UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
HIRECOUNSEL DC, LLC,
Plaintiff, Civil Action No. 20-3337 (LLA) v.
KILIAN CONNOLLY,
Defendant.
MEMORANDUM OPINION
Plaintiff HIRECounsel D.C., LLC (“HIRECounsel”) brings this action against Kilian
Connolly alleging breach of contract and violation of the District of Columbia Uniform Trade
Secrets Act (“DCUTSA”), D.C. Code § 36-401 et seq. ECF No. 1-1. Pending before the court is
Mr. Connolly’s motion for summary judgment. ECF No. 24. For the reasons explained below,
the court will grant the motion.
I. Factual Background and Procedural History
A. Factual Background
HIRECounsel is a company in the legal staffing industry, working to recruit and match
legal professionals with various employers. ECF No. 27-3, at 8; ECF No. 39, at 2. Starting in
2015, HIRECounsel employed Mr. Connolly in its Boston, Massachusetts office in the role of
Managing Director of Client Relations. ECF No. 24-1, at 2; ECF No. 39, at 2. Upon his hiring,
Mr. Connolly signed an Employment Agreement detailing the conditions of his employment. ECF
No. 27-3, at 11-35; ECF No. 39, at 11-34. The contract specifies that it “shall be governed by and
construed in accordance with the laws of the District of Columbia.” ECF No. 27-3, at 23; ECF
No. 39, at 22. Two provisions of the agreement are at issue here. First, the agreement contains a limitation on the sharing of confidential information and
trade secrets. The relevant section states
During and after EMPLOYEE’s employment with the COMPANY, the EMPLOYEE agrees that EMPLOYEE will not use, disclose, copy or retain or remove from the COMPANY’s premises any confidential or proprietary information or trade secrets, including, but not limited to, lists and information pertaining to clients and client contacts, job applicants, referrals, and employees, and all other ideas, methods, procedures, techniques, written material, and other know-how, developed or used in connection with the COMPANY’s or any of its Affiliates’ business belonging to the COMPANY or any of its Affiliates (collectively, “Confidential Information”), other than for use in connection with authorized work performed for the COMPANY or such Affiliates. Confidential Information shall also include, but not be limited to, the names, addresses, telephone numbers, qualifications, education, accomplishments, experience, availability, and résumés of all persons who have applied to or been recruited by the COMPANY or any of its Affiliates for employment or placement and job order specifications and the particular characteristics and requirements of persons generally hired by a client, as well as specific job listings, mailing lists, computer runoffs, financial and other information of the COMPANY and its Affiliates, not generally available to others. Confidential Information shall also include all information contained or stored in the confidential databases of the COMPANY and its Affiliates containing Confidential Information or other information of the COMPANY or its Affiliates (the “Confidential Database”).
ECF No. 27-3, at 15-16; ECF No. 39, at 14-15.
Second, the agreement contains a non-compete provision, limiting Mr. Connolly’s ability
to contribute to a competing business. ECF No. 27-3, at 17-20; ECF No. 39, at 16-19. In relevant
part, the non-complete provision states that
(a) EMPLOYEE agrees that during the term of this Agreement and for a period of twelve (12) months following EMPLOYEE ceasing to be an employee of the COMPANY, EMPLOYEE will not, without the prior written consent of the COMPANY, either directly or indirectly, on EMPLOYEE’S own behalf or in the service or on behalf of others: . . .
2 (vii) directly or indirectly . . . be employed by . . . any Competing Business within seventy-five (75) miles of any office of the COMPANY or any of the COMPANY’s Affiliates, at which the EMPLOYEE is or was employed, performed services or engaged or assisted in the business or operations of the COMPANY or any of its Affiliates[.]
ECF No. 27-3, at 17-18; ECF No. 39, at 16-17. The non-compete provision additionally prohibits
other forms of competition, such as contacting HIRECounsel’s clients or potential clients and
utilizing any of HIRECounsel’s proprietary software. ECF No. 27-3, at 18; ECF No. 39, at 17. It
further specifies that “[i]n the event of a breach . . . the running of the [12-month] period of the
restriction shall be tolled.” ECF No. 27-3, at 19; ECF No. 39, at 18.
