Bite Busters, LLC v. Burris

Bite Busters, LLC v. Burris, 2021 NCBC 19.

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
MOORE COUNTY 20 CVS 899

BITE BUSTERS, LLC,

Plaintiff,
ORDER AND OPINION ON
v.
DEFENDANT’S
MOTION TO DISMISS
CLIFFORD S. BURRIS,

Defendant.

1. THIS MATTER is before the Court on Defendant Clifford S. Burris’s

(“Burris” or “Defendant”) Motion to Dismiss (the “Motion”) pursuant to Rule 12(b)(6)

of the North Carolina Rules of Civil Procedure (“Rule(s)”) in the above-captioned case.

(ECF No. 13.)

2. Plaintiff Bite Busters, LLC (“Bite Busters” or the “Company”) alleges that

Burris violated an Employee Confidentiality, Non-Compete, and Invention

Assignment Agreement (the “Agreement”) that he signed as a condition of his

employment at Bite Busters and unfairly competed against the Company after

forming his own company. (Verified Compl., Mot. TRO & Preliminary Inj. ¶¶ 68–104

[hereinafter “Compl.”], ECF No. 3.)

3. Burris seeks to dismiss all of Bite Busters’s claims, contending that Bite

Busters has failed to state valid claims for breach of the non-competition and

employee non-solicitation provisions of the Agreement, tortious interference with

contract, and violation of both the North Carolina Trade Secrets Protection Act
(“NCTSPA”) and the North Carolina Unfair and Deceptive Trade Practices Act

(“UDTPA”). (Br. Supp. Def.’s Mot. Dismiss 9–16, ECF No. 14.)

4. Having considered the Motion, the related briefing, and the arguments of

counsel at the hearing on the Motion, the Court hereby GRANTS in part and

DENIES in part the Motion.

Meynardie & Nanney, PLLC, by Joseph H. Nanney, for Plaintiff Bite
Busters, LLC.

Vennum PLLC, by Liz Vennum, for Defendant Clifford S. Burris.

Bledsoe, Chief Judge.

I.

FACTUAL AND PROCEDURAL BACKGROUND

5. Under Rule 12(b)(6), “[t]he Court does not make findings of fact on motions

to dismiss[.]” Gallaher v. Ciszek, 2020 NCBC LEXIS 124, at *2 (N.C. Super. Ct. Oct.

16, 2020). Instead, the Court recites only those facts alleged in the Complaint

relevant to the Court’s determination of the Motion.

6. Bite Busters is a limited liability company formed and operating under the

laws of this State with its principal place of business in Moore County, North

Carolina.1 (Compl. ¶ 3.) The Company alleges that it provides outdoor pest control

services “mainly in Moore County, Stanly County, Richmond County, Montgomery

County, Anson County, and Scotland County, North Carolina[.]” (Compl. ¶¶ 5, 7.)

1 The Agreement describes the Company’s principal places of business as Aberdeen, North

Carolina and West Palm Beach, Florida. (Compl. Ex. A (preamble).)
7. Burris is a citizen and resident of Stanly County, North Carolina. (Compl.

¶ 8.) Bite Busters hired Burris in August 2019 as a technician to provide outdoor

pest control services. (See Compl. ¶¶ 5, 14–15, 18, 20.) In conjunction with his hiring,

Burris signed the Agreement on 23 August 2019, prior to beginning work for the

Company. (Compl. ¶ 24, Ex. A.)

8. The Agreement contains a set of non-competition provisions, which provide

as follows:

Non-Competition: Employee agrees not to, directly or indirectly, enter
into, or in any manner take part in, [sic] similar business, profession, or
other endeavor, which competes with the Company during the course of
employment and for a period of 5 years thereafter, within the
geographical limit of 200 miles of Company’s principal place of business
specified above.
i. Customers: Solicit the trade or patronage of any customers or
prospective customers or suppliers of Company with respect to
any technologies, services, products, trade secrets, or other
matters in which Company is actively involved or becomes
involved during the term of Employee’s employment with the
Company; or
ii. Competitors: Engage in any business or employment, or aid or
endeavor to assist any third party, which is in competition with
the products and/or services of Company.

(Compl. ¶ 26, Ex. A ¶ 3(a).)

9. The Agreement also contains a non-solicitation provision, which states:

Non-Solicitation: Employee agrees not to, directly or indirectly, during
the course of employment or for a period of 5 years thereafter, solicit or
aid third parties to solicit any employee or consultant of Company to
leave their employment or engagement with Company in order to accept
employment of any kind with any other person, including, but not
limited to, any firm, company, partnership, or corporation.

(Compl. ¶ 30, Ex. A ¶ 3(b).)
10. Bite Busters alleges that at some point in early 2020 and without Bite

Busters’s knowledge, Burris began advising various Bite Busters customers that he

was starting a competing business. (Compl. ¶¶ 33–34.) Burris launched this

competing business in March or April 2020, (Compl. ¶ 35), and resigned from the

Company on 24 April 2020, (Compl. ¶ 37).

