SimpliVity Corp. v. Moran

33 Mass. L. Rptr. 587
CourtMassachusetts Superior Court
DecidedAugust 14, 2016
DocketNo. 142133
StatusPublished

This text of 33 Mass. L. Rptr. 587 (SimpliVity Corp. v. Moran) 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
SimpliVity Corp. v. Moran, 33 Mass. L. Rptr. 587 (Mass. Ct. App. 2016).

Opinion

HogaN, Maureen B., J.

The plaintiff SimpliVily Corporation (“SimpliVity”) brings this action to enforce confidentiality and non-competition provisions of a Proprietary Information and Inventions Agreement signed by its former employee, the defendant Keith Moran (“Moran”), as a condition of his employment.1 The matter is before the court on SimpliVity’s motion for a preliminary injunction. After hearing and consideration of the verified complaint, the affidavits of Jakob Wahlberge, and the affidavit of Moran, as well as the attached exhibits, * for the following reasons, the motion will be ALLOWED.

BACKGROUND

The following facts were obtained from the verified complaint, the affidavits, and exhibits submitted by the parties.

SimpliVity is a start-up corporation which develops and sells converged IT infrastructure and software defined data center products in the markets of the information technology and services industry. Simpli-Vity was established in 2009, but did not formally launch its innovative converged IT infrastructure products into the information technology market until September 2012.2 SimpliVity’s products are designed to simplify IT for businesses by converging a number of functionalities of numerous disparate products, including server, storage, IT protection and management, into “all in one” products. SimpliVity is a leader in the market for converged IT infrastructure products. SimpliVily sells its products to small, medium and large for-profit and non-profit civilian and government entities all over the world. SimpliVily’s products have received broad market acceptance due to their technical superiority to competing products and the team of sales professionals at SimpliVily who market and sell these products.

The IT infrastructure and data storage industry is highly competitive. SimpliVity competes with many companies, such as EMC, VCE (a joint venture of EMC and Cisco), Hewlett Packard, and Dell, but its direct and primary competitor is another start-up company, Nutanix. Like SimpliVity, Nutanix also develops and sells converged IT infrastructure and software defined data center products in the same markets as Simpli-vity. Both SimpliVily and Nutanix pursue the same target customers, pursue the same type of resellers and partners, and present a very similar set of value propositions, marketing tactics, and themes to customers. Both Nutanix and SimpliVily refer to themselves as direct competitors in their marketing materials, on blogs and through social media. Customers, partners, and the media also view and refer to Simpli-Vity and Nutanix as direct competitors.

To maintain a competitive advantage in this highly competitive and rapidly developing market, SimpliVity expends substantial resources and effort to train its employees and to safeguard and protect its confidential information. SimpliVity password protects its computers, requires employees to sign non-disclosure agreements, restricts employee access to confidential information, and employs physical security measures at its offices. In order to protect its patentable, trade secret and confidential information, as well as its customer and employee relationships, SimpliVity requires employees to sign Proprietary Information and Inventions Agreements.

Moran began working for SimpliVily on or about April 29, 2013 as a Regional Sales Director, shortly [588]*588after SimpliVity introduced its innovative products into the IT market. Prior to working for SimpliVity, Moran was employed as a salesperson by two companies, EMC and NetApp, which sell data storage products and services in the markets of the information technology and services industiy. Moran began working for EMC in 2003. For the first nine months, he performed inside sales work and attended EMC’s training program, where he learned how the data storage industiy worked. He next worked for EMC for approximately two years in the San Francisco Bay area, selling data storage products and services. Moran left EMC in 2006 and joined NetApp as a salesperson in the Illinois area. He worked with NetA-pp until he joined SimpliViiy in April 2013. One year before he left NetApp, he was promoted to Regional Sales Manager with a sales territoiy that covered the upper Midwest, including Illinois and Indiana.

During the ten years Moran worked in the data storage industiy prior to joining SimpliViiy, Moran developed a network of IT professionals involved in the data storage industiy with whom he developed relationships. Such IT professionals included buyers of data storage product, individuals who make referrals to buyers of data storage products, and business partners who are referred to as value added resellers— companies that sell IT infrastructure products. Such business partners make recommendations and introductions to buyers of data storage products. Moran’s relationships with business partners was a key source of customers for him. Moran also found new customers through Trade Shows and on-line databases. When Moran joined SimpliVity, he was asked to tap into the network of IT professionals he had developed to find customers and employees for SimpliVity. The relationships Moran has with such IT professionals make him a valuable salesperson.

When Moran started with SimpliVity on April 29, 2013 as a Regional Sales Director, he was responsible for developing SimpliVity’s business in five states in the Midwest region of the United States. Moran was promoted in the third quarter of 2013 to a position where he managed SimpliVity’s sales for eighteen states. In the second quarter of 2014, Moran was again promoted to Director of Midwest Sales, in which position he was responsible for SimpliVity’s sales for the entire Midwest, Central, Plains and Texas regions of the United States, as well as the Central Canadian Territoiy, which included 19 states and two Canadian provinces. In this position, Moran supervised nine SimpliVity employees.

On April 29, 2013, as a condition of his employment, Moran entered into a Proprietary Information and Inventions Agreement (the “Agreement”) with SimpliViiy. By agreeing to the terms of this Agreement, Moran agreed that the Agreement was “a material part of the consideration of my employment and continued employment by” SimpliViiy. By signing this Agreement, Moran agreed to the following non-solicitation and non-competition restrictions, provided in Section 4(d) of the Agreement:

After Termination
For the period of one year immediately following termination of my employment with the Company (for any or no reason, whether voluntary or involuntary), I will not directly or indirectly: (i) Cause any person to leave their employment with the Company; (ii) Cause any person who was employed by the Company during the last six months to become an employee of mine or a third party; (iii) Solicit any Business Partner; or (iv) Act in Any Capacity in or with respect to any Competing Business located within the Commonwealth of Massachusetts, the rest of the region known as New England, the rest of the United States, or anywhere else in the world.

Section 4(c) of the Agreement defines “Competing Business” as “any commercial activity which competes or is reasonably likely to compete with any business that the Company conducts, or demonstrably anticipates conducting, at any time during my employment.” Section 4(a) of the Agreement also defines other relevant terms:

Definitions
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Cite This Page — Counsel Stack

Bluebook (online)
33 Mass. L. Rptr. 587, Counsel Stack Legal Research, https://law.counselstack.com/opinion/simplivity-corp-v-moran-masssuperct-2016.