United States District Court, M.D. Tennessee, Nashville Division
RICHARDSON UNITED STATES DISTRICT JUDGE.
Wachter, Inc. filed this action against Defendants Brian
Pitts, Megan Pitts, Josh Estes, and Cabling Innovations, LLC,
asserting nine causes of action. Before the Court is
Defendants' Motion to Dismiss (Doc. No. 21), supported by
an accompanying brief (Doc. No. 18). Plaintiff filed a
response (Doc. No. 23), and Defendants replied (Doc. No. 28).
For the below-stated reasons, Defendants' motion will be
granted in part and denied in part.
Inc. (hereinafter “Plaintiff”), a Kansas
corporation registered to do business in the state of
Tennessee, is a national provider of infrastructure services,
communications equipment, and technical support. (Doc. No. 1
at ¶¶ 1, 14). Plaintiff's services include
on-site wired and wireless network infrastructure, telephone
and structured cabling, design, installation, and electrical
services. (Id. at ¶ 15).
September 13, 2010, Plaintiff hired Brian Pitts as an Account
Project Manager to manage multi-client complex projects in
Nashville, Tennessee. (Id. at ¶¶ 16-17).
On December 5, 2011, Plaintiff promoted Mr. Pitts to Local
Business Unit Manager. (Id. at ¶ 18). As Local
Business Unit Manager, Mr. Pitts' responsibilities
included leading, coaching, and managing Plaintiff's
Nashville office; managing projects; and monitoring profits
and losses for the business unit. (Id. at ¶
19). On September 20, 2017, Plaintiff promoted Mr. Pitts to
Local Business Account Manager and he was responsible for
seeking and maintaining new customer opportunities.
(Id. at ¶¶ 20-21). On July 22, 2013,
Plaintiff hired Josh Estes as a foreman to manage projects
for customers. (Id. at ¶¶ 23-24).
of their employment, Plaintiff provided Mr. Pitts and Mr.
Estes with an email account and access to Plaintiff's
computer system which contained certain confidential and
trade secret information including, but not limited to,
pricing and other financial data; customer lists; customer
requirements; customer contacts; and other nonpublic business
information about Plaintiff, its customers, and suppliers.
(Id. at ¶ 26). As a condition of their
employment, Mr. Pitts and Mr. Estes signed [Plaintiff's]
Employee Handbook, which contains a Conflict of Interest
policy that provides, in part, as follows:
Employees have an obligation to conduct business within
guidelines that prohibit actual or potential conflicts of
interest. . . .
An actual or potential conflict of interest occurs when an
employee is in a position to influence a decision that may
result in a personal gain for that employee or for a relative
as a result of Wachter's business dealings. . . .
Personal gain may result not only in cases where an employee
or relative has a significant ownership in a firm with which
[Plaintiff] does business, but also when an employee or
relative receives any kickback, bribe, substantial gift, or
special consideration as a result of any transaction or
business dealings involving [Plaintiff].
(Id. at ¶ 27). The Employee Handbook also
contains a confidentiality policy that provides, in part:
No one is permitted to remove or make copies of any [of
Plaintiff's] records, reports or documents without prior
management approval. Disclosure of confidential information
could lead to termination, as well as other possible legal
(Id. at ¶ 28).
the course of their employment with Plaintiff, Mr. Estes and
Mr. Pitts accessed their email accounts provided by Plaintiff
and Plaintiff's computer system to review and obtain data
for their own personal benefit and/or for the benefit of
Cabling Innovations. (Id. at ¶ 29). Mr.
forwarded emails from his Plaintiff-provided email account to
his personal and/or Cabling Innovations email account, Mr.
Estes, and Megan Pitts (Mr. Pitts' spouse) without
Plaintiff's authorization. (Id. at ¶¶
9, 30-31). The following are examples of how Mr. Pitts used
the information he obtained through his employment with
Plaintiff to bid for/obtain work on behalf of Cabling
• In February 2017, Mr. Pitts utilized Plaintiff's
resources and confidential information to recommend
contracting work with Cabling Innovations to Plaintiff's
• In November 2017, Mr. and Ms. Pitts utilized
Plaintiff's resources and confidential information to
submit a bid to Plaintiff's customer on behalf of Cabling
Innovations for work at the eMIIDS project.
