Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

MANHATTAN ASSOCIATES, INC. v. RUDERMAN

September 19, 2005.

MANHATTAN ASSOCIATES, INC., Plaintiff,
v.
ROBERT G. RUDERMAN, Defendant.



The opinion of the court was delivered by: GARRETT BROWN, District Judge

OPINION

This matter comes before the Court upon Plaintiff's motion for a preliminary injunction pursuant to Federal Rule of Civil Procedure 65. The parties have extensively briefed the matter, and a preliminary injunction hearing was held on September 6, 2005. Having considered the parties' written submissions and the evidence presented at the hearing, and for the reasons set forth below, the Court will grant Plaintiff's motion.

I. PROCEDURAL HISTORY

  On August 9, 2005, Plaintiff Manhattan Associates ("Manhattan") filed this action against Defendant Robert G. Ruderman ("Defendant"), a former employee of Manhattan. Manhattan alleges that Defendant breached a non-compete agreement and employment agreement by leaving the company and accepting employment with RedPrairie, a direct competitor of Manhattan. In Count One of the Verified Complaint, Manhattan seeks injunctive relief to enjoin Defendant from working at RedPrairie. In Counts Two and Three, Manhattan asserts breach of contract claims pursuant to the two agreements. On August 11, 2005, Plaintiff filed an application for an order to show cause and temporary restraining order. Manhattan sought to enjoin Defendant from beginning employment with RedPrairie based on his alleged breach of the agreements. Defendant filed an opposition brief on August 25, 2005. A teleconference was held on August 26, 2005. On that day, the Court entered a temporary restraining order enjoining Defendant from engaging in any conduct that violates the non-compete and employment agreements. On August 31, 2005, the parties filed additional briefs in support of their positions. A preliminary injunction hearing was held on September 6, 2005. At the close of argument, the Court informed the parties that the temporary restraining order would remain in effect until the Court rendered a decision in the instant motion for a preliminary injunction.

  II. PRELIMINARY FINDINGS OF FACT

  Manhattan is a corporation engaged in the business of licensing software applications, including warehouse management software, to various markets. (Mitchell Aff. ¶ 2). Defendant was employed by Manhattan as a sales representative. As a Manhattan employee, Defendant was responsible for selling software applications to licensees. He primarily sold warehouse management software ("WMS") products, but also sold labor management software. (Ruderman Aff. ¶ 16). Defendant's compensation consisted of a base salary of $95,000 and commissions earned from his sales. (Mitchell Aff. ¶ 4). As a sales representative for Manhattan, Defendant created and developed relationships with several of Manhattan's customers. Defendant was also responsible for maintaining customer satisfaction even after the sale of a product.

  In January 2003, Manhattan informed its employees of the Fiscal Year 2003 Sales Compensation Plan. (Ruderman Aff. ¶ 6). Under the terms and conditions of the plan, which was signed by Defendant, an employee must execute a current non-compete agreement and employment agreement to receive his earned commissions. (Mitchell Test. Sept. 6, 2005). The original non-compete agreement given to the Manhattan employees contained, among other things, a twelve-month post-employment restriction period and a list of companies identified as Manhattan competitors. Initially, Defendant objected to the terms of the non-compete agreement, and relayed his objections to Jeff Mitchell, Manhattan's Executive Vice President. Defendant objected to the twelve-month limitation period, as well as the companies listed in Schedule A. (Mitchell Aff. ¶¶ 7-8; Ruderman Aff. ¶ 9). In an email addressed to Mitchell, Defendant requested that Manhattan eliminate nine companies in Schedule A. (Mitchell Aff., Ex. A). Notably, RedPrairie was not one of those companies.

