Industrial Technologies, Inc. v. Paumi, No. Cv 960335925 (May 28, 1997)

1997 Conn. Super. Ct. 6071, 19 Conn. L. Rptr. 573
CourtConnecticut Superior Court
DecidedMay 28, 1997
DocketNo. CV 960335925
StatusUnpublished

This text of 1997 Conn. Super. Ct. 6071 (Industrial Technologies, Inc. v. Paumi, No. Cv 960335925 (May 28, 1997)) is published on Counsel Stack Legal Research, covering Connecticut Superior Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Industrial Technologies, Inc. v. Paumi, No. Cv 960335925 (May 28, 1997), 1997 Conn. Super. Ct. 6071, 19 Conn. L. Rptr. 573 (Colo. Ct. App. 1997).

Opinion

[EDITOR'S NOTE: This case is unpublished as indicated by the issuing court.]MEMORANDUM OF DECISION ON MOTION FOR A TEMPORARY INJUNCTION STATEMENT OF THE CASE

This is an action instituted by the plaintiff, Industrial Technologies, Inc., seeking injunctive relief to enforce noncompete and nondisclosure provisions contained within an employment agreement signed by the defendant, Joseph Paumi. Pending before the court is the plaintiff's application for a temporary injunction.

"The issuance of an injunction and the scope and quantum of injunctive relief rests in the sound discretion of the trier."Krulikowski v. Polycast Corp., 153 Conn. 661, 669, 220 A.2d 444 (1966). "Injunctive relief may not lie where it is predicated on the fears and apprehensions of the party applying for it or where it would be incompatible with the equities of the case . . . . and likewise the power of equity to grant such relief may be exercised only under demanding circumstances. . . . The extraordinary nature of injunctive relief requires that the harm complained of is occurring or will occur if the injunctive relief is not granted. Although an absolute certainty is not required, it must appear that there is a substantial probability that but for the issuance of the injunction, the party seeking it will suffer irreparable harm." Karls v. Alexandra RealtyCorp., 179 Conn. 390, 402, 426 A.2d 784 (1980). Irreparable harm inevitably results from a violation of a valid and enforceable noncompete provision. Mattis v. Lally,138 Conn. 51, 56, 82 A.2d 155 (1951).

The primary facts concerning the parties relationship and the employment agreement are not in dispute. Except for one brief interruption, from 1974 to 1996, the defendant was CT Page 6072 employed by a company called Intec Corporation (Intec). Intec started its business in 1971 and has continually maintained its headquarters in Connecticut. Intec's business involved the designing and selling of camera and laser inspection devices used by companies during the manufacturing process to identify product defects or nonconformities. Over the years, the defendant has held numerous positions with Intec. In 1974, he started with Intec as an engineer. By 1992, the defendant was Intec's Director of Marketing, in charge of the company's entire marketing and sales activities. In 1994, the defendant became the general manager of Intec.

In 1992, a company named Aerodyne Products Corporation (Aerodyne) purchased Intec. Aerodyne maintained its principal office in Massachusetts. After Aerodyne purchased Intec, it required all Intec managerial employees, including the defendant, to execute new employment agreements. The defendant received the employment agreement in 1992, but did not sign the agreement until May 5, 1994. This employment agreement contains the noncompete and nondisclosure provisions at issue in this case. In 1994, Aerodyne moved its headquarters to Connecticut, and changed its name to Industrial Technology, Inc., the plaintiff in this case.

In August 1996, the defendant resigned from Intec. His last day of employment was on or about August 17, 1996. Soon after his resignation, the defendant began to work for a company called Mayan Automation (Mayan). Mayan is the Intec's exclusive supplier of an inspection camera that Intec uses for one of its primary product lines. Mayan also has started selling this same inspection camera, with different application features, in the same markets as Intec. Hence, Mayan is a competitor of Intec, and thus, the plaintiff. From these facts, there is no dispute that the defendant's employment with Mayan violates the noncompete provision of his employment agreement with the plaintiff. The crux of the parties' dispute is whether the noncompete provision is enforceable, and if so, to what extent.

DISCUSSION

I
The first issue presented is whether Connecticut law or Massachusetts law governs the employment agreement, and thus, the determination of the enforceability of the noncompete CT Page 6073 provision. The employment agreement provides under paragraph 6.2 that the agreement "shall be governed in accordance with the laws of the Commonwealth of Massachusetts." The parties agree that the courts of Connecticut and Massachusetts have adopted the rules on conflict of laws set forth in the Restatement of the Law, and under these rules, substantial weight and deference is required to be given to the parties' choice of law. Restatement (Second), Conflict of Laws § 187 (1971); see alsoElgar v. Elgar, 238 Conn. 839, 850 n. 10, 679 A.2d 973 (1996) ("in accordance with § 187 of the Restatement, parties to a contract generally are allowed to select the law that will govern their contract. . . .").

Yet, despite the weight and deference that is afforded to the parties' choice of law, the Restatement further provides that the parties' choice of Massachusetts law will be disregarded if either: 1) Massachusetts has no substantial relationship to the parties or transaction and there is no other reasonable basis for the parties' choice; or 2) the application of Massachusetts law would be contrary to a fundamental policy of Connecticut and Connecticut has a materially greater interest in the matter than Massachusetts. 1 Restatement (Second), supra, § 187; Elgar v. Elgar, supra, 238 Conn. 850.

In regard to the first test, the plaintiff asserts that Massachusetts law applies because Massachusetts has a substantial relationship to the parties and there is a reasonable basis for this choice. Plaintiff argues that this test is met because when the employment agreement was signed by the parties, the plaintiff was known as Aerodyne, Aerodyne was a party to the employment contract, and, Aerodyne was headquartered in Massachusetts.1 See 1 Restatement (second), supra § 187 comment f (a substantial relationship between the chosen state and the parties may be established when one of the parties has its "principal place of business" in the chosen state).

Under the specific circumstances presented here, the court cannot find that the parties' choice of Massachusetts law was without a reasonable basis. The employment agreement was executed between the defendant and Aerodyne. In the agreement, Aerodyne, as the "Corporation," was defined to include "all entities directly or indirectly owned by, owning or under common ownership with it." This broad definition would include Aerodyne itself, Intec, and Aerodyne's other subsidiaries or CT Page 6074 divisions. Aerodyne had an interest in the competitive activities of the people employed by its subsidiaries and an interest in their knowledge about propriety information which could be used to compete against the businesses. Consequently, under the precise terms of the agreement, the scope of the noncompete provision was based on Aerodyne's business, not Intec's business — so that the defendant, for example, could not work for a competitor of Aerodyne for one year after the termination of his employment with Intec.

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Bluebook (online)
1997 Conn. Super. Ct. 6071, 19 Conn. L. Rptr. 573, Counsel Stack Legal Research, https://law.counselstack.com/opinion/industrial-technologies-inc-v-paumi-no-cv-960335925-may-28-1997-connsuperct-1997.