United States District Court, E.D. Missouri, Eastern Division
MEMORANDUM AND ORDER
A. ROSS, UNITED STATES DISTRICT JUDGE.
matter is before the Court on Plaintiff Perficient,
Inc.'s request for a preliminary and permanent injunction
preventing Defendant Thomas Munley from continuing to work
for Defendant Spaulding Ridge, LLC, ("Spaulding")
on the grounds that Spaulding is a competitor and that
Munley's employment violates non-compete, non-solicit,
and non-disclosure covenants that he accepted when working
for Perficient. (Doc. 1.)
must show the following elements to obtain a permanent
injunction: (1) actual success on the merits of its claims;
(2) threat of irreparable harm; (3) that the threatened harm
to it outweighs any possible harm to others; and (4) that an
injunction serves the public interest. Cmty. of Christ
Copyright Corp. v. Devon Park Restoration Branch of Jesus
Christ's Church, 634 F.3d 1005, 1012 (8th Cir.
2011). Missouri law considers injunctive relief appropriate
for enforcing restrictive covenants. A.B. Chance Co. v.
Schmidt, 719 S.W.2d 854, 859 (Mo.Ct.App. 1986).
courts enter a permanent injunction after a trial on the
merits of the underlying claims. See, e.g., Tovaritch
Spirits Int'l SA v. Luxco, Inc., No. 4:11CV950 JCH,
2012 WL 6652949, at *1 (E.D. Mo. Dec. 21, 2012). This case is
somewhat unique insofar as the parties agreed to an expedited
briefing schedule and combined hearing on the preliminary and
permanent injunctions (Doc. 47), meaning the Court is left to
rule on the merits of the relevant underlying claims without
the benefit of a full trial. The Court therefore makes the
following findings of fact, for purposes of this hearing,
related to the claims on which Perficient seeks injunctive
relief, Counts I, VI, and VII, and its direct request for
injunctive relief, Count II.
Perficient is a "leading digital transformation
consulting firm serving Global 2000® and enterprise
customers throughout North America," specializing in the
sale and implementation of customized third-party enterprise
software from IBM, Microsoft, Oracle, Adobe, and Salesforce.
PERFICIENT, About Us,
https://www.perficient.com/about/media-kit (last visited
Aug. 20, 2019).
Spaulding was formed in 2018 by the acquisition and merger of
Plan Rocket-a firm specializing in Anaplan software-and Buan
Consulting-which specialized in Salesforce products.
Spaulding markets itself as providing consulting services to
help its clients "transform their business, from
strategy through implementation and business
transformation" relating to numerous software companies,
including Salesforce and SpringCM SPAULDING RIDGE,
https://www.spauldingridge.com/, (last visited Aug.
Munley joined Perficient in 2014 and was ultimately named
Vice President for Strategy, Business Transformation &
Applications Consulting,  where his duties included direct
responsibility for Perficient's Salesforce practice and
five other business units. He also served for a time as the
acting General Manager of the Salesforce practice where he
had direct supervision of the sales and service of Salesforce
Salesforce.com is one of the largest creators and
sellers of cloud-based computer programs to assist with
customer relationship management ("CRM")-the
process of recruiting, landing, servicing, and billing
Employment at Perficient
Under Munley, most of Perficient's Salesforce business
was in the implementation of Salesforce's core CRM
products-Sales Cloud, Service Cloud, Marketing Cloud, and
Community Cloud-which are databases of external and internal
information about current and potential customers that allow
the user to develop and manage their sales business.
Salesforce also sells dozens of applications that utilize the
CRM databases to improve the front-line, day-to-day functions
of selling, servicing, and marketing to customers, such as
Salesforce CPQ-Salesforce's version of the Configure,
Price, Quote tool-which allows users to quickly and
efficiently generate custom sales quotes by automatically
performing functions such as inputting price, suggesting
related products, and applying customer- or order-specific
major source of CPQ business by far is referrals from
Salesforce's internal CPQ sales team, known as the
"channel." 8. When a company wants to buy
Salesforce CPQ software, Salesforce introduces a third-party
consulting firm to assist the company with integrating and
implementing the program;" those referrals are known to
the consulting firms as "channel sales." 9.
Salesforce strictly controls to whom it will offer channel
sales-a consulting firm must meet minimum certification
requirements before Salesforce will refer them for
Spaulding CEO Jay Laabs testified that there are around 300
consulting firms certified to receive channel sales for
Salesforce's core CRM products but fewer than ten firms
to whom Salesforce will direct CPQ channel sales.
While at Perficient, Munley's compensation included
salary, benefits, and several awards of Perficient stock.