• In February 2018, Mr. Pitts utilized Plaintiff's
resources and confidential information to submit a bid to
Plaintiff's customer on behalf of Cabling Innovations for
work at the Medhost project.
• In March 2018, Mr. Pitts and Mr. Estes utilized
Plaintiff's resources and confidential information to
obtain and perform work for Plaintiff's customer on
behalf of Cabling Innovations at the E|Spaces Chattanooga
• In April 2018, Mr. Pitts utilized Plaintiff's
confidential information to submit a bid to Plaintiff's
customer on behalf of Cabling Innovations for work at the MDF
(Id. at ¶ 32). The work obtained from
Plaintiff's customers would have not been obtained by
Cabling Innovations but for Mr. Pitts' sharing of
Plaintiff's confidential information. (Id. at
¶ 33). Also during Mr. Pitts' employment, he
expensed to Plaintiff entertainment expenses he claimed were
for the benefit of Plaintiff's customer, when the
expenses were actually for the benefit of Mr. Pitts and/or
Cabling Innovations. (Id. at ¶ 34). Plaintiff
terminated Mr. Pitts on April 27, 2018. (Id. at
¶ 22). Mr. Estes resigned on February 2, 2018.
(Id. at ¶ 25).
purposes of a motion to dismiss, the Court must take all of
the factual allegations in the complaint as true as the Court
has done above. Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009). To survive a motion to dismiss, a complaint must
contain sufficient factual matter, accepted as true, to state
a claim to relief that is plausible on its face. Id.
A claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged. Id. Threadbare recitals of the elements of
a cause of action, supported by mere conclusory statements,
do not suffice. Id. When there are well-pleaded
factual allegations, a court should assume their veracity and
then determine whether they plausibly give rise to an
entitlement to relief. Id. at 679. A legal
conclusion, including one couched as a factual allegation,
need not be accepted as true on a motion to dismiss, nor are
mere recitations of the elements of a cause of action
sufficient. Id. at 678; Fritz v. Charter Twp. of
Comstock, 592 F.3d 718, 722 (6th Cir. 2010); Abriq
v. Hall, 295 F.Supp.3d 874, 877 (M.D. Tenn. 2018).
Moreover, factual allegations that are merely
consistent with the defendant's liability do not
satisfy the claimant's burden, as mere consistency does
not establish plausibility of entitlement to relief
even if it supports the possibility of relief.
Iqbal, 556 U.S. at 678.
determining whether a complaint is sufficient under the
standards of Iqbal and its predecessor and
complementary case, Bell Atlantic Corp. v. Twombly,
550 U.S. 544 (2007), it may be appropriate to “begin
[the] analysis by identifying the allegations in the
complaint that are not entitled to the assumption of
truth.” Iqbal, 556 U.S. at 680. Identifying
and setting aside such allegations is crucial, because they
simply do not count toward the plaintiff's goal of
showing plausibility of entitlement to relief. As suggested
above, such allegations include “bare assertions,
” formulaic recitation of the elements, and
“conclusory” or “bald” allegations.
Id. at 681. The question is whether the remaining
allegations-factual allegations, i.e., allegations
of factual matter-plausibly suggest an entitlement to relief.
Id. If not, the pleading fails to meet the standard
of Fed.R.Civ.P. 8 and thus must be dismissed pursuant to Rule
12(b)(6). Id. at 683.
Count I: Violations of the Computer Fraud and Abuse Act
(against Mr. Pitts, Mr. Estes, and Cabling
Count I, Plaintiff alleges the action of Mr. Pitts, Mr.
