CDI CORP. v. Hough

9 So. 3d 282, 2008 La.App. 1 Cir. 0218, 2009 La. App. LEXIS 457, 2009 WL 837735
CourtLouisiana Court of Appeal
DecidedMarch 27, 2009
Docket2008 CA 0218
StatusPublished
Cited by13 cases

This text of 9 So. 3d 282 (CDI CORP. v. Hough) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
CDI CORP. v. Hough, 9 So. 3d 282, 2008 La.App. 1 Cir. 0218, 2009 La. App. LEXIS 457, 2009 WL 837735 (La. Ct. App. 2009).

Opinions

PETTIGREW, J.

| gin this appeal, Richard Paul Hough, Larry Ward Kyzer, H & K Engineering, Inc. (“H & K”), and Sylinda Anderson appeal a judgment in favor of CDI Corporation enjoining Mr. Hough and H & K from directly or indirectly soliciting or hiring any employee of CDI Corporation in accordance with an agreement between Mr. Hough and CDI Engineering Group, Inc. For the reasons that follow, we affirm.

FACTS AND PROCEDURAL HISTORY

CDI Corporation, which has an office located in Baton Rouge, Louisiana, provides temporary engineering, information technology, and other professional workers and services to its clients. CDI Corporation was previously part of CDI Engineering Group, Inc., a separate corporate entity but wholly owned subsidiary of CDI Corporation. In 2003, CDI Engineering Group, Inc. changed its name to CDI Engineering Solutions, Inc., and on December 31, 2006, CDI Engineering Solutions, Inc. merged into its parent corporation, CDI Corporation.

In May 1998, Mr. Hough became employed with CDI Engineering Group, Inc. and served as vice-president of operations in Baton Rouge. After CDI Engineering Group, Inc. changed its name and after it merged into CDI Corporation, Mr. Hough continued to serve as vice-president of operations in Baton Rouge for the respective corporate entities, until he resigned on August 3, 2007, which was effective as of September 2, 2007.

In connection with Mr. Hough’s employment, he signed an “Employee Covenants and Agreements on Non-Solicitation, Non-Disclosure and Ownership of Inventions” (“the agreement”) in June 2000. Section A(4)(a) of the agreement (“the non solicitation of employees clause”) provided, in pertinent part, as follows:

4. Non^Solicitation Provisions. For a period of twelve (12) months following the termination of your employment with the Company, you will not:
(a) Directly or indirectly hire or cause to be hired, or solicit, interfere with or attempt to entice away from the Company, any individual who was an employee of the Company within six (6) months prior to such contact, solicitation, interference or enticement. ...

The agreement also contained a non-competition clause and a non-solicitation of the lacompany’s customers clause. It also required Mr. Hough to hold all of the company’s confidential information, including contracts and agreements, in the strictest confidence. The agreement did not specifically define the term “Company.” However, on page four of the agreement, the initials “CEG” appear on the line above “Name of Company.” It is undisputed by the parties herein that the initials “CEG,” as written on the agreement, represents CDI Engineering Group, Inc., the entity [285]*285that employed Mr. Hough at the time he signed the agreement.

Larry Ward Kyzer was a long-time employee of CDI Engineering Group, Inc. and it successors, CDI Engineering Solutions, Inc. and CDI Corporation, and was under the direct supervision of Mr. Hough. In connection with Mr. Kyzer’s employment, he signed an agreement requiring him to hold all of the information of the company (identified on the last page of the agreement as CDI Engineering Solutions, Inc.) in the strictest confidence. Mr. Kyzer also tendered his resignation on August 3, 2007, which was effective as of September 2, 2007.

While Mr. Hough and Mr. Kyzer were still employed by CDI Corporation, they met with Rick Summers, the owner of Epic Group, Inc. (“Epic”), to discuss forming a new business to compete with CDI Corporation. These discussions resulted in Mr. Hough and Mr. Kyzer tendering their resignations to CDI Corporation. However, on August 22, 2007, prior to Mr. Hough’s and Mr. Kyzer’s resignations being effective, CDI Corporation terminated both Mr. Hough and Mr. Kyzer.

Thereafter, on August 27, 2007, Mr. Hough, Mr. Kyzer, and Mr. Summers formed H & K, with Mr. Hough and Mr. Kyzer each owning 10 percent of the company (and serving on its board of directors) and Mr. Summers and/or Epic owning 80 percent of the company.

Sylinda Anderson was also an employee of CDI Engineering Solutions, Inc. (and later CDI Corporation). Like Mr. Kyzer, Ms. Anderson signed an agreement to hold all of the information of the company (again identified on the last page of the agreement as CDI Engineering Solutions, Inc.) in the strictest confidence. Ms. Anderson left CDI Corporation in September 2007, after being contacted by Mr. Hough and Mr. Kyzer regarding employment at H & K.

|/Thereafter, Mr. Hough also solicited and successfully hired CDI Corporation employee Dale Wilkins. Mr. Hough and/or Mr. Kyzer also solicited CDI Corporation employees Phil Harris, Bruce Thomas, and Jay Hennings to work for H & K. Additionally, two former CDI Corporation employees, Kim Pham and Mai Truong, who left CDI Corporation to work elsewhere, contacted Mr. Hough regarding possible employment at H & K.

On October 2, 2007, CDI Corporation commenced these proceedings by filing a petition for temporary restraining order, preliminary injunction, permanent injunction, and damages. Mr. Hough, Mr. Kyzer, H & K, and Ms. Anderson were named as defendants. CDI Corporation alleged that Mr. Hough and Mr. Kyzer resigned from CDI Corporation with the intention of forming a new corporation to compete against it by soliciting and hiring its employees and soliciting its clients, in violation of the agreement. CDI Corporation also alleged that after H & K was formed, Mr. Kyzer either directed the misappropriation of certain CDI Corporation contract information and forms and that Ms. Anderson, who was then still employed by CDI Corporation, complied, or that Mr. Kyzer had reason to know that the CDI Corporation contract information and forms were derived from Ms. Anderson, who owed CDI Corporation a duty to maintain secrecy. CDI Corporation further alleged that all of these activities were an attempt to gain an unlawful commercial advantage over it by using its confidential information. Therefore, CDI Corporation sought a temporary restraining order and a preliminary injunction enforcing the agreement, precluding Mr. Hough, Mr. Kyzer, and H & K from soliciting or hiring CDI Corporation em[286]*286ployees, and prohibiting H & K from employing Ms. Anderson. However, CDI Corporation did not seek to enforce either the non competition or the non-solicitation of customers clauses of the agreement.

In opposing the request for injunctive relief, the defendants asserted that the non-solicitation of employees clause was unenforceable because it violated La. R.S. 23:921, which prohibits contracts or agreements that restrains any person’s exercise of lawful profession, trade, or business. The defendants further argued that the agreement could not be enforced by CDI Corporation since Mr. Hough entered into the agreement with CDI Engineering Group, Inc., which ceased to exist when it merged into |aits joarent corporation, CDI Corporation.

Following a hearing on October 11, 2007, the trial court granted CDI Corporation’s request for a preliminary injunction and enjoined “[Mr.] Hough and H & K and those acting in concert or participating with [Mr.] Hough and H & K from directly or indirectly soliciting or hiring any employee of CDI [Corporation] or any individual who has been employed with CDI [Corporation] in the six months prior to such solicitation or hiring prior to August 22, 2008.” However, the judgment specifically did not enjoin H & K from employing Ms.

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9 So. 3d 282, 2008 La.App. 1 Cir. 0218, 2009 La. App. LEXIS 457, 2009 WL 837735, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cdi-corp-v-hough-lactapp-2009.