The non-compete provision also contains a liquidated damages clause. ECF No. 27-3,
at 20; ECF No. 39, at 19. It states
(e) The EMPLOYEE recognizes that the COMPANY has and will be making a significant investment of resources, financial and otherwise, into the success of the COMPANY and recognizes and agrees that the value of Confidential Information is, and the damage to the COMPANY caused by the EMPLOYEE’s violation of any of the covenants and agreements contained in [the non-compete provision] will be, significant and difficult to ascertain. It is therefore agreed that the COMPANY shall be entitled as payment from the EMPLOYEE and any person or entity involved in the violation of [the non-compete provision] as a fair and reasonable estimate of the liquidated damages and not as a penalty the greater of:
(i) the sum of forty thousand dollars ($40,000); and
(ii) for each calendar week or part thereof that such violation continues, a sum equivalent to the greater of
(A) one fifty-second (1/52) of the EMPLOYEE’s total compensation from the COMPANY during the twelve (12) months before the initial date of the violation and
(B) the gross commissions attributable to the EMPLOYEE’s direct or indirect efforts during such calendar week of the violation.
3 ECF No. 27-3, at 20; ECF No. 39, at 19. The provision additionally directs that liquidated
damages “are not exclusive, but are cumulative and [HIRECounsel] may pursue any and all other
relief available to it in law or equity.” ECF No. 27-3, at 20; ECF No. 39, at 19.
Mr. Connolly states that he did not negotiate the non-compete provision or the liquidated
damages clause. ECF No. 35, at 1-4; ECF No. 27-2, at 1-2, 4. In her initial deposition,
HIRECounsel’s corporate representative stated that she was unaware of any negotiations or
discussions related to those provisions of the employment agreement. ECF No. 39, at 42-43; ECF
No. 27-2, at 4. Further, she did not know how the liquidated damages clause came to be included
in the agreement or how the particular formulation of liquidated damages had been determined.
ECF No. 27-2, at 4; ECF No. 39, at 42-43.
Mr. Connolly resigned from HIRECounsel on August 7, 2020, and began working for a
competitor, Beacon Hill Staffing Group, LLC (“Beacon Hill”), a few days later. ECF No. 35-1,
at 2; ECF No. 27-3, at 49, 53-54. Mr. Connolly testified at his deposition that since moving to
Beacon Hill, he has worked with some of HIRECounsel’s clients. ECF No. 40, at 69-70.
B. Procedural History
HIRECounsel filed this lawsuit against Mr. Connolly in October 2020, bringing claims for:
(1) breach of the non-compete provision of his employment agreement; (2) breach of the
confidentiality provision of his employment agreement; and (3) misappropriation of trade secrets
under the DCUTSA, D.C. Code § 36-401 et seq. ECF No. 1-1. HIRECounsel seeks $261,610.72
in liquidated damages, increasing every week by $2,335.81 due to the non-compete provision’s
tolling clause. ECF No. 39, at 75; ECF No. 27-2, at 7. Mr. Connolly filed a motion to dismiss,
ECF No. 7, which the court denied, ECF No. 12.
During discovery, HIRECounsel requested that Beacon Hill (who is represented by the
same attorneys as Mr. Connolly), produce Mr. Connolly’s commission statements for the time 4 period in which Mr. Connolly had worked at Beacon Hill. ECF No. 27-1, at 13-14; ECF No. 40,
at 20-21. The commission statements would list all the customers and clients that Mr. Connolly
had worked with, as well as any profits gained from such transactions. ECF No. 27-1, at 13-14;
ECF No. 40, at 20. Beacon Hill did not produce these documents. ECF No. 27-1, at 14; ECF
No. 40, at 20-21. HIRECounsel claims that Beacon Hill “represented that they would produce the
commission statements” later in discovery. ECF No. 27-1, at 14. Beacon Hill states that it never
agreed to produce the records because “doing so would reveal all the customers and clients
[Mr.] Connolly made placements with at Beacon Hill.” ECF No. 33, at 17. HIRECounsel never
moved to compel production. See ECF No. 27-1, at 14.
Mr. Connolly now moves for summary judgment, arguing that HIRECounsel is unable to
prove damages—an essential element of all three counts. ECF No. 24, at 1. The matter is fully
briefed. ECF Nos. 24, 27, 33.
II. Legal Standards
A court may grant summary judgment “if the movant shows that there is no genuine dispute
as to any material fact and the movant is entitled to judgment as a matter of law” after considering
the parties filings and record in the light most favorable to the non-moving party. Fed. R. Civ.
P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). “The mere existence of some
alleged factual dispute between the parties will not defeat an otherwise properly supported motion
for summary judgment; the requirement is that there be no genuine issue of material fact” that
would impact the outcome of the litigation. Anderson, 477 U.S. at 247-48.