11. Bite Busters first learned of Burris’s competing business when some of Bite

Busters’s customers informed the Company that Burris had solicited them to do

business with his new company. (Compl. ¶¶ 38, 45.) A few of the solicited customers

switched their business from Bite Busters to Burris’s company. (Compl. ¶¶ 38, 45;

see also Aff. Larry Watkins2 ¶ 6, ECF No. 5.) Bite Busters later discovered that

Burris set up a Facebook page called “Mosquito Man,” where he advertised his new

firm’s competing services. (Compl. ¶ 59, Ex. C.)

12. One Bite Busters customer, Larry Watkins, reported to the Company that

Burris falsely told him that “Bite Busters was doing improper applications that were

dangerous to people and pets” and that “the chemicals that Bite Busters uses are

harmful to animals and plants.” (Compl. ¶¶ 46–49; see also Aff. Larry Watkins ¶ 9.)

13. One of the Company’s employees, Amedeo L. Camarco (“Camarco”), also

reported to the Company that Burris told him that Burris was starting a competing

2 Plaintiff’s Complaint references and relies upon the affidavit of Larry Watkins, (see Compl.

¶¶ 43, 45), thus the Court may consider the affidavit on this Motion, see, e.g., Schlieper v.
Johnson, 195 N.C. App. 257, 261 (“When documents are attached to and incorporated into a
complaint, they become part of the complaint and may be considered in connection with a
Rule 12(b)(6) motion without converting it into a motion for summary judgment.”).
business and that Burris had asked Camarco to terminate his employment with the

Company and come to work for Burris’s competing business. (Compl. ¶¶ 62–63.)

14. Bite Busters initiated this action on 25 August 2020. (See Compl.) Burris

filed the current Motion seeking dismissal of Bite Busters’s claims on 26 October

2020. (Def’s Mot. Dismiss. 1) After full briefing, the Court held a hearing on the

Motion on 17 December 2020 (the “Hearing”) via WebEx videoconference, at which

all parties were represented by counsel. The following day, the Court, with the

parties’ consent, entered an order permitting limited discovery and deferring its

ruling on the Motion through 28 February 2021 to assist the parties’ efforts in

pursuing early mediation and potential settlement of this action. (Interim Case

Management Order, ECF No. 27.) Those efforts have resulted in an impasse,

however, and the Motion is now ripe for resolution.

II.

LEGAL STANDARD

15. “A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of the

complaint by presenting ‘the question whether, as a matter of law, the allegations of

the complaint, treated as true, are sufficient to state a claim upon which relief can be

granted under some [recognized] legal theory.’ ” Forsyth Mem’l Hosp., Inc. v.

Armstrong World Indus., Inc., 336 N.C. 438, 442 (1994) (quoting Lynn v. Overlook

Dev., 328 N.C. 689, 692 (1991)). Accordingly, the Court must view the allegations in

the complaint “in the light most favorable to the non-moving party.” Christenbury
Eye Ctr., P.A. v. Medflow, Inc., 370 N.C. 1, 5 (2017) (quoting Kirby v. N.C. Dep’t of

Transp., 368 N.C. 847, 852 (2016)).

16. “When considering a [Rule] 12(b)(6) motion to dismiss, the trial court need

only look to the face of the complaint to determine whether it reveals an

insurmountable bar to plaintiff’s recovery.” Kemp v. Spivey, 166 N.C. App. 456, 461

(2004) (quoting Locus v. Fayetteville State Univ., 102 N.C. App. 522, 527 (1991)).

Further, “the complaint is to be liberally construed, and the trial court should not

dismiss the complaint unless it appears beyond doubt that [the] plaintiff could prove

no set of facts in support of his claim which would entitle him to relief.” State ex rel.

Cooper v. Ridgeway Brands Mfg., LLC, 362 N.C. 431, 444 (2008) (quoting Meyer v.

Walls, 347 N.C. 97, 111–12 (1997)); see also Strickland v. Hedrick, 194 N.C. App. 1,

20 (2008) (“[T]o prevent a Rule 12(b)(6) dismissal, a party must . . . state enough to

satisfy the substantive elements of at least some legally recognized claim.” (citation

and internal quotation marks omitted)).

17. Therefore, dismissal of a complaint under Rule 12(b)(6) is proper only when:

“(1) the complaint on its face reveals that no law supports the plaintiff’s claim; (2) the

complaint on its face reveals the absence of facts sufficient to make a good claim; or

(3) the complaint discloses some fact that necessarily defeats the plaintiff’s claim.”

Krawiec v. Manly, 370 N.C. 602, 606 (2018) (quoting Wood v. Guilford Cty., 355 N.C.

161, 166 (2002)).
III.

