company C during his employment with
Relation. (R. 397.) Company C is shown as a client of Pilot Risk’s in its 2021 Book of
Business Report, which reflects that Company C had “[n]ew” policies go into effect
within the Client Solicitation Restriction Period on 17 April 2021. 	Smythe is listed
as the associated producer. (R. 1750.)
243. 	Accordingly, Defendants’ Motion for Summary Judgment based on
violations of the Client Solicitation Restriction Period of the Settlement Agreement
is DENIED with respect to Smythe and Pilot Risk, but GRANTED as to Kinney,
Capps, and Pilot Benefits.
244. 	Finally, Relation contends that the Pilot Defendants violated the section
of the Settlement Agreement providing that “Pilot shall not disclose, publish or
disseminate any Company Information to any third party, or use any Company
Information.” 	“Company Information” is defined so as to include “Confidential
Information.”

245. 	The 	Settlement 	Agreement 	restricts 	Pilot’s 	use 	of 	Relation’s
Confidential Information between 11 March 2020 and 4 March 202218 and defines
“Confidential Information” as follows:
[D]ata and information, regardless of the form or medium in which it is
or was created, stored, reflected or preserved, and whether or not labeled
as “confidential”, relating to Relation’s Business (which does not rise to
the status of Trade Secret Information) which was disclosed to Kyle S.
Smythe (“Smythe”) or of which Smythe became aware as a consequence
of or through Smythe’s relationship with Relation and which has value
to Relation and is not generally known to its competitors. Confidential
Information shall not include any data or information that has been
voluntarily 	disclosed 	to 	the 	public 	by 	Relation 	or 	that 	has 	been
independently developed and disclosed by others (except where such
public disclosure has been made by Pilot without authorization), or that
otherwise enters the public domain through lawful means without
breach of any obligations of confidentiality owed to Relation by Pilot.
(Smythe Aff. I, Ex. F § 2(d).)
246. 	Notably, 	this 	definition 	of 	“Confidential 	Information” 	limits 	what
qualifies as “Confidential Information” to information disclosed to Smythe of which
he became aware as a consequence of—or through his relationship with— Relation
and which has value to Relation and is not generally known to its competitors.
247. 	In support of this portion of its claim, Relation points to a document
found on Smythe’s Pilot computer that is labeled “Smythe Documents Summary” and
“Potential confidential documents of Relation Insurance.” (R. 2123.) This document
contains a list of 23 documents identified by Smythe as potentially confidential.
Furthermore, there is a column labeled “to help me find again” and directions for
accessing these documents on the computer they were taken from. (R. 2123.)
18 The Court will refer to the period of time from 11 March 2020 and 4 March 2022 as the
Confidential Information Restriction Period.

248. 	The presence of these documents on Smythe’s Pilot Risk computer (and
the manner in which Smythe labeled them) would permit a jury to find that Smythe
used Relation’s confidential information in violation of the Settlement Agreement in
furtherance of his employment with Pilot Risk such that summary judgment is
improper as to Smythe and Pilot Risk. However, Relation has failed to point to any
evidence that would allow a reasonable jury to find that Pilot Benefits, Capps, or
Kinney breached the Settlement Agreement with regard to the use of Relation’s
Confidential Information.
249. 	Therefore, 	Defendants’ 	Motion 	for 	Summary 	Judgment 	based 	on
violations of the Confidential Information Restriction Period of the Settlement
Agreement is DENIED with respect to Smythe and Pilot Risk, but GRANTED as to
Kinney, Capps, and Pilot Benefits.
E. Unjust Enrichment
250. 	Defendants further seek summary judgment on Relation’s claim for
unjust 	enrichment. 	(Compl. 	¶¶ 	205–213.) 	In 	support 	of 	this 	claim, 	Relation
essentially contends that Defendants used Relation’s confidential information for the
benefit of the Pilot Entities.
251. 	Our Supreme Court has explained that a claim for unjust enrichment
“is neither in tort nor contract but is described as a claim in quasi contract or a
contract implied in law.” 	Booe v. Shadrick, 322 N.C. 567, 570 (1988). 	“The general
rule of unjust enrichment is that where services are rendered and expenditures made
by one party to or for the benefit of another, without an express contract to pay, the

law will imply a promise to pay a fair compensation therefor.” 	Atlantic C. L. R. Co.
v. State Highway Comm’n, 268 N.C. 92, 95–96 (1966) (citations omitted). 	“The
doctrine of unjust enrichment was devised by equity to exact the return of, or
payment for, benefits received under circumstances where it would be unfair for the
recipient to retain them without the contributor being repaid or compensated.”
Collins v. Davis, 68 N.C. App. 588, 591 (1984).
252. 	In order to recover on an unjust enrichment claim, a “[p]laintiff must
prove: (1) that it conferred a benefit on another party; (2) that the other party
consciously 	accepted 	the 	benefit; 	and 	(3) 	that 	the 	benefit 	was 	not 	conferred
gratuitously or by an interference in the affairs of the other party.” 	Jacobsen, 2020
NCBC LEXIS 103, at *29 (citing Southeastern Shelter Corp. v. BTU, Inc., 154 N.C.
App. 321, 330 (2002)). Additionally, the conferred benefit must be measurable. Booe,
322 N.C. at 570.
253. 	The Court is not convinced that an unjust enrichment claim exists on
these facts. This Court recently rejected a similar argument:
The Bayatronics Defendants further argue that ACI has provided no
evidence that it actually conferred any benefit on Defendants, or that
there is any contract implied in law between ACI and the Bayatronics
Defendants. (Br. Supp. 29.) They contend that ACI’s unjust enrichment
claim focuses on the Bayatronics Defendants having conferred a benefit
upon themselves, given that it is alleged that Mr. Patel—a member of
Bayatronics—retained trade secret information when he left ACI and
allegedly shared that information with the Bayatronics Defendants.
(Br. Supp. 29.)
ACI, however, contends that it conferred “the benefit of access to its
confidential information upon [Jayesh] Patel,” because he and ACI
entered into the Confidentiality Agreement, and that through the
Defendants’ conspiracy, all Defendants obtained the benefit of that

confidential information, and it would be inequitable for them to retain
that benefit. (Br. Opp. 28.)
However, ACI has alleged a taking of information in violation of Jayesh
Patel’s 	Confidentiality 	Agreement, 	not 	a 	willing 	transfer 	of 	that
information to the Bayatronics Defendants. 	See, e.g., Albritton v.
Albritton, 2021 NCBC LEXIS 53, at **33–36 (N.C. Super. Ct. June 7,
2021) (“Neither the allegations nor the facts in evidence support a claim
for unjust enrichment. 	Movants have not alleged that [Plaintiffs]
conferred benefits upon Defendants, but, rather, that Defendants took
assets belonging to [Plaintiff].” (emphasis in original)); Klos Constr., Inc.
v. Premier Homes & Props., LLC, 2020 NCBC LEXIS 85, at *48–51 (N.C.
Super. Ct. July 21, 2020) (dismissing a claim for unjust enrichment
where “it is undisputed that the [ ] Defendants took any benefit of
Plaintiff’s goodwill”); KNC Techs., LLC v. Tutton, 2019 NCBC LEXIS 72,
at *36–37 (N.C. Super. Ct. Oct. 9, 2019) (stating that “a claim for unjust
enrichment must be based on a contract implied in law in which one
party has provided a benefit to another, such as goods or services, for
which the first party should rightfully be compensated”).
The access granted to Jayesh Patel as a benefit of his Confidentiality
Agreement, and his alleged wrongful taking and disseminating of that
information to the Bayatronics Defendants, does not support a claim for
unjust enrichment against the Bayatronics Defendants. 	ACI did not
voluntarily confer a benefit on the Bayatronics Defendants. Rather, the
evidence is clear that, at most, Jayesh Patel wrongly misappropriated
or retained trade secret information which the Bayatronics Defendants
ultimately received.
Am. Cirs., Inc. v. Bayatronics, LLC, 2023 NCBC LEXIS 165, at **38–40 (N.C. Super.
Ct. Dec. 8, 2023).
254. 	The same logic applies here. 	Furthermore, to the extent this claim is
based 	upon 	the 	Former 	Employees’ 	alleged 	misuse 	of 	Relation’s 	confidential
information, it is well settled that “a claim for unjust enrichment cannot stand where
an express contract exists covering the same subject[.]” Jacobsen, 2020 NCBC LEXIS
103, at *29 (cleaned up).

255. 	As 	discussed 	above, 	the 	Court 	is 	denying 	summary 	judgment 	on
Relation’s 	claims 	for 	breach 	of 	the 	Confidentiality 	Provisions 	of 	the 	Former
Employees’ Employment Agreements. 	Therefore, because that claim encompasses
the same subject matter as the unjust enrichment claim, the latter claim cannot
survive. See Delta Envtl. Consultants, Inc. v. Wysong & Miles Co., 132 N.C. App. 160,
165, disc. review denied 350 N.C. 379 (1999) (“It is well established that if there is a
contract between the parties, the contract governs the claim and the law will not
imply a contract[; in such cases] an action for breach of contract, rather than unjust
enrichment, is the proper cause of action” (internal citations and quotation marks
omitted)).
256. 	Therefore, 	the 	Court 	GRANTS 	Defendants’ 	Motion 	for 	Summary
Judgment on Relation’s claim for unjust enrichment.
F. Computer Trespass
257. 	The Former Employees also seek summary judgment on Relation’s
claims for computer trespass under both federal and North Carolina law, arguing
that these claims fail because their use of the computers was authorized by Relation.
(Defs.’ Br. Supp. Mot. Summ. J., at 28.) 	They contend that Relation “granted the
Former Employees access to [Relation’s] computer system” and that “[t]here is
neither allegation nor evidence that any Former Employee evaded security protocols
to gain access to unauthorized areas.” (Defs.’ Br. Supp. Mot. Summ. J., at 29.)

258. 	Relation asserts that the Former Employees exceeded the access they
were provided to Relation’s computers. (Compl. ¶¶ 214–223; Pls.’ Br. Opp. Defs.’ Mot.
Summ. J., at 50.)
259. 	The federal Computer Fraud and Abuse Act of 1986 (“CFAA”), among
other things, renders liable a person who “intentionally accesses a computer without
authorization or exceeds authorized access, and thereby obtains . . . information from
any protected computer[.]” 	18 U.S.C. § 1030(a)(2)(C). 	The Fourth Circuit has
previously discussed the background and application of the CFAA in both civil
lawsuits and criminal proceedings:
In 1984, Congress initiated a campaign against computer crime by
passing the Counterfeit Access Device and Computer Fraud and Abuse
Act of 1984. Pub. L. No. 98-473, 98 Stat. 2190. 	Shortly thereafter, in
1986, it expanded the Act with a revised version, the Computer Fraud
and Abuse Act of 1986, Pub. L. No. 99-474, 100 Stat. 1213. 	Today, the
CFAA 	remains 	primarily 	a 	criminal 	statute 	designed 	to 	combat
hacking. A.V. ex rel. Vanderhye v. iParadigms, LLC, 562 F.3d 630, 645
(4th Cir. 2009). 	Nevertheless, it permits a private party “who suffers
damage or loss by reason of a violation of [the statute]” to bring a civil
action “to obtain compensatory damages and injunctive relief or other
equitable relief.” 	18 U.S.C. § 1030(g). 	Notably, although proof of at
least one of five additional factors is necessary to maintain a civil
action, a violation of any of the statute’s provisions exposes the offender
to both civil and criminal liability.
WEC Carolina Energy Solutions LLC v. Miller, 687 F.3d 199, 201 (4th Cir. 2012)
(internal footnote omitted).
260. 	In that same case, the Fourth Circuit succinctly explained what it means
under the statute to intentionally access a computer without authorization or exceed
authorized access and thereby obtain information from any protected computer.

