Labor & Employment Law Daily Wrap Up, TORT CLAIMS—W.D. Pa.: Glass processing equipment seller states misappropriation claims against competitor, (Jun 2, 2025)

By Kevin M. Finson, J.D.

Trade secrets claims survived dismissal because it was plausibly alleged that the defendant in question participated in a conspiracy or was otherwise involved in the misappropriation and that the claim accrued within the statute of limitations.

A seller of glass processing equipment stated claims for trade secret misappropriation against a competitor, which was established using trade secret information obtained by a former employee of the plaintiff, the U.S. District Court in Erie has held. The complaint plausibly alleged that the claimed secrets were protectable and had been misappropriated (American Glass Machinery, LLC v. Ott, No. 1:23-cv-00275-SPB (W.D. Pa. May 28, 2025)).

American Glass Machinery (AGM) was in the business of manufacturing, selling, and servicing glass processing equipment. AGM brought suit for trade secret misappropriation under the Defend Trade Secrets Act (DTSA) and the Pennsylvania Uniform Trade Secrets Act (PUTSA) against Ray Ott and John Pavalonis, d/b/a Arkaum Industries, LLC. AGM alleged that Ott and Pavalonis had formed their company in order to compete with AGM using confidential information obtained by Ott’s son, who had been employed by AGM to convert hand-drawn diagrams into computer-aided design files, and by Pavalonis himself, who had been employed by AGM as a shop foreman. Both individuals moved to dismiss, Pavalonis on the ground that he was not actually involved in the competing business, and Ott on the ground of the statute of limitations.

Misappropriation. As to Pavalonis, the court found that AGM had plausibly alleged the existence of trade secrets in the form of electrical wiring diagrams, machine drawings, and schematics which were reasonably protected through “need to know” disclosure, non-disclosure agreements, and password protection. It was plausibly alleged that Pavalonis participated in a confidential meeting with others involved in the Arkaum business in which use of AGM’s proprietary information in competition with AGM was discussed. The court held that this was sufficient at the pleading stage.

Statute of limitations. Ott argued that the claims against him were barred by the statute of limitations because AGM knew or should have known of the alleged misappropriation in August of 2020, in the time period of the alleged bad acts described in the complaint. The court found that AGM alleged it was not aware of the misappropriation until much later, when it discovered the minutes of the meeting between Ott, Pavalonis, and the others involved. The court held that this was sufficient to allege, at least at the pleading stage, that the discovery rule should apply.

The court denied the motions to dismiss.

The Case is No. 1:23-cv-00275-SPB.

Judge: Baxter, S.

Attorneys: John M. Adams (Price & Adams P.C.) for American Glass Machinery, LLC. Anthony W. Brooks (The Webb Law Firm P.C.) for Ray Ott and John Pavalonis, d/b/a Arkaum Industries, LLC.

Companies: American Glass Machinery, LLC; Arkaum Industries, LLC

Cases: TortClaims Procedure PennsylvaniaNews