Partylite Gifts, Inc. v. MacMillan
895 F. Supp. 2d 1213
M.D. Fla.2012Background
- PartyLite filed suit against MacMillan for breach of Leader and Consultant Agreements, misappropriation of trade secrets, and tortious interference, centered on non-compete, non-solicitation, and non-disclosure provisions.
- MacMillan rose to Senior Regional Vice President and signed a Leader Commitment Agreement delineating restrictive covenants and confidential information restrictions.
- Leader Agreement references and incorporates by reference PartyLite policies and procedures, including confidentiality and solicitation prohibitions.
- MacMillan joined Park Lane Jewelry in 2010 and held meetings with PartyLite consultants before and after leaving PartyLite, discussing Park Lane and recruiting potential consultants.
- PartyLite presented evidence that MacMillan made false or misleading statements about PartyLite and the enforceability of covenants.
- Cross-motions for summary judgment addressed whether the Leader Agreement’s covenants are enforceable and whether MacMillan breached them, with the court denying both motions in substantial part.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was there valid consideration for the Leader Agreement? | MacMillan signed after promotion but still received Profit Plus incentives. | Continued employment may be inadequate consideration under Massachusetts law. | Leader Agreement had sufficient consideration under Massachusetts law. |
| Are the Leader Agreement covenants reasonable to enforce? | Covenants protect trade secrets, goodwill, and legitimate business interests; scope is reasonable. | Covenants are broader than necessary and lack proper duration/geography; unconstrained non-solicitation is overbroad. | Covenants are enforceable; non-solicitation may be severed/blue-penciled to six months for enforceability. |
| Did MacMillan breach the non-compete provision? | MacMillan promoted or represented Park Lane while under PartyLite; Park Lane is a competitor in direct sales. | Park Lane is not similar to or competitive with PartyLite; no simultaneous selling occurred. | Material issues of fact preclude summary judgment on breach of non-compete. |
| Did MacMillan breach the non-solicitation provision? | MacMillan orchestrated solicitation of PartyLite Consultants to join Park Lane while still employed. | Solicitation terms are ambiguous and only some actions constitute solicitation. | Issues of fact remain; summary judgment on non-solicitation breach denied. |
| Is there liability for breach of the Consultant Agreement (Count II)? | Incorporation of Policies and Procedures into the Consultant Agreement imposes duties to protect confidential information and promote PartyLite. | Ambiguity about incorporation; contract interpretation questions for trial. | Ambiguity exists; summary judgment on Count II denied due to latent ambiguity about incorporation and scope. |
Key Cases Cited
- Marine Contractors Co. v. Hurley, 365 Mass. 280, 310 N.E.2d 915 (Mass. 1974) (legitimate business interests justify non-compete restraints)
- All Stainless, Inc. v. Colby, 364 Mass. 773, 308 N.E.2d 481 (Mass. 1974) (reasonableness of restraint balance between interests and public policy)
- Sherman v. Pfefferkorn, 241 Mass. 468, 135 N.E. 568 (Mass. 1922) (continued employment as consideration for covenants)
- Balasco v. Gulf Auto Holding, Inc., 707 So.2d 858 (Fla. 2d DCA 1998) (presumptive reasonableness of certain restraints to protect investments in training)
- Auto Club Affiliates, Inc. v. Donahey, 281 So.2d 239 (Fla. 2d DCA 1973) (geographic reasonableness supported by restraint scope)