United States District Court, D. Massachusetts
MEMORANDUM AND ORDER
J. Casper United States District Judge
New England Controls, Inc. (“NEC”) moves for a
preliminary injunction against Defendant Joseph Pilsbury
(“Pilsbury”), a former employee of POND Technical
Sales, Inc. (“POND”), NEC's wholly-owned
subsidiary. D. 9 at 1. NEC seeks to enjoin Pilsbury from
soliciting NEC customers on behalf of a direct competitor and
disclosing NEC's confidential business information in
violation of his non-solicitation and nondisclosure
agreements with NEC. D. 10 at 5. Pilsbury has also moved the
Court to order that NEC disclose all alleged confidential
information relevant to the case. D. 19. For the reasons
discussed below, NEC's motion for preliminary injunction,
D. 9, is ALLOWED. Pilsbury's motion for disclosure, D.
19, is DENIED.
Standard of Review
obtain a preliminary injunction, the Court must consider: (1)
the movant's likelihood of success on the merits; (2) the
likelihood of the movant suffering irreparable harm; (3) the
balance of equities; and (4) whether granting the injunction
is in the public interest. Corp. Techs., Inc. v.
Harnett, 731 F.3d 6, 9 (1st Cir. 2013). NEC “bears
the burden of establishing that these four factors weigh in
its favor.” Esso Standard Oil Co. (P.R.) v.
Monroig-Zayas, 445 F.3d 13, 18 (1st Cir. 2006).
a Maine resident, began working for POND as an outside sales
engineer in 2003. D. 16 ¶¶ 1, 5. POND, a
Connecticut company, was acquired by NEC, a corporation based
in Massachusetts, in 2008. D. 10-1 ¶ 5; D. 16 ¶ 14.
In January 2018, Pilsbury resigned from POND and began
working for TriNova, Inc. (“TriNova”). D. 10-1
to the affidavit provided by Thomas Ramundo, NEC's
president, NEC is a company that “provides process
control equipment and related services for the life sciences,
gas distribution and transmission, power, food and beverage,
pulp and paper, water and wastewater and chemical industries,
” including valve packages, among other instruments. D.
10-1 ¶¶ 2, 4. “POND is a sales organization
for certain products and services.” D. 10-1 ¶ 5.
Since NEC acquired POND, the two have “operate[d] as
affiliates, ” and their sales teams “work
collaboratively.” D. 10-1 ¶¶ 5-6. TriNova, an
Alabama company that “has recently expanded into New
England, ” “offers valves and instruments in
competition with NEC.” D. 10-1 ¶ 7.
describes NEC/POND and TriNova as “independent
manufacturer representative[s] that specialize in technical
engineered equipment.” D. 16 ¶ 6. Each company
serves as certain manufacturers' exclusive “sales
and service agent” in specific geographic regions.
Id. In New England, NEC holds this relationship with
the manufacturer Emerson. D. 16 ¶ 8. In December 2017,
TriNova established an exclusive relationship with the
manufacturer Endress & Hauser (“E&H”),
replacing E&H's prior designated representative. D.
16 ¶ 9. Emerson and E&H are competitors “and
have been for over 25 years.” D. 16 ¶ 8. Although
manufacturers and designated representatives maintain
exclusive relationships with each other, customers do not
maintain exclusive relationships with either. D. 16 ¶
10. Typically, a “customer solicits a proposal on a
solution to solve a problem” from manufacturers, who
contract directly with customers and pay commissions to
representative companies like NEC/POND and TriNova. D. 16
¶¶ 11, 7.
Pilsbury began working for POND in 2003, he was an account
manager who worked “with specific identified
customers” in Maine and New Hampshire selling Emerson
products. D. 16 ¶ 13. In 2013, he was promoted to Field
Sales Manager and in 2014 his title changed to “Measure
and Analyze Business Development Manager.” D. 16
¶¶ 15-16; see D. 10-1 ¶ 8. In this
role, Pilsbury “had technical and commercial leadership
responsibility for all of POND's measure and analyze
products and services.” D. 10-1 ¶ 8. Pilsbury
continued covering his designated accounts and traveled with
and coached other account managers. D. 16 ¶ 17.
to Ramundo, Pilsbury's tenure at POND exposed him to such
confidential NEC/POND information as “the
[c]ompanies' compilation of information about customers,
including those accounts [Pilsbury] did not personally
represent, through the SalesLogix customer relations
management database, ” including customers' contact
information, product and service needs, purchasing protocols
and procedures, transactional and negotiation history and
pricing information, as well as NEC/POND's “unique
sales and marketing techniques and strategies.” D. 10-1
¶ 10. Pilsbury contends, however, that “NEC has no
confidential pricing and marketing strategy
information” because “[p]ricing is set by each
manufacturer, not by the retailer, ” and pricing
information is given to all new POND employees when they
start and is available on the internet. D. 16 ¶¶
30-31, 42(c); D. 26-1. He states that the “client
identities of various competitors in the industry are well
known to each other” and often voluntarily disclosed.
