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Nicklas Associates, Inc. v. Zimet

United States District Court, D. Maryland, Southern Division

December 9, 2014

NICKLAS ASSOCIATES, INC. D/B/A THE BOSS GROUP, Plaintiff,
v.
DONNA ZIMET, et al., Defendants.

MEMORANDUM OPINION

GEORGE JARROD HAZEL, District Judge.

Plaintiff, a staffing company, alleges that one of its former employees is violating her non-compete agreement by working for one of Plaintiff's competitors within one mile of her former office. See ECF No. 4-1. This Memorandum Opinion and the accompanying Order address Plaintiff Nicklas Association, Inc.'s Motion for Temporary Restraining Order ("TRO") against Defendants Donna Zimet and her new employer, Atrium Staffing, LLC. ECF No. 4. A hearing was held on December 5, 2014. See Local Rule 105.6. For the reasons explained below, Plaintiff's motion is DENIED. The parties shall meet and confer to devise a schedule for expedited discovery on Plaintiff's still pending Motion for Preliminary Injunction.

II. BACKGROUND

According to Conor Smith, president of Nicklas Associates, Inc., Nicklas Associates, Inc. is a subsidiary of BLR Holdings, Inc. and does business as "the Boss Group." ECF No. 4-2 at ¶ 3. The Boss Group was founded in 1988 and is a staffing company that specializes in interactive, creative, and marketing personnel. Id. Essentially, Plaintiff represented to the Court, the Boss Group brings together employers who need creative employees (employees with artistic and design skills) with individuals who have creative skills. To be competitive, the Boss Group maintains customer/talent files, manuals, and other written records. Id. at ¶ 4. It has also created an in-house software, Shangri La, which serves as a client database containing information regarding clients and potential prospects. Id. at ¶ 5. The Boss Group considers this program and information to be its lifeblood, to have independent value to its competitors, and to be confidential. Id.

Defendant Donna Zimet began working for the Boss Group on November 7, 2011 as a selling branch manager at its Iselin, New Jersey office. Id. at ¶ 8. In December 2013, Zimet moved into the role of account manager. Id. Her responsibilities included "new business development, building and maintaining quality relationships with clients, managing accounts and assignments, and growing existing accounts." Id. As a condition of employment, Zimet entered into an agreement prohibiting, upon termination of employment, certain competitive conduct, disclosure of confidential information, and solicitation of the Boss Group's clients. Id. at ¶¶ 9, 11. Specifically with regard to non-competition, Zimet agreed:

that during the term of this Agreement, and for a period of twelve (12) months after the later of (x) the date of the conclusion of my employment with the Company for any reason, or (y) the date a court of competent jurisdiction enters an order enforcing this provision, I will not directly or indirectly, whether as a member, partner, shareholder, director, proprietor, officer, manager, employee, consultant, independent contractor, or otherwise compete with the Company, by engaging in the Business anywhere within a fifty (50) mile radius of any office in which the Company does Business that (i) I work at; (ii) I manage; or (iii) where I have client and/or talent relationships with in connection with my work on behalf of the Company. Nothing in this paragraph shall be construed to limit or restrict my ability to engage in the business of brokering independent consultants and placing temporary and permanent hires in fields outside of the Business of the Company after my employment with the Company concludes for any reason.

ECF No. 1-1 at 4. The "Business" is defined as "placing temporary workers and permanent hires in the fields of creative, marketing, communications, marketing and web, including but not limited to, art directors, copywriters, desktop publishers, editors, graphic designers, illustrators, interactive designers, marketing managers, marketing specialists, media buyers, medical copywriters, medical editors, medical proofreaders, multimedia experts, pre-press experts, production managers, proofreaders, user interface designers, web content specialists, web designers, web developers, web masters, writers, etc." Id. at 1. With regard to non-solicitation, Zimet agreed:

