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LLC v. Nichols

United States District Court, D. Massachusetts

January 22, 2016

178 LOWELL STREET OPERATING COMPANY, LLC, Plaintiff,
v.
DANA NICHOLS, DENISE BELLIVEAU, INTEGRATED HEALTH SERVICES, INC. d/b/a MEDFORD REHABILITATION AND NURSING CENTER and MRNC OPERATING, LLC d/b/a MEDFORD REHABILITATION AND NURSING CENTER, Defendants

          For 178 Lowell Street Operating Company, LLC, doing business as Lexington Health Care Center, Plaintiff: Danielle Y. Vanderzanden, LEAD ATTORNEY, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., Boston, MA; Francesco A. DeLuca, LEAD ATTORNEY, Ogletree Deakins Nash Smoak & Stewart, Boston, MA.

         For Dana Nichols, Denise Belliveau, Integrated Health Services, doing business as Meford Rehabilitation and Nursing Center, MRNC Operating, LLC, doing business as Medford Rehabilitation and Nursing Center, Defendants: Daniel J. Blake, LEAD ATTORNEY, LeClair Ryan, Boston, MA; Justin J. Twigg, LeClair Ryan, P.C., Boston, MA.

         MEMORANDUM & ORDER

         Nathaniel M. Gorton, United States District Judge.

         This case arises out of allegations by an employer that its former director solicited its employees to work at her new company and used or disclosed the employer's confidential information or trade secrets without authorization.

         Pending before the Court is plaintiff's renewed motion for a temporary restraining order (" TRO" ). For the reasons that follow, plaintiff's motion for injunctive relief will be allowed, in part, and denied, in part.

         I. Background

         A. The parties

         Plaintiff 178 Lowell Street Operating Company, LLC d/b/a Lexington Health Care Center (" Lexington" ) is a Delaware limited liability company that provides rehabilitation and medical services at a facility in Lexington, Massachusetts. None of the members of Lexington is a citizen of Massachusetts.

         Defendant Integrated Health Services, Inc. d/b/a Medford Rehabilitation & Nursing Center (" Medford" ) is a Massachusetts corporation with a principal place of business in Massachusetts. Medford provides rehabilitation and medical services at a facility in Medford, Massachusetts.

         Defendant MRNC Operating, LLC (" MRNC" ) d/b/a Medford is a limited liability company and, although it is the residency of such an entity's members and not its place of business that controls personal jurisdiction, plaintiff simply reports that its principal place of business is in Massachusetts.

         Defendant Dana Nichols (" Nichols" ) is the Administrator at Medford. She resides in New Hampshire. Prior to her employment at Medford, she was the Director of Nursing at Lexington. Defendants suggest that she was also promoted to Lead Director of Nursing and, most recently, to Administrator in Training.

         In 2002, Nichols signed a Non-Solicitation and Confidentiality Agreement (" the Agreement" ) that prohibited her from 1) directly or indirectly employing or soliciting Lexington's employees within 90 days preceding her departure from Lexington and for one year thereafter and 2) disclosing Lexington's confidential information and trade secrets. On August 17, 2015, Nichols allegedly informed Lexington that she intended to resign in order to pursue a better opportunity elsewhere. Nichols resigned on September 11, 2015.

         Defendant Denise Belliveau (" Belliveau" ) is the Director of Nursing at Medford. She resides in Massachusetts. Prior to her employment at Medford, she was the Assistant Director of Nursing at Lexington and reported directly to Nichols. On August 28, 2015, Belliveau purportedly informed Lexington that she intended to resign in order to spend more time with her family at home. Belliveau resigned on September 25, 2015.

         Non-party Jennifer Gorell is the Director of Admissions at Medford. Before her employment at Medford, she was the Director of Admissions at Lexington. On September 18, 2015, Gorell allegedly informed Lexington that she intended to resign because of health issues and because she had " too much" work at Lexington. Gorell resigned on that same day.

