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Aerotek, Inc. v. Murphy

United States District Court, E.D. Missouri, Eastern Division

October 16, 2017

AEROTEK, INC., Plaintiff,
v.
JOEL T. MURPHY and BEACON HILL STAFFING GROUP, LLC, Defendants.

          OPINION, MEMORANDUM AND ORDER

          HENRY EDWARD AUTREY, UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on Plaintiffs Motion for Temporary Restraining Order and Preliminary Injunction, [Doc. No. 2]. On October 5, 2017, the Court held a hearing on this matter, at which both parties were represented by counsel. Arguments were presented at that time. For the reasons set forth below, Plaintiffs' Motion for a Temporary Restraining Order and Preliminary Injunction is denied.

         Facts and Background[1]

         This is an action alleging unlawful conduct by Aerotek's former employee, Murphy, and his current employer, Beacon Hill. Aerotek alleges violation of Murphy's employment agreement and under Missouri law. Plaintiff further alleges Beacon Hill has tortuously interfered and is continuing to tortuously interfere with Murphy's employment agreement through its continued employment of Murphy.

         Aerotek is a Maryland corporation with its principal place of business located in the State of Maryland. Aerotek is registered to do business in Missouri and maintains an office in St. Louis. Murphy is a Missouri citizen. Murphy was an Aerotek employee from October 21, 2014 until his termination for cause on July 19, 2017. Beacon Hill is a limited liability company organized under the laws of the State of Massachusetts. Its headquarters and principal place of business are located at 152 Bowdoin Street, Boston, Massachusetts 02108.

         Aerotek and Defendants are citizens of different states. The amount in controversy is in excess of $75, 000, exclusive of interest and costs, including, but not limited to, that the value to Aerotek of the injunctive relief sought exceeds $75, 000, based on the amount of business at issue if Defendants are permitted to continue their current course of conduct. Subject matter jurisdiction is therefore proper under 28 U.S.C. § 1332(a).

         Venue is proper pursuant to 28 U.S.C. § 1391(b) because Defendants reside in this judicial district and a substantial part of the events or omissions giving rise to the claims occurred or is occurring in this district.

         Aerotek is engaged in the business of recruiting, employing and providing the services of personnel on a temporary or permanent basis to companies throughout the United States, and in the St. Louis, Missouri area, in particular. Aerotek invested, and continues to invest, considerable resources to develop information, methods, and techniques to: (a) identify entities that utilize professional placement services to fill staffing needs; (b) identify the key individuals responsible for recruitment of professional employees within those entities; (c) maintain, develop and nurture business relationships with those entities and individuals; (d) learn clients' business and staffing needs; (e) develop innovative solutions to meet clients' staffing needs; (f) develop, screen, and maintain highly-qualified candidates for placement with its clients; and (g) set appropriate pricing to attract and maintain clients. Plaintiff contends this information is valuable, confidential, and proprietary to Aerotek, and is not generally known in the public domain.

         Individuals employed by Aerotek who are involved in the recruitment of potential candidates and placement, inter alia, become inexorably and intimately knowledgeable regarding Aerotek's clients, financial information regarding its clients' rates, its contacts for those clients, its clients' needs, and the candidates Aerotek has or may have to fill those needs. This information has significant economic value to Aerotek and would be of significant economic value to competitors in the professional recruitment and placement industry.

         To protect its legitimate business interests with respect to this information, Aerotek requires that the individuals it employs for the purpose of conducting professional recruitment and placement sign restrictive covenants and nondisclosure agreements as a condition of employment. Aerotek also maintains its client and candidate information in secure, password-protected databases.

         On October 20, 2014, Aerotek hired Murphy for the position of Recruiter in its St. Louis, Missouri office. He was subsequently promoted to an Account Manager. At all times relevant to this matter, Murphy worked in Aerotek's St. Louis, Missouri office.

         Prior to his employment with Aerotek, Murphy had no knowledge of Aerotek's confidential information or trade secrets, i.e., the identity of Aerotek's clients, its contacts for those clients, pricing for various clients, its clients' needs and the data bank of information regarding potential candidates to fill positions. At the outset of his employment, Murphy received training from Aerotek related to his position as a Recruiter to learn information regarding Aerotek's confidential information. Thereafter, Murphy continued to receive training and gain knowledge of Aerotek' confidential information during his tenure with the company.