ANALYSIS

A. Breach of Contract (Non-Compete)

18. Burris contends that Bite Busters’s claim for breach of the non-competition

provisions in paragraph 3(a) of the Agreement should be dismissed because the

provisions Bite Busters seeks to enforce are invalid as a matter of North Carolina

law. The Court agrees.

19. As an initial matter, “[i]t is well established that ‘[a] covenant in an

employment agreement providing that an employee will not compete with his former

employer is not viewed favorably in modern law.’ ” Sterling Title Co. v. Martin, 266

N.C. App. 593, 597 (2019) (quoting Hartman v. W.H. Odell & Assocs., Inc., 117 N.C.

App. 307, 311 (1994)). Nevertheless, a covenant not to compete will be enforced if it

is “(1) in writing; (2) reasonable as to time and territory; (3) made a part of the

employment contract; (4) based on valuable consideration; and (5) designed to protect

a legitimate business interest of the employer.” Young v. Mastrom, Inc., 99 N.C. App.

120, 122–23, disc. review denied, 327 N.C. 488 (1990). “The reasonableness of a non-

competition covenant is a matter of law for the court to decide.” Med. Staffing

Network, Inc. v. Ridgway, 194 N.C. App. 649, 655 (2009).

20. Paragraph 3(a) provides that Burris may not, either “directly or indirectly,

enter into, or in any manner take part in, [sic] similar business, profession, or other

endeavor, which competes with the Company during the course of employment and

for a period of 5 years thereafter, within the geographical limit of 200 miles of
Company’s principal place of business.” (Compl. Ex. A ¶ 3(a).) That sentence is then

followed by two incomplete sentences that appear as numbered subparagraphs with

apparent (but not express) limitations, one as to “Customers” (“Solicit the trade or

patronage of any customers . . . of Company[,]” (Compl. Ex. A, at ¶ 3(a)(i))), and the

other as to “Competitors” (“Engage in any business or employment . . . which is in

competition with . . . Company[,] (Compl. Ex. A 3(a)(ii))).3 These provisions are

unenforceable as a matter of North Carolina law for several reasons.

21. First, paragraph 3(a) unreasonably restricts Burris’s business activities

because it prohibits him from “directly or indirectly” taking part “in any manner” in

a similar business, without regard to whether Burris is employed in a similar position

at that business or the services he provides at that business are the same as those he

provided at Bite Busters. See, e.g., VisionAIR, Inc. v. James, 167 N.C. App. 504, 509

(2004) (holding unenforceable a restriction that prevented the employee “from doing

even wholly unrelated work at any firm similar to [the employer]”); Hartman, 117

N.C. App. at 317 (holding unenforceable a restriction “that, rather than attempting

to prevent [the former employee] from competing for . . . business, it require[d] [the

former employee] to have no association whatsoever with any business that provides

[similar] services.”); Ridgway, 194 N.C. App. at 656 (holding unenforceable

restrictions that “prohibit the employee from engaging in future work that is distinct

from the duties actually performed by the employee”); Window Gang Ventures, Corp.

3 Although it is debatable whether subparagraphs 3(a)(i) and 3(a)(ii) restrict Burris’s
activities due to their lack of express prohibitory language, even if they can be read to do so,
each, as explained below, is unenforceable under North Carolina law.
v. Salinas, 2019 NCBC LEXIS 24, at *20 (N.C. Super. Ct. Apr. 2, 2019) (holding

unenforceable a provision restricting employees from working for competitors “in any

capacity whatsoever—not simply in roles which would cause competitive harm to [the

employer] or only in divisions of those businesses which compete with [the

employer]”).

22. Next, paragraph 3(a)’s geographic restriction is also unreasonable as a

matter of law. “A restriction as to territory is reasonable only to the extent it protects

the legitimate interests of the employer in maintaining [its] customers.” Hejl v. Hood,

Hargett & Assocs., Inc., 196 N.C. App. 299, 306 (2009) (quoting Manpower, Inc. v.

Hedgecock, 42 N.C. App. 515, 523 (1979)). “Ordinarily, a covenant’s geographic scope

will be found reasonable if it encompasses the area served by the business that the

covenant protects[.]” Beverage Sys. of the Carolinas, LLC v. Associated Beverage

Repair, LLC, 368 N.C. 693, 698 (2016) (citing Thompson v. Turner, 245 N.C. 478,

481–82 (1957)).

23. Bite Busters has alleged that its customers are located in “Moore County,

Stanly County, Richmond County, Montgomery County, Anson County, and Scotland

County, North Carolina[.]” (Compl. ¶ 7.) Yet the territory prohibited to Burris under

the Agreement extends 200 miles from the Company’s principal place of business,

which is alleged in the Complaint as Moore County, North Carolina but defined in

the Agreement as both Aberdeen, North Carolina (which is in Moore County) and

West Palm Beach, Florida. (Compl. ¶ 3, Ex. A (preamble).) The Court takes judicial

notice that the geographic territory extending 200 miles from Moore County, North
Carolina includes all but the westernmost counties of North Carolina, nearly all of

South Carolina, and a large portion of Virginia, including the cities of Roanoke,

Richmond, and Norfolk. For good measure, the territory extending 200 miles from

West Palm Beach, Florida includes the southern half of Florida as well as a large

portion of the Bahamas.

