Innovative Systems & Solutions, Inc. v. Hannah

75 Va. Cir. 363, 2008 Va. Cir. LEXIS 270
CourtNorfolk County Circuit Court
DecidedJuly 31, 2008
DocketCase No. (Civil) CL07-6926
StatusPublished

This text of 75 Va. Cir. 363 (Innovative Systems & Solutions, Inc. v. Hannah) is published on Counsel Stack Legal Research, covering Norfolk County Circuit Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Innovative Systems & Solutions, Inc. v. Hannah, 75 Va. Cir. 363, 2008 Va. Cir. LEXIS 270 (Va. Super. Ct. 2008).

Opinion

By Judge Charles E. Poston

This action is before the Court upon the Defendant’s demurrer. Having considered the written submissions of the parties and the argument of counsel, the Court sustains the demurrer and dismisses as to Counts I, II, III, IV, VI, Vin, X, XU, XVIII, and XIX. The demurrer is overruled as to the remaining counts.

Background

Consistent with familiar principles, the facts will be reviewed in the light most favorable to the Plaintiff. The Plaintiff, Innovative Systems & Solutions, Inc., d/b/a American Business Systems, Inc. (“ABS”), is a Cisco certified Gold Partner that sells, installs, and services network-based Internet Protocol (“IP”) communications. (First Am. Comp., ¶ 1.) In 2004, ABS hired the Defendants, William Alex Hannah, David Cantwell, and Patrick Tredway, [364]*364as network and voice engineers. (First Am. Comp., ¶ 2.) While employed with ABS, Hannah took four out of the five examinations necessaiy to become a Cisco Certified Voice Professional (“CCVP”), whereas Tredway and Cantwell became Internetwork Engineers, the highest level of Cisco certification. (First Am. Comp., ¶ 2.) ABS claims that it paid the expenses for them to acquire these certifications.

Each Defendant signed an Individual Employment Agreement (“Employment Agreement”), agreeing not to compete with ABS for one year following termination of employment with the company. (First Am. Comp., ¶ 3.) The Employment Agreement restricts the employees’ actions within a Restricted Area, defined as “the geographic region within a ninety (90) mile radius of any ABS or any established site from which ABS provides support services for clients.” (First Am. Comp., ¶ 22.) This includes Richmond, Roanoke, and Norfolk. (First Am. Comp., ¶ 22.) The Non-Competition clause states:

(b) Within the Restricted Area... I will not solicit work or employment from, commence employment with, or provide or sell services or products to, or perform duties for or on behalf of any Competitor . . . where the work performed by me includes Prohibited Activities.
(c) Within the Restricted Area, I will not undertake the planning of, organize, or assist in the organization or formation of, or operate or promote any competitor. ...
“Competitor” means any enterprise . . . that derives, or plans to derive, revenue from the same or substantially similar lines of business as are conducted at ABS....
“Prohibited Activities” means work duties which are the same as, substantially similar to, or directly related to the job duties or functions which I performed for ABS ... or involves work or services on or related to products, systems, and/or services competitive with the products, systems, and/or services manufactured, sold, leased, serviced, or provided by ABS.. ..

(First Am. Comp. Ex. A, B, and “C,” ¶ 4(b)-(c).)

Cantwell and Tredway terminated their employment with ABS in March 2007 and started TBL Networks, Inc. (“TBL”), which is a competitor of ABS. (First Am. Comp., ¶ 30.) (Alan Sears is the third partner at TBL; however, he was not a former ABS Employee.) To avoid “an obvious and impending lawsuit,” Plaintiff claims that Tredway and Cantwell, agreed to [365]*365modify their Employment Agreements (“Modified Agreement”). (First Am. Comp., ¶ 4.) Under the terms of this Modified Agreement, ABS continued to employ Tredway and Cantwell as contract employees “for four months or until ABS was able to achieve its Cisco Gold Partner Certification.” (First Am. Comp., ¶ 37.) The Non-Competition and Non-Solicitation clauses in the Modified Agreements states:

For a period of one (1) year beginning from the date of the final invoice to an ABS customer or prospect for work performed by Employee or [TBL], Employee agrees not to solicit business from or sell services or products to such customer or prospect, either directly or indirectly. “ABS Customer” means any of ABS’ current customers and any other Person to which during the twelve (12) month period measured backward from the date of Employee’s termination . . . such terms includes Persons which are ABS customers as of the date of the termination and Persons which become ABS customers thereafter. “ABS Prospects” means any of ABS’ prospects and any other Person to which ABS or any of its Affiliates have attempted, targeted, or marketed its products and/or provision of services at any time during the twelve (12) month period measured backward from the date of Employee’s termination . . . such terms include Persons which are ABS Prospects at the date of Employee’s termination and Persons which become ABS Prospects thereafter.

(First Am. Comp. Ex. E and F, ¶ (B)(1)(c).) This provision modifies ¶¶ 4(a), (b), and (c) in the Employee Agreements. The Modified Agreement also states that, if Cantwell and Tredway violate its terms, their original Employment Agreement would be reinstated. (First Am. Comp. Ex. “E”. and “F,” ¶ (C)(1).) Additionally, the original Employment Agreements remained in full effect except as modified. (First Am. Comp. Ex. E and F, ¶ (C).)

TBL also entered into a separate agreement with ABS (“TBL Agreement”). The Non-Competition clause in the TBL Agreement states:

[TBL] agrees not to solicit business from or sell services or products, or perform duties for or on behalf of to [sic] any ABS Client or Prospect where the business, products, or services are competitive with those of ABS, any ABS Client or Prospect for a period of one (1) year from March 30, 2007....

[366]*366(First Am. Comp. Ex. D at p. 4, ¶ D.) The Non-Solicitation clause states:

[TBL] agrees not to solicit or hire, directly or indirectly, any ABS employee while this Agreement is in effect. [TBL] also agrees not to solicit, directly or indirectly, any ABS Customer or Prospect while this Agreement is in effect. In addition, [TBL] agrees not to solicit any ABS Customer or Prospect with whom they have performed work on behalf of ABS for one (1) year from the date of the final invoice to the Customer or Prospect for work performed by [TBL].

(First Am. Comp. Ex. D at p. 4, ¶ C.)

ABS alleges that “Cantwell provided services to and sold Cisco products to the Martin Agency, an ABS customer, within the one year prohibited time period.” (First Am. Comp., ¶ 43.) According to the Complaint, Tredway and Cantwell also solicited and/or provided services to the Bank of Virginia, an ABS prospect. (First Am. Comp., ¶ 44.) ABS claims that TBL was able to achieve “a certain level of partnership with Cisco,” thereby enabling it to compete with ABS. (First Am. Comp., ¶ 45.) This was achieved when Hannah, who had previously terminated his employment with ABS, registered his CCVP credentials with TBL. (First Am. Comp., ¶ 46.) Although the Complaint also acknowledges that Hannah did not actually do any work for TBL (First Am. Comp., ¶ 46), ABS claims that this allowed TBL to “fraudulently obtain the ‘Premier Partner’ status and achieve the Advanced Unified Communication Specialization with Cisco.” (First Am. Comp., ¶ 46.) ABS alleges that, by registering with TBL, Hannah violated his Employment Agreement. ABS also claims that Hannah promoted TBL by developing its website. (First Am. Comp., ¶ 48.)

Finally, ABS claims that Tredway and Cantwell have failed to repay their training expenses.

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75 Va. Cir. 363, 2008 Va. Cir. LEXIS 270, Counsel Stack Legal Research, https://law.counselstack.com/opinion/innovative-systems-solutions-inc-v-hannah-vaccnorfolk-2008.