D. 16 ¶¶ 33, 42(a). According to Pilsbury, the
SalesLogix platform was not used to track account plans or
pricing strategy, which were instead maintained by account
managers on their own computers. D. 16 ¶ 34.
Pilsbury's use of the database involved
“review[ing] a weekly printed spreadsheet downloaded
from SalesLogix by POND's receptionist which contained
new opportunities, ” to which Pilsbury added
information he had about those opportunities and returned it
to the receptionist, who added his contributions to the
database. D. 16 ¶ 37. Pilsbury used other software
applications to store customer information, and when he
resigned, he was not asked to turn over his login information
for these accounts. D. 16 ¶¶ 41, 42(b). He also
states that many NEC/POND employees with access to the
SalesLogix database do not have non-solicitation agreements.
D. 16 ¶ 36.
December 19, 2017, approximately two months after E&H
announced that TriNova would be its new designated
representative, Pilsbury notified Ramundo that he
“wanted to explore opportunities with TriNova.”
D. 16 ¶¶ 20, 22. Ramundo asked Pilsbury if he
“was going to attempt to sell TriNova's products to
POND/NEC's customers, ” and Pilsbury responded that
he “did not see how such overlap was avoidable.”
D. 16 ¶ 22. Pilsbury also expressed his intentions to
his direct supervisor, Robert Osnoe, who warned of legal
action based upon Pilsbury's non-solicitation agreement
with NEC. D. 16 ¶ 23. Two days later, Ramundo contacted
Pilsbury to warn that he would “enforce the
non-solicitation agreement.” D. 16 ¶ 24.
January 11, 2018, Pilsbury accepted an offer from TriNova as
an account manager for key accounts and the general territory
of eastern New England and tendered his resignation to Osnoe.
D. 16 ¶ 25. One week later, Pilsbury returned the
“company property in [his] possession, ”
including his laptop, tablet, smartphone and other office
supplies. D. 16 ¶¶ 26, 28. NEC alleges that these
devices had been “wiped” when he returned them.
Compl. ¶ 29.
has held his position at TriNova since January 15, 2018. D.
16 ¶ 48. He contends that “[t]he majority of
customers that TriNova works with today, and with whom [he
is] working, were existing E&H customers prior to [his]
joining TriNova.” D. 16 ¶ 9. Pilsbury states that
his compensation at TriNova is partially dependent upon
commission. D. 16 ¶ 45. He anticipates that an
injunction would require him to “move to the Southern
territory of TriNova for the remainder of the injunction
period, ” which would also require relocation of his
wife, two children and his wife's parents for whom he
provides care. D. 16 ¶¶ 45-46.
The Nondisclosure and Non-Solicitation Agreements and
NEC acquired POND, Pilsbury entered into two agreements
relevant here. First, on November 22, 2010, in consideration
of continued employment, Pilsbury signed the “Employee
Agreement concerning Non-Disclosure & Intellectual
Property” (the “Nondisclosure Agreement”).
D. 10-1 ¶ 16, at 16-20. In the agreement, expressly
governed by Massachusetts law, Pilsbury agreed that upon
termination of employment, he would “not at any time
directly or indirectly, use (for [him]self or another),
disclose or make accessible to anyone any Confidential
Information, except as expressly permitted by NEC or as
required by law.” D. 10-1 at 18. The agreement defines
“Confidential Information” to include, inter
alia, “the names and contact information of actual
and potential customers of the NEC, ” “marketing
techniques or plans” and “pricing
policies.” D. 10-1 at 17. The agreement does not
contain terms limiting the duration of the agreement's
applicability. See D. 10-1 at 17-20.
between 2013 and 2016, Pilsbury was awarded twenty shares of
NEC Phantom Stock conditioned upon Pilsbury's signing the
Invention, Non-Disclosure and Non-Solicitation Agreement
(“the Non-Solicitation Agreement”). D. 10-1
¶ 14, at 13-15. This agreement, ...