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Global Control Systems, Inc. v. Luebbert

United States District Court, W.D. Missouri, Western Division

February 23, 2015

DEREK LUEBBERT, et al., Defendants.


GREG KAYS, Chief District Judge.

This case arises out of a soured business relationship between Plaintiff Global Control Systems, Inc. ("GCS") and its former employee, Defendant Derek Luebbert ("Luebbert"). Around the time he left GCS's employ, Luebbert founded his own company, Defendant Atlas Industrial Solutions LLC ("Atlas"), and began soliciting work from a GCS client, Defendant Alliant Techsystems Inc. ("ATK"). Now before the Court is GCS's motion for a preliminary injunction to enjoin Luebbert from working for ATK (Doc. 9). Because GCS has failed to demonstrate that it will suffer irreparable harm without an injunction, the motion is DENIED.

Findings of Fact

The Court held evidentiary hearings on November 10, 2014, and February 9, 2015, in Kansas City, Missouri, in which the parties presented documentary exhibits and testimony from witnesses Manuel David ("David") and Luebbert. Considering the evidence presented, the Court finds the following facts for the limited purpose of resolving this motion[1]:

David is the president of GCS, a firm that provides controls engineering services. GCS provides these services at customer sites. Customer relationships are crucial to GCS's business. At present, GCS has five or six customers.

One GCS customer was ATK, which operates a government-owned facility in Independence, Missouri, that manufactures bullets. GCS performed discrete jobs for ATK under purchase orders. In the typical scenario, an ATK engineer would notify GCS of a controls engineering need and invite GCS to submit a proposal for that work. In its proposal, GCS wrote a description of the necessary services and a cost estimate. Purchase orders could later be amended if ATK and GCS agreed that more man-hours were needed, perhaps because the scope of the project had expanded.

Luebbert worked for GCS as a controls engineer beginning in August 2006. GCS assigned Luebbert to work at ATK as GCS's representative.

As a condition of his employment, Luebbert signed a contract of employment ("the Employment Agreement"). The Employment Agreement contained a non-compete provision ("the Non-Compete Clause"), which states in pertinent part:

Derek [Luebbert] agrees and covenants that for a period of 3 year(s) following the termination of this Agreement, whether such termination is voluntary or involuntary, Derek [Luebbert] will not directly or indirectly engage in any business competitive with GCS or work directly or indirectly for GCS customers. This covenant shall apply to the geographical area that includes the area within a 100-mile radius of Lenexa, KS.

Because ATK was a GCS customer and because ATK's Independence plant is located within 100 miles of Lenexa, Kansas, [2] the Non-Compete Clause prohibited Luebbert from working for ATK following the termination of his employment.

On May 26, 2010, Luebbert informed GCS that he was resigning the next day. Unbeknownst to GCS, Luebbert had formed a competing company, Atlas. As GCS later found out, on the same day he resigned, Luebbert obtained a purchase order from ATK on Atlas's behalf. As he knew what GCS charged its customers, Luebbert submitted a proposal to do work at the exact dollar rate GCS was charging. This purchase order was labeled D37395 ("P.O. '95"). Once he began working for ATK, Luebbert had access to ATK's budgets and sole sourcing forms, which gave him influence on whether GCS could bid on new projects or additional scopes of work.

When GCS discovered that Luebbert was working at ATK, a violation of the Non-Compete Clause, it felt it should have been awarded P.O. '95. Wanting to be made whole, GCS began negotiating with Luebbert about settling its claims against him. The negotiation culminated in the Settlement Agreement, signed June 17, 2010. GCS agreed to suspend the Non-Compete Clause against Luebbert for no more than six months so that he could finish P.O. '95. Upon the conclusion of the suspension, the Non-Compete Clause would resume and remain in force for three years. In return, Luebbert agreed to pay GCS a certain amount of his revenue from P.O. '95.

After the Settlement Agreement went into effect, ATK indicated to GCS that it wanted Luebbert to keep working at its facility. GCS and Luebbert signed an Amendment to the Settlement Agreement on January 28, 2011, which suspended the Non-Compete Clause again, this time until Luebbert finished work on P.O. '95 at ATK. In exchange, Luebbert agreed to pay GCS fifty percent of all revenue it earned from ATK for P.O. '95. The work on P.O. '95 ended upon its expiration on July 31, 2013.

Today, Luebbert still works at ATK. He works there between fifty and eighty hours per week for Atlas, which subcontracts its work from GCS competitor Defendant Midwest Controls LLC ("Midwest"). Within the two years preceding the 2015 preliminary injunction hearing, Luebbert also worked for companies ...

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