The non-moving party must do more than rely on “mere allegations or denials,” rather, it
“must set forth specific facts showing . . . a genuine issue for trial” by pointing to specific parts of
the record. Id. at 256. If a party does not “establish the existence of an element essential to that
5 party’s case, and on which that party will bear the burden of proof at trial” the court may consider
the fact undisputed for purposes of the motion. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986);
Fed. R. Civ. P. 56(e). A court reviewing a motion for summary judgment must still “determine
for itself whether the record and any undisputed material facts justify granting summary
judgment,” even if a motion is unopposed or a party neglects to address a particular argument.
Winston & Strawn, LLP v. McLean, 843 F.3d 503, 507 (D.C. Cir. 2016) (quoting Grimes v. District
of Columbia, 794 F.3d 83, 95 (D.C. Cir. 2015)).
“Because the enforceability of a liquidated damages clause is determined by reference to
the ‘circumstances and expectations of the parties existing at the time of [the contract’s]
execution,’ the issue is often resolved at summary judgment or after trial, when evidence of those
‘circumstances and expectations’ is before the court.” Slinski v. Bank of Am., N.A., 981 F. Supp.
2d 19, 27 (D.D.C. 2013) (quoting Davy v. Crawford, 147 F.2d 574, 575 (D.C. 1945)).
III. Discussion
Mr. Connolly argues that HIRECounsel is unable to carry its burden on all three counts
because it cannot prove damages, either actual or liquidated. ECF No. 24, at 1. Each count—two
for breach of Connolly’s employment contract, and one for violation of the DCUTSA—requires
damages as an element of the claim. Tsintolas Realty Co. v. Mendez, 984 A.2d 181, 187
(D.C. 2009) (explaining that damages are required in a breach of contract claim); Catalyst Chem.
Servs., Inc. v. Glob. Ground Support, 350 F. Supp. 2d 1, 7-8 (D.D.C. 2004) (explaining damages
are required for a DCUTSA claim). If HIRECounsel cannot prove actual or liquidated damages,
its claims fail because “[i]t is a longstanding principle in civil law that there can be no monetary
recovery unless the plaintiff has suffered harm.” Tsintolas Realty Co., 984 A.2d at 187 (quoting
Mira v. Nuclear Measurements Corp., 107 F.3d 466, 473 (7th Cir. 1997)). The court concludes
6 that HIRECounsel has not met its burden to prove actual or liquidated damages; accordingly,
Mr. Connolly is entitled to summary judgment.
A. The Liquidated Damages Clause – Count I
By its plain language, the liquidated damages clause applies only to HIRECounsel’s claim
for breach of the non-compete provision, not to its claims of breach of the confidentiality provision
or violation of the DCUTSA. ECF No. 27-3, at 20; ECF No. 39, at 19. Neither party disputes this.
ECF No. 24-1, at 8; see ECF No. 27-1, at 9-10.
A liquidated damages provision in a contract allows the parties to stipulate “the amount of
damages recoverable in the event of a breach.” 24 Richard A. Lord, Williston on Contracts § 65:1
(4th ed. 2024). In this jurisdiction, a “liquidated damages clause is valid unless it is found to
constitute a penalty.” Burns v. Hanover Ins. Co., 454 A.2d 325, 327 (D.C. 1982). The party
challenging enforceability bears the burden of showing the provision is a penalty. S. Brooke Purll,
Inc. v. Vailes, 850 A.2d 1135, 1138 (D.C. 2004). The “common law views liquidated damages
clauses with a gimlet eye,” particularly “where there is a disparity of bargaining power and one
party unilaterally imposes [the provision].” Dist. Cablevision Ltd. P’ship v. Bassin, 828 A.2d 714,
723-24 (D.C. 2003). “To distinguish between enforceable liquidated damages provisions and
unenforceable penalties, [the court] considers the reasonableness of the terms of the liquidated
damages clause, as compensation for breach, viewed as of the time and under the circumstances
when it was agreed.” Proulx v. 1400 Pa. Ave., SE, LLC, 199 A.3d 667, 673 (D.C. 2019).
