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ISO Claims Partners, Inc. v. Cassavoy

Superior Court of Massachusetts, Suffolk

March 20, 2017

ISO Claims Partners, Inc.
v.
Martin Cassavoy No. 136682

          MEMORANDUM AND ORDER ON MOTION FOR PRELIMINARY INJUNCTION

          Douglas H. Wilkins, Associate Justice of the Superior Court.

         Plaintiff, ISO Claims Partners, Inc. (" ISO"), brought an action for injunctive relief and damages against the defendant Martin Cassavoy (" Cassavoy"). In particular, ISO claims that Cassavoy has breached and will breach restrictive covenants contained in his Employment Agreement dated December 9, 2010, prohibiting competitive employment, disclosure and use of confidential information and solicitation of ISO's clients. The court heard argument from both sides on March 15, 2017 on ISO's " Emergency Motion for a Preliminary Injunction" (" Motion"). For the reasons set forth below, the Motion is ALLOWED WITH CONDITIONS .

         BACKGROUND

         At this early stage, the court makes the following preliminary findings of fact, reflecting those facts that ISO is likely to prove.

         Martin Cassavoy (" Cassavoy") was Vice President, Policy for ISO. He began working for Crowe Paradis, a predecessor of ISO, on March 20, 2006. On December 9, 2010, after being promoted to Vice President of Policy, Cassavoy signed the Crowe Paradis Services Corporation's Confidentiality and Non-Competition Agreement (" Agreement"). Crowe Paradis was acquired by ISO's parent, Verisk Analytics on December 14, 2010, and later changed its name to ISO Claims Partners, Inc., effective January 1, 2014.

         The " Confidentiality and Non-Competition Agreement" (" Agreement") contained the following provisions, among others:

1. Non-Disclosure of Confidential Information . Employee hereby agrees to receive and to hold in trust and confidence during and after Employee's employment with the Company, regardless of whether such information is in Employee's memory or in written or recorded form. For purposes of this Agreement, " Confidential Information" includes, without limitation, all intellectual property, trade secrets, confidential information, proprietary information, customer lists (whether created by the Company or not), information about customers or potential customers, business cards or other contact information for customers or potential customers, vendor lists (whether created by the Company or not), information about vendors or potential vendors, business cards or other contact information for customers or potential vendors, lists of employees (whether created by the Company or not), information about employee, product development, marketing, research, products, processes, operations, computer programs and documents, pricing, costs, financials, accounting information, business policies or practices and similar information or other information pertaining to the Company and its business. Employee also agrees to (i) use its best efforts to safeguard Confidential Information at all times so that it is not exposed to, used by, or made available to any persons without the prior written consent of the Company, and (ii) not to cause or influence any person, business or entity to disclose, divulge, or make unauthorized use of any Confidential information.
* * *
4. Fair Competition After Termination . To protect the Confidential Information, the Company's client relationships and goodwill, and the Company's other business interests, all of which Employee agrees are legitimate business interests of the Company, and in consideration of the mutual promises set forth herein, Employee agrees that during the term of its employment with the Company and for a period of one (1) year following Employee's termination from the Company for any reason, Employee will not directly or indirectly do any of the following, whether as an individual, employee, agent, shareholder, or partner of any person, business or entity, in the United States:
A. Work, participate in, or otherwise be involved in any business activity that competes directly or indirectly with the products or services being developed, manufactured or sold by the Company, including without limitation, any other services that Company offered during the term of Employee's employment with the Company within the three (3) year period preceding Employee's termination from the Company; or
B. Solicit, pursue, accept, participate in, or otherwise be involved in any business activity that competes directly or indirectly with the products or services being developed, manufactured or sold by the Company, including without limitation, any other services that Company offered during the term of Employee's employment with the Company within the three (3) year period preceding Employee's termination from the Company; . . . [C.--E. omitted]