24. It merely states the obvious to note that the six-county area in central North

Carolina in which Bite Busters alleges it has customers is far smaller than the vastly

more expansive territory it seeks to protect from Burris’s competitive activities in the

Agreement. Even if Burris serviced customers in the Company’s entire six-county

operating area, Bite Busters’s prohibited territory under the Agreement far exceeds

any reasonable geographic limitation on Burris’s competitive activities that is

necessary to protect the Company’s legitimate business interests. See, e.g., Farr

Assocs., Inc. v. Baskin, 138 N.C. App. 276, 281 (2000) (“The employer must show that

the territory embraced by the covenant is no more than necessary to secure the

protection of its business[.]”). As such, the Court concludes that on the facts as

pleaded, the territory in the Agreement is unreasonable as a matter of law. Where,

as here, “the scope of the client-based territorial restriction . . . is unreasonable,” it

“thereby render[s] the non-compete agreement unenforceable.” Farr Assocs., Inc., 138

N.C. App. at 283.

25. The Court also concludes that the Agreement’s five-year restrictive period

is unenforceable as a matter of law on the pleaded facts. North Carolina courts only

enforce five-year employment covenants “under extreme conditions,” Hartman, 117
N.C. App. at 315 (quoting Eng’g Assocs., Inc. v. Pankow, 268 N.C. 137, 139 (1966)),

and no “extreme conditions” have been pleaded to support the five-year term here,

see, e.g., Akzo Nobel Coatings, Inc. v. Rogers, 2011 NCBC LEXIS 42, at *46–47 (N.C.

Super. Ct. Nov. 3, 2011) (holding a non-compete clause unenforceable where “[t]here

[we]re no special circumstances pled that would allow the Court to determine that a

five-year restriction is reasonable”).

26. The unreasonableness of paragraph 3(a)’s time restriction is all the more

apparent when the Court considers that the paragraph purports to restrict Burris

from soliciting “any customers . . . with respect to . . . matters in which Company is

actively involved or becomes involved during the term of Employee’s employment with

the Company[.]” (Compl. Ex. A ¶ 3(a)(i) (emphasis added).) Because the provision

looks back to the beginning of Burris’s employment in August 2019, North Carolina

courts deem the restriction as actually extending for five years and eight months.

See, e.g., Farr Assocs., Inc., 138 N.C. App. at 280 (“[W]hen a non-compete agreement

reaches back to include clients of the employer during some period in the past, that

look-back period must be added to the restrictive period to determine the real scope

of the time limitation.”). Thus, the actual time period of the Company’s restriction is

beyond the five-year period our courts have enforced only “under extreme conditions.”

See, e.g., Sterling Title Co., 266 N.C. App. at 599 (holding restriction unenforceable

because it restricted defendant “from soliciting or providing competitive services to

any of [p]laintiff’s customers with whom she had contact during her employment, a

period of roughly ten years.”).
27. Subparagraphs 3(a)(i) and 3(a)(ii) contain non-solicitation provisions that

are unenforceable for similar reasons. Non-solicitation provisions “ ‘must meet the

same requirements as are applied to . . . covenant[s] not to compete[,]’ including that

they be ‘reasonable as to time and territory.’ ” Window Gang Ventures, Corp., 2018

NCBC LEXIS 18, at *28 (quoting Aeroflow Inc. v. Arias, 2011 NCBC LEXIS 21, at

*24 (N.C. Super. Ct. July 5, 2011)).

28. Paragraph 3(a)(i) purports to restrict Burris from “[s]olicit[ing] the trade or

patronage of any customers or prospective customers and suppliers of the Company

with respect to any technologies, services, products, trade secrets, or other matters in

which Company is actively involved or becomes involved during the term of

Employee’s employment with the Company[.]” (Compl. Ex. A ¶ 3(a)(i).) This Court

has recognized that “North Carolina[ ] courts will enforce a covenant prohibiting a

former employee from soliciting his former employer’s customers even when not tied

to a specific geographic region where ‘the terms and conditions of this contract clause

were reasonably necessary to protect the employer’s legitimate business interests.’ ”

Sandhills Home Care, L.L.C. v. Companion Home Care - Unimed, Inc., 2016 NCBC

LEXIS 61, at *25–26 (N.C. Super. Ct. Aug. 1, 2016) (quoting Triangle Leasing Co. v.

