183 Conn. App. 734
Conn. App. Ct.2018Background
- National Waste Associates (plaintiff) sued former employees Carl Slusarczyk (S) and Danielle Scharf (D), and competitors Waste Harmonics and Omega, alleging breaches of confidentiality/non‑solicit covenants, unjust enrichment, CUTPA and CUTSA violations connected to solicitation of customers and prospects.
- S signed a 2004 confidentiality/noncompetition agreement and a 2010 general release (for $50,000) reaffirming those terms; after termination he worked briefly for Omega then Waste Harmonics and solicited several former plaintiff customers (including Guitar Center).
- D signed a similar confidentiality/noncompetition agreement and later worked for Waste Harmonics. Plaintiff alleged S and D used confidential information to win accounts and that Waste Harmonics/Omega benefited unjustly.
- Trial court (after partial summary judgment) found S breached his agreement by soliciting customers and winning Guitar Center, awarded plaintiff $50,000 restitution (the release consideration), but found no other liability as to S; it found Waste Harmonics ‘‘innocent’’ and the agreements unreasonable to enforce against Waste Harmonics; no liability against D or Omega.
- Trial court also held (1) the nonsolicitation clause was unreasonable as to unnamed prospects (enforceable only as to prospects the employee personally solicited on employer’s behalf within six months before departure) and (2) CUTPA claims premised on trade‑secret misappropriation are preempted by CUTSA (and in any event plaintiff failed to prove ascertainable loss/causation).
- On appeal, the Connecticut Appellate Court affirmed the trial court on all challenged points.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether unjust enrichment claims against Waste Harmonics and Omega were barred by existence of S’s contract | Contract with S should not preclude unjust enrichment claims against third parties | Court’s statements about S’s inability to recover in unjust enrichment were limited to S; separate unjust enrichment analysis applied to Waste Harmonics/Omega | Affirmed: trial court did not bar those claims simply because of S’s contract and properly applied equitable unjust enrichment analysis, finding Waste Harmonics innocent and Omega not shown to have caused damages |
| Enforceability of nonsolicitation clause as to prospects | Clause was reasonable and enforceable as written; trial court improperly broadened its summary‑judgment limitation | Clause was overbroad and unworkable for unnamed prospects; enforceable only as to prospects the employee personally solicited for employer within six months before departure | Affirmed: finding not clearly erroneous—clause unenforceable as to general prospects and enforceable only for prospects an employee personally solicited within the limited period; court examined causation/damages for specific prospects |
| Whether CUTPA claims premised on trade‑secret misappropriation are preempted by CUTSA and whether court failed to address CUTPA claims | §35‑57(a) does not bar CUTPA claims arising from same facts; trial court ignored CUTPA claims unrelated to trade secrets | CUTSA may preempt conflicting remedies; in any event plaintiff failed to prove ascertainable loss/causation under CUTPA | Affirmed: court need not decide preemption question because factual findings showed no loss from any misappropriated trade secret and plaintiff failed to prove ascertainable loss/causation for CUTPA recovery |
| Remedy for breach by employee (S) and liability of employer (Waste Harmonics) | Plaintiff sought broader damages and remedies against S and employers | Defendants argued limited relief appropriate; Waste Harmonics lacked notice/knowledge and the restriction period expired before S’s employment there | Affirmed: restitution limited to $50,000 (release consideration) as appropriate contract remedy; Waste Harmonics not liable given the expired/unenforceable restriction and lack of culpable conduct |
Key Cases Cited
- Gagne v. Vaccaro, 255 Conn. 390 (Conn. 2001) (defines unjust enrichment equitable standard)
- New Hartford v. Connecticut Resources Recovery Authority, 291 Conn. 433 (Conn. 2009) (unjust enrichment cannot supplant an express contract)
- Deming v. Nationwide Mut. Ins. Co., 279 Conn. 745 (Conn. 2006) (restrictive covenants enforceability and public‑policy considerations)
- Robert S. Weiss & Associates, Inc. v. Wiederlight, 208 Conn. 525 (Conn. 1988) (factors for assessing reasonableness of postemployment restraints)
- Lydall, Inc. v. Ruschmeyer, 282 Conn. 209 (Conn. 2007) (clearly erroneous standard for factual findings)
- Service Road Corp. v. Quinn, 241 Conn. 630 (Conn. 1997) (ascertainable loss and prospects in CUTPA context)
- Abrahams v. Young & Rubicam, Inc., 240 Conn. 300 (Conn. 1997) (proximate cause requirement for CUTPA damages)
- Naples v. Keystone Building & Dev. Corp., 295 Conn. 214 (Conn. 2010) (breach of contract alone, absent aggravating conduct, insufficient for CUTPA recovery)