Proctor Group Insurance Agency v. Jones

24 Mass. L. Rptr. 297
CourtMassachusetts Superior Court
DecidedJune 6, 2008
DocketNo. 20062050A
StatusPublished

This text of 24 Mass. L. Rptr. 297 (Proctor Group Insurance Agency v. Jones) 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
Proctor Group Insurance Agency v. Jones, 24 Mass. L. Rptr. 297 (Mass. Ct. App. 2008).

Opinion

Agnes, Peter W., J.

[298]*2981. Introduction

This is a civil action in which the plaintiff, Proctor Group Insurance Agency, Inc. (“plaintiff’), the former employer of the defendant, Michael K. Jones (“defendant”), alleges that it suffered harm and is entitled to money damages as a result of the defendant’s violation of an employment contract. Defendant was employed by the plaintiff on two separate occasions, including his second term of employment from September 6, 2005 to approximately March 23, 2006. It is undisputed that during this second term, defendant’s employment was governed by an employment agreement, which contained warnings regarding the use of confidential information and a post-employment covenant not to compete. Defendant’s alleged actions both during his employment term with the plaintiff and after-wards are what provide the basis for this litigation.

2.

On October 6, 2006, plaintiff filed its Verified Complaint and Demand for a Jury Trial alleging five counts against the defendant, including breach of contract (non-competition), breach of contract (misappropriation of proprietary information), violation of G.L.chapter 93, violation of G.L.chapter 93A, and intentional interference with contractual or advantageous relations. Plaintiff then filed its motion for summary judgment on December 3, 2007 in which it waived count four, violation of M.G.L.chapter 93A, for the purposes of summary judgment. In brief, this court denies the motion for summary judgment because there are material issues of fact remaining, including: whether the defendant breached an enforceable covenant to not compete, whether the information taken by the defendant constituted a trade secret, whether the defendant’s actions caused a provable harm to the plaintiff, and whether the defendant’s actions included the necessary improper purpose and/or the improper means needed for a successful claim of intentional interference with contractual or advantageous relations.

3. Count One — Breach of Contract (Non-Compete)

In the verified complaint, plaintiff alleges that the defendant breached his employment agreement when he violated the non-competition covenant included in the contract. In its relevant portion, the employment agreement between the parties stated:

Employee covenants and agrees that during the period of his employment hereunder, he will not, directly or indirectly, compete with the Employer in any manner, and that for a period of twenty-four (24) months after termination of his employment with the Employer, however caused, he will not, directly or indirectly, on his own behalf or as an employee, associate or co-owner of anyone else (i) solicit, attempt to obtain, accept, write or service or transact insurance business of any nature from any person, firm, or corporation which was a customer or account of the Employer at the time of termination of his employment or within 12 months prior thereto . . .

(Employment Agreement ¶8.) In order to succeed on a claim regarding breach of contract, specifically a covenant concerning non-competition, the plaintiff must demonstrate that the enforcement of the covenant is necessary to protect the employer’s legitimate business interests, and that it is reasonable in scope. All Stainless, Inc. v. Colby, 364 Mass. 773, 779-80 (1974). In addition to this, the plaintiff must also demonstrate a breach of the covenant by the defendant. Whether the defendant breached an enforceable non-competition covenant remains a question of material fact. When examining the covenant on a statewide level, it is important to note that in Massachusetts, post-employment covenants for non-competition are generally disfavored as public policy favors free mobility of workers in the marketplace. See generally Woolley’s Laundry v. Silva, 304 Mass. 383, 387 (1939). In addition, the covenant places restrictions on the defendant’s ability to recruit business to his new place of work and maintain working relationships with clients, which, he had developed throughout his career including his time at Protector. In Mazonson, Inc. v. Greenbaum, this court held that a post-employment restriction, which prohibits the defendant from providing services or selling insurance to any of the plaintiffs customers, even if the defendant did not solicit the customers, violates public policy and is therefore unenforceable. Mazonson, Inc. v. Greenbaum, 2007 Mass.Super. LEXIS (May 27, 2008). The type of restriction discussed in Mazonson appears to be the same type of restriction in place concerning the defendant in the present matter.

4.

The plaintiff in the present matter has asserted that defendant violated the covenant not to compete contained in his employment agreement while working for Chittenden Insurance Agency of Massachusetts, Inc. (hereinafter “Chittenden”), an insurance company in direct competition with Plaintiff, by actively soliciting Plaintiffs customers while working for Chittenden. According to Plaintiff, through Jones’s efforts two customers of Protector left the insurance agency and placed their business with Chittenden, Jones’s new employer, hence the breach of the covenant not to compete. Here, the plaintiff is asserting that Jones breached the non-compete covenant included in his employment agreement when he had conversations with customers of Protector, however in light of the Mazonson case, such a restriction may not be enforceable, in which case Jones would not be in breach. Taking this into account, material issues of fact appear to remain in regards to this claim.

5. Count Two — Breach of Contract (Misappropriation of Proprietary Information)

Also contained in the plaintiffs complaint are allegations that Jones breached his employment contract [299]*299with Protector by misappropriating proprietaiy information. In order to be successful on such an allegation, Protector must demonstrate that the company sustained harm as a result of the defendant’s breach or conversion, that the damages sought are not speculative and that there is a causal connection between the defendant’s acts or omissions and the plaintiffs damages. See Lufkin’s Real Estate, Inc. v. Aseph, 349 Mass. 343, 346 (1965). See also Augat, Inc. v. Aegis, Inc., 417 Mass. 484, 487 (1994). In light of this standard, there are remaining issues of fact pertaining to this count including whether the plaintiff suffered harm as a result of the defendant’s actions. In attempting to set forth the necessary information regarding this count, the plaintiff points to the defendant’s deposition testimony in which Jones admitted that upon his employment by Chittenden he forwarded onto Chittenden’s electronic mail server plaintiffs confidential information.

Q: And you did, in fact, electronically bring into their [Chittenden] computer email system, the information that originated with Protector Group; correct?
A: Yes, sir

Jones Deposition, p. 23, Ins.. 22-24. The fact that the defendant admitted to forwarding confidential information is not sufficient, however, for the plaintiff to prevail on this count, as the plaintiff must also demonstrate harm caused to Protector because of the defendant’s actions. The plaintiff claims that two customers left Protector to join Chittenden because of Jones’s solicitation, costing them approximately $68,000 in lost revenues.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

J. T. Healy & Son, Inc. v. James A. Murphy & Son, Inc.
260 N.E.2d 723 (Massachusetts Supreme Judicial Court, 1970)
Augat, Inc. v. Aegis, Inc.
631 N.E.2d 995 (Massachusetts Supreme Judicial Court, 1994)
All Stainless, Inc. v. Colby
308 N.E.2d 481 (Massachusetts Supreme Judicial Court, 1974)
Lufkin's Real Estate, Inc. v. Aseph
208 N.E.2d 209 (Massachusetts Supreme Judicial Court, 1965)
Woolley's Laundry, Inc. v. Silva
23 N.E.2d 899 (Massachusetts Supreme Judicial Court, 1939)
Buster v. George W. Moore, Inc.
438 Mass. 635 (Massachusetts Supreme Judicial Court, 2003)
Dynamics Research Corp. v. Analytic Sciences Corp.
400 N.E.2d 1274 (Massachusetts Appeals Court, 1980)

Cite This Page — Counsel Stack

Bluebook (online)
24 Mass. L. Rptr. 297, Counsel Stack Legal Research, https://law.counselstack.com/opinion/proctor-group-insurance-agency-v-jones-masssuperct-2008.