McMahon, 327 N.C. 224, 229 (1990)). But where, as here, a non-solicitation clause

“reaches not only clients, but potential clients, and extends to areas where [p]laintiff

had no connections or personal knowledge of customers, the [provision] is
unreasonable.” Aesthetic Facial & Ocular Plastic Surgery Ctr., P.A. v. Zaldivar, 264

N.C. App. 260, 272–73 (2019) (quoting Hejl, 196 N.C. App. at 307).4

29. Paragraph 3(a)(ii) appears to restrict Burris from “[e]ngag[ing] in any

business or employment, or aid[ing] or endeavor[ing] to assist any third party, which

is in competition with the products and/or services of Company.” (Compl. Ex. A

¶ 3(a)(ii).) As explained in connection with paragraph 3(a) above, however, such a

provision—which restricts Burris from working for a competitor in a position

different from the position he held at the Company and from providing services unlike

those he performed at the Company—is unreasonable as a matter of law and shall

not be enforced. See, e.g., VisionAIR, Inc., 167 N.C. App. at 509; Hartman, 117 N.C.

App. at 317.

30. For each of these reasons, therefore, the Court concludes that the Company’s

claim for breach of contract based on the non-competition and customer non-

solicitation provisions of paragraph 3(a) of the Agreement and its subparagraphs

should be dismissed under Rule 12(b)(6).5

4 Paragraph 3(a)(i)’s restriction on solicitation of suppliers is unreasonable as a matter of law

for the same reason.
5 Although not requested by Bite Busters, the Court notes that it is precluded from blue

penciling paragraph 3(a) and its subparagraphs because they do not contain distinctly
separable parts. See Hartman, 117 N.C. App. at 317 (“A court at most may choose not to
enforce a distinctly separable part of a covenant in order to render the provision reasonable.
It may not otherwise revise or rewrite the covenant.”).
B. Breach of Contract (Non-Solicitation of Employees)

31. Burris next contends that the same deficiencies that doomed Bite Busters’s

claim for breach of paragraph 3(a) compel the dismissal of its claim for breach of the

non-solicitation of employees provision in paragraph 3(b) of the Agreement.

32. “Courts in North Carolina have recognized that reasonable restrictions on a

former employee’s right to solicit an employer’s current employees are enforceable[,]”

as such provisions are simply “another means of protecting the former employer’s

interest in the good-will it has with its customers.” Wells Fargo Ins. Servs. USA, Inc.

v. Link, 2018 NCBC LEXIS 42, at *26–28 (N.C. Super. Ct. May 8, 2018), aff’d, 372

N.C. 260 (2019); see also, e.g., Kennedy v. Kennedy, 160 N.C. App. 1, 11 (2003) (“[T]he

covenant prohibiting [defendant] from soliciting and hiring plaintiff’s former

employees for the three-year period does not violate public policy.”) Nevertheless,

“[a] restriction on solicitation of employees generally is subject to the same

requirements as other restrictive covenants.” Wells Fargo Ins. Servs. USA, Inc., 2018

NCBC LEXIS 42, at *27. Thus, “[t]o establish that a non-solicitation of employees

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

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

no broader than necessary to protect that interest.” Id. at *28; see, e.g., Ridgway, 194

N.C. App. at 657 (holding unenforceable a prohibition on defendant’s solicitation of

employees of plaintiff’s affiliate for which defendant did not work).

33. Paragraph 3(b) of the Agreement provides that Burris may not “directly or

indirectly, during the course of employment or for a period of 5 years thereafter, solicit
or aid third parties to solicit any employee or consultant of Company to leave their

employment or engagement with Company in order to accept employment of any kind

with any other person[.]” (Compl. Ex. A ¶ 3(b).) This language is substantially

similar to the language of paragraph 3(a) and its subparagraphs, and the Company’s

counsel asserted at the Hearing that its claim for breach of paragraph 3(b) should

rise and fall with its claim for breach of paragraphs 3(a), 3(a)(i), and 3(a)(ii). The

Court agrees.

34. In particular, the Court concludes that paragraph 3(b)’s prohibition of

Burris’s “direct[ ] or indirect[ ]” solicitation of the Company’s employees for a period

of five years after the termination of his employment—regardless of whether the

employees were current Company employees, whether the employees worked in the

same territories in which Burris worked, whether Burris ever worked with the

employees, or whether the employees provided services or developed relationships for

Bite Busters that would be of value to a competitive business—is unreasonable as a

matter of law on the pleaded facts. Nothing on the face of the Complaint nor in the

Agreement suggests that such a restriction is necessary to protect the Company’s

legitimate business interests, and the Company has not contended that a legitimate

business interest supports the restriction in its briefing or oral argument. For each

of these reasons, therefore, the Court concludes that Bite Busters’s claim for breach

of contract based on paragraph 3(b) of the Agreement must be dismissed.
C. Violation of the NCTSPA

35. Burris next seeks the dismissal of Bite Busters’s claim for misappropriation

of trade secrets under the NCTSPA. (Compl. ¶¶ 84–96.) “To plead misappropriation

of trade secrets, 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, 370 N.C. at 609 (quoting Washburn v. Yadkin Valley Bank & Tr. Co., 190

N.C. App. 315, 326 (2008)). Therefore, “a complaint that makes general allegations

in sweeping and conclusory statements, without specifically identifying the trade

secrets allegedly misappropriated, is ‘insufficient to state a claim for

misappropriation of trade secrets.’ ” Id. at 610 (quoting Washburn, 190 N.C. App. at

327).