The CFAA is concerned with the unauthorized access of protected
computers. Thus, we note at the outset that “access” means “[t]o obtain,
acquire,” or “[t]o gain admission to.” Oxford English Dictionary (3d ed.
2011; online version 2012). Moreover, per the CFAA, a “computer” is a
high-speed processing device “and includes any data storage facility or
communications facility directly related to or operating in conjunction
with such device.” 	§ 1030(e)(1). 	A computer becomes a “protected
computer” 	when 	it 	“is 	used 	in 	or 	affecting 	interstate 	or 	foreign
commerce.” § 1030(e)(2).
With respect to the phrase, “without authorization,” the CFAA does not
define “authorization.” Nevertheless, the Oxford English Dictionary
defines 	“authorization” 	as 	“formal 	warrant, 	or 	sanction.” 	Oxford
English Dictionary (2d ed. 1989; online version 2012). 	Regarding the
phrase “exceeds authorized access,” the CFAA defines it as follows: “to
access a computer with authorization and to use such access to obtain
or alter information in the computer that the accesser is not entitled to
obtain or alter.” § 1030(e)(6).
Recognizing 	that 	the 	distinction 	between 	these 	terms 	is 	arguably
minute, see Citrin, 440 F.3d at 420, we nevertheless conclude based on
the “ordinary, contemporary, common meaning,” see Perrin v. United
States, 444 U.S. 37, 42, 100 S. Ct. 311, 62 L. Ed. 2d 199 (1979), of
“authorization,” that an employee is authorized to access a computer
when 	his 	employer 	approves 	or 	sanctions 	his 	admission 	to 	that
computer. Thus, he accesses a computer “without authorization” when
he gains admission to a computer without approval. 	See Brekka, 581
F.3d 	at 	1133. 	Similarly, we 	conclude 	that 	an 	employee 	“exceeds
authorized access” when he has approval to access a computer, but uses
his access to obtain or alter information that falls outside the bounds of
his approved access. 	See id. Notably, neither of these definitions
extends 	to 	the 	improper 	use 	of 	information 	validly 	accessed.
Id. at 204 (internal footnotes omitted).
261. 	In other words,
a violation for accessing “without authorization” occurs only where
initial access is not permitted. And a violation for “exceeding authorized
access” occurs where initial access is permitted but the access of certain
information is not permitted. . . . Stated differently, a violation does not
depend upon the defendant’s unauthorized use of information, but
rather upon the defendant’s unauthorized use of access.

Diamond Power Int’l, Inc. v. Davidson, 540 F. Supp. 2d 1322, 1343 (N.D. Ga. 2007).
262. 	With respect to the meaning of the phrase “exceeds authorized access,”
the United States Supreme Court in Van Buren v. United States, 141 S. Ct. 1648
(2021), recently addressed this issue. In Van Buren, a police officer “used his patrol-
car computer to access a law enforcement database to retrieve information about a
particular license plate number in exchange for money.” 	Id. at *1649. 	The police
officer “used his own, valid credentials to perform the search, [but] his conduct
violated a department policy against obtaining database information for non-law-
enforcement purposes.” 	Id. 	As a result, the police officer was charged with, and
convicted of, a felony violation of the CFAA. Id.
263. 	On appeal, the officer “argu[ed] that the ‘exceeds authorized access’
clause applies only to those who obtain information to which their computer access
does not extend, not to those who misuse access that they otherwise have.” However,
the Eleventh Circuit affirmed his conviction. Id. at *1653.
264. 	The Supreme Court subsequently overturned the officer’s conviction,
adopting a narrower meaning of “exceeds authorized access.”
In sum, an individual “exceeds authorized access” when he accesses a
computer with authorization but then obtains information located in
particular areas of the computer—such as files, folders, or databases—
that are off limits to him. 	The parties agree that Van Buren accessed
the law enforcement database system with authorization. 	The only
question is whether Van Buren could use the system to retrieve license-
plate 	information. 	Both 	sides 	agree 	that 	he 	could. 	Van 	Buren
accordingly did not “excee[d] authorized access” to the database, as the
CFAA defines that phrase, even though he obtained information from
the database for an improper purpose.
Id. at *1662.

265. 	Here, there is no evidence of any unauthorized access by the Former
Employees, as they were authorized to initially access the computers they used at
Relation. 	There is also no dispute that their level of access included permission to
obtain the specific information at issue. 	Therefore, the Former Employees did not
access this information “without authorization” or in a manner that “exceed[ed]
authorized access,” while employed at Relation, and, as a result, there was no
violation of the CFAA.
266. 	Accordingly, summary judgment is GRANTED in favor of the Former
Employees on Relation’s CFAA claim.
267. 	The Court reaches a different conclusion, however, with regard to
Relation’s claim for computer trespass under North Carolina law.
268. 	Section 14-458 of our General Statutes provides for both civil and
criminal liability against individuals who commit a computer trespass in violation of
the statute. 	“To synthesize, the statute has two elements: (1) a person must ‘use a
computer or computer network without authority,’ with (2) the intent to engage in
one of the enumerated prohibited actions.” 	CHGYM LLC v. Unify Ath., LLC, 2022
U.S. Dist. LEXIS 6249, at *12 (M.D.N.C. Jan. 12, 2022).
269. 	N.C.G.S. § 14-458(a) states, in pertinent part, as follows:
Except as otherwise made unlawful by this Article, it shall be unlawful
for any person to use a computer or computer network without authority
and with the intent to do any of the following:
(1) 	Temporarily 	or 	permanently 	remove, 	halt, 	or 	otherwise
disable any computer data, computer programs, or computer
software from a computer or computer network.

. . .
(3) Alter or erase any computer data, computer programs, or
computer software.
. . .
(5) Make or cause to be made an unauthorized copy, in any form,
including, but not limited to, any printed or electronic form of
computer 	data, 	computer 	programs, 	or 	computer 	software
residing in, communicated by, or produced by a computer or
computer network.
N.C.G.S. § 14-458(a)(1), (3), (5).
270. 	For purposes of this statute, “a person is ‘without authority’ when (i) the
person has no right or permission of the owner to use a computer, or the person uses
a computer in a manner exceeding the right or permission[.]” N.C.G.S. § 14-458(a).
271. 	Here, Relation alleges that the Former Employees “used” Relation’s
computers in a manner exceeding their rights or permission.
272. 	Although there is not an abundance of case law interpreting N.C.G.S. §
14-458, there are a few decisions that provide some degree of guidance.
273. 	A federal court in North Carolina has held that N.C.G.S. § 14-458
“prohibits erasing computer data without authorization and making an unauthorized
copy of computer data.” 	Sirona Dental, Inc. v. Smithson, 2018 U.S. Dist. LEXIS
54568, at *30 (W.D.N.C. Mar. 30, 2018). In that case, the defendant-employee refused
to initially return his employer-issued laptop after he was terminated. 	When he
returned the laptop the next day, all of the computer data had been deleted. 	The
employee “admitted deleting the data by mistake and copying the contents of the
laptop onto [a] drive, although the company had not authorized him to do so.” 	Id.

Based on the employee’s admission, the court determined that the plaintiff-employer
had “produced sufficient evidence to defeat summary judgment on its computer
trespass claim.” Id.; see also McKeown v. Tectran Mfg., 2018 U.S. Dist. LEXIS 81743,
(W.D.N.C. May 14, 2018) (finding allegations sufficient to state a claim for violation
of N.C.G.S. § 14-458 where a former employee, after resigning but prior to returning
his work-issued laptop, uploaded his employer’s documents and information to a
thumb drive and then proceeded to delete those same files from his work-issued
laptop).
274. 	In CHGYM LLC v. Unify Ath., LLC, a federal court in North Carolina
addressed whether a former employee “used” his then-employer’s computer in a
manner exceeding his right or permission. The court determined that the employee
did, in fact, exceed his right or permission when he used his employer’s database to
generate 	reports 	containing 	customer 	information 	prior 	to 	beginning 	his 	own
business. The court reasoned as follows:
When the reports were generated, [the employee] had full access to
Plaintiff’s 	ICP 	databases. 	However, 	just 	because 	[the 	employee]
had unlimited access did not mean he had unlimited authorization.
While he could access all of ICP, he was only authorized to use that
access to the extent it was necessary to perform his CHGYM tasks and
duties. Any greater utilization of that access would exceed his “right or
permission,” thus qualifying as “without authority” for purposes of the
North Carolina computer trespass statute. N.C. Gen. Stat. § 14-458(a).
CHGYM LLC, 2022 U.S. Dist. LEXIS 6249, at *13–14 (internal citations omitted).
275. 	In the present case, Relation provides the following examples of the
Former Employees exceeding the access they were provided:

King accessed carrier portals after leaving Relation. (R. 480, 2064–65,
2981–85). 	She also made unauthorized copies. 	(R. 4035–62). 	Gurley
changed a file name and deleted it. (R. 1094). Crooker took expiration
lists by impermissibly accessing Relation’s computers. (R. 474, 475–76).
And the Former Employees emailed confidential documents to their
personal emails and took screenshots of information from Relation’s
computers.
(Pls.’ Br. Opp. Defs.’ Mot. Summ. J., at 50.)
276. 	The Court has carefully reviewed the evidence in the record relevant to
this claim along with the arguments of the parties. Based on this review, the Court
is satisfied that a genuine issue of material fact exists as to whether the Former
Employees acted in violation of N.C.G.S. § 14-458.
277. 	Therefore, 	summary 	judgment 	is 	DENIED 	as 	to 	Relation’s 	claim
pursuant to N.C.G.S. § 14-458.
G. Tortious Interference with Existing or Prospective Contract
278. 	Relation has alleged claims against all Defendants for both tortious
interference with business and contractual relations and for tortious interference
with prospective economic advantage. (Compl. ¶¶ 224–243.)
279. 	Although these two claims are legally distinct, they are related. 	The
Court elects to consider them together.
280. 	The Court notes that in its Complaint, Relation limits its claim for
tortious interference with business and contractual relations to “existing and long-
standing contractual relationships with its clients and vendors.”19 (Compl. ¶ 225.)
19 In its briefing, Relation also argues that “Pilot has tortiously interfered with agreements
between Relation and the Former Employees.” (Pls.’ Br. Opp. Defs.’ Mot. Summ. J., at 15.)
However, Relation did not plead this theory in its Complaint and cannot now raise it for the
first time at the summary judgment stage of this case.

With 	respect 	to 	its 	claim 	for 	tortious 	interference 	with 	prospective 	economic
advantage, the Complaint alleges that this claim is limited to its “future expectation
of long-standing relationships with its clients.” (Compl. ¶ 235.)
281. 	Our Supreme Court has articulated the following elements of a tortious
interference with contract claim:
(1) a valid contract between the plaintiff and a third person which
confers upon the plaintiff a contractual right against a third person; (2)
the defendant knows of the contract; (3) the defendant intentionally
induces the third person not to perform the contract; (4) and in doing so
acts without justification; (5) resulting in actual damage to plaintiff.
Kuykendall, 322 N.C. at 661.
282. 	In order “[t]o state a claim for tortious interference with prospective
economic advantage, a plaintiff must show that the defendant, without justification,
induced a third party to refrain from entering into a contract with the plaintiff and
which would have been entered into absent the defendant’s interference.” Silverdeer,
LLC v. Berton, 2013 NCBC LEXIS 21, at **31 (N.C. Super. Ct. Apr. 24, 2013).
283. 	In addition, “[t]o maintain an action for tortious interference with
prospective economic advantage, a plaintiff must identify a specific contract between
itself and a third party.” Plasman v. Decca Furniture (USA), Inc., 2016 NCBC LEXIS
80, at **70–71 (N.C. Super. Ct. Oct. 21, 2016) (dismissing claim for tortious
interference with prospective economic advantage where plaintiff failed to identify a
particular 	contract 	that 	would 	have 	been 	entered 	but 	for 	the 	defendant’s
interference).
284. 	As an initial matter, the Court has thoroughly reviewed the record and
has not found any evidence that supports Relation’s claim that Defendants tortiously

interfered with its existing and long-standing contractual relationships with vendors.
Accordingly, to the extent Relation’s claim for tortious interference with contract is
based on contractual relationships with vendors, Defendants’ Motion for Summary
Judgment is GRANTED.
285. 	The 	remainder 	of 	the 	Court’s 	analysis 	addresses 	the 	validity 	of
Relation’s two tortious interference claims with regard to its client relationships.
286. 	Both types of tortious interference claims require that a defendant act
“without justification.” “[T]he ‘without justification’ element of a tortious interference
claim is satisfied where the defendant’s conduct involved the use of unlawful means.”
MarketPlace 4 Ins., LLC, v. Vaughn, 2023 NCBC LEXIS 31 at **35–36 (N.C. Super.
Ct. Feb. 24, 2023). It follows then that “interference with a contract is justified if it
is motivated by a legitimate business purpose, as when the plaintiff and the
defendant, an outsider, are competitors.” 	Bev. Sys. Carolinas, 368 N.C. at 700
(cleaned up).
287. 	Such interference is without justification where the defendant—even if
it is a competitor of the plaintiff—acts by use of unlawful means. 	This Court has
recently explained the rationale behind this rule as follows:
This 	limitation 	on 	a 	defendant’s 	ability 	to 	assert 	justification 	is
eminently logical. After all, if a defendant could automatically escape
liability on a tortious interference claim simply by claiming that it was
engaged in a competitive relationship with the plaintiff during the time
period referenced in the complaint, then it would be virtually impossible
for a plaintiff to ever succeed on a tortious interference claim in this
context.
MarketPlace 4 Ins., LLC, 2023 NCBC LEXIS 31, at **35–36.

