Oliver Wyman, Inc. v. Eielson
282 F. Supp. 3d 684
S.D. Ill.2017Background
- Defendants Eielson and Adam co-founded OCC Boston and sold it to Oliver Wyman in October 2014; both signed employment and non-solicitation agreements and began work at Oliver Wyman in December 2014.
- Defendants were promised information about Oliver Wyman compensation/flow-through and received documents and oral statements (including references to ~30% flow-through and ~$1M average partner pay); Oliver Wyman agreed to exempt them from a deferred bonus program for two years.
- Defendants became dissatisfied with realized compensation, billable hours fell, and both resigned the same day in April–May 2015 to pursue a new investment opportunity (which later failed).
- Oliver Wyman sued for breach of the employment and non-solicitation agreements; Defendants counterclaimed for fraud, fraudulent inducement, negligent misrepresentation, deceit, and Chapter 93A violations based on alleged misstatements about flow-through, partner pay, and platform strength.
- Cross-motions for summary judgment: Defendants sought dismissal of Oliver Wyman’s contract claims; Oliver Wyman sought dismissal of Defendants’ tort and statutory counterclaims. Court also considered multiple sealing requests for confidential business information.
Issues
| Issue | Plaintiff's Argument (Oliver Wyman) | Defendant's Argument (Eielson/Adam) | Held |
|---|---|---|---|
| Enforceability of non-solicitation clause | Clause protects legitimate interests (unique employees, client base); reasonable when narrowly read | Clause overbroad and unenforceable; no competition and solicitation not shown | Clause enforceable as narrowed to solicitation for counselor’s own/third-party ventures; jury question whether Eielson solicited Adam (SJ denied) |
| Breach of employment "best efforts" / notice-and-cure | Defendants failed to devote time/act in good faith; notice requirement excused if futile | No breach; in any event OW failed to give required prompt written notice and cure opportunity | Genuine factual disputes on performance and futility of notice preclude summary judgment for either side (SJ denied) |
| Misrepresentations re: flow-through rates | Statements were true/backward-looking or non-actionable opinion; no actionable falsity | OW misrepresented benchmarks and CIVT comparables to induce sale | Summary judgment for OW granted as to flow-through: record shows overall figures accurate and forward-looking statements were not actionable |
| Misrepresentations re: average partner compensation | Statements were estimates/opinion and contradicted by written employment terms | Statements were material, possibly false, and relied upon in selling/joining — not plainly contradicted by $425k base | Summary judgment denied as to partner-compensation claims: disputed material facts on falsity and reasonable reliance survive |
| Misstatements about platform strength/synergies | Characterizations were general puffery/opinion, not actionable | Statements were materially false given internal assessments | Summary judgment for OW granted: platform statements are non-actionable puffery |
| Negligent misrepresentation & Chapter 93A | Same defenses as to fraud; only compensation claims can support tort/statutory claims | All tort/statutory claims are viable if misstatements were false and relied upon | Negligent-misrep and Chapter 93A survive only to extent tied to partner-compensation misrepresentations; other tort claims dismissed as to flow-through/platform |
| Sealing of confidential materials | OW seeks to seal compensation, client identities, internal assessments to avoid competitive harm | Defendants do not oppose sealing | Court grants sealing in substantial part (narrowly tailored) but orders limited unredactions to three overbroad redactions; redacted opinion to be filed publicly |
Key Cases Cited
- BDO Seidman v. Hirshberg, 93 N.Y.2d 382 (N.Y. 1999) (sets three-factor reasonableness test for restrictive covenants)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (U.S. 1986) (summary judgment standard—no genuine issue if reasonable factfinder could not accept nonmovant's version)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (U.S. 1986) (summary judgment standard—view evidence in light most favorable to nonmovant)
- Celotex Corp. v. Catrett, 477 U.S. 317 (U.S. 1986) (movant may show absence of evidence to support nonmovant's position)
- Lugosch v. Pyramid Co. of Onondaga, 435 F.3d 110 (2d Cir. 2006) (framework for sealing judicial documents)
- United States v. Amodeo, 71 F.3d 1044 (2d Cir. 1995) (privacy interests of third parties weigh heavily in sealing analysis)
- Masingill v. EMC Corp., 449 Mass. 532 (Mass. 2007) (reasonable reliance—written agreements can preclude reliance on prior oral statements)