36. The NCTSPA defines a “[t]rade 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 from 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).

37. Our courts consider the following factors in determining whether a plaintiff

has successfully pleaded a cognizable trade secret:

(1) [t]he extent to which information is known outside the business; (2)
the extent to which it is known to employees and others involved in the
business; (3) the extent of measures taken to guard secrecy of the
information; [(4)] the value of information to business and its
competitors; [(5)] the amount of effort or money expended in developing
the information; and [(6)] the ease or difficulty with which the
information could properly be acquired or duplicated by others.

Wilmington Star-News, Inc. v. New Hanover Reg’l Med. Ctr., Inc., 125 N.C. App. 174,

180-81 (1997) (citations omitted). “These factors overlap, and courts do not always

examine them separately and individually.” Vitaform, Inc. v. Aeroflow, Inc., 2020

NCBC LEXIS 132, at *19 (N.C. Super. Ct. Nov. 4, 2020) (citation omitted).

“Information 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., 266 N.C. App. at 601 (quoting Analog Devices, Inc.

v. Michalski, 157 N.C. App. 462, 470 (2003)).

38. 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). Further, “[a] complaint must contain allegations,

identifying with specificity, ‘the acts by which the alleged misappropriations were

accomplished.’ ” Strata Solar, LLC v. Naftel, 2020 NCBC LEXIS 129, at *9 (N.C.

Super. Ct. Oct. 29, 2020) (quoting Washburn, 190 N.C. App. at 327).

39. Bite Busters alleges that its trade secrets “includ[e] but [are] not limited to

its processes, procedures, customer lists and other trade secrets,” (Compl. ¶ 85), and

that “Defendant, while an employee of Bite Busters, misappropriated those trade
secrets,” (Compl. ¶ 88). These allegations are insufficient to survive Rule 12(b)(6)

scrutiny. See Krawiec, 370 N.C. at 609 (requiring trade secret identification with

“sufficient particularity”).

40. First, the courts of this State routinely dismiss NCTSPA claims broadly

asserting that a plaintiff’s processes and procedures constitute its trade secrets

because, without more, such allegations do not identify with sufficient particularity

the trade secrets the defendant allegedly misappropriated. See, e.g., Washburn, 190

N.C. App. at 327 (concluding that trade secrets comprised of “business methods;

clients, their specific requirements and needs; and other confidential information”

failed to identify alleged trade secrets with sufficient specificity); Analog Devices, Inc.,

157 N.C. App. at 468–69 (concluding that “general claims concerning areas of

[plaintiff’s] production and design” failed to identify alleged trade secrets with

reasonable particularity); Window Gang Ventures, Corp., 2019 NCBC LEXIS 24 at

*43 (concluding that trade secrets comprised of “[i]nformation regarding [plaintiff’s]

proprietary equipment and chemical cleaning solutions” failed to identify alleged

trade secrets with sufficient particularity); Edgewater Servs., Inc. v. Epic Logistics,

Inc., 2009 NCBC LEXIS 21, at *9, *11 (2009) (concluding that “formulae, patterns,

programs, devices, compilations of information, methods, techniques and

processes,” failed to identify alleged trade secrets with sufficient particularity

(citation and internal quotation marks omitted)).

41. Bite Busters’s identification of its “customer lists” trade secret, however,

fares better. Our Supreme Court has held that customer lists may, in certain
circumstances, constitute a trade secret, see Krawiec, 370 N.C. at 610, provided that

the plaintiff “allege[s] that the lists contained . . . information that would not be

readily accessible to defendant[ ,]” id. at 611. Here, Bite Busters specifically alleges

that “[Burris] would not have had access to customer contact information, including

addresses, telephone numbers, and e-mail addresses, had he not been employed by

Bite Busters[,]” (Compl. ¶ 22), and supports this assertion with additional factual

allegations identifying various measures the Company took to protect this

information from anyone other than an employee with a need to know, including by

locking doors, limiting access to computers, and requiring employees to execute

nondisclosure agreements, (Compl. ¶¶ 23, 28). The Court finds these allegations

sufficient to satisfy the identification requirement set forth in Krawiec.

