Corporate Technologies, Inc. v. Harnett
943 F. Supp. 2d 233
D. Mass.2013Background
- CTi sues former employee Harnett and OnX USA LLC for breach of contract and tortious interference related to confidential information and non-solicitation obligations.
- Harnett left CTi for OnX in October 2012; he signed a Non-Disclosure and Non-Solicitation Agreement restricting disclosure and solicitation for 12 months after employment.
- Harnett allegedly solicited CTi clients (e.g., Harvard, EBSCO Publishing, Demandware) for OnX and helped secure a contract with Demandware; he took CTi materials and price quotes upon departure.
- OnX initially announced Harnett’s move to over 100 potential clients; CTi contends this conduct violates the non-solicitation and nondisclosure covenants.
- CTi sought a preliminary injunction to bar Harnett from soliciting its former clients; the court previously granted a temporary injunction and issued a written order addressing scope, particularly Harvard and “non-competition” phrasing.
- Defendants moved separately for an injunction to prevent CTi from labeling the covenant as non-competition; CTi requested a bond and continued injunctive relief related to Harvard and Demandware.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CTi’s NDA/Nonsolicit is enforceable and prohibits Harnett’s solicitation | Harnett violated the non-solicitation clause by soliciting CTi clients for OnX. | Defendant argues the agreement is narrow and does not amount to a broad non-compete. | CTi’s NDA/Nonsolicit is enforceable; Harnett’s actions constitute solicitation and breach. |
| Whether CTi is likely to prove breach of the nondisclosure provision | Harnett disclosed or used confidential CTi client information with OnX. | Disclosure necessity and scope are argued to be limited; information may not be confidential. | CTi is likely to prove breach of nondisclosure; information remains confidential and was disclosed. |
| Whether CTi is likely to prove tortious interference with Harnett’s contracts | OnX induced Harnett to leave CTi and harbors improper motives/means to contact CTi clients. | Defendants contend lack of improper motive or means and a permissible competitive action. | CTi is likely to succeed on tortious interference with improper means/motive. |
| Whether irreparable harm supports an injunction | Inevitable disclosure and loss of goodwill constitute irreparable harm. | Harm is derivative and can be compensated; irreparable harm contested. | CTi demonstrates irreparable harm; injunction appropriate. |
| Public interest in enforcing covenants and narrowing the injunction | Enforce covenants to protect confidential information and client relationships. | Public policy favors third parties’ freedom to contract and choose providers. | Public interest supports enforcing the NDA/Nonsolicit while shaping scope to avoid broad bans on third parties. |
Key Cases Cited
- Jet Spray Cooler, Inc. v. Crampton, 361 Mass. 835 (Mass. 1972) (confidential information protections in Massachusetts)
- Alexander & Alexander, Inc. v. Danahy, 488 N.E.2d 22 (Mass. App. Ct. 1986) (non-solicitation scope and client solicitation considerations)
- New England Tree Expert Co. v. Russell, 28 N.E.2d 997 (Mass. 1940) (upholding partial restraints as reasonable public policy)
- Ross-Simons of Warwick, Inc. v. Baccarat, Inc., 102 F.3d 12 (1st Cir. 1996) (likelihood of success and four-factor injunction framework)
- Blackstone v. Cashman, 860 N.E.2d 7 (Mass. 2007) (misrepresentation and interference standards)
- Cavicchi v. Koski, 855 N.E.2d 1137 (Mass. App. Ct. 2006) (improper means and tortious interference)