Boch Toyota, Inc. v. Klimoski

18 Mass. L. Rptr. 80
CourtMassachusetts Superior Court
DecidedJune 28, 2004
DocketNo. 04966
StatusPublished

This text of 18 Mass. L. Rptr. 80 (Boch Toyota, Inc. v. Klimoski) 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
Boch Toyota, Inc. v. Klimoski, 18 Mass. L. Rptr. 80 (Mass. Ct. App. 2004).

Opinion

Graham, J.

The plaintiff Boch Toyota, Inc./Boch Honda (Boch) brings this action to enforce an employment agreement (Agreement) containing certain nondisclosure, confidentiality, and noncompetition provisions, signed by one of its former employees, the defendant Kim Klimoski (Klimoski). This court previously granted plaintiff a preliminary injunction as to the nondisclosure provision of the Agreement. Remaining before this court is plaintiffs motion for preliminary injunction as to the noncompetition provision of the Agreement. For the reasons discussed below, the motion is allowed.

Background

The record before this court includes a verified complaint for breach of contract (Count I) and a request for equitable relief (Count II) in the form of an injunction, plaintiffs motion for preliminary injunction with accompanying memorandum and affidavits, and an opposition memorandum and other materials in support of the opposition from which the following facts are found.

Boch Toyota, Inc. and Boch Honda are affiliated Massachusetts companies which operate multi-line automotive sales and leasing car dealerships in the Boston area. Boch’s line-makes are Honda and Toyota. Boch is currently the top-ranking car dealership in the Greater Boston area in terms of sales. A competing dealership, Herb Chambers, also sells and leases Hondas and Toyotas and now ranks second in sales behind Boch in the Greater Boston area.

[81]*81Prior to accepting a position as Finance Manager at Boch Toyota, Klimoski was a Finance Manager at Herb Chambers. On May 6, 2004, Klimoski interviewed for a Finance Manager position with Michael Shafman, the Vice President of Operations for Boch. Boch hired Klimoski into Boch Toyota on May 8, 2004 as a Finance Manager. Klimoski originally was seeking the position of Finance Manager at Boch Honda.

Among other things, Finance Managers are responsible for arranging financing options and lending rates with car buyers in a way that maximizes profits for the dealership. In order to make the best deal for the dealership and not lose the customer, Finance Managers are given full access to a Rate Book which contains the varying lending rates from banks, the rates at which Boch buys financing from banks and the mark-up at which it sells the financing to the customer, and the various split-rates (how Boch and the various banks have agreed to divide the profits from the financing mark-up). Boch attempts to preserve the confidentiality of this information by (1) restricting employee access to the information (only Finance Managers and senior management, not sales staff, have access to the Rate Book); (2) requiring Finance Managers to keep copies of the Rate Book locked up and not to remove them from the premises; and (3) requiring Finance Managers to sign nondisclosure agreements promising to not divulge any of the information contained in the Rate Book.

Boch also developed a computerized “sales methodology program” and database to streamline the sales process, capture sales and profits information by car line, and generate daily operating reports. Boch trains its staff, including its Finance Managers, to use this program and considers it one of the means by which it maintains its market position. Boch attempts to keep this information confidential through special password access that changes eveiy tweniy-one days.

Before beginning to work for Boch, and as a condition of employment, Klimoski was required to execute a “Confidentiality, Non-Competition and Non-Solicitation Agreement.” The covenant regarding confidentiality prohibited Klimoski from, at any time during or after her employment disclosing or in any way using confidential and proprietary information, at any time after or during her employment at Boch that she learned in the course of her employment at Boch. 1

The noncompetition provision sets forth the following restrictions:

As a material inducement to Boch to employ and/or continue to employee (sic.) the Employee and to pay compensation to the Employee for services rendered, and in order to protect Boch’s Confidential, Consumer and Third-Party Information obtained by or disclosed to the Employee during his or her employment as well as to protect Boch’s good will, the Employee agrees that during his or her employment by Boch and for a period of twelve (12) months immediately following the last day of his or her employment with Boch for any reason, whether the termination was voluntary or involuntary, with or without reason or cause, the Employee will not:
(i) render services, directly or indirectly, either for his or her own account or as a partner, shareholder (except shares publicly traded in a recognized market), officer, employee or agent, or otherwise be employed by, connected with, participate in or consult for or with any other automobile dealership within a seven (7) mile radius of the Boch entity for whom he or she worked;
(ii) render services, directly or indirectly, either for his or her own account or as a partner, shareholder (except shares publicly traded in a recognized market), officer, employee or agent, or otherwise be employed by, connected with, participate in or consult for or with any other entity which includes within its family of companies, whether directly or indirectly, a dealership of the same line-makes as the Boch entity for whom he or she worked, or any other multi-line dealership that includes the same line-make as the Boch dealership for whom the Employee worked, within a thirty-five (35) mile radius from the Boch dealership for whom he or she worked.

Klimoski resigned her position at Boch on May 17, 2004, abruptly and without notice, and was immediately re-employed as a Finance Manager at Herb Chambers.

Boch filed the Verified Complaint and Motion for Preliminary Injunction on June 9, 2004 to enforce the confidentiality and noncompetition covenants in Klimoski’s employment agreement. Boch’s breach of contract claim alleges Klimoski breached the noncom-petition provision of the Agreement by working for Herb Chambers and that she will inevitably breach the confidentiality/nondisclosure provision by continuing to work there.

In its motion for preliminary injunction, Boch specifically asks the court to enjoin Klimoski from (1) working directly or indirectly for Herb Chambers for a period of twelve months following the date of the court’s order; (2) enjoin Klimoski from working directly or indirectly for any automotive dealership within seven miles of Boch Toyota for a period of twelve months from the date of the court’s order; (3) enjoin Klimoski from working directly or indirectly for any multi-line dealership selling Toyotas within thirty-five miles of Boch Toyota for a period of twelve months from the date of the court’s order; and (4) enjoin Klimoski from using or disclosing any confidential or proprietary information or trade secret of Boch (including but not limited to pricing information, lending rate information, vendor rate information, and proprietary business and sales methods).

[82]*82Discussion

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Bluebook (online)
18 Mass. L. Rptr. 80, Counsel Stack Legal Research, https://law.counselstack.com/opinion/boch-toyota-inc-v-klimoski-masssuperct-2004.