Court finds non-solicitation agreement enforceable but declines to extend its time-frame.

United States District Court District of Massachusetts

SUMMARY: (court decision – opens in PDF)

“Thermal Engineering International (USA) Inc. (‘Thermal Engineering’ or ‘plaintiff’) brings this action against Daryl L. Lanaville (‘Lanaville’ or ‘defendant’) seeking monetary damages and injunctive relief. Plaintiff alleges that defendant breached a non-solicitation covenant when he left Thermal Engineering to join a new company, HyPro, Inc. (‘HyPro’), and shortly thereafter solicited other Thermal Engineering employees to follow him there. Defendant has filed a motion for summary judgment (Docket No. 53) which plaintiff opposes. …

“Defendant moves for summary judgment on the grounds that the Non-Solicitation Agreement is unenforceable, there was no breach of the agreement and the alleged damages were not caused by his purported breach of contract. …

“For the reasons that follow, the Court finds that the challenged provisions of the Non-Solicitation Agreement are enforceable. …

“Lanaville asserts that the Non-Solicitation Agreement does not protect a legitimate business interest such as the protection of trade secrets, confidential information or good will. …

“… In the case at bar, Thermal Engineering has submitted a sworn declaration that it provided Lanaville with severance payments and other benefits in consideration for his compliance with the Non-Solicitation Agreement and other aspects of the Separation Agreement.

“Thermal Engineering also disputes that Lanaville’s recitation of legitimate business interests fully defines the interests an employer is permitted to protect in the context of an employer-employee restrictive covenant. Thermal Engineering cites a decision from within this district in which the court held that employers have an interest ‘in preserving the talent and goodwill of their employees’. Seniorlink Inc. v. Landry, No. 19-CV-11248, 2021 WL 3932309, at *8 (D. Mass. Sept. 2, 2021) (quoting Advanced Micro Devices, Inc. v. Feldstein, No. 13-CV40007, 2013 WL 10944934, at *11 (D. Mass. May 15, 2013)). Such an interest includes ‘ensuring [current employees] are not influenced to leave by former employees.’ …

“Although neither of the cases cited by the parties is binding authority upon this Court, Seniorlink is persuasive and analogous to the facts of the pending case. In Seniorlink, the relevant provisions of the agreement at issue were substantially similar to the disputed terms of the Non-Solicitation Agreement. … Moreover, the defendant in Seniorlink received additional compensation as consideration for his compliance with the challenged terms, just as Lanaville did here. Thus, the Court finds that the Non-Solicitation Agreement here protects a legitimate business interest. …

“Defendant next contends that even if the Non-Solicitation Agreement protects a legitimate business interest, it is nevertheless too broad for him to understand or for this Court to enforce. …

“In any event, the terms of the Non-Solicitation Agreement do not create an unreasonable limitation on employee mobility in general. The agreement applies to former employees for only one year after their departure from Thermal Engineering and extends only to the solicitation of current employees or those who worked for a protected entity within the past year. Courts in Massachusetts have routinely upheld non-solicitation agreements of a similar or even greater length. …

“Defendant insists that the number of corporate entities covered by the Non-Solicitation Agreement makes the covenant far too broad. Plaintiff concedes that the Non-Solicitation Agreement applies without geographic limitation to Thermal Engineering and more than twenty other subsidiaries of Babcock Power Inc. It avers, however, that in practice the agreement applied to fewer than 950 employees across eight domestic entities and fewer than 80 employees at two foreign entities. Moreover, those employees could have left Thermal Engineering to join HyPro or any other company. The challenged restrictive covenant simply prohibited Lanaville and other former Thermal Engineering employees from inducing them to do so for a relatively short period of time. Thus, the scope of the disputed terms of the Non-Solicitation Agreement does not render it unenforceable. …

“Although plaintiff briefly purports to seek equitable relief that would compel defendant ‘to comply with his contractual obligations[,]’ there is no dispute that the pertinent obligations expired long ago. Thermal Engineering cites no authority in support of the notion that this Court could extend and enforce an expired restrictive covenant. Thus, the claim for injunctive relief (Count I) will be dismissed. …

“For the foregoing reasons, the motion for summary judgment of defendant (Docket No. 53), as to the claim for injunctive relief (Count I), is allowed, but, as to the claim for breach of contract (Count II), is denied.”