Estes, and Cabling Innovations are violations of the Computer
Fraud and Abuse Act (“CFAA”). 18 U.S.C. §
1030, et seq. Although the CFAA is primarily a
criminal statute, it also permits “[a]ny person who
suffers damage or loss by reason of a violation of this
section [to] maintain a civil action against the violator to
obtain compensatory damages and injunctive relief or other
equitable relief.” 18 U.S.C. § 1030(g).
asserts these Defendants violated 18 U.S.C. §
1030(a)(2)(C), which prohibits “intentionally
access[ing] a computer without authorization or exceed[ing]
authorized access, and thereby obtain[ing] . . . information
from any protected computer”; and Section (a)(5)(A) and
(a)(5)(B), which provides for liability on the part of any
(A) knowingly causes the transmission of a program,
information, code, or command, and as a result of such
conduct, intentionally causes damage without authorization,
to a protected computer;
(B) intentionally accesses a protected computer without
authorization, and as a result of such conduct, recklessly
18 U.S.C. § 1030(a)(5). The foregoing sections of the
CFAA describe two types of claims: “access”
claims and “transmission” claims. Such claims
require that Defendants' access or transmission,
respectively, of Plaintiff's data be without
authorization. ReMedPar, Inc. v. AllParts Med.,
LLC, 683 F.Supp.2d 605, 609 (M.D. Tenn. 2010)
(“Thus, for all civil claims under the CFAA, a
plaintiff must show that the defendant's access to the
protected computer was either ‘without
authorization' or that it ‘exceed[ed] authorized
access.'” (citation omitted)). Defendants contend
Plaintiff's CFAA claim fails because Plaintiff has not
pled that Defendants accessed a computer without
Authorization/Exceeds Authorized Access
argue that, even when the factual allegations regarding the
CFAA are accepted as true, these facts do not give rise to an
entitlement to relief because Plaintiff granted Mr. Pitts and
Mr. Estes computer access.
response, Plaintiff correctly argues that the CFAA does not
expressly define the term “without authorization”
and some courts have “found that an employee
may access an employer's computer ‘without
authorization' where it utilizes the computer to access
confidential or proprietary information that he has
permission to access, but then uses that information in a
manner that is inconsistent with the employer's
interest.” (Doc. No. 23 at 6 (citing Frees, Inc. v.
McMillan, No. 3:06-cv-307, 2007 WL 708593, at *2 (E.D.
Tenn. Mar. 5, 2007) and Shurgard Storage Ctrs., Inc. v.
Safeguard Self Storage, Inc., 119 F.Supp.2d 1121, 1126
(W.D. Wash. 2000))).
Sixth Circuit has not addressed whether an employee's
misuse or misappropriation of an employer's
computer-accessible business information is “without
authorization” when an employer has given the employee
permission to access such information. But other district
courts in this circuit have adopted a narrow approach,
holding that there is no violation of the CFAA if an employer
has given an employee access to a computer and the employee
subsequently misuses data or confidential information
obtained on the computer. See Royal Truck & Trailer
Sales & Serv., Inc. v. Kraft, No. 18-10986,
2019 WL 1112387, at *3 (E.D. Mich. Mar. 11, 2019); see
also ReMedPar, Inc., 683 F.Supp.2d at 610 (no
CFAA violation when defendant “had access . . . for the
purpose of performing his job while he was still an employee,
and for performing the tasks he undertook as an independent
contractor[.]”); Black & Decker (US), Inc. v.
Smith, 568 F.Supp.2d 929, 935-36 (W.D. Tenn. 2008);
Am. Family Mut. Ins. Co. v. Rickman, 554 F.Supp.2d
766, 771 (N.D. Ohio 2008) (“The [CFAA] was not meant to
cover the disloyal employee who walks off with confidential
information. Rather, the statutory purpose is to punish
trespassers and hackers[.]”).
there is a split of authority on this issue, the weight of
authority appears to be that there cannot be a CFAA violation
where an employee has lawful access to his computer.
See Scheper v. Daniels, No. 1:10-CV-385,
2011 WL 13228113, at *2 (S.D. Ohio June 1, 2011) (collecting
cases). In Scheper, referring to courts that have
adopted this narrow approach, the court explained:
Generally speaking, these courts have reasoned that the
according to its plain terms, the CFAA's reference to
“without authorization” and “exceeds
authorized access” means that the defendant did not
have permission to access the information within the computer
from the outset, i.e., the defendant was a hacker,
and that the statute was not meant ...