288. 	Defendants’ primary argument in support of their summary judgment
motion as to these claims is that their actions were justified because they are
“business competitors” with Relation. Defendants acknowledge that they “have never
denied that they took substantial business from” Relation, but claim that Relation
has not “show[n] that Defendants competed through some illegal means.” 	(Defs.’
Reply Br. Supp. Mot. Summ. J., at 6.)
289. 	As discussed in detail earlier in this Opinion, the Court has concluded
that a jury question exists as to whether Defendants tortiously used Relation’s
confidential information, misappropriated its trade secrets, and engaged in computer
trespass. 	As a result, a jury could reasonably conclude that Defendants’ acts were
without justification. 	Moreover, Defendants have failed to convince the Court that
Relation has not put forth sufficient evidence to survive summary judgment as to the
remaining elements of its tortious interference claims.20
290. 	Accordingly, Defendants’ Motion for Summary Judgment is DENIED
as to Relation’s claims for both tortious interference with business and contractual
relations and tortious interference with prospective economic advantage as those
claims relate to interference with Relation’s client relationships.
20 On the present record, it is difficult to make a precise determination as to which of the
contracts of Relation’s with which Defendants allegedly interfered are more appropriately
characterized as existing contracts or future contracts. This issue is further complicated by
the unique aspects of the insurance brokerage industry. Such a determination can be made
by the jury at trial in connection with these claims.

H. Unfair Competition and Unfair and Deceptive Business Practices
291. 	The 	final 	claim 	asserted 	by 	Relation 	for 	which 	Defendants 	seek
summary judgment is its claim for unfair competition and unfair and deceptive
business practices (“UDTP”) in violation of N.C.G.S. § 75-1.1.
292. 	This Court has previously stated that
Chapter 75 of the North Carolina General Statutes [the “UDTPA”]
provides, in pertinent part, that “[u]nfair methods of competition in or
affecting commerce, and unfair or deceptive acts or practices in or
affecting commerce, are declared unlawful . . . To successfully state a
claim under [the UDTPA]. . . a plaintiff must allege (1) an unfair or
deceptive act or practice, or an unfair method of competition, (2) in or
affecting commerce, (3) which proximately caused actual injury to the
plaintiff or to his business.
Poluka v. Willette, 2021 NCBC LEXIS 105, at **13 (N.C. Super. Ct. Dec. 2, 2021)
(cleaned up).
293. 	This Court has previously held “that the existence of valid underlying
claims for misappropriation of trade secrets or tortious interference with contract is
sufficient to give rise to liability on a UDTP theory.” MarketPlace 4 Ins., LLC, 2023
NCBC LEXIS 31, at **39; see also Power Home Solar, LLC, 2021 NCBC LEXIS 55,
at *51 (“Our Courts have long recognized that claims for misappropriation of trade
secrets and tortious interference with contract may form the basis of a UDTPA claim.”
(cleaned up)).
294. 	Here, as discussed above, the Court has held that Relation’s claims for
tortious interference and misappropriation of trade secrets—at least in part—are

sufficient to proceed to trial. As a result, on that ground alone, Defendants’ Motion
for Summary Judgment as to Relation’s UDTP claim is DENIED.21
III. 	Relation’s Motion for Summary Judgment
295. 	The final motion that the Court must address is Relation’s Motion for
Partial Summary Judgment, which seeks the dismissal of each of the counterclaims
asserted by various Defendants in this case.
296. 	Five of the Former Employees—Gurley, Kelly, Crooker, Linthicum, and
Lancaster (the “Counterclaiming Former Employees”)—have brought counterclaims
against Relation for violation of the North Carolina Wage and Hour Act (“NCWHA”),
breach of contract, and breach of the implied covenant of good faith and fair dealing.22
(Countercl. ¶¶ 22–47, 55–60, 78–86.) 	Additionally, Pilot Risk has asserted a
counterclaim against Relation for UDTP. (Countercl. ¶¶ 68–77.)
297. 	The Court will address each of these claims in turn.
A. Claims Under North Carolina Wage and Hour Act
298. 	The specific bases for the Counterclaiming Former Employees’ claims
under the NCWHA largely vary as to each individual claimant. 	However, they all
involve commissions or bonuses that they claim were owed to them by Relation but
were never paid.
21 The Court need not—and does not—decide at the present time whether Relation may be
able to show other bases for a UDTP claim at trial.
22 Originally, these counterclaims also included a claim for tortious interference with
prospective economic advantage against Relation along with a claim for defamation.
(Countercl. ¶¶ 48–54, 61–67.) However, Defendants subsequently took a voluntary dismissal
of these latter two claims. (See Vol. Dismiss., ECF No. 127.)

299. 	This Court has previously stated the following regarding the NCWHA:
“The Wage and Hour Act was enacted to safeguard the hours worked by
and the wages paid to ‘the people of the State without jeopardizing the
competitive position of North Carolina business and industry.’ ” Horack
v. S. Real Estate Co. of Charlotte, 150 N.C. App. 305, 309, 563 S.E.2d 47,
51 (2002) (quoting N.C. Gen. Stat. § 95-25.1(b) (2001)).
An employee may sue under the Act to recover wages due and owing
pursuant to the terms of the employment. 	N.C. Gen. Stat. § 95-
25.22(a) (2007).
A “ ‘[w]age’ paid to an employee means compensation for labor or
services rendered by an employee whether determined on a time, task,
piece, job, day, commission, or other basis of calculation,” and it includes
(among other things) “bonuses, and other amounts promised when the
employer has a policy or a practice of making such payments.” N.C. Gen.
Stat. § 95-25.2(16).
An employer who violates the Act is liable for the unpaid wages with
interest from the date each amount first comes due. N.C. Gen. Stat. §
95-25.22(a). 	The trial court also must double any such judgment as a
form of liquidated damages unless the employer proves that it acted in
good faith and that it had reasonable grounds for withholding payment,
in which case the Court may decline to award liquidated damages or
award a lesser sum. N.C. Gen. Stat. § 95-25.22(a1).
Finally, if the Court finds a violation of the Act, it may order the
employer to pay costs and a reasonable attorneys’ fee. N.C. Gen. Stat. §
95-25.22(d).
A-1 Pavement Marking, LLC v. APMI Corp., 2009 NCBC LEXIS 16, **9–10 (N.C.
Super. Ct. June 26, 2009).
300. 	It is undisputed that the commissions and bonus payments at issue fall
under the broad definition of “wages” for purposes of the NCWHA. See N.C.G.S. § 95-
25.2(16).
301. 	At the outset, the Court elects to address a threshold issue concerning
the statute of limitations governing claims under the NCWHA.

302. 	A claim brought pursuant to the NCWHA is subject to a two-year
limitations period. 	N.C.G.S. § 95-25.22(f) (“Actions under this section must be
brought within two years pursuant to G.S. 1-53.”). 	Our Court of Appeals has held
that “the statute begins to run on the date the promise is broken.” Kornegay v. Aspen
Asset Grp., LLC, 204 N.C. App. 213, 233 (2010). 	“[W]hen the party moving for
summary judgment pleads the statute of limitations, ‘the burden is then placed upon
the [non-movant] to offer a forecast of evidence showing that the action was instituted
within 	the 	permissible 	period 	after 	the 	accrual 	of 	the 	cause 	of 	action.’ 	”
PharmaResearch Corp. v. Mash, 163 N.C. App. 419, 424 (2004) (quoting Pembee Mfg.
Corp., 313 N.C. at 491).
303. 	The validity of a statute of limitations defense is sometimes an issue
that must be resolved at trial:
Whether a claim is barred by the statute of limitations is a mixed
question of law and fact. Stratton v. Royal Bank of Can., 211 N.C. App.
78, 81 (2011). 	“If a plaintiff’s claim is barred by the running of the
applicable statute of limitations, summary judgment in favor of a
defendant is appropriate.” 	Lockerman v. S. River Elec. Membership
Corp., 794 S.E.2d 346, 354 (N.C. Ct. App. 2016). 	“When, however, the
evidence is sufficient to support an inference that the limitations period
has not expired, the issue should be submitted to the jury.” 	Baum v.
John R. Poore Builder, Inc., 183 N.C. App. 75, 81 (2007).
Zagaroli v. Neill, 2018 NCBC LEXIS 25, at **33 (N.C. Super. Ct. Mar. 28, 2018).
304. 	Here, the NCWHA counterclaims were filed on 5 July 2022. 	However,
the parties disagree as to when these claims accrued.
305. 	The Court of Appeals addressed a similar issue under the NCWHA in
Hamilton v. Memorex Telex Corp., 118 N.C. App. 1 (1995). In that case, the plaintiffs
brought an action pursuant to the NCWHA to recover vacation pay that their former

employer had allegedly failed to pay each of them upon termination of their
employment. 	Id. at 7–8. 	The defendant employer contended that the statute of
limitations had begun to run on the day it gave notice of the change in the vacation
policy. Id. at 9. The Court of Appeals rejected the employer’s argument and held as
follows:
As was recently made plain in Glover v. First Union National Bank, 109
N.C. App. 451 (1993), defendant’s argument is meritless. 	In that case
the plaintiff sued the defendant to recover retirement benefits he was
allegedly owed. 	The defendant argued that the statute of limitations
barred his claim because any loss the plaintiff had suffered had occurred
over twenty years previously when the retirement plan was amended.
This Court rejected that argument, stating: “The statute begins to run
on the date the promise is broken. In no event can the limitations period
begin to run until the injured party is at liberty to sue.” Id. at 455, 428
S.E.2d 208 (citation omitted).
In this case, the plaintiffs suffered no injury until the defendant failed
to pay them for the vacation days they had allegedly earned in 1988.
Defendant’s policy did not require it to pay cash for any unused vacation
days until the employment was terminated. 	Therefore, no individual
plaintiff had a cause of action until the next pay day after termination.
The trial court correctly found that only those plaintiffs whose pay date
next following termination preceded 3 April 1989 (two years prior to the
filing of this action) were barred by section 95-25.22. 	We reject
defendant’s first argument.
Id.
306. 	Therefore, the statute of limitations for the NCWHA claims here began
to run each time one of the payments at issue first became due and was not paid.
This means that the Counterclaiming Former Employees can only recover owed
wages that first became due after 5 July 2020.
307. 	The Court will now address the specific counterclaims that have been
asserted by each Counterclaiming Former Employee.

i. 	Gurley
308. 	Gurley’s NCWHA claim is premised on his contention that he is owed
commission payments that Relation has wrongfully withheld. 	He asserts that
because his book of business for certain years at Relation exceeded $500,000, he was
entitled—under Relation’s tiered commission structure—to receive a commission rate
of 27% but instead was paid a commission rate of only 25% during those years. As a
result, Gurley contends, he is entitled to receive the 2% difference for the years in
question.
309. 	Relation argues that it is entitled summary judgment as to Gurley’s
NCWHA claim because it changed its commission rates prior to the years when his
book of business met or exceeded the requisite $500,000 threshold. Relation further
asserts that Gurley never qualified for the 27% rate while the 27% tier remained in
effect. (Cooper Aff. III ¶¶ 11, 14, 18.)
310. 	Gurley’s Producer Agreement, dated 5 February 2013, provided the
following terms of compensation:
While employed by the Company pursuant to this Agreement, the
Company will pay to Producer compensation in accordance with Exhibit
A to this Agreement, the initial form of which follows this Agreement
and is incorporated herein by this reference. The company may at any
time in its sole discretion change any or all aspects of Producer’s
compensation without need to amend this Agreement in writing. 	Any
reference in Exhibit A to compensation for any specified period of time
shall not entitle Producer to payment of compensation (i) beyond any
compensation earned through Producer’s performance of services under
this Agreement through the date of termination of this Agreement, or
(ii) after such specified period of time. Producer’s compensation shall be
paid in accordance with the Company’s usual payroll procedures in
effect from time to time[.]
. . .

The Company may offset any bona fide amounts that Producer then
owes to the Company or any other member of the Ascension Group
against any amounts the Company then owes Producer hereunder,
except that no offset shall be made from any amount if the offset would
violate the requirements of Section 409A of the Internal Revenue Code
of 1986, as amended.
(Compl., Ex. J § 4(a), (d), ECF No. 5.10.) 	In turn, Exhibit A to Gurley’s Producer
Agreement stated in pertinent part as follows:
If Producer’s employment hereunder continues after January 31, 2015,
instead of the compensation described in Sections 2 and 3 of this Exhibit
A, 	Producer 	shall 	be 	entitled 	to 	payment 	of 	commissions 	earned
according 	to 	the 	terms 	of 	the 	Company’s 	applicable 	producer
compensation plan, as that plan exists from time to time, subject to the
Company’s 	sole 	discretion 	as 	to 	the 	nature, 	content, 	terms 	and
conditions of such plan (the “Standard Plan”). 	Subject to the rights of
offset set forth in Section 4(d) of the Agreement, after January 31, 2015,
any commission payments to Producer under the Agreement shall be
payable to Producer in accordance with the terms of the Standard Plan
and payroll practices of the Company, as that Standard Plan and those
practices exist from time to time. 	The Company may in its sole
discretion revise or replace the Standard Plan or any portion thereof
without need to amend the Agreement or this Exhibit A in writing.
. . .
Notwithstanding any other provision of the Agreement, including this
Exhibit A, to fully earn and be eligible for payment of any compensation
under Section 3 and 4 of this Exhibit, Producer must remain employed
by the Company as of the applicable compensation payment date.
Producer forfeits any right to any compensation not yet paid under
Sections 3 and 4 as of Producer’s employment termination date, if
employment by the Company terminates at any time for any reason.
Upon 	termination 	of 	Producer’s 	employment 	with 	the 	Company,
Producer shall no longer be entitled to payment of any compensation
under Sections 3 and 4, and all Agency Net Revenue shall remain the
exclusive property of the Company.
(Compl., Ex. J, at Ex. A.)