A liquidated damages clause will be enforced if it was crafted as “reasonable protection
against uncertain future litigation,” but it may be an unenforceable penalty if it “appears” to have
been “designed to make the default of the party against whom it runs more profitable . . . than
performance would be.” Id. at 674 (quoting Davy, 147 F.2d at 575). “[A]greements to pay fixed
sums plainly without reasonable relation to any probable damage which may follow a breach will 7 not be enforced,” id., especially when “the fixed sum greatly exceeds the actual damages likely to
be inflicted by a minor breach,” Falconi-Sachs v. LPF Senate Square, LLC, 142 A.3d 550, 557
(D.C. 2016) (quoting Dist. Cablevision, 828 A.2d at 724).
The court concludes that the liquidated damages clause at issue here is an unenforceable
penalty. First, the court adopts the common-law suspicions of the liquidated damages clause
because the employment agreement was not the result of negotiations between sophisticated
parties, but rather imposed by the employer unto Mr. Connolly, a prospective employee with no
legal training. Dist. Cablevision, 828 A.2d at 723-24; cf. The Cuneo L. Grp., P.C. v. Joseph, 669
F. Supp. 2d 99, 117 (D.D.C. 2009) (finding no “unfair bargaining” where the agreement was
between a law firm and a lawyer, among other things).
More importantly, the court centers its analysis on the context and time that the contract
was entered into. Proulx, 199 A.3d at 675. “Under D.C. law, ‘the written language of a contract
governs the parties’ rights unless it is not susceptible to clear meaning.’” Red Sage Ltd. P’ship v.
Despa Deutsche Sparkassen Immobilien-Anlage-Gasellschaft mbH, 254 F.3d 1120, 1125 (D.C.
Cir. 2001) (quoting Adler v. Abramson, 728 A.2d 86, 88 (D.C.1999)). The liquidated damages
clause in HIRECounsel’s employment agreement with Mr. Connolly provides that any violation
of the non-compete provision entitles HIRECounsel to the highest of three options: (1) a flat sum
of $40,000; (2) an amount equal to Mr. Connolly’s previous HIRECounsel wages for the length in
weeks that breach occurs; or (3) the commissions attributable to Mr. Connolly’s direct or indirect
action for his new employer, for each week of breach. ECF No. 27-3, at 20; ECF No. 39, at 19.
Although the provision states that its purpose is to specify damages because actual damages will
be “significant and difficult to ascertain,” such a statement is not dispositive, and the court must
8 consider the substance of the provision itself. ECF No. 27-3, at 20; ECF No. 39, at 19; see Proulx,
199 A.3d at 673-76.
The court concludes that this liquidated damages clause lacks a “reasonable relation to any
probable damage which may follow a breach.” Proulx, 199 A.3d at 674 (quoting Davy, 147 F.2d
at 575). Typically, damages for a breach of a non-compete provision are comprised of the former
employer’s lost profits. Mercer Mgmt. Consulting, Inc. v. Wilde, 920 F. Supp. 219, 238
(D.D.C. 1996). In this circumstance, this means that the liquidated damages clause must have
some “reasonable relation” to HIRECounsel’s lost profits due to Mr. Connolly’s breach. Of the
three measures provided in the liquidated damages provision, none has a reasonable relationship
to lost profit. The $40,000 figure is not anchored to anything. It is seemingly arbitrary, and as
such, has no relationship to a potential breach—it merely serves as a “bonus” in the event of
breach. Next, the provision disgorging Mr. Connolly’s prior wages bears no relationship to
HIRECounsel’s lost profits upon violation of the non-compete provision. Mr. Connolly notes that
profits in the staffing industry are “razor thin,” and it is common sense that an employee’s salary
may lack connection to the amount of profit they bring to the company. ECF No. 24-1, at 10. A
highly paid employee could be ineffective, whereas a low-paid employee could bring in a windfall.
Measuring damages based on an employee’s salary is thus disconnected from an estimate for
damages. Finally, the measure of commissions attributable to Mr. Connolly’s direct and indirect
efforts with his new employers is similarly unmoored from potential damages. Mr. Connolly notes
that this measure could include commissions not only from his direct actions, but also indirect
commissions earned by other employees that he supervises. ECF No. 24-1, at 12-13. This again
has no relationship to HIRECounsel’s lost profits. Mr. Connolly could earn commissions at
9 another employer based on a separate pool of clients without any impact to HIRECounsel’s
business.
Further, the contract provides that liquidated damages are not exclusive, but rather
cumulative with common-law remedies such as traditional damages. ECF No. 27-3, at 20; ECF
No. 39, at 19. This means that damages will always be at least $40,000 higher than actual
damages. The disgorgement and commission-based measures also have the potential to award a
sum “greatly exceed[ing] the actual damages likely to be inflicted by a minor breach.”
