Syngenta Seeds, LLC v. Warner

Background

Syngenta alleged that former employees Todd Warner and Joshua Sleper took confidential business information and trade secrets and used them to help Farmer’s Business Network (FBN), a competitor. Syngenta alleged that Warner and Sleper had access to information about seed genetics, breeding programs, testing, analytics, costs, and business plans. Both had signed employment agreements containing confidentiality, noncompete, and company-property return provisions.

Syngenta alleged that Warner and Sleper communicated with FBN while still working for Syngenta, discussed creating a seed-breeding program, accessed Syngenta information, and copied information to external storage devices. Sleper later joined FBN, and Warner resigned after FBN offered him a job. Syngenta originally sued Warner, then amended its complaint to add Sleper and FBN after expedited discovery.

Motion and governing standard

Sleper and FBN moved under Federal Rule of Civil Procedure 12(b)(6), which asks whether a complaint states a legally sufficient claim. The court treated the motion as directed at Syngenta’s Second Amended Complaint because the changes from the earlier complaint were limited and the parties requested a ruling for efficiency. At this stage, the court accepted the complaint’s factual allegations as true and considered whether they plausibly supported relief.

The court also addressed the choice-of-law provision in Sleper’s employment agreement. It concluded that Syngenta had not waived the provision by filing suit in Minnesota, and that applying North Carolina law was constitutionally permissible based on the alleged connections to North Carolina and Sleper’s agreement to that provision. The court applied North Carolina law to the state trade-secret claim, civil-conspiracy claim, and tortious-interference claims, in addition to the breach-of-contract claim.

Claims allowed to continue

The court rejected dismissal of Syngenta’s breach-of-contract claim against Sleper. Syngenta plausibly alleged that Sleper breached the agreement’s confidentiality provision and its requirement to return company property. The court found the allegations about Sleper’s access to confidential information, communications with FBN, creation and transmission of the BreedingPlanCosts document, and copying of information to external devices sufficient at the pleading stage.

The court separately found that Syngenta had not plausibly alleged that Sleper breached the agreement’s noncompete provision. The allegations described discussions about a possible future role at FBN, but did not show that Sleper actively participated in developing FBN’s seed products while still employed by Syngenta. The breach-of-contract claim nevertheless survived because Syngenta plausibly alleged other contractual breaches.

The court also allowed the trade-secret claims against Sleper and FBN to continue. Syngenta identified categories of information with enough detail for the pleading stage, including breeding-program datasets, genetic maps, genotyping information, trial data, and analytics. The court found it plausible that Sleper misappropriated trade secrets based on his access, contractual duties, discussions with FBN, alleged copying, failure to return external storage devices, and subsequent work connected to FBN’s seed-breeding program. It likewise found it plausible that FBN acquired or used the information while knowing of Sleper’s confidentiality obligations.

The court also allowed the civil-conspiracy claim to continue. Although civil conspiracy is a theory of liability rather than a separate cause of action under North Carolina law, it may be pleaded as a separate count. Because Syngenta plausibly alleged trade-secret misappropriation and the defendants did not challenge other elements of the conspiracy claim at this stage, dismissal was inappropriate.

Claims dismissed

The court dismissed Syngenta’s tortious-interference claims against Sleper and FBN. Syngenta had not plausibly alleged that Sleper induced Warner to breach Warner’s employment agreement. As to FBN, the court found insufficient allegations that FBN induced Warner or Sleper to breach their duties, and it found that the allegations did not plausibly show FBN acted without justification. North Carolina law generally treats competition and recruiting employees from a competitor as privileged unless the complaint plausibly alleges legal malice.

The court also dismissed Syngenta’s claim against FBN under the California Unfair Competition Law. Syngenta plausibly alleged economic injury, but the court found the claim preempted by the California Uniform Trade Secrets Act because it relied on the same facts as Syngenta’s trade-secret claim and did not allege materially distinct wrongdoing.

Disposition

Judge Eric C. Tostrud ordered that Sleper and FBN’s motion to dismiss was granted in part and denied in part. The motion was granted as to Counts IV and V, which were dismissed without prejudice. The motion was denied in all other respects. The court explained that dismissal without prejudice would allow Syngenta an opportunity to amend the dismissed claims, and discovery would continue on the remaining claims.