42. Despite satisfying its burden to sufficiently plead its customer list trade

secret, however, Bite Busters’s trade secret claim nonetheless fails because the

Company has failed to allege “the acts by which the alleged misappropriations were

accomplished.’’ Strata Solar, LLC, 2020 NCBS LEXIS 129, at *9 (quoting Washburn,

190 N.C. App. at 327). Indeed, Bite Busters has not pleaded how Burris accessed or

acquired the Company’s trade secrets when he was not authorized to do so or how he

used Bite Busters’s trade secrets without authorization. To the contrary, the

Company’s only allegation concerning misappropriation is general and conclusory:

“Defendant, while an employee of Bite Busters, misappropriated those trade secrets,

acquiring them to use in his competing business to unfairly compete with Bite

Busters.” (Compl. ¶ 88.) Our courts have made clear that such allegations are
insufficient to survive Rule 12(b)(6) scrutiny. See, e.g., Washburn, 190 N.C. App. at

327 (holding that “general and conclusory” allegations of misappropriation are

insufficient to survive a motion under Rule 12(b)(6)); see also Strata Solar, LLC, 2020

NCBC LEXIS 129, at *11–12 (holding that when a “[p]laintiff does not allege any

specific acts by [defendants] to show that they accessed, disclosed, or used [p]laintiff’s

trade secrets without [p]laintiff’s authorization[,]” a trade secret misappropriation

claim necessarily fails).

43. Accordingly, for the reasons discussed above, Bite Busters’s NCTSPA claim

must be dismissed. Nevertheless, given that Bite Busters has not yet amended its

Complaint and based on counsel’s representations at the Hearing that the failures of

pleading identified above may be cured through repleading, the Court will dismiss

the Company’s trade secret claim without prejudice6.

D. Tortious Interference with Business and Contractual Relationships

44. Burris next seeks to dismiss Bite Busters’s claim for tortious interference

with the Company’s business and contractual relationships. The Company bases its

claim on Burris’s alleged conduct in soliciting the business of Bite Busters’s customers

in violation of his contractual obligations to the Company, including by “defaming

Bite Busters[.]” (Compl. ¶¶ 76–83.)

6
Notwithstanding the Court’s conclusion that this claim should be dismissed, “[t]he decision
to dismiss an action with or without prejudice is in the discretion of the trial court[.]” First
Fed. Bank v. Aldridge, 230 N.C. App. 187, 191 (2013). The Court concludes, in the exercise
of its discretion, that dismissal of Bite Busters’s NCTSPA claim should be without prejudice
to its right to attempt to reassert that claim through proper factual allegations consistent
with Rule 12.
45. Under North Carolina law, a plaintiff bringing a tortious interference with

contract claim must allege more than “an expectation of a continuing business

relationship” with a third party to survive dismissal under Rule 12(b)(6). Dalton v.

Camp, 353 N.C. 647, 655 (2001). Rather, a plaintiff must plead:

(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.

Krawiec, 370 N.C. at 606–07 (quoting United Labs. v. Kuykendall, 322 N.C. 643, 661

(1988)).

46. Although Bite Busters has alleged that it has “developed . . . contractual

relationships with its customers[,]” (Compl. ¶ 77), and that Burris approached

customers of Bite Busters and advised them that he would begin a competing

business, (Compl. ¶ 33), the Company nowhere pleads specific facts showing that

Burris knew of the particular contractual relationships with customers on which Bite

Busters’s claim is based. Such a failure of pleading requires that the claim be

dismissed. See, e.g., Salon Blu, Inc. v. Salon Lofts Grp., LLC, 2018 NCBC LEXIS 72,

at *12 (N.C. Super. Ct. July 16, 2018) (“[W]hen alleging a claim for tortious

interference with contract, it is not enough to broadly allege that the defendant[ ] had

‘knowledge of the contract[ ]’; rather, a complaint must contain ‘facts sufficient to

make a good claim’ that the defendant[ ] knew of the contract[ ] at issue.” (quoting

Krawiec, 370 N.C. at 606–07)). As both parties admitted at the Hearing, however, it
appears that these pleading deficiencies can be cured. The Court will therefore

dismiss this claim without prejudice.

E. Violation of the UDTPA (Section 75-1.1)

47. Bite Busters’s final claim is for violation of the UDTPA, N.C.G.S. § 75-1.1,

(Compl. ¶¶ 97–104), and is based on a variety of alleged misconduct, including that

Burris (i) “misrepresented to customers that he had the right to start a competing

business,” (Compl. ¶ 100), (ii) “us[ed] the confidential trade secret information that

belongs to Bite Busters,” (Compl. ¶ 100), and (iii) falsely represented to a Bite Busters

customer that Bite Busters used “improper applications that were dangerous to

people and to pets[,]” (Compl. ¶¶ 46-47), and chemicals that were “harmful to animals

and to plants[,]” (Compl. ¶¶ 48-49).

48. To “establish a prima facie claim for unfair trade practices, a plaintiff must

show: (1) [the] 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.” Bumpers v. Cmty. Bank of N. Va., 367 N.C. 81, 88 (2013)

(quoting Dalton, 353 N.C. at 656).