  Ultimately, Manhattan agreed to some of Defendant's requests, and he signed the non-compete agreement on October 24, 2003. The agreement provided that Defendant would refrain from performing his "duties" with one of the competitors listed in Schedule A of the agreement during a six-month period following termination of employment with Manhattan. On December 3, 2003, Defendant also signed an employment agreement, which generally provided that he would not disclose proprietary or confidential information, including trade secrets, to Manhattan's competitors after termination of employment. On July 29, 2005, Defendant informed Manhattan that he was leaving the company. Manhattan discovered that Defendant accepted employment with RedPrairie, one of Manhattan's competitors listed in Schedule A of the non-compete agreement. (Waltz Aff. ¶ 5). The instant lawsuit ensued. III. CONCLUSIONS OF LAW AND FURTHER FINDINGS OF FACT PURSUANT THERETO

  A. Standard for Preliminary Injunction

  The "grant of injunctive relief is an extraordinary remedy which should be granted only in limited circumstances." Frank's GMC Truck Ctr., Inc. v. General Motors Corp., 847 F.2d 100, 102 (3d Cir. 1988). See also E.B. v. Poritz, 914 F. Supp. 85, 90 (D.N.J. 1996) (noting "[t]here is no power the exercise of which is more delicate, which requires greater caution, deliberation, and sound discretion, or more dangerous in a doubtful case, than the issuing [of] an injunction."), rev'd on other grounds, 119 F.3d 1077 (3d Cir. 1997). The Court must consider four factors in determining whether to grant a motion for a preliminary injunction:
(1) whether the movant has shown a reasonable probability of success on the merits; (2) whether the movant will be irreparably injured by denial of the relief; (3) whether granting preliminary relief will result in even greater harm to the nonmoving party; and (4) whether granting the preliminary relief will be in the public interest.
Gerardi v. Pelullo, 16 F.3d 1363, 1373 (3d Cir. 1994) (citations omitted). An injunction should only be issued if Plaintiff produces sufficient evidence to convince the Court that all four factors warrant injunctive relief. Am. Tel. & Tel. v. Winback & Conserve Program, Inc., 42 F.3d 1421, 1427 (3d Cir. 1994). The Third Circuit has placed particular weight on the first two prongs of the four-part test. Hoxworth v. Blinder, Robinson & Co., Inc., 903 F.2d 186, 197 (3d Cir. 1990).

  B. Likelihood of Success on the Merits

  i. Non-Compete Agreement . . . Validity and Enforceability

  The Court will first address the non-compete agreement executed by the parties on October 23, 2003.*fn1 Defendant raises several arguments challenging the validity and enforceability of this agreement. He asserts that the agreement is unenforceable because: 1) he was coerced into signing the agreement; 2) the agreement was superceded by the December 3, 2003 employment agreement; and 3) the agreement lacks a geographical limitation. The Court will address each argument in turn.

  First, Defendant argues that Manhattan coerced him into executing the non-compete agreement by withholding earned commissions until he agreed to sign the agreement. The record reflects, however, and this Court finds that the agreement was the product of negotiations between both Manhattan and Defendant, rather than a product of coercion. (Mitchell Aff. ¶¶ 7-8). The evidence demonstrates, and this Court finds, that Mitchell and Defendant negotiated the terms of the agreement months before Defendant signed it. (Id.). Manhattan produced an email from Defendant to Mitchell dated May, 15, 2003, in which he stated:
Jeff, Thank you for reaching out to me. You were sincere and it was appreciated very much. I would like to continue to be open and honest with you, and keep our lines of communication open. In the spirit in which you offered to reduce the limitation period to 6 months, I would like to simplify this and resolve. Below are the few requests I have in order to feel comfortable enough to sign the non-compete.
(Mitchell Aff., Ex. A). Defendant proceeded to list his requested changes to the agreement, including the elimination of certain companies from Schedule A. Defendant's email evinces his willingness to execute the agreement, as long as Manhattan adopted certain modifications. This belies Defendant's claim that he was coerced into signing the agreement, and this Court finds that he was not. Defendant further contends that he was forced into signing the non-compete agreement because Manhattan began withholding commissions. The record, however, supports the contrary, and this Court so finds. In particular, Defendant signed Manhattan's 2003 Sales Compensation Plan which provided that commissions would not be paid until the employee executed a current non-compete agreement with Manhattan. (Pl.'s Ex. List, Ex. 17). Despite this prerequisite, ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.