         In executing his duties for Aerotek, Murphy had access to proprietary and confidential information, including but not limited to: Client Lists, Internal Employee Contracts, Client Service Agreements, Consultant Agreements, Road Books (print-outs of all clients and contacts within territory), Siebel reports (sales and documentation information), Bill Rate information based on skills of consultants and clients, Burden Sheets, RWS Information (resume and information database for all candidates), Hot Books, Submittal Logs, and Phone Interview Sheets. Murphy also participated in meetings to discuss current and target accounts with other employees in the office where he worked, learning about opportunities with the accounts Aerotek was and is servicing.

         During his employment with Aerotek, Murphy had a duty to, among other things, gain familiarity with candidates and clients; to evaluate them; maintain business relationships with existing clients; develop and maintain lists of candidates, clients and contacts; and work diligently to develop the business of Aerotek.

         As an employee of Aerotek and through the use of Aerotek's resources, Murphy developed and maintained relationships with clients and candidates in Aerotek's database. Murphy's duties included creating goodwill for Aerotek through personal contacts and business relationships. In particular, Murphy developed and maintained strong business relationships with prospects and clients through cold-calling, directly meeting with them, and networking among industry associations. He also utilized a consultative approach to determine potential client needs and developed well-rounded business plans with optimal solutions, and managed a team of recruiters and ensured they had an effective recruiting strategy to deliver on clients' tight deadlines.

         As an employee of Aerotek and through the use of its resources, Murphy had access to and was exposed to the following confidential information: a. the identity of Aerotek's clients; b. the identity of the contact persons at Aerotek's clients who decide or have significant influence regarding which recruiting/ placement firm(s) they will use; c. the billing rates Aerotek charges each of its clients (which vary by client); d. the placement/recruitment history of Aerotek with clients and current/future staffing requirements; e. margin tolerances regarding prices including wage rates of contract employees; f. sales and marketing strategies, along with sales, recruiting, pricing and marketing techniques; g. the particular idiosyncrasies of each client/contact person including their preferences, likes, and dislikes regarding recruiting/placement; and h. the employment histories, qualifications, contact information, and preferences of candidates suitable to satisfy clients' requirements.

         This information is not otherwise obtainable from public sources and constitutes confidential information and trade secrets.

         On October 20, 2014, Murphy signed an Employment Agreement (the "Agreement") with Aerotek, which included non-compete, non-solicit and nondisclosure obligations. The Agreement provides, in relevant part, as follows:

         3. NON-COMPETE COVENANT:

         EMPLOYEE agrees that upon the termination of EMPLOYEE'S employment, whether by AEROTEK or EMPLOYEE and whether with or without cause, for a period of eighteen (18) months thereafter EMPLOYEE shall not directly or indirectly engage in or prepare to engage in, or be employed by, any business that is engaging in or preparing to engage in any aspect of AEROTEK's Business for which EMPLOYEE performed services or about which EMPLOYEE obtained Confidential Information during the two (2) year period preceding termination of EMPLOYEE'S employment, within a radius of fifty (50) miles from the office in which EMPLOYEE worked at the time EMPLOYEE'S employment terminated or any other office in which EMPLOYEE worked during the two (2) year period preceding termination of EMPLOYEE'S employment. The prohibitions contained in this Paragraph shall extend to (i) activities undertaken by EMPLOYEE directly on EMPLOYEE'S own behalf, and to (ii) activities undertaken by EMPLOYEE indirectly through any individual, corporation or entity which undertakes such prohibited activities with EMPLOYEE'S assistance and in or with respect to which EMPLOYEE is an owner, officer, director, trustee, shareholder, creditor, employee, agent, partner or consultant or participates in some other capacity.

         4. NON-SOLICITATION COVENANT:

         EMPLOYEE agrees that upon the termination of EMPLOYEE'S employment, whether by AEROTEK or EMPLOYEE and whether with or without cause, for a period of eighteen (18) months thereafter EMPLOYEE shall not directly or indirectly:

(a) Communicate with any individual, corporation or other entity which is a customer of AEROTEK and about which EMPLOYEE obtained Confidential Information or with which EMPLOYEE did business on AEROTEK's behalf during the two (2) year period preceding ...

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