(Exs. 60, 63, 64, 65, 66.)
exchange for his employment and compensation, Munley executed
multiple contracts containing restrictive covenants:
a. not to work for a "Competing Business" or
perform "Competitive Duties" for twenty-four months
following his departure (Ex. 60 at ¶ 15(e)(iii)-(iv));
b. not to use or disclose Perficient's trade secrets or
other proprietary information and to "hold in the
strictest confidence and [to use] best efforts and the utmost
diligence to protect and safeguard" such information
(Id. at ¶ 15(a), (c); Ex. 61 at 2-3); and
c. not to solicit Perficient's clients or employees for a
period of twelve or twenty-four months following his
departure (compare Ex. 61 at 3 with Ex. 62
at ¶ 8(a), (b) and Ex. 63 at ¶ l5(e)(i),
a vice president, Munley had direct access to confidential
and trade secret information relating to the six business
units he oversaw and, in high-level strategy meetings, was
exposed to similar information about Perficient's other
business units, including: customer-focused information such
as lists of potential customers and current customer's
buying behavior and contact information; strategic
information regarding marketing and sales techniques, sales
volume, and future investment areas for all of
Perficient's business units; potentially harmful
information regarding delivery issues and operational
difficulties; and financial data, including profit margins,
budgets, sales projections, and pricing models.
acting General Manager for the Salesforce practice, Munley
had additional extensive knowledge of confidential
proprietary information. He approved statements of work, was
authorized to vary from standard pricing and profitability
metrics and was involved in some capacity with the sale and
service for all of Perficient's Salesforce projects.
Munley did not actively participate in sales, but he oversaw
the directors to whom the sellers reported and, on rare
occasion, was called in to help close a big sale or to
address a major client's concern.
2017, Munley oversaw two failed attempts at Salesforce CPQ
implementation in the form of projects for Haggar and Roche
Diagnostics. Perficient quickly ran into functionality issues
and neither project progressed beyond the initial
proof-of-concept stage. As a result, there was a period of
time where Perficient did not further pursue CPQ
Salesforce's annual Dreamforce Conference in late 2018,
Munley was approached by internal Salesforce personnel who
told him that there was significant need for CPQ-certified
implementers and that, because Perficient did not have
trained CPQ consultants, Perficient should subcontract the
hands-on implementation to Advanced Technology Group
("ATG"), a firm that was already doing CPQ work.
Following the Dreamforce meeting, Munley developed and
directed Perficient's strategy for pursuing CPQ business.
He reassigned Suresh Krishnan from the Oracle practice to
investigate the viability of a Perficient CPQ practice,
contacted ATG about a potential partnership, and listed CPQ
as an area to "Nurture & Invest" in his
go-to-market plan for Perficient's 2019 Salesforce
practice, estimating that CPQ represented a market
opportunity of $500, 000 in 2019 CPQbusiness. (Ex.7.)
Thereafter, Krishnan left Perficient, ATG rejected
Perficient's offer to partner on CPQ implementations, and
Munley put CPQ "on hold" until he could get a
permanent General Manager in place. (Exs. 3, 20, 26.)
that time and unbeknownst to Munley, Perficient was actively
pursuing experienced CPQ firm SunDog Interactive, and had
assigned another vice president, Hari Madamalla, to perform
the due diligence for an acquisition. Perficient ultimately
acquired SunDog in May 2019, after Munley left. (Exs. AN,
late April, Munley was notified that May 1, 2019, would be
his last day at Perficient.
Prior to leaving, Perficient offered Munley a severance
package of a $40, 000 payment and the accelerated vesting of
1, 700 shares of Perficient stock in exchange for executing a
separation agreement reaffirming his promises not to compete,
solicit, or disclose and releasing Perficient from all
claims. (Ex. 62.) Munley engaged in brief negotiations with
Perficient's Vice President of Human Resources, Pamela
Cannon, regarding the separation agreement. (Ex.
Only days after leaving Perficient, Munley met with Laabs,
who testified that he was impressed by Munley's education
and experience and his strong belief that CPQ was a
significant market opportunity.
May 13, 2019, just two weeks after his final day at
Perficient, Munley joined Spaulding to oversee the operation
of its pre-existing Salesforce business unit according to
Spaulding's proprietary internal processes and
Spaulding's director of sales for Salesforce and
DocuSign, Kyle Boston, was left in place to continue managing
all aspects of the sales process, but he reported to Munley.
Spaulding's business model is to sell consulting services
relevant to an organization's Chief Financial Officer,
including software relating to budgeting, forecasting,
billing, and accounting. Accordingly, it typically sells its
clients a software solution consisting of Salesforce CPQ
& Billing-a product that combines the functionality of
CPQ with automated billing software-and SpringCM, a ...