Falconi-Sachs, 142 A.3d at 557 (quoting Dist. Cablevision, 828 A.2d at 724) Just take this case
as an example: HIRECounsel seeks actual damages, plus an additional $261,610.72 in liquidated
damages, increasing every week indefinitely by $2,335.81. This would exceed actual damages,
potentially by a large amount, and that would have been obvious to the parties at the time of the
contract’s formation.
The liquidated damages clause also treats all breaches with the same level of severity,
“even though it is apparent that all are not of the same gravity”—another indication that the clause
is an unenforceable penalty. Id. Such was the case in Falconi-Sachs, where a late fee for rent was
“the same regardless of how late the payment [was] made.” Id. There, a tenant one day late on
rent owed the same penalty as a tenant two weeks late, despite the difference in harm to the
landlord. Id. So too here. Whether the noncompete is violated by an employee moving to a
competing employer while poaching multiple clients, or by sending a holiday card to one of the
many job candidates in HIRECounsel’s database, the penalty would be the same. HIRECounsel’s
Corporate Representative admitted as much in her deposition. ECF No. 39, at 39. This outcome
strongly indicates that the clause is an unenforceable penalty.
10 More fundamentally, HIRECounsel has simply failed to carry its summary judgment
burden. At the summary judgment stage, the non-moving party must do more than rely on “mere
allegations or denials,” rather, it must “set forth specific facts showing . . . a genuine issue for trial”
by pointing to specific parts of the record. Anderson, 477 U.S. at 248. HIRECounsel does not
explain with specificity how the clause is reasonable, instead relying on conclusory statements that
the clause must be enforceable. ECF No. 27-1, at 11-12. Mr. Connolly points to specific support
in the record indicating that the HIRECounsel sales manager responsible for hiring Mr. Connolly
was unaware of the clause and that, during her deposition, HIRECounsel’s corporate representative
did not know how the particular formula for the provision was calculated. ECF No. 39, at 43-44,
48-49, 84.
Comparison clarifies this reasoning. In Proulx, the court upheld a liquidated damages
clause “which called for forfeiture of the $150,000 deposit in the event that [buyer] did not close
on the purchase” of a property. 199 A.3d at 675. The buyer argued that this amount was too high;
because, had the sale gone through, the seller would only have made $85,000 in profit. Id.
Additionally, the seller had agreed to a price $50,000 over the market value for the property and
argued that the actual damages could not exceed that amount. Id. Thus, the buyer’s central
argument was that the liquidated damages clause was a penalty because it was “more
profitable . . . to default than to go through with the sale.” Id. The court disagreed, holding that
the clause was enforceable because the $150,000 amount was entirely reasonable when viewed at
the time of the contract’s execution. Id. at 675-76. This was supported by evidence, including
expert testimony explaining the volatility of the housing market and specific reasoning offered by
the seller about the potential costs incurred by carrying the property for a longer period of time.
Id. at 676. Similarly, in Order of AHEPA v. Travel Consultants, Inc., 367 A.2d 119 (D.C. 1976),
11 the court upheld a liquidated damages provision in a contract for travel agency-related services
between two sophisticated parties, a nonprofit and a business, and relied on testimony that
illustrated how difficult it would have been to estimate damages based on the cost of air fare many
months in the future, the number of trips that would have been taken, and more. Id. at 123.
Here, in the face of Mr. Connolly’s motion for summary judgment, HIRECounsel offers
no specific support from the record to explain how the liquidated damages clause is reasonable in
relation to its actual damages. See ECF No. 27-1, at 7-13. Instead, it points to the language in the
contract stating that damages will be “significant and difficult to ascertain,” which, as explained
above, is not independently dispositive. Id. at 9-10. HIRECounsel further argues that
Mr. Connolly “bases [his] argument on nothing because he has not quantified the value of his work
in violation of the noncompete.” Id. at 11. But this misunderstands the legal standard. It does not
matter what the damages from the actual breach are, but rather what the parties believed they could
be at the time of contracting. Proulx, 199 A.3d at 673. On that point, HIRECounsel has nothing
to offer. It points to no figures about the economics of the staffing industry, the profit it anticipated
it could draw from Mr. Connolly’s services, or any other concrete figures. See id. at 675-76.