311. 	The most recent written producer compensation plan contained in the
record is from 2016 (the “2016 Producer Compensation Plan”).23 The 2016 Producer
Compensation Plan provided as follows:
1. Renewal Compensation Tiers:
A Producer’s 2016 adjustable draw will be set based on their 2015 Book
of Business measured on December 31, 2015. The Book of Business will
exclude known lost accounts. 	Additionally, the Book of Business will
determine the Renewal Compensation Tier a Producer falls in for 2016.
The thresholds and associated renewal income splits for each Production
Tier are:
Production Tier 	2015 Total Book of Business 	Renewal %
Tier 1 	Up to $300,000 	23%
Tier 2 	$300,001 to $499,999 	25%
Tier 3 	$500,000 and up 	27%
An illustrative example of how the Production Tier plan will work is
shown below:
Producer A has a December 31, 2015 total book of business of $325,000
before deleting lost accounts. 	The revenue from lost business totals
$30,000, resulting in a final book of business for tier and draw setting of
$295,000. 	The 2016 Production Tier for Producer A is 1 and the 2015
renewal % for this Producer is 23%. The monthly draw will be $295,000
x 23% divided by 12 or $5,654.00.
2. 	Producer Compensation - Actual Earned or Adjustable Base
Draw:
Based on the “Total Book of Business” as of December 31, 2015, a
suggested adjustable base will be calculated, based on the producer’s
current book of business and renewal tier. 	This adjustable base draw
will be presented to the producer and an agreement will be reached, and
the adjustable base set for the next year. 	This adjustable base will be
23 However, at the hearing on the present Motions, counsel for Relation acknowledged that
written plans for later years existed but were not contained in the record.

paid in accordance with Ascension NC’s pay schedule in effect for that
year.
Alternately, a producer may elect to be paid on the “actual earned” basis
rather than receiving a draw. In this basis of compensation, a producer
is paid on the first payroll of the month the total account balance in his
producer account as of the end of the preceding month. 	The account
balance is equal to the actual earned commissions credited to the
producer’s account.
3. Producer Accounts:
An individual commission account will be set up for each producer. All
commission credits and debits will be entered into this account monthly.
Renewal transaction commissions will be multiplied by the producer’s
renewal tier factor (23%, 25% or 27%). New business commissions will
be multiplied by the appropriate new business rate in section 4 of the
2016 Producer Compensation Plan. The total of these two calculations
will be the producer’s total compensation earned for the month.
The agreed monthly draw will be debited against this account monthly.
At the end of each month, the producer can draw down on excess earned
commission in addition to the monthly draw. 	Requests for additional
payouts should be made on the attached form and emailed to East
Region Finance. Negative draw balances must be cleared on a quarterly
basis by a revision to the adjustable base draw amount.
4. New business:
The commission rate for recurring new business is 40% for all new
business sold effective 1/01/2016 and later. Non-recurring new business
(i.e. surety accounts, etc.) will be paid at a rate of 30% for year 1.
(Gurley Aff. I, Ex. D, ECF No. 72.)
312. 	Gurley 	testified 	that 	his 	book 	of 	business 	exceeded 	the 	$500,000
threshold in the “third to fourth quarter of 2017ish, timeframe.” (Defs.’ Br. Opp. Pls.’
Mot. Summ. J., Ex. 33, at 207:7–24, ECF Nos. 224.38 (sealed), 238 (redacted), 224.39.)
He further stated his belief that the revenue that came into Relation for his clients
exceeded $500,000 in at least 2018, 2019, and 2020. (Defs.’ Br. Opp. Pls.’ Mot. Summ.
J., Ex. 33, at 208:17–24.)

313. 	However, Relation argues that the tiered commission structure (i.e.,
27%/25%/23%) was not in place during the years when Gurley’s book of business was
greater 	than 	$500,000. 	Relation 	contends 	that 	“[w]hile 	historical 	producer
compensation plans offered a range of renewal rates from 23% to 27%, depending on
the producer’s respective book size, this tiered approach was replaced with a standard
25/40 split (i.e., 40% on new business and 25% on renewal) by 2019.” (Cooper Aff. III
¶ 12.) 	Cooper testified that the old 27%/25%/23% structure was replaced by a new
commission plan effective on 1 January 2019. 	(Defs.’ Br. Opp. Pls.’ Mot. Summ. J.,
Ex. 29.) Cooper further stated that “[f]rom 2019 to present date, this 40/25 split has
remained the standard producer compensation plan.” 	(Cooper Aff. III ¶ 12.)
314. 	In response, Gurley asserts that he was never notified of this change in
Relation’s commission plan prior to the years in which he met the $500,000 cutoff.
Moreover, Gurley testified that after 2019 Cooper continued to represent to him that
the 27% rate remained in place and falsely assured Gurley that he was, in fact,
receiving a 27% commission on renewal business. 	(Gurley Aff. II ¶ 23; Nelson Aff.,
Ex. A-1, at 26–27, ECF No. 183.1.) 	Defendants contend that “Relation has never
produced: (1) any document that shows that Relation ever actually modified the
Standard Plan to reduce the top rate to 25% or (2) ever provided any producer with a
copy of the modified Standard Plan or with any other written notice that the top rate
had been reduced[,]” in violation of the NCWHA. 	(Defs.’ Br. Opp. Pls.’ Mot. Summ.
J., at 7.)

315. 	Gurley testified that he first learned about the discrepancy between the
27% and 25% commission rates around the beginning of the COVID-19 pandemic in
2020. (Defs.’ Br. Opp. Pls.’ Mot. Summ. J., Ex. 33, at 223:11–24.) In addition, Gurley
stated that he was never “officially” notified of this change and that Cooper continued
to represent to him that the 27% rate remained in place. 	(See Defs.’ Br. Opp. Pls.’
Mot. Summ. J., Ex. 33, at 203:21–24.)
316. 	Relation concedes that it did not give Gurley notice of this change in the
compensation plan before the change was implemented. 	(See Defs.’ Br. Opp. Pls.’
Mot. Summ. J., Ex. 29; Defs. Br. Opp. Pls.’ Mot. Summ. J., Ex. 9, ECF No. 224.10.)
Instead, it argues that it was only required to give such notice to producers who
(unlike Gurley) had actually qualified for the higher 27% commission rate prior to
the agency’s decision to change the commission structure.
317. 	The NCWHA requires employers to “[n]otify employees, in writing, at
least one pay period prior to any changes in promised wages.” N.C.G.S. § 95-25.13(3).
With respect to this required notice to employees, our Court of Appeals has stated the
following:
Once the employee has earned the wages and benefits under this
statutory scheme, the employer is prevented from rescinding them, with
the exception that for certain benefits such as commissions, bonuses and
vacation pay, an employer can cause a loss or forfeiture of such pay if he
has notified the employee of the conditions for loss or forfeiture in
advance of the time when the pay is earned.
Narron v. Hardee’s Food Sys., Inc., 75 N.C. App. 579, 583, disc. rev. denied, 314 N.C.
542 (1985).

318. 	North Carolina courts have addressed the sufficiency of notice under the
NCWHA on several occasions. For example, in Gallaher v. Ciszek, employees alleged
that they were underpaid for the months of January through April of the year in
question. Gallaher v. Ciszek, 2022 NCBC LEXIS 131, at **26 (N.C. Super. Ct. Nov.
4, 2022). The employer provided its employees with their January paychecks, which
were for the amount set out in their original employment agreements but were for a
lesser amount than the employees had been previously paid. Id. at **26–27. A memo
accompanied the January paychecks, stating in its entirety that “[c]ompensation has
been adjusted to meet the terms of your employment agreement.” 	Id. 	This Court
held that the content of the memo did not satisfy the NCWHA notice requirements
for the month of January. Id. However, the memorandum—in conjunction with the
employees’ contemporaneous receipt of the January paycheck at the pay rates set in
their employment agreements—provided the requisite notice under the NCWHA for
all future wages. Id.
319. 	In Arndt v. First Union Nat’l Bank, 170 N.C. App. 518 (2005), our Court
of Appeals determined that evidence supported a jury’s finding that the defendant
employer had failed to give the plaintiff employee proper notice of a modification of
the formula used to calculate the plaintiff’s annual bonus in violation of the NCWHA.
The plaintiff offered the following evidence at trial:
(1) when initially hired, he and Simpson orally agreed that plaintiff
would receive twenty percent of the Structured Product Group’s net
income; (2) the agreement did not include an expiration date; (3) this
agreement 	was 	separate 	from 	incentive 	plans 	offered 	to 	other
employees; (4) defendants paid plaintiff’s bonuses from 1997 to 1999
according to the terms of the agreement; (5) at no time did defendants

modify the agreement, orally or in writing; and (6) defendants breached
this agreement by retroactively reducing plaintiff’s year 2000 bonus.
Id. at 522–23. The Court of Appeals explained that although the defendant gave the
plaintiff notice of the bank’s incentive compensation program (“ICP”), which began
and ended each calendar year, these notices did not apply to the plaintiff because the
evidence showed that his bonus and compensation structure was unique to him and
different from the generic ICP plans applicable to the defendant’s other employees.
Id. at 524–25.
320. 	In the present case, the Court is unable to agree with Relation’s
argument on this issue. 	Neither Relation’s briefs nor the Court’s own research has
disclosed any legal authority allowing an employer to avoid giving notice to an
employee of a change in the employer’s compensation plan for the reason claimed by
Relation. 	The fact that Gurley’s book of business had never reached the requisite
$500,000 amount prior to the change in the company’s commission structure did not
excuse Relation from its obligation to notify Gurley (and every other producer) of the
modification. Because the new commission structure changed the amounts to which
Gurley would be entitled if he later met the $500,000 threshold, he was entitled to
such notice.
321. 	Accordingly, Relation’s Motion for Summary Judgment is DENIED as
to Gurley’s claim under the NCWHA based on this issue.
322. 	Gurley also contends that he is owed an additional $10,000 to $15,000
from commissions that were earned, but not paid to him, after his resignation. (Defs.’
Br. Opp. Pls.’ Mot. Summ. J., Ex. 40, ECF No. 224.48.) 	However, there is no

supporting evidence in the record with respect to this allegation. 	Moreover, in his
deposition, Gurley confirmed that in his NCWHA claim he was only seeking the 2%
difference in commissions. 	(Pls.’ Mot. Summ. J., Ex. 10, at 205:21–206:3, ECF No.
189.10.)
323. 	Therefore, to the extent that Gurley is asserting other grounds for relief
under the NCWHA in his counterclaim, Relation’s Motion for Summary Judgment is
GRANTED as to any such additional theories of recovery.
ii. 	Kelly
324. 	Kelly’s NCWHA claim is largely identical to Gurley’s. Like Gurley, Kelly
contends that Relation never gave him notice that the commission rates were being
changed as of 2019, that he subsequently produced a book of business that exceeded
$500,000, and that he was only paid a commission rate of 25% (rather than 27%)
during the year (or years) for which he was entitled to the higher rate. (Defs.’ Br. Opp.
Pls.’ Mot. Summ. J, Ex. 35, at 230:5–22, ECF Nos. 224.41–.42.)
325. 	Relation’s argument in support of its summary judgment motion as to
this claim is identical to its argument as to Gurley’s claim. 	(Cooper Aff. III ¶¶ 11,
14, 18.)
326. 	The 	relevant 	portion 	of 	Kelly’s 	Producer 	Agreement, 	dated 	13
September 2010, provided the following terms of compensation:
Standard Producer Compensation Plan. 	If Producer’s employment
hereunder continues after December 31, 2012, Producer shall then then
convert to the Company’s standard producer compensation plan in effect
at that time (without need to amend this Agreement in writing), subject
to the Company’s sole discretion as to the nature, content, terms and
conditions of such plan. The Company may in its sole discretion revise

