366 F. Supp. 3d 170
D.D.C.2019Background
- Agero (plaintiff) provides towing/roadside assistance; Frank Campolo was its VP of Sales from 2004 until Nov. 30, 2018.
- Campolo signed an employment Agreement (Apr/June 2015) containing confidentiality, customer non-solicitation, and a non-compete clause; he joined Road America (defendant) on Dec. 3, 2018.
- Plaintiff seeks a preliminary injunction barring Campolo from working for Road America, soliciting Agero customers, or using/disclosing Agero confidential information; it also seeks to enjoin Road America from using Agero’s confidential information/goodwill.
- The Agreement’s Restricted Period is 12 months post-termination (extendable for breach); the non-solicitation clause covers customers with whom Campolo had material contact or access to material confidential information.
- The non-compete is 12 months but lacks a geographic limit and would bar Campolo from the U.S. roadside-assistance sales industry; defendants contest enforceability and assert material changes to employment/compensation.
- Parties do not dispute the confidentiality provision; factual disputes (e.g., compensation changes, alleged file deletion) prevent resolution of some issues at the preliminary stage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of customer non-solicitation | Clause is reasonably tailored (12 months; limited subset of customers) to protect Agero's goodwill/confidential info | Clause overbroad only if improperly defined contacts; disputes about scope of contact | Granted: likely enforceable; preliminary injunction issued as to non-solicitation |
| Enforceability of non-compete | 12-month restriction protects legitimate interests beyond non-solicitation/confidentiality | Overbroad (no geographic limit), would bar ordinary competition; employment changes may void covenant | Denied: plaintiff unlikely to show enforceability on current record |
| Applicability of material-change doctrine to non-compete | Agreement remains binding; non-compete should be enforced | Agero materially changed Campolo's compensation/role, possibly voiding covenant | Not decided on merits: factual disputes preclude injunction enforcing non-compete |
| Irreparable harm & balance of harms for injunction relief | Campolo’s employment at Road America risks misuse of confidential info and loss of goodwill | Confidentiality and non-solicitation clauses (if enforced) mitigate harm; non-compete would impose undue hardship on Campolo | Irreparable harm and balance favor injunctive relief for non-solicitation only; non-compete relief denied |
Key Cases Cited
- Nieves-Marquez v. Puerto Rico, 353 F.3d 108 (1st Cir. 2003) (four-factor preliminary injunction framework)
- New Comm Wireless Servs., Inc. v. SprintCom, Inc., 287 F.3d 1 (1st Cir. 2002) (likelihood of success is the sine qua non for preliminary injunction)
- Boulanger v. Dunkin' Donuts Inc., 442 Mass. 635, 815 N.E.2d 572 (Mass. 2004) (restrictive covenants enforceable only to protect legitimate business interests and be reasonable in time/space)
- Marine Contractors Co. v. Hurley, 365 Mass. 280, 310 N.E.2d 915 (Mass. 1974) (ordinary competition is not a protectable business interest supporting restrictive covenants)
- Rohm & Haas Elec. Materials, LLC v. Elec. Circuits Supplies, Inc., 759 F. Supp. 2d 110 (D. Mass. 2010) (courts avoid preliminary injunctions when factual disputes require credibility determinations)