Protégé Software Services, Inc. v. Colameta

30 Mass. L. Rptr. 127
CourtMassachusetts Superior Court
DecidedJuly 16, 2012
DocketNo. MICV200903168
StatusPublished
Cited by2 cases

This text of 30 Mass. L. Rptr. 127 (Protégé Software Services, Inc. v. Colameta) 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
Protégé Software Services, Inc. v. Colameta, 30 Mass. L. Rptr. 127 (Mass. Ct. App. 2012).

Opinion

Kirpalani, Maynard M., J.

The plaintiff, Protégé Software Services, Inc. (“Protégé”), commenced this [128]*128action against its former employee and his new employer, defendants Dennis Colameta (“Colameta”) and Monument Data Solutions LLC (“Monument”) (collectively, “defendants”), respectively, alleging, inter alia, that the defendants violated G.L.c. 93A and Colameta’s non-competition, non-solicitation, and non-disclosure provisions of his employment agreement with Protégé by misappropriating Protégé’s trade secrets, including customer lists, financial information, business plans and strategies, and by soliciting Protégé’s clients and customers. The defendants asserted a counterclaim against Protégé, contending that Protégé breached the employment agreement by decreasing Colameta’s compensation and by changing his job duties, thereby rendering the employment agreement and its provisions unenforceable. The action is before this court on the defendants’ motion for summary judgment and on Protégé’s cross motion for summary judgment. For the following reasons, the defendants’ motion is ALLOWED and Protégé’s motion is DENIED.

BACKGROUND

The following facts are undisputed and, where disputed, viewed in the light most favorable to the non-moving party. See Nelson v. Salem State Coll., 446 Mass. 525, 535 (2006).

Protégé provides software consulting and implementation support for the customers of the Oracle Corporation (“Oracle”) who purchase Oracle’s integrated business software and hardware. Approximately 80% of Protégé’s business is repeat business. Black Diamond Business Solutions LLC (“Black Diamond”), which Colameta founded in 2002, was also an Oracle consulting company. Black Diamond and Protégé entered into an Asset Purchase and Sale Agreement (“Asset P&S”) dated August 3, 2004. Pursuant to the Asset P&S, Protégé purchased for $1,475,000 Black Diamond’s customer contracts, “customer lists!,]” “rights to telephone numbers and directory listings and URL address!,]” and “goodwill and all rights to the use of the name” Black Diamond. Tab C to Protégé’s Motion.2 Colameta received $811,250 from the sale. Also pursuant to the Asset P&S, Colameta and other Black Diamond employees entered into employment agreements with Protégé, effectively becoming Protégé employees.3

I. 2004 Employment Agreement

Colameta’s employment agreement with Protégé (“2004 Employment Agreement”) expressly reflected the requirement in the Asset P&S that Protégé and Colameta enter into an employment contract: “one of the terms of the [Asset P&S] requires that [Protégé] and [Colameta] mutually agree upon an Employment Contact [sic] to be effective upon the closing . . .’’ Exhibit A to Joint Appendix of Exhibits. The 2004 Employment Agreement listed Colameta’s title as Protégé’s Director of Customer Relations and described his primary duties as “[b]usiness development in existing accounts!,] client satisfaction!,] general over-site on projects!,] extending the full service offeringU and maintenance of positive relationships and customer base”[;] and his secondary duties as “[s]upport [of] sales cycles and teams (newbusiness)!,] and maintenance of] business partner relationships (to be assigned).” Exhibit A to Joint Appendix of Exhibits. The 2004 Employment Agreement also set his minimum salary at $200,000 per year, and provided for commissions, stock options, a yearly bonus, and fringe benefits. With respect to Colameta’s salary “for the initial year term of this Agreement,” the agreement provided that it “may be increased but not decreased upon an annual review by [Protégé].” Id.

The 2004 Employment Agreement provided four ways in which Colameta’s employment with Protégé could terminate: Colameta’s death; Colameta’s incapacity; Protégé’s termination of Colameta for “cause” which the agreement defined as, inter alia, Colameta’s criminal misconduct, incapacity resulting from drug or alcohol abuse, or violations of certain provisions of the 2004 Employment Agreement; and Colameta’s terminating his own employment for “good reason” which the agreement described as Protégé’s significantly changing Colameta’s duties under the agreement, reducing his compensation or benefits under the agreement, or otherwise failing to honor its obligations under the 2004 Employment Agreement, under the Asset P&S, or under “any ancillary document. . .” Id.

By its express terms, the 2004 Employment Agreement was effective for two years; the parties agreed that, at the end of the two-year term, Colameta would become “an employee at will.” Id. The 2004 Employment Agreement also expressly provided that, “[ejxcept as otherwise provided in this Agreement, the provisions of Paragraphs 6, 7, [and] 8 . . . shall continue in full force and effect notwithstanding the termination of [Colameta’s] employment with [Protégé] and/or the termination of this Agreement.” Id. Paragraph 6 is the “Confidential Information and Non-Disclosure” provision; paragraph 7 is the “Non-Competition” provision; and paragraph 8 is the “Return of Documents” provision.

Paragraph 6, the [‘Confidential Information and Non-Disclosure” provision of the 2004 Employment Agreement, prohibited Colameta “during or after the term of his employment hereunder” from disclosing Protégé’s “business and financial records, customer lists, proprietary knowledge or data, trade secrets and confidential methods of operations” to any party except in the course of his work for Protégé. Id. Under paragraph 7, the “Non-Competition” provision of the 2004 Employment Agreement, Colameta, for one year after his termination from Protégé, could not engage in the same business as Protégé, sell the same services as Protégé, solicit or accept business from any of Protégé’s customers or competitors, recruit any of [129]*129Protégé’s employees, or assist any party engaged in selling services similar to or in competition with Protégé’s services. Paragraph 8, the “Return of Documents” provision of the 2004 Employment Agreement, required Colameta, “(u)pon termination of his employment with [Protégé] for any reason,” to return “any originals and copies of any books, papers, customer or client contracts, customer lists, files, computer programs and data bases, books of account, notes and other documents and data or other writings, tapes or records of’ Protégé. Id.

II. 2007 Employment Agreement

To prevent Colameta from becoming an at-will employee, Protégé asked Colameta to execute a new employment agreement before the 2004 Employment Agreement expired.4 Colameta negotiated this new employment agreement with Protégé’s then chief operating officer, Mary Mandarino (“Mandarino”) who drafted the new agreement, basing it on the 2004 Employment Agreement; Protégé’s president Michael Ivers (“Ivers”) and Colameta’s supervisor, Peter Lang (“Lang”) were also involved in the process. Colameta’s new agreement became effective on January 1, 2007 (“2007 Employment Agreement”), therefore he was an at-will employee between the September 2006 expiration of the 2004 Employment Agreement and the January 2007 effective date of the 2007 Employment Agreement.

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Cite This Page — Counsel Stack

Bluebook (online)
30 Mass. L. Rptr. 127, Counsel Stack Legal Research, https://law.counselstack.com/opinion/protege-software-services-inc-v-colameta-masssuperct-2012.