or replace the standard producer compensation plan or any portion
thereof. 	Any such replacement or revised incentive compensation
program shall replace the then existing incentive compensation program
for such subsequent 	incentive period without need to amend this
Agreement in writing.
Effect of Termination of Employment upon Incentive Compensation.
Upon termination of Producer’s employment with Company, Producer
shall no longer be entitled to payment of any commissions or other
incentive 	compensation, 	and 	all 	commission 	or 	other 	incentive
compensation payments shall remain the property of the Company.
This provision shall survive the termination of this Agreement and of
Producer’s employment with the Company.
(Compl., Ex. K § 3(c)–(d), ECF No. 5.11.)
327. 	Defendants 	have 	put 	forth 	evidence 	showing 	that 	Kelly’s 	book 	of
business exceeded the $500,000 threshold after 2019, which would have entitled him
to 	a 	27% 	commission 	rate 	on 	renewal 	business 	under 	the 	2016 	Producer
Compensation Plan. (Defs.’ Br. Opp. Pls.’ Mot. Summ. J., Ex 29, at 20.) 	They have
also put forth evidence that he was not given notice of the change in the commission
plan that occurred as of 2019.
328. 	Furthermore, Linthicum testified that she saw spreadsheets containing
producer commission rates reflecting that Kelly’s commission percentage on renewal
business was, in fact, 27% in February of 2020, but that it was lowered to 25% in
2021. (Linthicum Aff. II ¶¶ 6–7.) Linthicum stated that she “distinctly remember[ed]
seeing the change in the commission because [she] had never before seen a reduction
in the percentage rate for a producer, especially one whose book of business had
grown.” (Linthicum Aff. II ¶ 8.)
329. 	Kelly began to suspect that his commissions paid on renewal business
“looked short” at some point in the summer of 2020 but that he did not become aware

of the change until “at least one year after that[,]” when he was notified of the change
in compensation rates via email from Jonathan Cooper and Kate Rager, Relation’s
in-house counsel, on 10 June 2021. 	(Kelly Aff. I ¶ 10.)
330. 	For the same reasons discussed above with regard to Gurley’s NCWHA
counterclaim, Relation’s Motion for Summary Judgment is also DENIED as to
Kelly’s counterclaim under the NCWHA based on this issue.
331. 	Kelly also contends that he is owed an additional $10,000 to $15,000
from commissions that were earned, but not paid to him after his resignation. (Defs.’
Br. Opp. Pls.’ Mot. Summ. J., Ex. 40.) 	However, there is no supporting evidence in
the record with respect to this allegation.
332. 	Therefore, to the extent that Kelly is asserting additional grounds for
relief under the NCWHA in his counterclaim, Relation’s Motion for Summary
Judgment is GRANTED as to any such other theories of recovery.
iii. 	Lancaster
333. 	Lancaster claims that “he was underpaid as a result of Relation under
reporting [sic] amounts received from carriers on his book of business.” 	(Defs.’ Br.
Opp. Pls.’s Part. Mot. Summ. J., at 24.) In connection with this claim, it appears that
he is pursuing several distinct theories.
334. 	First, in an interrogatory response, Lancaster stated his belief that he
is owed “$4,333 for the month of January 2022.” (Nelson Aff., Ex. A-1, at 51–52.) In
his deposition, Lancaster testified that the amount of his underpayment for that
month was actually $4,666.67. 	(Pls.’ Mot. Summ. J., Ex. 12, at 62–63, ECF No.

189.12.) 	Lancaster also contends that he is owed between $5,000 and $10,000 in
commissions earned prior to his resignation, but not paid to him following his
resignation. (Defs.’ Br. Opp. Pls.’ Mot. Summ. J., Ex. 40.)
335. 	Relation argues that Lancaster’s allegations are not supported by the
record because “Relation provided paychecks evidencing that Lancaster was, in fact,
paid $4,666.67 (his monthly draw amount) in February 2022 (prior to his termination)
and in March 2022 (after his termination), as well as his remaining commissions.”
(Pls.’ Br. Supp. Mot. Summ. J., at 12 (citing Pls.’ Mot. Summ. J., Ex. 19, ECF No.
189.19; Pls.’ Mot. Summ. J., Ex. 20, ECF No. 189.20; Butler Aff. ¶¶ 16–18).)
336. 	During his employment with Relation, Lancaster elected to be paid via
“variable compensation” through which he would receive a predetermined draw in
the amount of $4,666.67.
337. 	Ray Dobens, Relation’s Vice President of Finance and Sales Operations,
testified on the subject of how producers who (like Lancaster) received variable
compensation were paid:
For producers paid via variable compensation, their compensation
comes in the form of commissions classified at typically two different
rates—a higher rate for securing “new” policies, and a lower rate for
retaining 	“renewal” 	policies. 	These 	terms, 	along 	with 	their
compensation terms, are defined in producers’ employment agreements.
Typically, 	the 	commission 	a 	producer 	receives 	based 	on 	“new” 	or
“renewal” business is paid on an account-by-account basis; that is, the
producer’s commission is calculated based on the revenue received by
Relation for each account.
For example, if a producer’s “new” commission rate is 40%, and Relation
receives $100 in revenue for a new policy sold by that producer, the
producer is paid $40 in commission.

The producer only receives a commission on an account if revenue is
actually received by Relation. In the example above, if Relation did not
receive the $100 in revenue, then the producer would not receive a
commission for that policy.
Producers at Relation can also be eligible for a draw, which is a set
amount given each paycheck.
The purpose of the draw is to provide a steady income flow to producers
on a variable compensation plan. If Relation did not offer a draw, then
producers would have to wait until revenue is received and their
compensation would vary widely.
The draw is merely an estimate; final, actual compensation is calculated
based on actual revenue received.
These producers always had the opportunity to request additional
compensation from a remaining balance over and above the draw.
Each month, producers receive an email with reports that detail the
commissions they received for the previous month’s pay period. This
information allows producers to verify that their commissions are
accurate.
. . .
If 	a 	producer 	raises 	a 	question 	about 	something 	in 	the 	monthly
production 	reports, 	that 	question 	is 	investigated and analyzed by
Relation’s variable compensation team. If a correction needs to be made,
the adjustment will be forwarded to the next month’s commissions.
Producers can raise these questions at any time. Anytime we receive a
concern, my team does a thorough investigation.
(Dobens Aff. ¶¶ 2, 7–15, 20–21.)
338. 	The 	record 	reflects 	that 	Lancaster 	was 	paid 	$4,666.67 	(his
predetermined draw amount) on 2 February 2022, and was paid an additional
$13,095.87 in commissions on 18 February 2022 as a result of his request for an
additional draw. (Butler Aff. ¶¶ 16–17.)

339. 	Lancaster’s employment with Relation was terminated on 25 February
2022. 	(Butler Aff. ¶ 15.) 	The record shows that Relation paid Lancaster two more
times after his termination. 	First, on 4 March 2022, he received a payment in the
amount of $4,666.67. 	Second, on 23 March 2022, he was paid $14,140.38, which
included commissions received by Relation through the date of his termination.
(Butler Aff. ¶ 18.)
340. 	However, as explained below, evidence exists suggesting that revenue
was improperly attributed to the period after Lancaster’s termination, despite being
received prior to his resignation.
341. 	The NCWHA provides as follows with respect to the payment of wages
upon the discontinuance of an employee’s employment:
Employees whose employment is discontinued for any reason shall be
paid all wages due on or before the next regular payday either through
the regular pay channels or by trackable mail if requested by the
employee in writing. 	Wages based on bonuses, commissions or other
forms of calculation shall be paid on the first regular payday after the
amount becomes calculable when a separation occurs. Such wages may
not be forfeited unless the employee has been notified in accordance with
G.S. 95‑25.13 of the employer’s policy or practice which results in
forfeiture. 	Employees not so notified are not subject to such loss or
forfeiture.
N.C.G.S. § 95-25.7.
342. 	Dobens testified that a “producer only receives a commission on an
account if revenue is actually received by Relation” from the insurance carrier
because “the commission a producer receives based on ‘new’ or ‘renewal’ business is
paid on an account-by-account basis; that is, the producer’s commission is calculated
based on the revenue received by Relation for each account.” (Dobens Aff. ¶¶ 8, 10.)

343. 	Lancaster’s Producer Agreement stated the following:
Upon 	termination 	of 	Producer’s 	employment 	with 	Company, (a)
Producer shall no longer be entitled to payment of any commissions, and
all commission payments shall remain the property of the Company, and
(b) in the event that Producer then owes the Company a refund of any
draws paid but not earned, the amount of any unearned draws shall be
promptly repaid by Producer to the Company and such repayment may
be made, at the Company’s sole election, in accordance with Section 3(h)
of this Agreement. This provision shall survive the termination of this
Agreement and of Producer’s employment with the Company.
(Compl., Ex. L § 3(e), ECF No. 5.12.)
344. 	The record contains some information regarding how Lancaster’s last
paycheck was computed. 	Jasmine Che, a Relation compensation analyst, sent an
email to Diana Panchuck, a Relation “direct bill supervisor,” stating that Relation
needed to know the date when it actually received the deposits for the commission
payments from two different insurance carriers in order to process the final paycheck
for Lancaster. Both Dobens and Zewalk were copied on Che’s email to Panchuck.
345. 	Panchuck responded that the commission payment from the first carrier
was 	received 	by 	Relation 	on 	28 	February 	2022, 	which 	was 	after 	Lancaster’s
termination. 	However, with respect to the second insurance carrier, multiple
commission payments were received throughout February, requiring Panchuck to
look further into this issue. Panchuck subsequently wrote back to Che, Dobens, and
Zewalk as follows: “We’ll need to do a little more research on the [second carrier’s]
payments. We receive multiple payments from [the second carrier] during the month,
so these are not quite as straight forward [sic].” (Defs.’ Br. Opp. Pls.’ Mot. Summ. J.,
Ex. 7, ECF Nos. 224.8 (sealed), 231 (public).)

346. 	Dobens responded by email to Panchuck, Che, and Zewalk as follows:
“[i]f it makes it easier, we don’t need to know the exact date for the [second carrier’s]
policies, just if they were/were not on the 26th, 27th, or 28th.” (Defs.’ Br. Opp. Pls.’
Mot. Summ. J., Ex. 7.) The significance of these three dates is that they are the only
days in the month of February that Lancaster was no longer an employee and
therefore no longer entitled to commissions received by Relation.
347. 	Panchuck responded to Dobens’ email, copying Che and Zewalk, as
follows:
This one is a little more convoluted. 	So we receive 2 payments during
the month for 1 commission statement. The majority of the funds were
received on 02-09-22, with the remainder of the funds received on 02-28-
22. We posted the entire $48,712.02 as of the last payment date 02-28-
22.
I don’t think this makes your answer any easier . . .
(Defs.’ Br. Opp. Pls.’ Mot. Summ. J., Ex. 7.)
348. 	Panchuck’s response also included specific transaction details reflecting
that a deposit was received by Relation from the second carrier for $47,428.03 on 9
February 2022 and another one for $1,283.99 on 28 February 2022. 	(See (Defs.’ Br.
Opp. Pls.’ Mot. Summ. J., Ex. 7.) However, it is unclear what Panchuck was referring
to when she wrote that “[w]e posted the entire $48,712.02 as of the last payment date
02-28-22.” (Defs.’ Br. Opp. Pls.’ Mot. Summ. J., Ex. 7.) Nevertheless, in response to
the information provided by Panchuck, Dobens wrote that “[t]his will suffice for what
we need.” (Defs.’ Br. Opp. Pls.’ Mot. Summ. J., Ex. 7.)
349. 	Although 	the 	entire 	amount 	was 	not 	internally 	“posted” 	until 	28
February, as discussed previously, producers earn their commissions when they are

actually received by Relation. Therefore, Lancaster’s portion of the $47,428.03 that
Relation received on 9 February was “earned” by him that same day.
350. 	Accordingly, a jury could find that at least some commission revenue
was improperly attributed to the pay period after Lancaster’s termination. Therefore,
Relation’s Motion for Summary Judgment is DENIED as to Lancaster’s NCWHA
claim based on this theory.
351. 	Next, Lancaster asserts that after reviewing commission reports, he
“noticed that year over [sic] year, [his] book of business had dropped by about
$120,000.00, even though [he] didn’t lose accounts that would generate the revenue
to even come close to that amount[.]” (Lancaster Aff. I ¶ 33; Defs.’ Br. Opp. Pls.’ Mot.
Summ. J., Ex. 12, ECF No. 224.13.) 	As a result, he believes he is owed “27% of
$96,891.00 -- totaling $26,160.57 -- which is the difference between 2020 and 2021
commissions.” 	(Defs.’ Br. Opp. Pls.’ Mot. Summ. J., Ex. 40.) 	Lancaster claims that
“[s]uch wages include commissions that could be calculated through a review of
carrier’s [sic] actual commission statements and comparing them to what Lancaster
actually [was] paid.” (Nelson Aff., Ex. A-1, at 51–52.)
352. 	In support of this theory, Lancaster asserts that “Relation did not allow
[him] access to the actual insurance carrier commission statements to verify whether
the data contained in the Commission Reports that Relation generated in-house (the
ones [he] and other Producers received) matched the actual carrier commission
statements.” (Lancaster Aff. I ¶ 33.) Moreover, Lancaster testified that he and “the
other producers . . . would routinely find errors” in their commission reports.

