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CFGI, LLC v. Beacon Hill Staffing Group, Inc.

Superior Court of Massachusetts, Suffolk, Business Litigation Session

June 12, 2018

CFGI, LLC
v.
BEACON HILL STAFFING GROUP, INC.

          MEMORANDUM OF DECISION AND ORDER FOLLOWING JURY WAIVED TRIAL

          Mitchell H. Kaplan, Justice of the Superior Court

         INTRODUCTION

         This case was tried to the court, without a jury, on March 4, 2018. Four witnesses testified and 42 exhibits were entered in evidence. Each of the parties submitted proposed findings of fact and rulings of law on June 1, 2018. In consideration of the testimony of the witnesses, the exhibits introduced in evidence, and the post-trial submissions, the court makes the following findings of fact and rulings of law and orders the entry of final judgment.

         FACTS

         The plaintiff, CFGI, LLC is a staffing firm with approximately 220 employees and offices in five cities, including Boston. It specializes in supplying technical accounting staff and supporting the financial departments of its customers. Marc Roberts joined CFGI as its Talent Acquisition Manager in December 2015. His job responsibilities included the recruitment and retention of professional staff to be placed with CFGI’s customers.

         Beacon Hill Staffing Group, LLC (Beacon Hill) is a national staffing firm, which also has a Boston office. Its customers include businesses seeking to hire staff and individuals seeking employment. Stephen Kouri was first employed at Beacon Hill in September 2014. At the time relevant to this case, Kouri was a senior consultant whose job responsibilities included recruiting prospects for employment with customer firms and developing relationship with firms that might require new employees.

         Roberts was friendly with Kouri before Roberts joined CFGI. After joining CFGI, Roberts reached out to Kouri with a view to developing a professional relationship between CFGI and Beacon Hill, as the firms had not previously done business with one another. He explained that CFGI had approximately 30 positions that it needed to fill. To that end, Roberts visited Beacon Hill’s office to meet with Kouri and four or five other senior staff members. Thereafter, CFGI and Beacon Hill entered into a Recruiting Services Agreement which was dated as of January 4, 2016 (the Agreement). It was signed by Roberts and Kouri on behalf of their respective firms. Prior to or shortly after execution, Roberts and Kouri had some discussions concerning the fees that Beacon Hill would be paid for successfully referring a person to CFGI and how long after his/her employment the payment would be received, but CFGI never departed from its original offer of 22.5% of the employee’s initial starting salary, to be paid 60 days after commencing employment. The Agreement was CFGI’s standard form of recruiting services contract. It was not customized or amended in any way for Beacon Hill.

         Paragraph 4 of the Agreement is central to this action. It is entitled "Nonsolicitation" and reads as follows:

During the term of this Agreement and for a period of six (6) months thereafter, the Agency[1] will not solicit or discuss with any employee of CFGI the employment of such CFGI employee by any other party, whether or not competitive to the business of CFGI, nor recruit, nor attempt to recruit, any such CFGI employee other than on behalf of CFGI, nor in any manner seek to induce such person to leave his or her employment with CFGI. Agency agrees that as consideration for a breach of the preceding sentence, Agency shall immediately refund to CFGI a cash fee equal to forty percent (40%) of the Candidate’s current base salary within thirty (30) days of termination.

         The Agreement was non-exclusive, and CFGI was free to use other firms to search for new employees. After the Agreement was executed, Beacon Hill referred 5 or 6 individuals to CFGI for employment, but none received a job offer and, consequently, Beacon Hill received no payments from CFGI.

         Eric Beasley was an employee of CFGI. He began working for CFGI in September 2015, having been referred by another staffing firm, Hollister Staffing, which was paid $16, 800 for placing him with CFGI. Beasley has a bachelor’s degree in Finance from Florida State University and a Master’s in Accounting from Northeastern University. Before joining CFGI, he was employed as a senior auditor for Ernst & Young.

         Beasley went through a one-week training program at CFGI and was then placed with CFGI’s client, Fusion Star. Fusion Star is a large international company, and Beasley was assigned to work on inventory management and monthly closes of its books of account. Beasley worked at Fusion Star during the entire period that he was employed by CFGI. By December 2015, Beasley had become unhappy with his work at CFGI/Fusion Star and decided to look for another position. To that end, in January 2016 he posted his resume on various job search web sites, including Linked-In and Indeed. Thereafter, Beasley was contacted by a number of individuals from staffing/recruiting firms and began working with a number of them searching for a new job-including Sherick Jansen of Beacon Hill.

         Sherick Jansen focuses on placing professionals in the finance and consulting areas. He searches for applicants on public, web-based job boards, such as Indeed, on a daily basis. That is where he saw Beasley’s posting. On January 27, 2016, he first contacted Beasley through his Linked-In account and arranged to speak with him by telephone. After speaking together and discussing the kinds of job opportunities Beasley was interested in, Jansen asked for an up-dated resume, which Beasley sent him later that day.

         Also on January 27, 2016, Jansen caused Beasley’s resume and a description of the positions he was interested in to be circulated among recruiters at Beacon Hill.[2] He then began to send Beasley information concerning open positions that Beacon Hill was trying to fill for its employer customers. On January 29, 2016, Beasley expressed interest in two such opportunities, in particular, an assistant controller position with Berkshire Partners, LLC, a hedge fund. Jansen then put Beasley in touch with Jansen’s Beacon Hill colleague, Andrew McCourt, who had the business relationship with Berkshire Partners. With ...


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