Judge upholds countersuits in Joe Gibbs Racing trade secrets case

Joe Gibbs Racing, Spire Motorsports and racing exec Christopher Gabehart are all embroiled in a complex legal battle over Gabehart’s move to a new NASCAR team.CHARLOTTE, N.C. (CN) — A federal judge upheld countersuits against NASCAR team Joe Gibbs Racing Wednesday after the parties met in Charlotte court to argue over their dismissal.Gibbs Racing filed suit against its former exec Christopher Gabehart in February, claiming he took photos of confidential racing data and put the pictures in a digital folder labeled “Spire.” Gabehart planned to give the data to Spire Motorsports, Gibbs Racing says, and shortly after, he accepted a new position with the team’s competitor as chief motorsports officer. Gibbs Racing later tacked on Spire as a defendant, claiming the team induced Gabehart to break his employment contract.Spire and Gabehart filed their own countersuits against Gibbs Racing in June, with Spire arguing Gibbs Racing violated an implied agreement over soliciting each other’s employees and Gabehart contending Gibbs Racing broke his employment contract and wrongfully accessed his personal accounts.In a verbal order Wednesday, U.S. District Judge Susan Rodriguez allowed both countersuits to proceed, surviving Gibbs Racing’s attempts to dismiss them.She denied Gibbs Racing’s request to throw out Spire’s lawsuit but left Gibbs Racing the ability to refile its request in the future. Rodriguez killed several of Gabehart’s claims against his former employer but allowed claims of breach of contract, breach of the implied covenant of good faith and fair dealing, the North Carolina Wage and Hour Act and a request for declaratory judgment to move forward.Rodriguez dismissed Gabehart’s claims that Gibbs Racing violated the Computer Fraud and Abuse Act, North Carolina’s Computer Trespass Act and the state’s unfair and deceptive trade practices act. Gabehart could potentially refile them later.“I’m just not sure you’ve got anything plausible here,” Rodriguez told Gabehart’s attorney Cary Davis when discussing Gabehart’s argument that Gibbs Racing exceeded its authorization to inspect Gabehart’s accounts and computer.“If I were to adopt this, I would be making new law here,” the Donald Trump appointee said. “You’ve got the wrong judge for that.”Sarah Hutchins, representing Gibbs Racing, argued Spire’s countersuit should be dismissed because the parties never reached a contract. Their agreement to solicit each other’s employees was “a promise for some sort of future engagement, at best,” she said, adding that the teams hadn’t agreed what employees could be poached or determined an end date. Spire also didn’t benefit Gibbs Racing by allowing a car chief out of his noncompete agreement, she said.Rodriguez seemed unconvinced, noting the lower standard of success for a suit to survive a motion to dismiss.“This whole lawsuit is about noncompetes, and they’re valuable, right?” Rodriguez said. “They’re not waived lightly.”Spire had previously released car chief Robert “Cheddar” Smith from a noncompete agreement to work for Gibbs Racing, Spire said, in exchange for Gibbs Racing allowing Spire to hire one of its employees later on, or pay $100,000. Spire asked to hire two other employees before Gabehart, but Gibbs Racing refused and, Spire said, has not paid the $100,000.“I’m puzzled by the argument that there was no benefit to JGR,” Joshua Davey, counsel for Spire, said. “JGR needed a crew chief. They got one.”Smith could have benefited any company after leaving Spire, Hutchins said, and the noncompete release primarily benefited him.Gabehart argued in his countersuit against Gibbs Racing that Gibbs Racing’s forensic examiner gave dozens of Gabehart’s privileged attorney-client communications to opposing counsel, materials that were off limits in the court-ordered analysis. The team also stopped paying his wages several months before issuing a termination letter, and the 18-month noncompete agreement he had with Gibbs Racing is overly broad and unenforceable, he said. Gabehart, who was not present in court Wednesday, is now working as chief motorsports officer for Spire Motorsports.Gabehart is trying to “paint himself as the victim,” Gibbs Racing said, arguing Gabehart was not entitled to a salary after he stopped performing work for Gibbs Racing. The forensic examiner improperly disclosed privileged communications, Gibbs Racing said, but its attorneys took immediate action to delete the files.Gabehart also can’t argue his former team violated the Computer Fraud and Abuse Act because Gabehart logged in to personal accounts on his work laptop and uploaded confidential Gibbs Racing data to those accounts, Gibbs Racing said. It added that it accessed the computer with authorization — as it was company-owned — and the law only protects unauthorized access to computers, not accounts, the team said.Gibbs Racing previously secured an injunction prohibiting Gabehart from retaining or using any of Gibbs Racing’s confidential data but failed to convince the court that Gabehart should be required to resign his new position.Gabehart has admitted to taking photos of business data but said he was aware of his confidentiality obligations and had no plan to use the information at Spire, and instead took the photos to document the 13 years he spent working at the company.Spire has protested the idea that Gabehart has provided the team any data, repeating it has no want or desire for its competitor’s racing information.Counsel for Gabehart and Spire declined to comment after the hearing.“We’re pleased and look forward to litigating the rest of it in court,” Hutchins told Courthouse News.Trial in the case is currently scheduled for February 2027.Subscribe to our free newslettersOur weekly newsletter Closing Arguments offers the latest about ongoing trials, major litigation and rulings in courthouses around the U.S. and the world, while the monthly Under the Lights dishes the legal dirt from Hollywood, sports, Big Tech and the arts.Additional Reads