Labor & Employment Law Daily Wrap Up, TORT CLAIMS—LED lighting installation entities survive motion to dismiss misappropriation of trade secrets DTSA claim, (Nov 5, 2025)

By Justin Marcus Smith, J.D.

The plaintiffs fared less well on their tortious interference claim because they did not adequately identify a poached relationship.

A pair of “sister” LED lighting installation companies partly survived a motion to dismiss claims brought against two limited liability entities and multiple natural persons, held a magistrate judge of the federal district court in Youngstown, Ohio. First, the court found the complaint adequately addressed the nature of the plaintiffs’ “sister” status and joint interest in guarding their trade secrets. They otherwise pleaded the remaining elements for misappropriation of trade secrets under the Defend Trade Secrets Act (DTSA). However, they failed to state a claim for tortious interference with business relationships because they failed to identify a poached business relationship in more than a conjectural way. One of the plaintiff entities also could not recover under a breach of contract claim against a subset of the natural person defendants because that plaintiff entity did not exist at the time those putative employees entered into their respective employment agreements (Hercules LED, LLC v. Uhl, No. 5:25-cv-01099-CEH (N.D. Ohio Oct. 30, 2025)).

Background. Youngstown Ohio LED lighting installers Hercules and Lumenforce (H&L) asserted claims against J&J Electrical Contracting, Inc. (J&J), LLC Norris McQueen, and multiple natural persons for (1) misappropriation of trade secrets under the Defend Trade Secrets Act (DTSA), 18 U.S.C. § 1836, et seq., and (2) tortious interference with business relationships.

H&L also asserted separate breach of contract actions against three natural persons for violations of the non-compete clause in their respective employment agreements. The non-compete restricted competition within one hundred miles of a primary workplace in Butler, Pennsylvania. H&L also contended these natural person defendants violated their agreements by soliciting H&L employees and by gaining unauthorized post-termination access to H&L proprietary software. H&L asserted separate breach of contract actions against two other natural persons for alleged violations of their respective agreements after their employment ended.

At the core of this dispute, H&L said they provided the natural person defendants with substantial training or access to sensitive trade secret information about LED lighting products used for energy savings or utility rebate assessments. H&L sought a temporary restraining order, preliminary injunction, and permanent injunction ordering return of all proprietary information; prohibiting the use of confidential proprietary information; prohibiting the defendants from reviewing the contents of any H&L confidential and proprietary information in the marketplace; prohibiting the defendants from interfering with H&L business relationships; and prohibiting the defendants from violating the terms and conditions of their respective agreements including non-compete time and geographic limitations. H&L also sought damages in excess of $75,000, attorneys’ fees, and costs of suit.

The magistrate judge partly granted the defendants motion for dismissal under Fed. R. Civ. P. 12(b)(6) for failure to state a claim.

Trade secrets. The court denied the defendants’ motion to dismiss the trade secrets claim of the complaint inasmuch as H&L sufficiently pleaded the trade secret claim under the DTSA. First, the court held H&L sufficiently established trade secret ownership under the DTSA. The defendants argued the two separate plaintiffs filed the complaint but failed to specifically identify which plaintiff had standing to recover for which alleged misappropriation from which defendant. However, the court found the complaint adequately addressed the nature of the H&L business relationship, as “sister” companies, as well as their joint interest in guarding their trade secrets. The court perceived the complaint as sufficiently indicating both companies owned the trade secrets in question.

The defendants next contended that H&L made only vague allegations of fact to support the existence of trade secrets, but the court said it was enough at this stage. The court acknowledged that some categories of trade secret listed might “strain” the definition of trade secret, but federal courts have agreed that pleadings need not disclose the details of trade secrets allegedly misappropriated. The court reasoned the allegations gave sufficient notice about the categories of information involved. The court found H&L identified specific software, specialized processes and techniques, and at least one specific customer. The court reasoned discovery would reveal whether the information actually qualifies as a trade secret, but for now, H&L provided sufficient information about their trade secrets under the DTSA.

The court next found that H&L met their burden for showing they engaged in reasonable efforts to preserve their putative trade secrets by, among other measures, restricting access to sensitive files. H&L also met their burden of establishing independent economic value pursuant to the DTSA.

Next, the court found the defendants did not directly address the H&L misappropriation allegations and instead targeted how H&L based two of the DTSA allegations on “information and belief.” The court said “information and belief” allegations were not improper at this stage of the proceedings in the Sixth Circuit where, as here, facts are peculiarly within the possession or control of a defendant or where based on factual information making an inference of culpability plausible. H&L pleaded a theory of misappropriation through unauthorized acquisition and use of trade secrets, either allegedly accessed while Hercules employees, taken at departure, or gained through unauthorized access to Hercules’ online systems and then used to compete against Hercules. The court found the defendants’ counterargument, i.e., that the customer sought them out, as without merit at this stage. The complaint sufficiently pleaded allegations that the defendants used misappropriated trade secrets to unfairly compete, and the court reminded it could not weigh anything on a motion to dismiss.

Finally, the court found H&L sufficiently pleaded the interstate or foreign commerce DTSA element because the parties were in multiple states and the products and services at issue were in the flow of interstate commerce. The court accordingly denied dismissal of the misappropriation of trade secrets claim because H&L sufficiently pleaded it under the DTSA.

Tortious interference. The court held H&L did not sufficiently plead a tortious interference with business relationships claim because the complaint lacked a factual allegation that the defendants’ actions ended or prevented a business relationship. The defendants’ only mention of this element was a vague and conclusory allegation that J&J and Norris McQueen were attempting to contact existing H&L customers. H&L responded that Norris McQueen obtained a public record contract for LED replacement for a specific school district, but H&L did not identify any specific relationship with that school district other than past contact. H&L offered only a conclusory allegation of poaching that was merely conceivable, not plausible.

Contract breach. The court held Lumenforce could not assert a breach of contact action against three of the natural person defendants. Lumenforce did not have standing. Unlike the contract in Aragonite Capital Markets, LLC, the instant contractual provision did not state whether present or future subsidiaries or affiliates were included parties in the contract. See Aragonite Capital Markets, LLC v. Dark Horse Media, LLC, 2023 U.S. Dist. LEXIS 53193, *4 (N.D. Ohio Mar. 28, 2023). H&L acknowledged Lumenforce was not in existence when these three natural persons signed their respective contracts, and Lumenforce was not a party to them. The court accordingly granted the defendants’ motion to dismiss on the breach of contract claim as it pertained to Lumenforce.

The Case is No. 5:25-cv-01099-CEH.

Judge: Henderson, C.

Attorneys: Thomas F. Hull, II (Manchester, Newman & Bennett) for Hercules LED, LLC. Jeffrey A. Panehal (Bernstein-Burkley, P.C.) for Travis Dane Uhl.

Companies: Hercules LED, LLC

Cases: ContractClaims TortClaims StateLawClaims OhioNews