(Lancaster Aff. I ¶ 30.) 	Lancaster stated that he “suspect[s], based on my years of
dealing with Mr. Cooper, Ascension and Relation, that the numbers don’t match and
that [he] ha[s] been short-changed and underpaid by Relation for a while.” (Lancaster
Aff. I ¶ 33.)
353. 	However, the Court has thoroughly reviewed the record and concludes
that there is a lack of evidence supporting this argument. 	Accordingly, summary
judgment is GRANTED in favor of Relation as to Lancaster’s NCWHA claim based
on this additional theory.
iv. 	Crooker
354. 	Like 	Lancaster, 	Crooker 	contends 	“that 	he 	was 	not 	paid 	for 	all
commissions that were received from carriers prior to his termination[,]” and that
“the issue is what amounts Relation received from carriers prior to his termination.”
(Defs.’ Br. Opp. Pls.’s Part. Mot. Summ. J., at 26.)
355. 	First, Crooker believes he was underpaid between $10,000 and $12,000
in his last paycheck. (Defs.’ Br. Opp. Pls.’ Mot. Summ. J., Ex. 40.) In his deposition,
Crooker testified that he believes he should have been paid “$10,000 to $12,000” for
business that he brought in during November or December 2021, “but for whatever
reason somehow $10,000 turned into the $300.” 	(Pls.’ Mot. Summ. J., Ex. 11, at
281:5–9, ECF No. 189.11.) 	Crooker testified that Relation “tried to say that the
commissions that [Crooker] made in November or December somehow paid for
November.” (Pls.’ Mot. Summ. J., Ex. 11, at 280:7–15.)

356. 	Crooker, like Lancaster, was also paid via “variable compensation” with
a predetermined draw in the amount of $9,166.66. (Defs.’ Br. Opp. Pls.’ Mot. Summ.
J., Ex. 5, ECF No. 224.6 (sealed).) On 30 November 2021, the day of his resignation,
“Crooker received a paycheck from Relation, reflecting commissions for revenue
previously received by Relation.” 	(Butler Aff. ¶ 26.) 	He was paid $9,166.66 on 30
November 2021, his pre-determined draw amount. (Defs.’ Br. Opp. Pls.’ Mot. Summ.
J., Ex. 5.) 	Crooker’s November 2021 Production Analysis reflects that he earned
$9,340.79 in commissions for that month. (See Crooker’s Production Analysis; Defs.’
Br. Opp. Pls.’ Mot. Summ. J., Ex. 5.) 	Accordingly, Crooker was owed the difference
between the commissions earned prior to resigning and that amount paid by draw on
30 November 2021. 	(See Defs.’ Br. Opp. Pls.’ Mot. Summ. J., Ex. 5.) 	Although the
record reflects that Crooker received a paycheck on 15 December 2021, it does not
reflect the monetary amount of that paycheck. However, Crooker’s testimony at his
deposition confirms that his last paycheck was for an amount that covers what the
record evidence shows he was owed.
357. 	In 	addition, 	Crooker 	also 	makes 	several 	unclear 	allegations 	of
underpayment. For example, he states that he “was promised a book of personal line
business that was never provided to [him] for the period July 5, 2020 through
November 20, 2021, totaling approximately $13,500.00.” 	(Defs.’ Br. Opp. Pls.’ Mot.
Summ. J., Ex. 40.) 	At another point, he contends that since 5 July 2020, Relation
owes him “[a]bout $9,000 a year” for that same book of personal line business. (Defs.’
Br. Opp. Pls.’ Mot. Summ. J., Ex. 29, at 15.) Although there is evidence in the record

of discussions about the possibility of Relation providing additional clients to Crooker
by supplying him with that book of personal line business, such clients were never
actually given to him. 	Accordingly, these commissions were never actually earned,
and, as a result, any hypothetical commissions associated therewith cannot be
recovered under the NCWHA.
358. 	Crooker also argues that Relation “failed to pay [him] commissions for
at least six (6) life insurance premiums -- totaling approximately $6,000.00.” (Defs.’
Br. Opp. Pls.’ Mot. Summ. J., Ex. 40.) He additionally contends that he is owed “about
$30,000 in life policies commission[.]” (Pls.’ Mot. Summ. J., Ex. 11, at 294.) Crooker
conceded, however, that he is “not sure how [we] prove it[,]” (Pls.’ Mot. Summ. J., Ex.
11, at 294:2–6), and the Court has not found any evidence in the record supporting
Crooker’s contention.
359. 	Therefore, the Court concludes that Crooker has failed to show a
genuine issue of material fact as to his claim under the NCWHA. 	Accordingly,
Relation’s Motion for Summary Judgment is GRANTED as to this claim.
v. 	Linthicum
360. 	Unlike the other Counterclaiming Former Employees, Linthicum was
not a Producer compensated on a commission basis. 	Rather, she was an Account
Manager who was a salaried employee.24 As such, Linthicum’s NCWHA claim is not
based on commissions allegedly owed. 	Instead, she contends that she was orally
24 As previously discussed, Relation’s Account Managers work with producers to manage
client relationships and service accounts.

promised, but never paid, a 5% bonus on Smythe’s accounts that were retained by
Relation after Smythe’s resignation. In addition, she asserts that she was entitled to
an increase in pay for her promotion to a supervisory role. Linthicum claims that she
is owed approximately $5,000 for the unpaid bonus and “several thousand” dollars
for the increase in pay. (Defs.’ Br. Opp. Pls.’ Mot. Summ. J., Ex. 34, at 171:3–9, ECF
No. 224.40.)
361. 	However, at the hearing on the Motions, counsel for Linthicum informed
the Court that she was no longer pursuing her NCWHA claim based on the allegedly
promised pay increase resulting from her promotion. Furthermore, her counsel also
conceded that the two-year statute of limitations applicable to NCWHA claims
appeared to foreclose Linthicum’s NCWHA claim with respect to her allegations
regarding the bonus.
362. 	Therefore, summary judgment is GRANTED in favor of Relation as to
Linthicum’s NCWHA claim.25
B. Claims for Breach of Contract
363. 	In addition to their NCWHA counterclaims, Gurley, Kelly, Lancaster,
Crooker and Linthicum have also asserted counterclaims for breach of contract
(Countercl. ¶¶ 83–86), and argue that their “breach of contract claims for unpaid
compensation survive summary judgment for the same reasons already set forth
regarding their Wage and Hour claims.” (Defs.’ Br. Opp. Pls.’s Part. Mot. Summ. J.,
at 26.)
25 However, as discussed below, the Court is denying Relation’s Motion for Summary
Judgment as to Linthicum’s breach of contract claim based on the alleged promise of a bonus.

364. 	The statute of limitations for a breach of contract claim is three years,
N.C.G.S. § 1-52(1), and “begins to run on the date the promise is broken.” Harrold v.
Dowd, 149 N.C. App. 777, 781 (2002) (citing Penley v. Penley, 314 N.C. 1, 20 (1985)).
i. 	Gurley and Kelly
365. 	As with their NCWHA claims, Gurley and Kelly’s breach of contract
claims are based on their contention that they are owed the 2% difference in
commission rates for renewal business for the years in which their respective books
of business exceeded $500,000. In response to Gurley and Kelly’s breach of contract
claims, Relation simply relies on its arguments (which the Court has now rejected)
as to why no breach of the NCWHA occurred on this set of facts.
366. 	Therefore, the Court concludes that Relation’s Motion for Summary
Judgment should likewise be DENIED as to Gurley and Kelly’s breach of contract
claim on this theory.
ii. 	Lancaster
367. 	Lancaster’s breach of contract claim is premised on the same facts as his
NCWHA claim. 	His evidence (as discussed in detail above in connection with his
NCWHA claim) that Relation improperly attributed commission revenue to the pay
period after Lancaster’s termination, if accepted by a jury, would constitute not only
a violation of the NCWHA, but also a breach of his Employment Agreement.
368. 	Lancaster’s 	Employment 	Agreement 	provides 	in 	pertinent 	part 	as
follows:
Producer’s 	monthly 	draw 	shall 	be 	paid 	in 	accordance 	with 	the
Company’s usual payroll procedures . . . After the end of each month,

the gross amount of draws paid to Producer after the Effective Date
through the end of such month reflected in the Draw Account shall be
compared to incentive compensation earned by the Producer after the
Effective Date through the end of each month. 	In the event that the
Company owes Producer incentive compensation in addition to the draw
at the end of any month as a result of such comparison (after taking into
consideration 	any 	previous 	payments 	of 	incentive 	compensation
pursuant to this sentence), payment of the amount due to the Producer
. . . shall be made in accordance with the Company’s standard practice
for 	the 	payment 	of 	incentive 	compensation 	under 	the 	Company’s
incentive compensation programs.
(Compl., Ex. L § 3(c).)
369. 	Accordingly, Relation’s Motion for Summary Judgment is DENIED as
to Lancaster’s breach of contract claim based on this theory. However, to the extent
that Lancaster’s breach of contract claim is also based on the additional theory that
the Court has rejected in connection with his NCWHA claim, summary judgment is
GRANTED in favor of Relation on that additional theory.
iii. 	Crooker
370. 	Crooker’s breach of contract claim is primarily based on his contention
that he was not paid all of the commissions owed to him from payments that Relation
received from carriers prior to his termination. 	The Court has thoroughly reviewed
the record with regard to this argument as well as the other contentions raised in
Defendants’ brief and concludes that he has failed to offer sufficient evidence to raise
a genuine issue of material fact in response to Relation’s evidence that no breach of
his employment agreement occurred. Accordingly, summary judgment is GRANTED
in favor of Relation on Crooker’s breach of contract claim.

iv. 	Linthicum
371. 	As noted above, Linthicum contends that Relation reneged on its oral
promise that she would be paid a 5% bonus on Smythe’s accounts that were retained
by Relation after his resignation. 	(Defs.’ Br. Opp. Pls.’ Mot. Summ. J., Ex. 34, at
171:3–9.)
372. 	Smythe resigned from Relation on 4 March 2020. 	Linthicum asserts
that at some point after his resignation, she was promised 5% “of the commission
bonus for every account of Kyle [Smythe]’s that we renewed for that year.” (Defs.’ Br.
Opp. Pls.’ Mot. Summ. J., Ex. 34, at 158:20–22, 159:6–23.)
373. 	Linthicum testified in her deposition as follows:
Q. Who made this promise to you?
A. Jill Zewalk and Jonathan Cooper.
Q. When was this promise made?
A. This promise was made when we were meeting and discussing
moving Kyle’s accounts, and that the producers were going to be
paid extra commission in order to help retain those accounts, as
well as in exchange for the extra work they were going to do to
have to keep those accounts.
We, as the account managers, were promised a [sic] 5 percent of
the commission bonus for every account of Kyle’s that we renewed
for that year.
Q. What type of additional work were you going to have to do?
A. 	We may have to market the account, the additional work for
trying to rebuild the relationship, working on the account, just
making sure we did everything quicker, faster, re-marketed
pricing, anything we had to do to try to retain those accounts.
Q. And when was -- can you give a month and year estimate for
when this discussion took place?

A. 	This would have happened, more than likely -- Kyle left in, I
believe February of 2020, late February. 	So this would have
happened in more than likely March of 2020, because that’s when
they gave us -- maybe April. 	I’m not sure how long it took them
to decide what the producer commission bonus was going to be,
because they received an override for the year.
And then, like I said, they promised the account managers 5
percent of the commission bonus for those accounts we helped
retain.
Q. So the 5 percent bonus was for account managers?
A. For the account managers for the accounts we handled. I only
handled one account of Kyle’s that I helped keep. 	Others had
more.
Q. So the 5 percent bonus would have been on that one account?
A. Yes, but it was a $300,000 account.
Q. 	And this promise was made to other account managers as
well?
A. It was made to all of the account managers in Greensboro.
Q. At one time, in one room?
A. Yes. And they paid it to none of them.
Q. How do you know that?
A. Because none of us got it, and trust me, they talked about it.
Q. When you say “they,” you mean who?
A. My team. None of them were paid the promised bonus and all
of them were upset about it because they worked their rear ends
off that year to keep what business they could.
Q. Your team, meaning the other account managers?
A. The account managers that I managed, yes.
Q. And you said the producers were also promised 5 percent?

