WELLS FARGO INSURANCE SERVICES USA, INC.
KEVIN LINK, NELSON RAYNOR, ELIZABETH PACK, and BB&T INSURANCE SERVICES, INC.
in the Supreme Court on 10 April 2019.
pursuant to N.C. G.S. § 7A-27(a)(2) from an order and
opinion on defendants' motion to dismiss entered on 8 May
2018 by Judge Gregory P. McGuire, Special Superior Court
Judge for Complex Business Cases, in Superior Court, Wake
County, after the case was designated a mandatory complex
business case by the Chief Justice under N.C. G.S. §
& Phillips LLP, by J. Michael Honeycutt, Meredith W.
Norvell, and Holly N. Mancl, for plaintiff-appellant.
Tyndall White, by K. Alan Parry, Michelle M. Walker, and
Megan E.A. Bishop, for defendant-appellees.
COURT OF NORTH CAROLINA, WAKE
MATTER comes before the Court on Defendants Kevin Link,
Nelson Raynor, Elizabeth Pack, and BB&T Insurance
Services, Inc.'s Partial Motion to Dismiss Pursuant to
Rule 12(b)(6). ("Motion to Dismiss", ECF No. 7.)
Defendants seek to dismiss Counts One-Five, Seven, and Eight
in the Complaint, but do not seek dismissal of Count Six.
COURT, having considered the Motion to Dismiss, the briefs
filed in support of and in opposition to the Motion to
Dismiss, the arguments of counsel at the hearing, and other
appropriate matters of record, CONCLUDES, in its discretion,
that the Motion to Dismiss should be GRANTED, in part, and
DENIED, in part, for the reasons set forth below.
& Phillips, by J. Michael Honeycutt and Meredith W.
Norvell, for Plaintiff Wells Fargo Insurance Services USA,
Tyndall White, by K. Alan Parry and Michelle M. Walker, for
Defendants Kevin Link, Nelson Raynor, Elizabeth Pack, and
BB&T Insurance Services, Inc.
AND OPINION ON DEFENDANTS' MOTION TO DISMISS
FACTS AND PROCEDURAL BACKGROUND
Court does not make findings of fact on motions to dismiss
under N.C. Gen. Stat. § 1A-1, Rule 12(b)(6)
(hereinafter, "Rule(s)"), but only recites those
facts included in the complaint that are relevant to the
Court's determination of the Motion. See, e.g.,
Concrete Serv. Corp. v. Inv'rs Grp., Inc., 79
N.C.App. 678, 681, 340 S.E.2d 755, 758 (1986).
Plaintiff Wells Fargo Insurance Services USA, Inc.
("Plaintiff" or "Wells Fargo") is a North
Carolina-licensed insurance broker that sells insurance
products and services to its customers. (Compl., ECF No. 3,
at ¶ 9.) Wells Fargo alleges that it provides
"insurance products and services that are unique to the
particular needs of its customers." (Id. at
Defendant BB&T Insurance Services, Inc.
("BB&T") is also an insurance broker providing
insurance products and services to its customers in the same
segment of the insurance market. (Id. at ¶ 10.)
Wells Fargo employed Defendant Kevin Link ("Link")
as a Senior Sales Executive. Link was responsible for
"soliciting insurance customers and providing risk
management services." (Id. at ¶ 11.) Link
resigned from Wells Fargo effective October 31, 2016, and
began working for BB&T. (Id.)
Wells Fargo employed Defendant Nelson Raynor
("Raynor") as a Commercial Insurance Producer.
Raynor was responsible for "procuring insurance
customers and providing risk management services."
(Id. at ¶ 12.) On April 12, 2017, Raynor
resigned from Wells Fargo and began working for BB&T.
Wells Fargo employed Elizabeth Pack ("Pack") as a
Marketing Placement Specialist. Pack was responsible for
marketing to Wells Fargo's insurance customers.
(Id. at ¶ 13.) On April 3, 2017, Pack resigned
from Wells Fargo and began working for BB&T.
(Id. at ¶ 13.) (Collectively, Link, Raynor, and
Pack are referred to as the "Individual
While employed with Wells Fargo, the Individual Defendants
"brokered and serviced the insurance needs of Wells
Fargo customers assigned to them" and had knowledge
about the insurance needs and policies of their customers.
(Id. at ¶ 14.)
Wells Fargo has developed and maintains certain
"confidential and trade secret information"
concerning its customers. (Id. at ¶¶
17-21.) The confidential and trade secret information
"provides Wells Fargo with a competitive advantage over
its competitors who do not know the information."
(Id. at ¶ 20.) Wells Fargo makes efforts to
protect the secrecy of its confidential and trade secret
information through the use of written confidentiality
agreements, and the implementation of a Code of Ethics and
Information Security Policy and policies in its Team Member
Handbook. (Id. at ¶¶ 22-25.)
Link's and Raynor's Restrictive Agreements
During their employment with Wells Fargo, Link and Raynor
each executed an agreement with Wells Fargo entitled
"Agreement Regarding Trade Secrets, Confidential
Information, Nonsolicitation and Assignment of
Inventions" (the "Restrictive Agreements").
(ECF No. 3, at ¶ 27; Link Restrictive Agreement, ECF No.
3, Ex. 1; Raynor Restrictive Agreement, ECF No. 3, Ex. 2.)
