Agero Admin. Serv. Corp. v. Campolo

366 F. Supp. 3d 170
CourtDistrict Court, District of Columbia
DecidedFebruary 4, 2019
DocketCIVIL ACTION NO. 18-12643-RWZ
StatusPublished
Cited by3 cases

This text of 366 F. Supp. 3d 170 (Agero Admin. Serv. Corp. v. Campolo) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Agero Admin. Serv. Corp. v. Campolo, 366 F. Supp. 3d 170 (D.D.C. 2019).

Opinion

ZOBEL, S.D.J.

*172Plaintiff Agero Administrative Service Corp. ("Agero") filed suit against Frank Campolo, its former Vice President of Sales, and Road America Motor Club, Inc. ("Road America"), Campolo's current employer. The complaint asserts several claims related to both Campolo's alleged breach of his employment agreement with plaintiff and his current employment with Road America.

Plaintiff seeks an injunction prohibiting Campolo from working for Road America, soliciting plaintiff's customers, and using or disclosing any of plaintiff's confidential information or goodwill. Plaintiff also seeks to enjoin Road America from using plaintiff's confidential information or goodwill. The motion (Docket # 1-1) is allowed in part and denied in part.

I. Factual Background

Agero and Road America both contract with various companies, including insurance carriers and car manufacturers, to provide towing services and roadside assistance to consumers. Campolo began working for Agero in 2004. Thereafter, he executed an employment agreement that includes three provisions relevant to the instant dispute: (1) a confidentiality provision; (2) a customer non-solicitation provision; and (3) a non-compete provision. Docket # 1-1 at 51-56 ("Agreement").1 On November 30, 2018, Campolo left his position as Agero's Vice President of Sales and on, December 3, 2018, he joined Road America as its Vice President of Sales.

II. Legal Standard

A preliminary injunction is an extraordinary remedy granted only if the movant demonstrates "(1) a substantial likelihood of success on the merits; (2) a significant risk of irreparable harm if the injunction is withheld; (3) a favorable balance of hardships; and (4) a fit (or lack of friction) between the injunction and the public interest." Nieves-Marquez v. Puerto Rico, 353 F.3d 108, 120 (1st Cir. 2003). "The sine qua non of this four-part inquiry is likelihood of success on the merits." New Comm Wireless Servs., Inc. v. SprintCom, Inc., 287 F.3d 1, 9 (1st Cir. 2002).

Under Massachusetts law,2 a restrictive covenant in an employment agreement is enforceable "only if it is necessary to protect a legitimate business interest, reasonably limited in time and space, and consonant with the public interest." Boulanger v. Dunkin' Donuts Inc., 442 Mass. 635, 639, 815 N.E.2d 572 (2004) (collecting cases). Legitimate business interests include the protection of confidential information, goodwill, and trade secrets. Id. at 641, 815 N.E.2d 572.

III. Analysis

A. Likelihood of Success

On the merits, the core issue before the court is the enforceability of the customer *173non-solicitation provision and the non-compete provision. The parties do not contest the confidentiality provision.

1. Customer Non-Solicitation Provision
During the Restricted Period, [Campolo] will not directly or indirectly solicit, divert, take away, or attempt to divert or take away, from [Agero] any of the business or patronage of any of its actual or potential customers, clients, accounts, vendors, or suppliers with whom [Campolo] had material contact with or which whom [Campolo] had access to material Confidential Information regarding, or induce or attempt to induce any such customers, clients, accounts, vendors or suppliers to reduce the amount of business it does with [Agero].

Agreement at ¶ 3(c).3

The "Restricted Period" is defined as a period of 12 months following the termination of Campolo's employment with Agero, which may be extended by a "period of time equal to any period in which [Campolo] is in breach" of certain covenants.4 Agreement at ¶ 3(a)(i).

Thus, the provision prevents Campolo from soliciting two categories of Agero's "actual or potential customers, clients, accounts, vendors, or suppliers": (1) those with whom Campolo had "material contact"; and (2) those regarding whom Campolo had "access to material Confidential Information." Id. at ¶ 3(c).

Because Section 3(c) contains a 12-month temporal limit and only applies to a subset of customers, I am persuaded that the covenant is reasonably tailored to protect plaintiff's legitimate business interests. Putting aside the parties' disagreement regarding the extent of Campolo's client interaction after closing a sale, Campolo undisputedly interacted with and solicited customers on behalf of Agero during his lengthy employment. Plaintiff has a cognizable interest in preventing Campolo from usurping its goodwill and this interest is particularly strong during the 12 months following his resignation and with respect to customers with whom Campolo had material contact or regarding whom he had access to certain sensitive information. Plaintiff is therefore likely to prove that the customer non-solicitation is valid and enforceable.

2. Non-Compete Provision
[For the Restricted Period, Campolo] will not directly or indirectly, for his/her own account, or in any capacity on behalf of any other third person or entity, whether as an owner, officer, director, employee, partner, joint venture, consultant, investor, lender or otherwise, engage or assist others to engage, in whole or in part in any business that is in direct competition with [Agero] (which includes current or planned activities of [Agero] ), in a business unit or area in which [Campolo] participated in on behalf of [Agero] (either directly or through his/her supervision or assistance of others) or in an area in which [Campolo] had access to Confidential Information ....

Agreement at ¶ 3(a)(i).5

Although the non-compete provision is similarly limited to a period of 12 *174months, it lacks a geographic limit and is far-reaching. Plaintiff concedes that its enforcement would prevent Campolo from working in the entire U.S.

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Cite This Page — Counsel Stack

Bluebook (online)
366 F. Supp. 3d 170, Counsel Stack Legal Research, https://law.counselstack.com/opinion/agero-admin-serv-corp-v-campolo-dcd-2019.