Seemingly recognizing its shortfall, HIRECounsel seeks to add a new affidavit to the
record, after the close of discovery, which includes at least some specific testimony from its Chief
Revenue Officer, Andreana Nelson Amaya, related to the circumstances at the time of contracting.
ECF No. 27-3, at 68-72. Specifically, she states that “[a]t the time that HIRECounsel and
Connolly contracted, it was impossible to know with any certainty what its damages would be in
the event Connolly breached.” Id. at 69. Ms. Amaya states that HIRECounsel could not know
how many of its customers Mr. Connolly would work with after leaving or how much revenue he
would generate for his new employer. Id. Assuming that the court can rely on this affidavit—and
12 Mr. Connolly offers many reasons why it cannot, ECF No. 33, at 3-8—the same problems exist
with this testimony as described above: there is no grounding information from which the court
can determine whether the specific provisions are reasonable. It is just another conclusory
statement that damages would have been difficult to estimate.
In sum, the liquidated damages provision is an unenforceable penalty. HIRECounsel can
proceed on this claim only if it can establish actual damages. ECF No. 27-3, at 20; ECF No. 39,
at 19 (employment contract provision clarifying that liquidated damages “are not exclusive, but
are cumulative and [HIRECounsel] may pursue any and all other relief available to it in law or
equity” including damages).
B. Actual Damages – All Counts
Under Federal Rule of Civil Procedure 56, “[a] party is entitled to summary judgment only
if there is no genuine issue of material fact and judgment in the movant’s favor is proper as a matter
of law.” Soundboard Ass’n v. FTC, 888 F.3d 1261, 1267 (D.C. Cir. 2018) (quoting Ctr. for Auto
Safety v. Nat’l Highway Traffic Safety Admin., 452 F.3d 798, 805 (D.C. Cir. 2006)); see Fed. R.
Civ. P. 56(a). To withstand summary judgment on a breach of contract claim, the plaintiff must
produce some evidence of discernable consequences stemming from the purported breach. See
Chambers v. Cobb, 193 A.3d 123, 127-28 (D.C. 2018). Mere speculation of generalized harm is
insufficient. See id.; Wood v. Day, 859 F.2d 1490, 1493 (D.C. Cir. 1988) (“[W]hile damages are
not required to be proven with mathematical certainty, there must be some reasonable basis on
which to estimate damages.” (quoting Romer v. District of Columbia, 449 A.2d 1097, 1100
(D.C. 1982)).
Because the liquidated damages provision is unenforceable, HIRECounsel must establish
actual damages to move forward with any of its three claims. Tsintolas Realty Co., 984 A.2d
at 187. Mr. Connolly contends that HIRECounsel cannot carry its burden because it has provided 13 no evidence supporting actual damages and, as a consequence, there is no genuine dispute of
material fact and HIRECounsel’s claims fail as a matter of law. ECF No. 24, at 1. The court
agrees.
First, there is no dispute of material fact. Mr. Connolly points to specific evidence in the
record showing HIRECounsel suffered no damages. HIRECounsel’s Corporate Representative
stated in a deposition that HIRECounsel had “no information” about whether Mr. Connolly had
“caused harm” to it, ECF No. 39, at 47; and another HIRECounsel employee stated that other than
having “one less salesperson” who was “good for the culture,” he was “not aware of any other
damage” caused by Mr. Connolly’s departure. ECF No. 24-3, at 85. HIRECounsel points to no
disputed facts in response. Instead, it points to an undisputed fact—that Mr. Connolly has worked
with some of its clients in his new role at Beacon Hill. ECF No. 27-1, at 15; ECF No. 33, at 14-15.
This fact is not material because it is unclear how it causes harm to HIRECounsel. None of
HIRECounsel’s clients are exclusive to it, so an overlap of clients does not necessarily mean a loss
of business or profits for HIRECounsel. ECF No. 40, at 18-19. HIRECounsel’s Corporate
Representative said that she “did not know” whether Mr. Connolly’s involvement with
HIRECounsel’s clients had impacted the business. ECF No. 39, at 40. The situation could be
different if HIRECounsel had pointed to testimony that a client had stopped working with it, or
that the staffing industry generally operates in a zero-sum setting in which one employer succeeds
to the detriment of another. But it did not. Accordingly, the fact has no material impact on
damages.
