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Trico Equipment, Inc. v. Manor

June 13, 2009

TRICO EQUIPMENT, INC., PLAINTIFF,
v.
WILLIAM MANOR, DEFENDANT.



The opinion of the court was delivered by: Kugler, United States District Judge

(Docket Entry No. 3)

OPINION

Plaintiff, Trico Equipment, Inc. ("Trico") brought suit in the Superior Court of New Jersey, Cumberland County, Chancery Division, against its former employee William Manor ("Manor"), alleging (among other things) breach of an employment agreement, misappropriation of trade secrets, breach of the covenant of good faith and fair dealing, breach of the duty of loyalty, and tortious interferences with prospective economic advantage. Defendant removed the case to the United States District Court on the basis of diversity of citizenship. Plaintiff is incorporated in New Jersey and maintains its principle place of business in New Jersey. Defendant is a citizen of the Commonwealth of Virginia.

Before the court is plaintiff's Motion for an Injunction. Previously, plaintiff sought a Temporary Restraining Order. The court issued an Order to Show Cause returnable November 27, 2008. On December 5, 2008, the court issued a preliminary injunction restraining defendant from "directly or indirectly engaging in the solicitation of, servicing of, or contracting with any customer listed in Plaintiff's Exhibit 1." That Order remains in effect.

The court thereafter heard additional testimony from Kenneth Pustizzi (CEO of Trico), William L. Manor (defendant), and Edward Krause (Trico Sales Manager and Manor's immediate supervisor when he worked at Trico). At the conclusion of the testimony, counsel submitted proposed findings of fact and conclusions of law, together with responses to their adversary's filings. The following constitutes the court's findings and conclusions pursuant to Rule 52 (c)(2).

I. FINDINGS OF FACT

A. The Parties

1. Trico rents arial lift equipment for use indoors and outdoors, mostly for construction projects. T 12/14/08 14-14.*fn1

2. Trico's corporate headquarters is located at 1101 Wheaton Ave., Millville, NJ 08332. Trico has branch locations in Beltsville, MD, Gainesville, VA, South Plainfield, NJ, Houston, TX, Plainville, CT, Marcus Hook, PA and Cincinnati, OH. T 12/5 26-24 to 27-12; P.14.*fn2

3. Trico employed Manor from 2001 through October 23, 2008, as a territory manager in Virginia. Essentially he arranged for leases of Trico's equipment to customers.

4. Manor previously worked for a Trico competitor named NES, T 12/5 40-19, where he did essentially the same job.

5. Manor had a non-compete agreement with NES. T 12/5 41-13.

6. When Manor left NES to work for Trico, NES threatened to sue to enforce the non-compete agreement. T 12/5 41-17 to 42-17. Trico paid $25,000 to NES to settle the dispute and release Manor from his non-compete agreement. P.17.

B. The Non-Compete, Non-Solicitation and Confidentiality Agreement

7. Trico gave Manor an offer memorandum which explicitly informed Manor he would have to sign a non-compete agreement in order to work for Trico. T 12/15 44-23; P.4; T 12/17 94-21 to 95-18. Manor understood he could not work for Trico unless he agreed to the non-complete agreement.

T 12/17 95-18 to 97-18.

8. Manor signed the non-compete agreement, P.2, and a confidentiality (non-disclosure) agreement, P.3, before starting work for Trico. The non-compete clause provided that:

1. I covenant and agree that as long as I am employed by the Company, and for a period of twenty-four (24) months after termination of such employment for any reason, with or without cause, voluntarily or involuntarily, I shall not, directly or indirectly, enter into or engage in the ownership, management, operation, or control of, or act as an employee of, or consultant, advisor, or contractor to, any existing or proposed entity engaged, or planning to be engaged, in the same or similar business as the Company, if such entity competes with the Company in the same geographic area which constituted my sales territory while employed by the Company, or if such entity competes with the Company for business with regard to any customers I called on, solicited, attempted to solicit, had contact with, or became aware of during the term of my employment....

9. The Agreement also restricted solicitation of customers should Manor leave his employment with Trico:

2. I covenant and agree that for a period of twenty-four (24) months after my employment with the Company has been terminated for any reason, with or without cause, voluntarily or involuntarily, I will not directly or indirectly engage in the solicitation of, servicing of, or contracting with any person or entity which is or was a Company customer, supplier, contractor or subcontractor within two (2) years prior to the termination of my employment, for the purpose of selling goods or services in competition with the Company's business. I further convenient and agree not to solicit or aid in such solicitation of any Company customers, suppliers, contractors or subcontractors for my own benefit or the benefit of any other person or entity during such time....

10. Manor further agreed that

"...in the event my employment with the Company terminates, I will still be able to earn a livelihood without violating this agreement and that paragraphs 1 & 2 are material conditions to my employment or continued employment with the Company."

11. Manor agreed that his violation of the Agreement would cause "irreparable" damage to the company "for which money damages may not be adequate." Moreover, he agreed that if he breached the Agreement "the Company shall be entitled to obtain temporary, preliminary and permanent equitable relief, without bond, to prevent irreparable harm or injury, and to money damages.... " P.2, para. 9.

C. The Trico-Manor Relationship

12. In the last two years with Trico, Manor reported to Edward Krause, the Sales Manager responsible for ...


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