National Engineering Service Corp. v. Grogan

23 Mass. L. Rptr. 451
CourtMassachusetts Superior Court
DecidedJanuary 29, 2008
DocketNo. 071583
StatusPublished
Cited by1 cases

This text of 23 Mass. L. Rptr. 451 (National Engineering Service Corp. v. Grogan) 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
National Engineering Service Corp. v. Grogan, 23 Mass. L. Rptr. 451 (Mass. Ct. App. 2008).

Opinion

Hogan, Maureen B., J.

The plaintiff National Engineering Service Corporation (“NESC”) brings this action to enforce provisions of a confidentiality, non-solicitation and non-competition agreement signed by one of its former employees, the defendant Travis Grogan (“Grogan”), and to recover damages.1 NESC also seeks to recover damages and enforce the agreement against Grogan’s current employer, defendant CCSI, Inc. (“CCSI”).2 The matter is before the court on NESC’S motion for preliminary injunction, which defendants oppose. After hearing and for the following reasons, the motion is allowed.

BACKGROUND

The following facts were obtained from the verified complaint and affidavits submitted by the parties. Plaintiff NESC is a recruiting and staffing firm which recruits qualified engineering and computer skilled candidates and places them at companies throughout the United States. NESC is a Massachusetts corporation with a principal place of business at 10 Cedar Street, Woburn, MA and an office in Portsmouth, New Hampshire. Defendant CCSI is also a recruiting and staffing firm which recruits and places employment candidates with engineering and computer skills throughout the country. CCSI is a New Hampshire corporation with a principal place of business in Stratham, NH. NESC and CCSI’s offices in New Hampshire are located less than 10 miles apart. NESC and CCSI are competitors in the staffing industry.

Defendant Grogan is a former employee of NESC. Grogan first worked for NESC from January 27, 1998 through November 3, 1998, during which time he worked as a recruiter of potential candidates for placement and as an Account Manager, which position included identifying and servicing customers for NESC’s staffing services. NESC had hired Grogan after he graduated from college, at which time Grogan had no prior experience in the staffing industry. NESC rehired Grogan as an Account Executive in October 2002 with an initial base salary and subsidy of $550.00 per week, plus commissions.3 On October 16, 2002, Grogan accepted the position with NESC and signed a “Restrictive Covenant/Nondisclosure Agreement” (hereinafter “Agreement”).

The Agreement contained both non-competition and confidentiality provisions. The non-competition covenants provide:

Agreement Not To Compete for Accounts or Personnel. Employee agrees that during his/her employ[452]*452ment with employer and/or the twelve (12) months after such employment ends, he/she will not directly or indirectly, contact, solicit, divert, take away or attempt to contact, solicit, divert or take away any staff employee, temporary personnel, customer, account, business or goodwill from employer, either for Employee’s own benefit or to benefit some other person or entity, and will not aid or assist any other person or entity to engage in any such activities.
Non-competition Agreement. Employee agrees that in the event of termination of employment for any reason whatsoever, he shall not, for a period of twelve (12) months from the date of such termination (such period not to include any period(s) of violation or period(s) of time required for litigation to enforce the covenants herein) either directly or indirectly, on his own account or as agent, stockholder, employer, employee, consultant, independent contractor or otherwise in conjunction with any other person or entity, engage in competition with the employer within a radius of fifty (50) miles of any office(s) and/or area(s) to which he was assigned and/or managed for the Employer; nor will he solicit accounts, personnel, or engage in any other competitive activities within the above referenced geographic locations(s). Employee further agrees that regardless of geographic location, he will not, during said time period, service any customers the Employer has done any business with during the preceding eighteen (18) months. Employer acknowledges that doing so in any manner would interfere with, diminish and otherwise jeopardize and damage the business and goodwill of the Employer.

In addition, the confidentiality provision of the Agreement provides:

Non-Disclosure Agreement. Employee agrees that except as directed by Employer, the employee will not at any time, whether during or after his employment with Employer, use for any reason or disclose Employer’s Confidential Information4 or permit any person, to examine and/or make copies of any documents which may contain or are derived from Confidential Information, whether prepared by the employee or otherwise, without the prior written permission of the Employer.

Grogan worked for NESC out of the Portsmouth, New Hampshire office from October 16, 2002 through August 23, 2006, when Grogan was terminated by NESC. During this time, as an Account Executive, Grogan worked in sales, which included identifying, soliciting, and servicing customers for NESC’s staffing services. Given Grogan’s limited experience in the staffing industry, all of which was obtained at NESC during his employment in 1998, NESC provided Grogan with extensive training and resources. After accompanying senior sales representatives and being introduced to NESC clients and customers, Grogan took over and began servicing existing accounts, clients and customers. NESC’s business involves substantial sales effort by salesmen such as Grogan to locate positions, determine the needs of the customer-company, identify potential candidates to fill the positions, and place candidates in positions. NESC’s success in sales is dependent upon the development and maintenance of good and loyal relationships with customers and obtaining repeat business with such customers.

While employed at NESC, Grogan was responsible for developing and increasing sales. His duties thus included creating leads, locating positions, determining the needs of the customer-company, Identifying potential candidates to fill the positions, and placing candidates in positions. Grogan also assisted in managing, supervising, and training other account managers and recruiters at NESC. In these capacities, Grogan was responsible for developing and maintaining good relationships with customers, clients and accounts, and for generating repeat business. To enable Grogan to successfully serve NESC’s customers, clients and accounts, NESC provided Grogan with information regarding the prices, terms and conditions of NESC’s contracts with its customers, as well as NESC’s pricing policies and price lists, marketing and business plans, and contractor list and database. NESC also provided Grogan with resources to attend sales conferences and to travel and entertain existing and potential clients and customers, in order to develop good relationships, maintain NESC’s good will with them, and generate business.

Staffing firms, like NESC and CCSI, conduct their business of placing employment candidates in two ways. First, NESC and CCSI contracts directly with employer companies to identify and place candidates in staffing positions within those companies. Second, NESC and CCSI do business by contracting with so-called Managed Service Providers to place candidates in positions in larger companies that use the services of such Managed Service Providers. Managed Service Providers typically work with large companies to assist them in hiring for open positions. Supplier-vendors, like NESC and CCSI, contract with the Managed Service Providers to be able to submit potential candidates for open positions at the client-companies of the Managed Service Provider.

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Related

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28 Mass. L. Rptr. 233 (Massachusetts Superior Court, 2011)

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Bluebook (online)
23 Mass. L. Rptr. 451, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-engineering-service-corp-v-grogan-masssuperct-2008.