Tuesday, July 13, 2010

Revised Federal Pleading Standard Heightens Plaintiff's Duty to State Claim (US Bank v. Parker)

Lawyers are accustomed to lax pleading standards available to them in federal court. While discovery and pre-trial obligations are far more exacting, getting a claim to survive the initial pleading stage has never been perceived as that difficult.

However, after the recent Supreme Court decisions in Twombly and Iqbal, that perception is changing.

Those decisions held that simply reciting bare elements of a cause of action and surrounding them with mere labels and conclusions would not allow a plaintiff to survive a motion to dismiss a complaint. Instead, the complaint had to plead enough facts to make a claim factually plausible.

This standard can impact non-compete cases, particularly when the plaintiff may have a reasonable suspicion that a departed employee is violating a post-employment obligation but little in the way of actual evidence.

In a recent case out of Missouri, a federal district court held that Twombly and Iqbal require allegations beyond those qualified as "upon information and belief." The court in US Bank v. Parker found that the plaintiff's sole allegations of breach were all made upon information and belief and contained no facts that would render them plausible.

The case highlights the problem employers often face when deciding whether to pursue a claim for unfair competition: the information gap. For employees who have left no paper (or digital) trail of their post-competitive plans, an employer must have some means to discover wrongdoing. Particularly when there is only a non-disclosure or non-solicit covenant at issue, the employer will need evidence, not just belief, that documents have been taken or are missing, or that protected accounts have been solicited.


Court: United States District Court for the Eastern District of Missouri
Opinion Date: 7/9/10
Cite: US Bank Nat'l Ass'n v. Parker, 2010 U.S. Dist. LEXIS 68324 (E.D. Mo. July 9, 2010)
Favors: Employee
Law: Federal Rules of Civil Procedure

No comments:

Post a Comment