         B. The alleged conduct

         Lexington asserts that Nichols violated her contractual obligations when she 1) participated in soliciting and hiring Belliveau, Gorell and other former Lexington employees to work at Medford and 2) misappropriated Lexington's trade secret and confidential information. Lexington contends that Nichols did so despite its letter to her dated September 23, 2015 reminding her of, and demanding compliance with, her post-employment obligations under the Agreement. Lexington avers that it sent Medford a copy of that correspondence and that Medford knew, or should have known, about Nichols's non-solicitation and confidentiality obligations.

         Lexington alleges that Medford, through its Chief Executive Officer Bruce Bedard (" Bedard" ), 1) " knowingly colluded" with Nichols to solicit Belliveau, Gorell and other Lexington employees to become employed at Medford and 2) willfully and knowingly participated in the breach by Nichols of her contractual obligations to Lexington.

         Lexington declares that Belliveau, before her resignation, e-mailed several of Lexington's forms and polices containing confidential and trade secret information from her Lexington e-mail address to her personal e-mail address and to Nichols's Medford e-mail address.

         Lexington further submits that Belliveau and Gorell " concocted" false explanations for their resignations in order to " hide Nichols's and Medford's improper solicitation."

         C. Procedural history

         In early October, 2015, Lexington filed this lawsuit asserting that defendants unlawfully solicited its employees and misappropriated its confidential and trade secret information. Lexington claims that those actions constituted 1) a breach of contract by Nichols, 2) breaches of the fiduciary duty of loyalty by Nichols and Belliveau, 3) aiding and abetting the breaches of such duties by Medford, 4) intentional interference by Medford with the contractual relationship between Lexington and Nichols, 5) misappropriation of confidential and trade secret information by all defendants and 6) unfair and deceptive trade practices by Medford in violation of M.G.L. c. 93A, § § 2 and 11 (" Chapter 93A" ). Lexington amended the complaint shortly thereafter to name MRNC d/b/a Medford as an additional defendant.

         In mid-October, 2015, Lexington moved for a temporary restraining order 1) to enjoin defendants from soliciting Lexington employees, performing services for Medford and using or disclosing Lexington's confidential or trade secret information, 2) to require the immediate return of all copies of such information and 3) to direct defendants to provide an accounting of any materials that incorporate, involve or rely on such information. Lexington also moved for limited, expedited discovery of materials demonstrating that defendants solicited its employees and misappropriated its confidential and trade secret information.

         The Court convened a motion hearing in late October, 2015 and authorized the parties to conduct limited discovery on the narrow issue of whether defendants solicited Lexington employees to work at Medford. It directed the parties to submit supplementary memoranda after the conclusion of limited discovery. It also ordered Belliveau to return to plaintiff any Lexington materials that she had e-mailed to herself. The Court then held under advisement the motion for injunctive relief.

         In November, 2015, the parties stipulated to, and the Court entered, 1) a protective order with respect to confidential documents produced or obtained during the action and 2) a " temporary order" a) prohibiting Nichols from violating her contractual duties to Lexington, b) prohibiting Belliveau, Gorell and any other former Lexington employees from performing services for Medford, c) requiring Medford to prevent Nichols and Gorell from violating their contractual duties to Lexington on Medford's behalf and d) ensuring that the parties continue their " good faith, collaborative efforts" to return hardcopies of Lexington documents to Lexington and to erase any electronic copies of Lexington documents located on defendants' computers. The stipulated " temporary order" was to remain in effect until when and if one party moved for a hearing on the pending motion for injunctive relief.

         In December, 2015, defendants, having retained new counsel, moved for a hearing on injunctive relief. Lexington refiled its motion for a temporary restraining order that incorporated some of the information obtained from the limited discovery. The Court held a motion hearing on January 14, 2016 and took the matter under advisement.

         II. Plaintiff's motion for a TRO

         A. ...


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