A. 	The producers got their additional commission overrides
because we billed it, but we didn’t get it because we were
dependent upon management to honor their promise to pay us.
. . .
Q. So it was anyone who handled Kyle Smythe business that was
offered that 5 percent?
A. 	Yes. 	Well, we had to retain it at renewal. 	So if you didn't
retain the account, just because you handled them, you didn’t get
them. And this account we retained.
Q. When you say “we,” who are you referring to?
A. The producer and I, and Relation retained it.
(Defs.’ Br. Opp. Pls.’ Mot. Summ. J., Ex. 34, at 158:11–160:24, 174:17–175:1.)
374. 	Linthicum stated her belief that “[t]he commission would be about
$5,000, maybe more, because . . . it was about a $300,000 account[.]” (Defs.’ Br. Opp.
Pls.’ Mot. Summ. J., Ex. 34, at 171:5–7.)
375. 	No written documentation exists regarding the alleged promise of the
5% bonus. (Defs.’ Br. Opp. Pls.’ Mot. Summ. J., Ex. 34, at 161:11–13.) Furthermore,
Zewalk expressly denies that she promised Linthicum a 5% bonus on any of Smythe’s
accounts that were retained. 	(Pls.’ Mot. Summ. J., Ex. 14, at 165:13–18, ECF No.
189.14.) Zewalk also contends that no account manager at Relation was ever paid a
bonus or commission for retention of any account previously serviced by Smythe.
(Zewalk Aff. II ¶ 7.)
376. 	A conflict in the evidence exists as to whether the promise was made
that cannot be resolved at the summary judgment stage. 	But Relation argues that
summary judgment is nonetheless proper because, even assuming such a promise

was, in fact, made, “the terms were never defined—neither Linthicum nor any other
staff member was told what efforts would be required to qualify for the bonus, how
the bonus would be allocated among staff members, or how or when the bonus would
be calculated.” (Pls.’ Br. Supp. Mot. Summ. J., at 13.)
377. 	North Carolina courts have long held that
[t]o be enforceable, the terms of a contract must be sufficiently definite
and certain. Brooks v. Hackney, 329 N.C. 166, 170, 404 S.E.2d 854, 857
(1991). In addition, “it is a well-settled principle of contract law that a
valid contract exists only where there has been a meeting of the minds
as to all essential terms of the agreement.” 	Northington v. Michelotti,
121 N.C. App. 180, 184, 464 S.E.2d 711, 714 (1995).
Maxwell v. Michael P. Doyle, Inc., 164 N.C. App. 319, 326 (2004).
378. 	These principles were applied by our Court of Appeals in Maxwell, which
involved a dispute between two real estate brokers over the payment of a commission.
Id. The defendant argued that the plaintiff failed to present “sufficient evidence of a
breach 	of 	a 	valid, 	enforceable 	contract 	with 	[the 	defendant] 	for division 	of 	a
commission.” Id. 	The plaintiff testified as follows on this issue:
If it materialized into a sale - and we shook hands on this in the
beginning, that we were going to co-broker on a 50-50 basis - that we
would work the Cambridge Arms on the same basis, because, even
though he had known about them, he had not been able to make any
headway, and since I know Mr. Wood, since I knew the apartments - and
we shook hands and had a meeting of the minds right there - that if it
materialized into a sale and there was a commission paid and a closing
takes place, that I would get fifty percent of the commission and that I
was to assist him by letting him go through my files . . . of all the
materials.
Id. (cleaned up).
379. 	Our Court of Appeals found that the plaintiff’s

evidence was sufficiently definite as to the material terms of the
agreement: (1) he was required to arrange a meeting with Wood and
allow Doyle access to his files; and (2) if a sale resulted within a
reasonable period of time, he was then entitled to a 50-50 split of any
commission. Defendant has not specified any other material terms
necessary to the enforcement of the contract that were missing or
indefinite and, after reviewing the record, we have been unable to
identify any.
Since Maxwell offered evidence of the material terms of the agreement,
that he performed his obligations under the agreement, and that Doyle
later brokered the sale of the apartment complex and earned a sizeable
commission that he failed to split with plaintiff, we hold that there was
sufficient evidence of a breach of contract for this case to be submitted
to the jury.
Id. at 328.
380. 	In reaching this conclusion, the Court of Appeals also rejected the
defendant’s argument that the plaintiff failed to put forth sufficient evidence of the
time for performance:
Defendant also points to the fact that there was no agreement as to the
time for performance. Our courts have, however, long held that “where
a contract does not specify the time of performance . . . the law will
prescribe that performance must be within a reasonable time and that
the contract will continue for a reasonable time, ‘taking into account the
purposes the parties intended to accomplish.’ ” Rodin v. Merritt, 48 N.C.
App. 64, 71-72, 268 S.E.2d 539, 544 (quoting Scarborough v. Adams, 264
N.C. 631, 641, 142 S.E.2d 608, 615 (1965)), disc. review denied, 301 N.C.
402, 274 S.E.2d 226 (1980). See also S & W Realty, 274 N.C. at 254, 162
S.E.2d 	at 	493-94 	(when 	no 	time 	is 	specified 	in 	a 	contract 	for 	a
commission, the sale must occur within “a reasonable time”).
The 	determination 	of 	what 	constitutes 	a 	reasonable 	time 	for
performance presents a mixed question of law and fact:
If, from the admitted facts, the Court can draw the conclusion as to
whether the time is reasonable or unreasonable, by applying to them a
legal principle or a rule of law, then the question is one of law. 	But if
different inferences may be drawn, or circumstances are numerous and
complicated, and such that a definite legal rule cannot be applied to
them, then the matter should be submitted to the jury. It is only when

the facts are undisputed and different inferences cannot be reasonably
drawn from them, that the question ever becomes one of law.
Id. at 327 (cleaned up).
381. 	More recently, in Grub, Inc. v. Sammy's Seafood House & Oyster Bar,
LLC, 2015 N.C. App. LEXIS 330 (N.C. Ct. App. Apr. 21, 2015) (unpublished), the
Court of Appeals addressed an argument regarding whether the terms of an alleged
contract were sufficiently definite.
Contract terms are reasonably certain “if they provide a basis for
determining the existence of a breach and for giving an appropriate
remedy.” Restatement (Second) of Contracts § 33(2) (2012). In addition,
“the law . . . does not favor the destruction of contracts on account of
uncertainty, and the courts will, if possible, so construe [a] contract as
to carry into effect the reasonable intent of the parties, if it can be
ascertained.” 	Welsh v. N. Telecom, 85 N.C. App. 281, 290, 354 S.E.2d
746, 751 (citation and internal quotation marks omitted), disc. review
denied, 320 N.C. 638, 360 S.E.2d 107 (1987). 	“In the usual case, the
question whether an agreement is complete or partial is left to inference
or further proof. 	The subsequent conduct and interpretation of the
parties themselves may be decisive of the question as to whether a
contract has been made . . . .” Cnty of Jackson v. Nichols, 175 N.C. App.
196, 	199, 	623 	S.E.2d 	277, 	279–80 	(2005) 	(citations 	and 	internal
quotation marks omitted).
Id. at *15–16.
382. 	In the present case, the Court has carefully reviewed the applicable
evidence in the record and concludes that Linthicum’s testimony is sufficient to raise
a genuine issue of material fact with respect to this claim. 	Therefore, Relation’s
Motion for Summary Judgment is DENIED as to Linthicum’s breach of contract
claim.

C. Claim for Breach of Implied Covenant of Good Faith and Fair
Dealing
383. 	Each of the Counterclaiming Former Employees has also asserted a
claim for breach of the implied covenant of good faith and fair dealing. 	(Countercl.
¶¶ 78–82.)
384. 	It is well-settled under North Carolina law that every contract contains
“an implied covenant of good faith and fair dealing that neither party will do anything
which injures the right of the other to receive the benefits of the agreement.” Bicycle
Transit Authority, Inc. v. Bell, 314 N.C. 219, 228 (1985) (cleaned up). In other words,
“there is implied in every contract a covenant by each party not to do anything which
will deprive the other parties thereto of the benefits of the contract.” Id.
385. 	Our Court of Appeals has articulated the elements of such a claim as
follows:
“To state a valid claim for breach of the implied covenant of good faith
and fair dealing, a plaintiff must plead that the party charged took
action ‘which injure[d] the right of the other to receive the benefits of the
agreement,’ thus ‘depriv[ing] the other of the fruits of [the] bargain.’ ”
Conleys Creek Ltd. P’ship v. Smoky Mountain Country Club Prop.
Owners Ass’n, Inc., ___ N.C. App. ___, ___, 805 S.E.2d 147, 158 (2017)
(alterations in original) (quoting Bicycle Transit Authority, Inc. v. Bell,
314 N.C. 219, 228-29, 333 S.E.2d 299, 305 (1985)), disc. review denied,
370 N.C. 695, 811 S.E.2d 596 (2018). 	A defendant cannot breach a
covenant of good faith and fair dealing when a claimant fails to establish
the defendant breached the underlying contract. 	See Suntrust Bank v.
Bryant/Sutphin Props., LLC, 222 N.C. App. 821, 833, 732 S.E.2d 594,
603 (2012).
McDonald v. Bank of N.Y. Mellon Trust Co., 259 N.C. App. 582, 586–87 (2018).
386. 	Moreover, “[a]s a general proposition, where a party’s claim for breach
of the implied covenant of good faith and fair dealing is based upon the same acts as

its claim for breach of contract, we treat the former claim as ‘part and parcel’ of the
latter.” Cordaro v. Harrington Bank, FSB, 260 N.C. App. 26, 38–39 (2018) (holding
that defendant’s claim for breach of the implied covenant of good faith and fair dealing
was properly dismissed where the basis of the claim was identical to defendant’s
breach of contract claim, which had been dismissed).
387. 	Given that the Court has ruled that summary judgment should be
granted in Relation’s favor as to Crooker’s breach of contract claim, summary
judgment is likewise GRANTED in favor of Relation on Crooker’s claim for breach of
the implied covenant of good faith and fair dealing.
388. 	Conversely, the Court has ruled that genuine issues of material fact
exist with regard to Gurley, Kelly, Lancaster, and Linthicum’s breach of contract
claims. 	Therefore, the question of whether Relation breached the covenant of good
faith and fair dealing as to them is an issue to be decided by a jury. Accordingly, the
Court DENIES Relation’s Motion for Summary Judgment as to Gurley, Kelly,
Lancaster, and Linthicum’s claims for breach of the implied covenant of good faith
and fair dealing.
D. Unfair and Deceptive Trade Practices
389. 	Finally, Pilot Risk asserts a counterclaim against Relation for UDTP.26
(Countercl. ¶¶ 68–77.) In this counterclaim, Pilot Risk alleged that Relation engaged
in the following unfair and deceptive acts:
26 Originally, Pilot Benefits, Smythe, Capps, and Kinney also asserted UDTP claims against
Relation. However, those parties are no longer pursuing such claims. (Defs.’ Br. Opp. Pls.’
Mot. Summ. J., at 27–28.)

