Posts tagged with "job"

Court Denies Injunction Against Former IBM Executive

By:  Joseph Maya, Esq.

Early in the morning of January 19, 2011, Mr. Visentin notified IBM that he was leaving the company to work for a major competitor- Hewlett-Packard.  Just one day later, he found himself the subject of a lawsuit.  On January 20, 2011, in an effort to enforce the parties’ noncompetition agreement, IBM filed suit against Mr. Visentin, a former executive, in the United States District Court for the Southern District of New York, claiming breach of contract and misappropriation of trade secrets.

Case Background

On January 24, 2011, the Court issued a temporary restraining order, and scheduled the case for a preliminary injunction hearing.  Within five days of providing IBM with notice of his departure, Mr. Visentin was effectively without a job, precluded- at least temporarily- from engaging in his newly secured position.  This case demonstrates not only the force, speed and agility of a large corporation’s legal team, but perhaps more importantly, illustrates the effectiveness of a quickly orchestrated and well-executed legal defense.

Prior to his resignation, Mr. Visentin worked for IBM in various capacities for twenty-six years.  In 2006, he became a Global Vice President in the company’s Integrated Technology Services Group (ITS).  Then, in September, 2007, he became General Manager of the ITS business.  Responsible for providing its clients with various technology services, including services to improve data storage and recovery capabilities, protect networks from viruses, and implement data security systems, this segment generates approximately five thousand to nine thousand deals per quarter, and total revenue of $2.5 billion annually.

In December, 2008, Mr. Visentin was appointed to IBM’s Integration and Value Team, a leadership group that develops IBM’s corporate strategy.  Although there were technical aspects of Mr. Visentin’s various positions, after hearing four days of testimony, the Court found that he was a business manager, not a technical expert.

Non-Compete Agreements

As part of his employment with IBM, Mr. Visentin signed two noncompetition agreements, the first on July 16, 2008 and the second on July 29, 2009.  The July 29th agreement essentially provided that during his employment with IBM, and for 12 months thereafter, he would not directly or indirectly engage in or associate with any competitors of the company.  Mr. Visentin also agreed to a restrictive covenant precluding him from soliciting IBM clients for a period of one year, and IBM employees for a period of two years.

IBM’s first argument was that if Mr. Visentin were allowed to work for HP, IBM would be irreparably harmed because Mr. Visentin’s new position posed the risk that he would inevitably disclose confidential IBM information.  IBM argued that Mr. Visentin possessed a plethora of confidential information including strategic business and marketing plans, “strategic initiative,” new service offerings, acquisition plans, the operational finances of the ITS business, IBM’s competitive business and pricing strategies, the identity of new client targets, the identify of troubled clients, and IBM’s competitive strategies to attack HP.

Court Denies Injunction

In denying IBM’s application for an injunction, the Court first noted that a preliminary injunction is “an extraordinary and drastic remedy which should not be routinely granted.”  Med. Soc’y of State of N.Y. v. Toia, 560 F.2d 535, 538 (2nd Cir. 1977).  Indeed, to obtain a preliminary injunction, the moving party must demonstrate, first, that it will be irreparably harmed if an injunction is not granted, and, second, either a likelihood of success on the merits or sufficiently serious questions going to the merits to make them a fair ground for litigation, as well as a balance of the hardships tipping decidedly in its favor.  Lusk v. Vill. Of Cold Spring, 475 F.3d 480, 485 (2nd Cir. 2007).

To show that it will be irreparably harmed, a movant bears the burden of demonstrating that absent an injunction, it will suffer an injury that is neither remote nor speculative, but rather actual and imminent, and one that cannot be redressed through a monetary award. Payment Alliance Int’l, Inc. v. Ferreira, 530 F. Supp. 2d 477, 480 (S.D.N.Y. 2007).

Next, the Court explained that in New York, properly scoped noncompetition agreements are enforceable to protect an employer’s legitimate interests so long as they pose no undue hardship on the employee and do not militate against public policy.  BDO Seidman v. Hirshber, 712 N.E. 2d 1220, 1223 (N.Y. 1999).

The Court further explained that trade secrets and confidential information are considered legitimate interests; however, only that confidential information or those trade secrets that the employee misappropriates or will inevitably disclose are protectable.  Reed, Roberts Assocs., Inc. v. Strauman, 353 N.E. 2d 590, 593 (N.Y. 1976).

Court’s Ruling

In ruling in Mr. Visentin’s favor, the Court noted that his primary job at IBM was to be a general manager, explaining, “[a]lthough trade secrets may have lurked somewhere on the periphery, the real thrust of his position was to manage his teams to make them as efficient as possible.”  The Court relied on Mr. Visentin’s testimony that he had never taken a computer science course and considered himself a generalist.  Mr. Visentin testified, “I am not technical, I don’t know the details of offerings, I’m more of a general manager and I run a business.”

The Court also relied on the testimony of Mr. Visentin’s new manager at HP, who confirmed that Mr. Visentin’s generalist qualities were the driving factor behind his hiring.  Mr. Visentin’s future manager testified that he hired Mr. Visentin because, “he had good general IT services knowledge [and] broad experience,” and that Mr. Visentin struck him, “as a process-oriented thinker, a guy who could sort of connect the dots, if you will, of the overall responsibilities of the job.”  He also testified that Mr. Visentin’s job would not include involvement in technical services, but rather would be to “manage people.”