The Restrictive Agreements provide that for a period of two
(2) years immediately following termination of their
employment for any reason, Link and Raynor will not:
a. [S]olicit, recruit or promote the solicitation or
recruitment of any employee or consultant of the Company for
the purpose of encouraging that employee or consultant to
leave the Company's employ or sever an agreement for
b. [S]olicit, participate in or promote the solicitation of
any of the Company's clients, customers, or prospective
customers with whom [they] had Material Contact and/or
regarding whom [they] received Confidential Information, for
the purpose of providing products or services that are in
competition with the Company's products or services
("Competitive Products/Services"). "Material
Contact" means interaction between [them] and the
customer, client or prospective customer within one (1) year
prior to [their] last day as a team member which takes place
to manage, service, or further the business relationship; or
c. Accept insurance business from or provide Competitive
Products/Services to customers or clients of the Company:
i. with whom [they] had Material Contact, and/or
ii. were [their] clients or customers of the Company within
six (6) months prior to [their] termination of employment.
No. 3, at ¶¶ 30, 34.)
Restrictive Agreements also prohibit Link and Raynor from
using or disclosing Wells Fargo's "Trade
Secrets" and "Confidential Information".
(Id. at ¶¶ 30 and 35.) The Restrictive
Agreements define "Trade Secrets" as including, but
not limited to:
[T]he names, addresses, and contact information of the
Company's customers and prospective customers, as well as
any other personal or financial information relating to any
customer or prospect, including, without limitation, account
numbers, balances, portfolios, maturity and/or expiration or
renewal dates, loans, policies, investment activities,
purchasing practices, insurance, annuity policies and
[A]ny information concerning the Company's operations,
including without limitation, information related to its
methods, services, pricing, costs, margins and mark ups,
finances, practices, strategies, business plans, agreements,
decision-making, systems, technology, policies, procedures,
marketing, sales, techniques, agent information, and
[A]ny other proprietary and confidential information relating
to the Company's customers, employees, products,
services, sales, technologies, or business affairs.
No. 3, at Exs. 1 and 2.) The Restrictive Agreements do not
contain a separate definition of "Confidential
Restrictive Agreements define "the Company" as:
"a Wells Fargo company and/or any of its past, present,
and future parent companies, subsidiaries, predecessors,
successors, affiliates, and acquisitions."
Under the Restrictive Agreements, Link and Raynor also were
required to return to Wells Fargo upon termination of
employment all "Confidential Information of the
Company" and all "Records of the Company" in
their respective possessions. (Id. at ¶¶
31, 36; Exs. 1 and 2.)
The resignations from Wells Fargo and breaches of the
Link resigned from Wells Fargo on October 31, 2016, Pack
resigned on April 3, 2017, and Raynor resigned on April 12,
2017. Link and Raynor "solicit[ed] and
encourage[ed]" each other, and Pack, to terminate
employment with Wells Fargo. (ECF No. 3, at ¶¶
or about April 12, 2017, immediately prior to submitting his
resignation, Raynor entered Wells Fargo's offices at
around 8:00 p.m. and printed and copied documents for
approximately one hour. (Id. at ¶¶ 42,
101.) Wells Fargo alleges that it "is informed and
believes . . . that the documents printed and copied by
Defendant Raynor contained highly confidential and trade
secret information belonging to Wells Fargo."
(Id. at ¶ 46.)
Since becoming employed with BB&T, Link, Raynor, and Pack
have contacted and solicited Wells Fargo's customers
"in an attempt to divert their insurance business away
from Wells Fargo" and to BB&T. (Id. at
¶¶ 47-48.) Wells Fargo alleges upon information and
belief that Link, Raynor, and Pack used Wells Fargo's
trade secrets and confidential information "to identify,
contact, solicit and induce Wells Fargo clients to transfer
their accounts and otherwise divert business from Wells Fargo
to BB&T." (Id. at ¶ 56.) In the
Complaint, Wells Fargo lists approximately 18 Wells Fargo
customers assigned to Link or Raynor who have transferred
their insurance business to BB&T since Link and Raynor
left Wells Fargo. (Id. at ¶¶ 53-71.)
November 27, 2017, Wells Fargo filed the Complaint. In the
Complaint, Wells Fargo alleges four separate claims against
Link and Raynor for breaches of Restrictive Agreements:
breach of the non-solicitation of customers provision (Count
One); breach of the non-solicitation of employees provisions
(Count Two); breach of the confidential information
provisions (Count Three); and breach of the return of
property provision (Count Four). Wells Fargo also alleges the
following claims against all of the Defendants:
misappropriation of trade secrets in violation of the North
Carolina Trade Secrets Protection Act ("NCTSPA"),
N.C. General Statute § 66-152 et seq., (hereinafter
"G.S.") (Count Five); tortious interference with
contractual relations (Count Seven); and unfair and deceptive
trade practices (Count Eight). Finally, Wells Fargo alleges a
claim for computer trespass under G.S. § 14-458 against
Raynor only (Count Six).
November 28, 2017, the case was designated to the North
Carolina Business Court and assigned to the undersigned.
(Designation Order, ECF No. 1; Assignment Order, ECF No. 2.)
December 28, 2017, Defendants filed the Motion to Dismiss and
a supporting memorandum of law. (Def. Memo. Supp. Mot.
Dismiss, ECF No. 8.) On January 22, 2018, Plaintiff filed its
brief in opposition to the Motion to Dismiss. (Pl. Br. Opp.
Mot. Dismiss, ECF No. 10.) Defendants filed a reply on
February 8, 2018. (Def. Reply Supp. Mot. Dismiss, ECF No.
15.) On February 20, 2018, ...