(a) told insurance carriers, clients, Pilot Risk and Pilot Benefits clients
and others that the Former Employees’ Agreements (attached to the
Complaint) were enforceable; (b) told insurance carriers, clients and
Pilot Risk and Pilot Benefits clients that Judge Bray’s Order [in the
Smythe Lawsuit]. . . was not relevant or controlling as to the Former
Employees; (c) told insurance carriers, clients, Pilot Risk and Pilot
Benefits clients and others that the [Pilot] Defendants breached the [11
March 2021 Settlement Agreement]; (d) offered to and did, in fact, advise
customers that they would cut their commissions to zero in order to
interfere with the business of Pilot Risk and Pilot Benefits; and (e)
stated 	(and 	continue 	to 	state) 	to 	employees 	and 	clients 	that 	the
individual 	Defendants 	or 	some 	of 	them 	were 	immoral, 	unethical,
dishonest and acting illegally.
(Countercl. ¶ 70.)
390. 	In its summary judgment briefing, Pilot Risk primarily contends “that
Relation: (a) told third-parties that the non-competition provisions were enforceable
and (b) used its influence to prevent or delay Pilot from being approved by carriers.”
(Defs.’ Br. Opp. Pls.’ Mot. Summ. J., at 30–31.)
391. 	With regard to the latter argument, Pilot Risk asserts that “Relation has
used its size and clout to prevent or delay Pilot from being approved by carriers, which
has prevented it from developing business from/with those carriers[,]” by blocking
appointments 	from 	those 	carriers,27 	and 	that 	“Relation 	made 	knowing 	false
representations to carriers and customers concerning Defendants’ legal ability to
book business from those customers.” (Defs.’ Br. Opp. Pls.’ Mot. Summ. J., at 29.)
392. 	In response, Relation argues that the entry of summary judgment in its
favor on this claim is proper because Pilot Risk has not identified any false
representations actually made. 	(Pls.’ Br. Supp. Mot. Summ. J., at 19.) 	Relation
27 The term “carrier appointment” refers to an agency’s ability to place coverage with a
particular carrier. (Linthicum Aff. I ¶ 9.)

further contends that Pilot Risk “does not cite a single instance in which Relation told
a carrier or client that Defendants were ‘subject to a non-competition period.’ ” (Pls.’
Reply Br. Supp. Mot. Summ. J., at 13.) 	Moreover, with respect to carrier approval,
Relation asserts that it “is undisputed that insurance carriers make the decision on
which brokers to appoint, not the brokers[,]” and “[t]he fact that Relation, when asked
by a carrier, stated that it would prefer for carriers not to do business with a direct
competitor (Pilot) is not an unfair act.” (Pls.’ Reply Br. Supp. Mot. Summ. J., at 14.)
393. 	This Court has previously stated the following with regard to UDTP
claims:
North Carolina law created a private right of action under Chapter 75
as part of its effort to protect consumers from unfair or deceptive trade
practices. See N.C.G.S. § 75-1.1 (outlawing unfair or deceptive practices
in trade); N.G.G.S. § 75-16 (creating a private right of action and
authorizing treble damages); see also Hardy v. Toler, 24 N.C. App. 625,
630–31, 211 S.E.2d 809, 813 (1975). 	The protections of N.C.G.S. § 75-
1.1 extend, in certain circumstances, to businesses as well. 	Dalton v.
Camp, 353 N.C. 647, 656, 548 S.E.2d 704, 710 (2001) (citing United
Labs., 322 N.C. at 665, 370 S.E.2d at 389). “[T]o establish a prima facie
claim for unfair trade practices, a plaintiff must show: (1) defendant
committed an unfair or deceptive act or practice, (2) the action in
question was in or affecting commerce, and (3) the act proximately
caused injury to the plaintiff.” 	Dalton, 353 N.C. at 656, 548 S.E.2d at
711 (citing Spartan Leasing, Inc. v. Pollard, 101 N.C. App. 450, 460–61,
400 S.E.2d 476, 482 (1991)). 	“The Act does not . . . define an unfair or
deceptive act, ‘nor is any precise definition of the term possible.’ ”
Bernard v. Cent. Carolina Truck Sales, Inc., 68 N.C. App. 228, 229–30,
314 S.E.2d 582, 584 (1984) (quoting Wachovia Bank & Trust Co. v.
Smith, 44 N.C. App. 685, 690, 262 S.E.2d 646, 649 (1980)). 	A trade
practice “is unfair if it is unethical or unscrupulous, and it is deceptive
if it has a tendency to deceive.” Sunbelt Rentals, Inc. v. Head & Engquist
Equip., L.L.C., 174 N.C. App. 49, 59, 620 S.E.2d 222, 230 (2005) (citing
Polo Fashions, Inc. v. Craftex, Inc., 816 F.2d 145, 148 (4th Cir. 1987)).

Charah, LLC v. Sequoia Servs., LLC, 2020 NCBC LEXIS 52, at *18 (N.C. Super. Ct.
Apr. 17, 2020).
394. 	Whether the alleged conduct constitutes an unfair or deceptive act is “a
question of law for the court.” 	Dealers Supply Co. v. Cheil Indus., 348 F. Supp. 2d
579, 592 (M.D.N.C. 2004) (citing Gray v. North Carolina Ins. Underwriting Ass’n, NC,
352 N.C. 61, 68 (2000)). 	The question of “[w]hether a particular act is unfair or
deceptive, depends on the facts surrounding the transaction and the impact on the
marketplace.” Dealers Supply, 348 F. Supp. 2d at 591 (citing Concrete Serv. Corp. v.
Invs. Group, Inc., 79 N.C. App. 678, 685 (1986)).
395. 	After a thorough review of the record, the Court is unpersuaded by
Defendants’ arguments regarding Pilot Risk’s UDTP claim.
396. 	The statements at issue that are supported by the record were largely
made by Relation’s Chief Operating Officer, Jill Zewalk. 	(See Defs.’ Br. Opp. Pls.’
Mot. Summ. J., Ex. 28, at 206:13–16, ECF No. 224.29.)
397. 	As an initial matter, although there is evidence supporting Pilot Risk’s
contention that Relation “told third-parties that the non-competition provisions were
enforceable[,]” such statements were simply an expression of its belief regarding the
legal effect of an employment agreement between Relation and the Individual
Defendants.
398. 	Our Supreme Court long ago stated that
[a] 	misrepresentation 	to 	be 	material 	should 	be 	in 	respect 	of 	an
ascertainable fact as distinguished from a mere matter of opinion. A
representation which merely amounts to a statement of opinion goes for

nothing, though it may not be true, for a man is not justified in placing
reliance on it.
Cash Register Co. v. Townsend, 137 N.C. 652, 656 (1905) (cleaned up).
399. 	Here, Zewalk’s statements amounted to nothing more than her opinion
as to the validity of Relation’s legal rights and falls far short of evidence sufficient to
support a UDTP claim. 	See Hopkins v. MWR Mgmt. Co., 2017 NCBC LEXIS 47, at
*45–46 (N.C. Super. Ct. May 31, 2017) (holding that defendant’s statements that
plaintiff “wasn’t allowed” to work with a competitor because of the defendant’s
noncompete was understood as an expression of the defendant’s opinion of its legal
rights and was not considered “false”); Kingsdown, Inc. v. Hinshaw, 2016 NCBC 15,
at **38 (N.C. Super. Ct. Feb. 17, 2016) (holding that defendant’s statements made
about the opposing party’s claims were “fairly understood as simply reflecting
[defendants’] 	respective 	positions 	in 	the 	pending 	litigation 	and 	their 	opinions
concerning the strength of their respective cases. Such statements are understood by
the average reader or hearer as statements of opinion rather than of objective,
verifiable facts”).
400. 	Furthermore, Pilot Risk’s contention that Zewalk made statements to
insurance carriers stating her preference that they not use Pilot Risk as an insurance
agency likewise fails to support its UDTP claim. 	Zewalk testified as follows with
respect to discussions she had with carriers about Pilot Risk:
I never asked them not to do business. They asked -- there were a couple
of carriers who asked our opinion on what our feelings would be if they
were appointed. And my exact words were, I would prefer it if you don’t.
That’s not the same. It was just an opinion and a preference.
(Pls.’ Mot. Summ. J., Ex. 14, at 105:6–11.)

401. 	Defendants 	have 	failed 	to 	put 	forth 	any 	legal 	authority 	for 	the
proposition that such statements are sufficient to support a UDTP claim.
402. 	The 	Court 	has 	carefully 	considered 	all 	of 	Pilot 	Risk’s 	additional
arguments in support of its UDTP claim and concludes that they are either not
supported by admissible evidence in the record or are insufficient to raise a genuine
issue of material fact on this issue.
403. 	Therefore, summary judgment is GRANTED in favor of Relation as to
Pilot Risk’s claim for UDTP.
CONCLUSION
THEREFORE, IT IS ORDERED as follows:
1. 	Plaintiffs’ Motion for Adverse Inference is GRANTED.
2. 	Defendants’ Motion for Summary Judgment regarding Relation’s trade
secrets claims under the DTSA and NCTSPA is GRANTED in part and
DENIED in part. 	Summary judgment is GRANTED as to all of the
Former Employees on this claim, except for King, Lancaster, and
Linthicum. 	Accordingly, 	Relation’s 	claims 	under 	the 	DTSA 	and
NCTSPA 	against 	Gurley, 	Kelly, 	Crooker, 	and 	Sneed 	are 	hereby
DISMISSED. 	As 	to 	King, 	Lancaster, 	and 	Linthicum, 	summary
judgment is DENIED. The four documents that the jury may consider
at trial as potential trade secrets are King’s Carrier Contact List,
Linthicum’s Net Rate Calculations Spreadsheet, Lancaster’s Production
Analysis, and Lancaster’s Production Report.

3. 	Defendants’ 	Motion 	for 	Summary 	Judgment 	is 	GRANTED 	as 	to
Relation’s claim for breach of the Non-Solicitation Clauses contained in
the Employment Agreements, and this claim is hereby DISMISSED.
4. 	Defendants’ Motion for Summary Judgment is DENIED as to Relation’s
claim for breach of the Confidentiality Provisions contained in the
Employment Agreements.
5. 	Defendants’ Motion for Summary Judgment is GRANTED in favor of
the Pilot Defendants on Relation’s claim for breach of the Employee
Solicitation Restriction Period of the Settlement Agreement, and this
claim is hereby DISMISSED.
6. 	Defendants’ Motion for Summary Judgment as to Relation’s claims for
violations 	of 	the 	Client 	Solicitation 	Restriction 	Period 	and 	of 	the
Confidential 	Information 	Restriction 	Period 	of 	the 	Settlement
Agreement is DENIED with respect to Smythe and Pilot Risk, but
GRANTED as to Kinney, Capps, and Pilot Benefits.
7. 	Defendants’ 	Motion 	for 	Summary 	Judgment 	is 	GRANTED 	as 	to
Relation’s 	claim 	for 	unjust 	enrichment, 	and 	this 	claim 	is 	hereby
DISMISSED.
8. 	Defendants’ Motion for Summary Judgment is GRANTED in favor of
the Former Employees on Relation’s computer trespass claim under the
CFAA, and this claim is hereby DISMISSED.

9. 	Defendants’ Motion for Summary Judgment is DENIED as to Relation’s
computer trespass claim pursuant to N.C.G.S. § 14-458.
10. 	To the extent that Relation’s claims for tortious interference with
business and contractual relations and for tortious interference with
prospective economic advantage are based on contractual relationships
with 	vendors, 	Defendants’ 	Motion 	for 	Summary 	Judgment 	is
GRANTED, and these claims are hereby DISMISSED.
11. 	To the extent that Relation’s claims for tortious interference with
business and contractual relations and for tortious interference with
prospective 	economic 	advantage 	are 	based 	on 	interference 	with
Relation’s 	client 	relationships, 	Defendants’ 	Motion 	for 	Summary
Judgment is DENIED.
12. 	Defendants’ Motion for Summary Judgment as to Relation’s UDTP
claim is DENIED.
13. 	Relation’s Motion for Summary Judgment as to Gurley’s counterclaim
under the NCWHA is GRANTED in part and DENIED in part, as set
forth above.
14. 	Relation’s Motion for Summary Judgment as to Kelly’s counterclaim
under the NCWHA is GRANTED in part and DENIED in part, as set
forth above.

15. 	Relation’s 	Motion 	for 	Summary 	Judgment 	as 	to 	Lancaster’s
counterclaim under the NCWHA is GRANTED in part and DENIED
in part, as set forth above.
16. 	Relation’s Motion for Summary Judgment is GRANTED as to Crooker’s
NCWHA counterclaim, and this claim is hereby DISMISSED.
17. 	Relation’s 	Motion 	for 	Summary 	Judgment 	is 	GRANTED 	as 	to
Linthicum’s 	NCWHA 	counterclaim, 	and 	this 	claim 	is 	hereby
DISMISSED.
18. 	Relation’s Motion for Summary Judgment is DENIED as to Gurley and
Kelly’s breach of contract counterclaims based on the 2% difference in
commission rates as explained above.
19. 	Relation’s Motion for Summary Judgment as to Lancaster’s breach of
contract counterclaim is GRANTED in part and DENIED in part, as
set forth above.
20. 	Relation’s Motion for Summary Judgment is GRANTED as to Crooker’s
breach of contract counterclaim, and this claim is hereby DISMISSED.
21. 	Relation’s Motion for Summary Judgment is DENIED as to Linthicum’s
breach of contract counterclaim.
22. 	Relation’s Motion for Summary Judgment is GRANTED as to Crooker’s
breach 	of 	the 	implied 	covenant 	of 	good 	faith 	and 	fair 	dealing
counterclaim, and this claim is hereby DISMISSED.

23. 	Relation’s Motion for Summary Judgment is DENIED as to the breach
of the implied covenant of good faith and fair dealing counterclaims of
Gurley, Kelly, Lancaster, and Linthicum.
24. 	Relation’s Motion for Summary Judgment is GRANTED as to Pilot
Risk’s counterclaim for UDTP, and this claim is hereby DISMISSED.
SO ORDERED, this the 12th day of July, 2024.28
/s/ Mark A. Davis
Mark A. Davis
Special Superior Court Judge for
Complex Business Cases
28 This Order and Opinion was originally filed under seal on 12 July 2024. This public version
of the Order and Opinion is being filed on 25 July 2024. To avoid confusion in the event of
an appeal, the Court has elected to state the filing date of the public version of the Order and
Opinion as 12 July 2024.