United States District Court, D. New Jersey
WILLIAM J. MARTINI, U.S.D.J.
ADP, LLC brings this action against its former employees
Jordan Lynch and John Halpin (collectively
“Defendants”), alleging violations of restrictive
covenants contained in their employment agreements. This
matter comes before the Court on Defendants' motion for
reconsideration (ECF No. 87) of the Court's Order and
Opinion issued on April 24, 2017 (ECF Nos. 84, 85), denying
Defendant's motion to vacate the preliminary injunction
(ECF No. 71). There was no oral argument. Fed.R.Civ.P. 78(b).
For the reasons set forth below, Defendants' motion is
Court assumes the parties' familiarity with the facts and
will summarize below only those facts relevant to the instant
motion. On April 24, 2017, this Court denied Defendants'
motion to vacate the preliminary injunction (the
“Injunction”), which the Court issued on June 30,
2016 (ECF No. 31), and which the Third Circuit affirmed on
February 7, 2017 (ECF No. 69-1). The Injunction enjoined
Defendants from using or disclosing any of Plaintiff's
proprietary information, from soliciting Plaintiff's
current clients, vendors, employees or partners, and from
soliciting Plaintiff's prospective clients that
Defendants gained knowledge of during the course of their
employment. Defendants were not enjoined from working at
addressing Defendants' motion to vacate, the Court found
that “Defendants essentially [made] the same argument
against the enforceability of the tolling provisions as they
did against the restrictive covenants as a whole in their
previous motion to dismiss.” See ECF No. 84 at
3. The Court noted that it and the Third Circuit expressly
rejected the argument that Plaintiff failed to notify
Defendants of changes to their employment agreements and held
that the restrictive covenants were enforceable. Id.
at 4. The Court again rejected that argument in holding that
the tolling provisions, also found in the restrictive
covenants, were enforceable. Id.
now move for reconsideration, arguing that the Court
overlooked two conditions precedent to the tolling
provisions. See Defs.' Br. in Supp. of Mot. for
Reconsideration (“Defs.' Mot.”) 3-6, ECF No.
87-1. Defendants further argue that manifest injustice will
result if the Court's ruling stands because Defendants
will be unable to effectively engage in their current
employment for fear that they will unknowingly and
unwittingly violate the Injunction. See id. at 6-8.
Plaintiff opposes, arguing that Defendants failed to meet
their high burden for reconsideration and that the Court
correctly interpreted the tolling provisions. See
Pl.'s Br. in Opp'n to Defs.' Mot.
(“Pl.'s Opp'n”) 2- 6, ECF No. 93.
Defendants timely filed a reply. Defs.' Reply Br. to
Pl.'s Br. in Opp'n (“Defs.' Reply”),
ECF No. 94.
Civil Rule 7.1(i) provides that “a motion for
reconsideration shall be served and filed within 14 days
after the entry of the order or judgment on the original
motion by the Judge or Magistrate Judge.” “A
motion for reconsideration is properly treated as a motion
under Rule 59(e) . . . to alter or amend the judgment.”
Koshatka v. Phila. Newspapers, Inc., 762 F.2d 329,
333 (3d Cir. 1985). “[A] judgment may be altered or
amended if the party seeking reconsideration shows at least
one of the following grounds: (1) an intervening change in
the controlling law; (2) the availability of new evidence
that was not available when the court granted the motion . .
.; or (3) the need to correct a clear error of law or fact or
to prevent manifest injustice.” Max's Seafood
Cafe ex rel. Lou-Ann, Inc. v. Quinteros, 176 F.3d 669,
677 (3d Cir. 1999).
word ‘overlooked' is the operative term in [Rule
7.1(i)].” Lentz v. Mason, 32 F.Supp.2d 733,
751 (D.N.J. 1999) (citation omitted). “Only dispositive
factual matters and controlling decisions of law which were
presented to the court but not considered on the original
motion may be the subject of a motion for
reconsideration.” Id. (quotation and citation
omitted). “[S]uch motions are not an opportunity to
argue what could have been, but was not, argued in the
original set of moving and responsive papers.”
Id. (quotation and citation omitted).
the manifest injustice rationale, “reconsideration is
proper if the contested holding . . . would create manifest
injustice if not addressed.” See Valcom, Inc. v.
Vellardita, No. 2:13-cv-3025, 2014 WL 2965708, at *2
(D.N.J. July 1, 2014) (quotations and citation omitted).
“Just what constitutes manifest injustice is not well
defined by the Third Circuit, but courts in this district
have noted that other circuits look to the Black's law
definition: an error in the trial court that is direct,
obvious, and observable.” Id. (quotations and
citations omitted). “[A] district court has
considerable discretion to decide whether reconsideration is
necessary to prevent manifest injustice.” Id.
(quotation and citation omitted).
move under the clear error of law and manifest injustice
rationales. First, Defendants argue that the Court made a
clear error of law by overlooking two conditions precedent in
the tolling provisions that must be satisfied before tolling
is available. See Defs.' Mot. at 3. As a
threshold matter, Defendants never expressly raised the
existence of conditions precedent in their original moving or
reply papers that they do now. Nevertheless, Defendants did
argue in their original reply papers that the tolling
provisions require a determination “by a court of
competent jurisdiction that Defendants are in violation of
the restrictive covenants.” See ECF No. 81 at
21. They also argued that Plaintiff's evidence did not
support a finding that they violated the Injunction.
Id. The Court, therefore, will briefly address their
contractual language in question reads as follows:
The restricted time periods in paragraphs three (3) through
six (6) shall be tolled during any time period that I am in
violation of such covenants, as determined by a court of
competent jurisdiction, so that ADP may realize the full
benefit of the bargain. This tolling shall include any time
period during which litigation is pending, but during which I
have continued to violate such protective covenant and ...