that during the term of this Agreement, and for a period of twelve (12) months after the later of (x) the date of the conclusion of my employment with the Company for any reason, or (y) the date a court of competent jurisdiction enters an order enforcing this provision, I will not, (i) for my own account or (ii) on behalf of any person or entity other than the Company (a) directly or indirectly sell, provide or solicit the services (that are the kind or type with the Company sold, offered or provided) to a customer or client, prospective customer or prospective client, talent or prospective talent of the Company; (b) directly or indirectly cause any person or entity to cancel or terminate any business relationship with the Company, or (c) directly or indirectly interfere with any business relationship of the Company. For purposes of this Agreement the terms "customer" or "client"; "prospective customer" or "prospective client"; and "talent" and "prospective talent" are defined above in Section A 1 of this Agreement and the definitions of those terms are incorporated by reference herein as well, rather than being repeated.

Id. at 4-5. Finally, as to confidentiality, Zimet acknowledged:

that the "Confidential Information" which the Company wants to protect is broadly defined. Specifically, "Confidential Information" shall mean the confidential information provided to me by the Company (or which I otherwise have access to), including without limitation, information regarding the Company or any of its business affiliates, customers or clients, customer, or client lists, prospective customers or clients, and its prospective talent or talent, candidates or prospective candidates, consultants and potential consultants, internal staff, including their respective names, identities, and addresses, list of workers, referral lists, and information regarding testing, screening, evaluation and recruiting processes, costs, prices, business strategies and plans, sales strategies, marketing methods, business means, ideas, reports, studies, financial information, earnings, projections, financial data, means and methods, systems, operating procedures, web-based services, products or processes, computer programs and software, worked products, copyrights, trademarks, patents, licensees, trade secrets, technical data, software know-how, technology with respect to business and existing and future products and services, and confidential information provided to me by prospective and executed contracts and other business arrangements, and sources of supply, except to the extent that any such information is otherwise lawfully available to the general public.

Id. at 2-3.

Zimet resigned from the Boss Group effective July 11, 2014 and did not indicate where she would work next. ECF No. 4-2 at ¶ 15. The Boss Group sent Zimet a letter to remind her of her obligations of non-competition, confidentiality, and non-solicitation. Id. at ¶16. According to the Boss Group's president, in August 2014, it learned that Zimet was working for Defendant Atrium Staffing, LLC ("Atrium"). Id. at ¶¶ 17, 19. Atrium is a direct competitor of the Boss Group. Id. The Boss Group believes that Zimet is working at an office a few blocks from her former office. Id. Atrium has told the Boss Group that Zimet is working approximately 25 miles from her former office (which is still less than the 50 miles the non-compete agreement contemplates). Id. at ¶ 24.

The Boss Group believes that Zimet is working for Atrium in the same sector as she was for the Boss Group. Id. at ¶ 19. This belief stems from Zimet's Linked In profile and two emails that were inadvertently sent to Zimet's Boss Group email address. Zimet's Linked In profile notes that she is a "creative recruiter." Id. at ¶ 20. As for the emails, one email was from Dennis Nobel, who had been a Boss Group employee in the past, and was an individual with creative skills who sought Atrium's help to be placed with an employer. Id. at 19. In the email, he was confirming that he and Zimet had spoken regarding potential placement and recruitment opportunities. Id. at 19. In another email, Andrea Kozakewich, the representative of a business looking for potential employees, sent Zimet a signed Atrium contract for placements. Id. at ¶ 28. Zimet had previously pursued Kozakewich as a potential client for the Boss Group. Id.

After receiving the first email, the Boss Group sent Zimet a cease and desist letter and negotiated with Atrium and its attorney. Id. at ¶¶ 21, 23. Atrium told the Boss Group that Zimet was not employed in a sales capacity, she would not work with known Boss Group clients, and she was working approximately 25 miles from the closest Boss Group office. Id. at ¶ 24. Defendants represented to the Court at the hearing that Zimet was working on the sales side for the Boss Group (where she was reaching out to companies that were looking to employ individuals with creative skills), and is working on the recruiting side for Atrium (where she is reaching out to individuals with creative skills who will be placed with the employers). The Boss Group believes that, even if ...


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