49. As an initial matter, to the extent the Company’s UDTPA claim is premised

on the success of its claims for tortious interference and misappropriation of trade

secrets, the failure of those claims, as discussed above, is fatal to the Company’s claim

under Chapter 75. See, e.g., Krawiec, 370 N.C. at 613 (“Because we determined that

plaintiffs failed to state a valid claim for tortious interference with contract or

misappropriation of trade secrets, we necessarily must conclude that plaintiffs also
failed to adequately allege that [defendants] committed an unfair or deceptive act or

practice [based on those claims].” (citation and internal quotation marks omitted)).

Similarly, because the Court has dismissed the Company’s breach of contract claims,

the Company’s UDTPA claim shall also be dismissed to the extent it is based on

Burris’s alleged breach of contract.

50. In addition, to the extent Bite Busters bases its UDTPA claim on its

allegations that Burris misrepresented to customers his right to start a competing

business and thereby induced those customers to take actions that harmed the

Company, that claim, too, must fail. Our appellate courts have made clear that

where, as here, a plaintiff asserts a misrepresentation-based UDTPA claim, the

plaintiff must plead “reliance on the misrepresentation in order to show the necessary

proximate cause[,]” Bumpers, 367 N.C. at 88, and, in particular, that “the plaintiff

[has] affirmatively incorporated the alleged misrepresentation into his or her

decision-making process[,]” id. at 90.

51. Because Bite Busters has failed to allege that the Company relied on

Burris’s alleged misrepresentation, the Company’s UDTPA claim must be dismissed

to this extent. See, e.g., D C Custom Freight, LLC v. Tammy A. Ross & Assocs., Inc.,

848 S.E.2d 552, 562 (N.C. Ct. App. 2020) (“It is clear from [Bumpers] that only the

direct reliance of the plaintiff is sufficient to support a UDTP[A] claim based on

misrepresentation. The holding in Bumpers precludes a UDTP[A] claim . . . in which

a third party’s reliance caused damage to the plaintiff.”).
52. The Court reaches a different conclusion, however, concerning Bite

Busters’s allegation that Burris falsely stated to a customer that the Company’s

chemicals and applications caused harm to plants, animals, and humans. (Compl.

¶¶ 46–49.) Such alleged statements, if false, impeach the Company in its trade or

business and can support a claim for slander per se. See, e.g., Taube v. Hooper, 840

S.E.2d 313, 317 (N.C. Ct. App. 2020) (“Slander per se is an oral communication to a

third person which amounts to . . . an allegation that impeaches the plaintiff in his

trade, business, or profession[.]” (citation omitted)). Our courts have recognized that

slander per se may constitute an unfair trade practice under section 75-1.1. See

Ausley v. Bishop, 133 N.C. App. 210, 216 (1999) (holding that “slander per se may

constitute a violation of section 75-1.1”); see also, e.g., Ellis v. N. Star Co., 326 N.C.

219, 226 (1990) (holding that “a libel per se of a type impeaching a party in its business

activities is an unfair or deceptive act in or affecting commerce in violation of N.C.G.S.

§ 75-1.1”); Nguyen v. Taylor, 219 N.C. App. 1, 9 (2012) (holding that “defam[ing]

[plaintiffs] while profiting at their expense” may constitute an unfair trade practice

under section 75-1.1).

53. Accordingly, because the Court concludes that the Company has pleaded

sufficient facts which, if proven, would support a finding that Burris engaged in an

unfair or deceptive act or practice “in or affecting commerce” that proximately caused

injury to the Company by defaming the Company in its trade or business, Burris’s

motion to dismiss Bite Busters’s UDTPA claim based on these allegations should be

denied.
IV.

CONCLUSION

54. WHEREFORE, for the reasons set forth above, the Court hereby ORDERS

as follows:

a. Defendant’s Motion is GRANTED as to Bite Busters’s claims for

breach of contract (non-compete) and breach of contract (non-

solicitation), and those claims are hereby DISMISSED with

prejudice.

b. Defendant’s Motion is GRANTED as to Bite Busters’s claims for

tortious interference with business and contractual relationships and

violation of the North Carolina Trade Secrets Protection Act, and

those claims are hereby DISMISSED without prejudice.

c. Defendant’s Motion is GRANTED as to Bite Busters’s claim for

violation of section 75-1.1 (except to the extent that claim is based on

the Company’s allegations that Burris made false statements that

defamed the Company in its trade or business), and that claim is

hereby DISMISSED without prejudice to the extent that claim is

based on Bite Busters’s claims for tortious interference with business

and contractual relationships and for violation of the North Carolina

Trade Secrets Protection Act and DISMISSED with prejudice to

the extent that claim is based on Bite Busters’s claims for breach of

contract (non-compete) and breach of contract (non-solicitation).
d. Defendant’s Motion is DENIED as to Bite Busters’s claim for

violation of section 75-1.1 to the extent that claim is based on the

Company’s allegations that Burris made false statements that

defamed the Company in its trade or business, and that claim shall

proceed to discovery.

SO ORDERED, this the 25th day of March, 2021.

/s/ Louis A. Bledsoe, III
Louis A. Bledsoe, III
Chief Business Court Judge