BNY Mellon, N.A. v. Schauer

27 Mass. L. Rptr. 329
CourtMassachusetts Superior Court
DecidedMay 14, 2010
DocketNo. 201001344BLS1
StatusPublished
Cited by2 cases

This text of 27 Mass. L. Rptr. 329 (BNY Mellon, N.A. v. Schauer) is published on Counsel Stack Legal Research, covering Massachusetts Superior Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
BNY Mellon, N.A. v. Schauer, 27 Mass. L. Rptr. 329 (Mass. Ct. App. 2010).

Opinion

Hinkle, Margaret R., J.

In this one-count action for breach of contract, BNY Mellon, N.A., (“BNY Mellon”) alleges that former employee Coiy Schauer violated restrictive covenants set forth in a nonsolicitation and confidentiality agreement. After a hearing on April 14, 2010, the Court granted BNY Mellon’s Renewed Mo[330]*330tion for Temporary Restraining Order to enforce those covenants. Currently before the Court is BNY Mellons’ motion for a preliminary injunction.

Upon consideration of the motion papers, supporting materials and oral argument, the Court allows in part and denies in part BNY Mellon’s motion and hereby dissolves the April 14 Order.

BACKGROUND

“By definition, a preliminary injunction must be granted or denied after an abbreviated presentation of the facts,” Packaging Indus. Group, Inc. v. Cheney, 380 Mass. 609, 616 (1980), which here includes the Verified Complaint with attachments,1 affidavits and declarations from both parties and deposition testimony and documents produced through the limited discovery conducted thus far. The material facts in the record are as follows.

In 2005, Mellon Financial Corporation (“Mellon Financial”), a predecessor of BNY Mellon, hired Schauer for its Wealth Management Group.2 (Verified Compl. at 2, par. 2; see Schauer Decl. at par. 5.) At the time, Schauer was a partner at the law firm of Donovan Hatem LLP (“Donovan Hatem”), specializing in tax, trusts and estates. (Schauer Decl. at par. 4; see Verified Compl. at par. I.)3 He was hired as a Portfolio Manager to provide clients with investment services, including advice how to invest assets to achieve financial and estate planning goals. (Verified Compl. at 2, par. 2; see Schauer Decl. at par. 11.)

According to Schauer, the “vast majority” of clients to whom he provided financial services as a Portfolio Manager were brought from Donovan Hatem or developed over the years through referrals from attorneys, accountants and insurance professionals whom he knew from his law practice or from personal networking. (Schauer Decl. at pars. 9-10 & 23; see also Schaeur Suppl. Decl. at par. 2.)4 Schauer’s clients, “dozens” of whom had “substantial” assets under management, generated annual revenue over $2.3 million for the firm. (See Schauer Decl. at pars. 13 & 24.)

As a condition of employment at Mellon Financial, Schauer signed a nonsolicitation agreement. (Verified Compl. at 3, par. 4.) However, in late 2007, during a review of employee personnel records following Mellon Financial’s merger with Bank of New York, a copy of that agreement could not be located. (Dicker Aff. at par. 6.) Schauer was then presented with a second Nonsolicitation and Confidentiality Agreement (“Agreement”). (Verified Compl. at 3, par. 5; See Dicker Aff. at par. 7; Schauer Decl. at par. 7.) In relevant part, the Agreement stated:

In consideration of and as a condition precedent to the following additional compensation (the adequacy, sufficiency and receipt of which are hereby acknowledged) and providing I execute this Non-solicitation and Confidentiality Agreement (“Agreement”) within fifteen (15) days of its receipt, I will be awarded a one-time restricted stock award of 661 shares on February 21, 2008 in accordance with all of the applicable terms and conditions of the Mellon Financial Corporation Long-Term Profit Incentive Plan (2004) and the Restricted Stock Agreement. I hereby enter into this Agreement, and represent, warrant, covenant and agree as follows:
2. (a) I acknowledge that, by reason of my duties, I will be given or may have access to and become informed of information which BNY Mellon possesses or to which BNY Mellon had access, and which relates to BNY Mellon, is not generally known to the public or in the trade or is a competitive assets and/or otherwise constitutes a “trade secret,” as that term is defined by applicable law, of BNY Mellon (collectively, “Confidential Information”), including without limitation, non-public: (i) planning data and marketing strategies; (ii) terms of any new products and investment strategies; (iii) information relating to other officers and employees of BNY Mellon; (iv) financial results and information about the business condition for BNY Mellon; (v) terms of any investment, management or advisory agreement or other material contract; (vi) proprietary software and related documents; (vii) customer and potential customer prospecting lists and contact persons at such customers and customer prospects; (viii) names and other information regarding any BNY Mellon Paid Channel (as hereinafter defined) and contact persons at any such BNY Mellon Paid Channel; and (viii) [sic] material information concerning customers of BNY Mellon or their operations, condition (financial and otherwise) or plans.
(b) I acknowledge that my employment by BNY Mellon creates a relationship of confidence and trust between me and BNY Mellon with respect to Confidential Information and that Confidential Information, regardless of its form or format and whether compiled or created by me or BNY Mellon, will remain the sole property of BNY Mellon and that I shall not, either directly or indirectly, at any time, while an employee of BNY Mellon or thereafter, make known, divulge, reveal, furnish, make available, or use (except for use in the regular course of my duties for BNY Mellon) any Confidential Information without the written consent of BNY Mellon.
I also agree that this obligation is in addition to, and not in limitation or preemption of, all other obligations or confidentiality that I may have to BNY Mellon under its Code of Conduct or Securities Trading policy or other policies or general or specific legal or equitable principles. I expressly agree that upon termination of my employment, regardless of reason, I will immediately return to BNY Mellon all of BNY Mellon’s property, including without limitation any property from which any Confidential In[331]*331formation may be discerned in any manner. I expressly acknowledge that in order to solicit a customer or employee as defined in Section 3 I would be using information considered by BNY Mellon to be confidential. I understand and acknowledge that my obligations under this Section 2 survive termination of my employment, regardless of reason, and will continue indefinitely unless and until any such Confidential Information has become, through no fault of mine, generally known to the public or I am required by law (after providing BNY Mellon as applicable with notice and an opportunity to contest such requirement) to make disclosure . . .
3. During my employment and for twelve (12) months thereafter, regardless of the reason for termination, I shall not, in any capacity, directly or indirectly:
(a) (i) solicit the business or patronage of any Customer or BNY Mellon Paid Channel for myself or on behalf of any person or entity other than BNY Mellon for the purpose of providing Relevant Wealth Management Services, (ii) divert, entice or otherwise take away from BNY Mellon the business or patronage of any Customer, or BNY Mellon Paid Channel or attempt to do so, (iii) provide for myself or on behalf of any person other than BNY Mellon any Relevant Wealth Management Services to any Customer or any customer of BNY Mellon Paid Channel or(iv) solicit or induce any Customer or BNY Mellon Paid Channel to terminate or reduce its relationship with BNY Mellon; . .

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Forman, Itzkowitz, Berenson & LaGreca, P.C. v. Tankel, Rosenberg & Co., P.C.
31 Mass. L. Rptr. 453 (Massachusetts Superior Court, 2013)
EMC Corp. v. Breen
31 Mass. L. Rptr. 114 (Massachusetts Superior Court, 2013)

Cite This Page — Counsel Stack

Bluebook (online)
27 Mass. L. Rptr. 329, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bny-mellon-na-v-schauer-masssuperct-2010.