         At ISO, Cassavoy worked on Medicare Secondary Payer (" MSP") compliance. He has described his role as " work[ing] one-on-one with clients to serve their individual compliance needs" and " work[ing] with major national insurers to assist them in developing and implementing a compliance model." He has said that he acts " as the business unit lead for all contract matters including negotiation, drafting and contract strategy." He was a member of a 20-person group, including employees of various levels of responsibility, known as the " Senior Team." While the parties disagree about whether he was responsible for " developing" products as such, he did, at least, assist ISO employees on applying MSP compliance concepts to the services and (in at least one case) products that ISO provided. He has also stated " My diverse background includes experience in product development, marketing, management and public speaking." He was the MSP compliance policy advisor prior to the development of the ISO product known as MSP Navigator. He otherwise lacks a technical background relating to development or upgrades of operating systems. He was responsible for responding to RFPs, as assigned by the ISO Business operations department. At times, he was consulted about the price of offerings, specific products offered and the development of additional products and services for the client. On a daily basis, he often answered MSP compliance-related questions for the decision makers at clients and for others needing assistance. While he spoke and wrote on topics related to MSP compliance, ISO also eliminated his name as author in some instances. His salary, including salary, bonuses and equity compensation grants, exceeded $200, 000.

         As Vice President, Policy, Cassavoy had knowledge of ISO's sales activities, customer relations issues, sales prospects and corporate strategies, including plans for submissions in response to customers' requests for proposals. He knew confidential aspects of ISO's current and future technical capabilities and processes. He had extensive client contact, including several major insurance companies who were ISO's clients. The identity of those well-known companies and their need for MSP compliance services, of course, is no secret.

         On January 25, 2017, at Barr's specific direction, Cassavoy requested a meeting with Amanda Smith to get a deeper understanding of how " system to system" clients would be affected by an ongoing ISO product development project. Shortly before Cassavoy resigned (January 27 at 2 pm), he attended a meeting that Caitlin Henry had previously scheduled with ISO project managers. Cassavoy was not a typical attendee at that meeting. At the meeting, he asked about how " system to system" clients would be affected by an ongoing ISO product development project. He said " if I were to reach out to [two specifically identified clients], I need to understand what I will be able to tell them about the options available to them." The project manager answered the question and sent a summary email immediately after the meeting. This information qualifies as confidential business information. Disclosure to ISO's competitors would cause irreparable injury, particularly where there is an ongoing RFP process involving one or two of those clients.

         Given Cassavoy's resignation on January 27, the Court does not at this time credit Cassavoy's assertion (Aff. ¶ 11.b) that the meeting that very same day " was important for me in my role of responding to the Allstate RFP." He knew that he was going to end any such role immediately.

         On Friday, January 27, 2017, Cassavoy asked Assistant Vice President, Human Resources, Amanda Gilbert, if she would be available for a brief meeting it the end of the day. At about 4:15 that day, he went to Ms. Gilbert's office and said that he was giving his two weeks' notice. At Ms. Gilbert's request, he sent a resignation email, attaching a list of ongoing projects, to Chief Operating Officer Carrie Barr at 4:22 P.M. He spoke to Ms. Barr by phone at about 4:30 and, because he could not confirm that he was not joining a competitor, was told to leave ISO right away. Cassavoy's employment with ISO terminated effective Monday, January 30, 2017.

         ISO performed a forensic examination of Cassavoy's work laptop and discovered a 10-page document in the " recently accessed document file" that contained a list of contact information of decision-makers at numerous Claims Partners' clients. It appeared to be cut and pasted from a spread sheet of all high-profile clients of Claims partners, including new clients. It was recently created. Certainly, Cassavoy might remember portions of the list. However, given the generality of the complaint--and the obviousness of the information mentioned during the hearing that certain named insurers were ISO's clients--the Court is not persuaded that a memory of some names of decision-makers at these large, well-known companies qualify as confidential information. While ISO invested resources in creating the list itself (and alleges that it " costs thousands of dollars and a significant number of work hours to obtain"), it has no proof that Cassavoy took the list or any other document or electronic file with him.

         A review of Cassavoy's emails and calendar led to the inference that he travelled to Atlanta, Georgia on December 15, 2016. ExamWorks has its headquarters in Atlanta. It is not clear whether there is a connection between these facts.

         On February 13, 2017, Cassavoy began work for ExamWorks Group, Inc. (" ExamWorks"), as Vice President of MSP Compliance. He describes his role as (1) acting as a resource for employees and management regarding MSP Act and its ramifications on medicare compliance, and (2) overseeing the Compliance Department and assisting its two employees in understanding the MSP statute and applying it in individual ...


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