Court Does Not Find

Although IBM identified numerous types of information potentially in Mr. Visentin’s possession which it argued should be afforded protection, the court noted that much of the information is either applicable to all large corporations, in the public domain, or outdated, and, thus, does not constitute “trade secrets.”

The court also explained that simply showing Mr. Visentin had access to some confidential information does not sufficiently demonstrate irreparable harm.  IBM failed to provide specific examples of confidential or trade secret information that could actually be used to its detriment if Mr. Visentin were allowed to assume his new position at HP.  The Court further held that IBM failed to demonstrate Mr. Visentin’s position at HP would require him to disclose any confidential IBM information he might remember.

Contact Us

Attorney Joseph Maya is a Managing Partner of Maya Murphy, P.C. Litigation Department. He can be reached by telephone in the Firm’s Westport office at (203) 221-3100 or by e-mail at JMaya@Mayalaw.com.

Legitimate Signature is Required for Enforcement of Non-Compete Agreement

In Stay Alert Safety Services, Inc. v. Fletcher, 2005 Conn. Super. LEXIS 1915, Mr. Christopher Fletcher began to work at United Rentals, Inc., a North Carolina company in the traffic safety and control industry, starting in February 2003.  He signed an employment agreement upon accepting the job offer wherein the agreement contained a non-compete provision.   According to the restrictive provisions, he was prohibited from working at a competing company located within two hundred miles for a period of two years after his termination.  The company felt it needed to protect its legitimate interests due to Mr. Fletcher’s access to its customer lists, cost information, and pricing schemes.  Mr. Fletcher’s employment was terminated on June 8, 2004, and he proceeded to start a new company, Traffic Control, with his wife.  He essentially performed the same services as he had previously in connection with his employment at United Rentals.

Stay Alert Safety Services, Inc., a company with headquarters in Greenwich, Connecticut, acquired United Rentals in January 2005 and its legal department concluded that Mr. Fletcher and other employees’ non-compete agreements were assignable and could be transferred to the possession of Stay Alert.  Stay Alert sued Mr. Fletcher in Connecticut state court for breach of the non-compete agreement and asked the court to enforce the restrictive covenant that he had signed with United Rentals.

The Superior Court sitting in Bridgeport found in favor of Stay Alert and ordered the enforcement of the non-compete agreement.  It held that the agreement’s provisions were reasonable given the circumstances of the case and that Stay Alert was entitled to injunctive relief because of the contractual breach.  Mr. Fletcher argued that he had not actually signed the non-compete agreement and therefore its restrictions were not applicable.  The court rejected this argument and noted that Mr. Fletcher’s signature appeared on page six of the employment agreement right above his typed name.  He claimed that it was not his signature so the court called in a handwriting expert to ascertain whether it was in fact his signature.  The expert, Dr. Marc Seiter, concluded that it was Mr. Fletcher’s signature and the court agreed with this finding.  A signed employment agreement coupled with reasonable provisions meant that the restrictive covenant was valid and enforceable.

The lawyers at Maya Murphy, P.C., are experienced and knowledgeable employment and corporate law practitioners and assist clients in New York, Bridgeport, Darien, Fairfield, Greenwich, New Canaan, Norwalk, Stamford, Westport, and elsewhere in Fairfield County. If you have questions regarding non-compete agreements or any employment matter, contact Joseph Maya at 203-221-3100 or by email at JMaya@MayaLaw.com.

Labor & Employment Law – What to consider after losing your job

So you’ve lost your job.  Now what?  Depending on the circumstances, there are several legal issues to explore before moving on with your career.  Here is a basic summary of five issues to consider:

First, file for unemployment as soon as possible so you don’t miss any deadlines.  There is no guarantee that you will be eligible for unemployment benefits but it doesn’t hurt to try.  You may be eligible for unemployment benefits depending upon the circumstances surrounding your job loss and whether you receive any compensation as severance on the way out the door.

Second, consider whether you have a contract with your former employer, either individually or through a union.  Today, at will employment is very common.  Generally, employers and employees each have the option to terminate the employment relationship at any time for any reason or for no reason at all.  However, an employee may have the right to enforce a contract if his or her employer failed to uphold the agreed upon terms of employment.  The provisions of a written contract are more likely to be enforceable but even an oral promise may have legal ramifications.

Third, make sure you are fully paid by your employer.  It is not unusual for an employer to fail to pay wages or to withhold a commission payment to a former employee.  Employers may face stiff penalties for neglecting to make these payments.  An employee may have several options to pursue a claim through the state or the court system.

Fourth, check to see if your former employer has any written policies or an employment handbook that may apply to you.  While the terms of a policy or handbook provision may not be legally enforceable against your employer, it doesn’t hurt to bring the relevant provision to the attention of your employer to see if they will honor it.  An example of a relevant provision would be a severance policy guaranteeing separation pay based upon years of service.

Fifth, verify what happens to your employment benefits now that you’ve lost your job.  Health insurance is the most common benefit to consider here.  Make sure to confirm when your employer will stop providing benefits.  Also, consider whether you want to continue any benefits through an individual plan.  You may be eligible for continued medical and dental benefits through The Consolidated Omnibus Budget Reconciliation Act (“COBRA”) as well.

This five-point list is not meant to cover all the possible issues that may arise when you lose your job but it is a starting point.  Under some circumstances, more complicated matters concerning deferred compensation, employment discrimination and whistleblower claims must be considered.  If you have any questions about your rights, please consult with an attorney.

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