Again, a comparison sharpens this shortcoming. In Hawthorne v. Rushmore Loan
Management Services, LLC, No. 20-CV-393, 2023 WL 6388928 (D.D.C. Sept. 29, 2023), the
defendant sought summary judgment on the grounds that the plaintiff could not establish damages
14 for its claim under the Fair Credit Reporting Act. Id. at *5. The defendant suggested that the only
record evidence of harm was a letter from a bank denying the plaintiff’s application for a credit
card due to an inaccurate report by the defendant. Id. The court noted that such evidence alone
might not suffice but explained that the plaintiff had provided additional evidence including
testimony that multiple of her loan applications had been denied because of the defendant’s
inaccurate reporting. Id. at *5-6. While noting that even that was “not the strongest evidence,”
the court found it “sufficient to defeat a motion for summary judgment.” Id. at *6. In contrast,
HIRECounsel points to just one vague, poorly developed fact in the record: that Mr. Connolly
worked with some of its clients in his new role. ECF No. 27-1, at 15. It is less material than the
letter in Hawthorne, and for the reasons described above, fails to create a genuine dispute of
material fact precluding summary judgment. See Doe v. De Amigos, LLC, 987 F. Supp. 2d 12, 18
(D.D.C. 2013) (granting the defendant’s motion for summary judgment because the plaintiff had
failed to present evidence sufficient to create a genuine dispute of material fact concerning an
award of punitive damages).
In its opposition, HIRECounsel raises a discovery issue, alleging that Beacon Hill failed to
comply with a subpoena in which it sought Mr. Connolly’s commission statements, which it
contends would have shown actual damages by listing the specific clients with whom he worked,
and the profit derived from them. ECF No. 27-1, at 13-14. HIRECounsel states that it did not
move to compel the statements because Mr. Connolly’s counsel assured it that the documents
would be produced. Id. at 14. Then, after discovery closed, Beacon Hill refused to produce the
documents. Id. HIRECounsel describes this as a “gotcha” tactic, essentially allowing
Mr. Connolly to “hide behind” Beacon Hill’s actions. Id. at 15.
15 The court will not credit these accusations because they were raised in a procedurally
improper manner and they are unsupported by evidence. HIRECounsel did not attach an affidavit
supporting its assertion that Beacon Hill misled it during discovery. “The mere averment that the
crucial information is within the exclusive knowledge of the opponent without stating that further
discovery is desired and will be productive has been held insufficient to prevent the entry of
summary judgment.” 10B Charles Alan Wright et al., Federal Practice and Procedure § 2741
(4th ed. 2024). In contrast, Mr. Connolly presents a different version of events supported by sworn
declarations. His and Beacon Hill’s counsel provided an affidavit explaining that Beacon Hill
never agreed to produce the commission statements and instead provided Mr. Connolly’s wage
statements. ECF No. 40, at 20-23.
In any event, the court need not determine what exactly occurred, because HIRECounsel
merely states these allegations without anchoring them in a request for additional discovery or any
other type of relief. It does not invoke Federal Rule of Civil Procedure 56(d), which provides
relief to a nonmovant when facts are unavailable to it, and the court cannot construe its brief in
opposition to summary judgment as such because HIRECounsel did not comport with the
procedures called for in that rule. Fed. R. Civ. P. 56(d) (“If a nonmovant shows by affidavit or
declaration that, for specified reasons, it cannot present facts essential to justify its opposition, the
court may: (1) defer considering the motion or deny it; (2) allow time to obtain affidavits or
declarations or to take discovery; or (3) issue any other appropriate order.”). Further, the court
provided the parties with an opportunity to supplement their filings, and HIRECounsel elected not
to request additional discovery or an opportunity to bolster its opposition. See Minute Order,
Jan. 9, 2024; ECF No. 38.
16 At bottom, HIRECounsel fails to identify a dispute of material fact with respect to actual
damages, and it cannot proceed with its claim in the absence of a showing of harm. Tsintolas
Realty Co., 984 A.2d at 187 (explaining that damages are required in a breach of contract claim);
Catalyst Chem. Servs., Inc, 350 F. Supp. 2d at 8 (explaining damages are required for a DCUTSA
claim). For these reasons, Mr. Connolly is entitled to summary judgment on HIRECounsel’s
breach of contract and DCUSTA claims.
IV. Conclusion
For the foregoing reasons, the court will grant Defendant’s motion for summary judgment,
ECF No. 24. A separate order will issue.
/s/ Loren L. AliKhan LOREN L. ALIKHAN United States District Judge
Date: July 31, 2024