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Allegis Group, Inc. v. Jordan

United States District Court, D. Maryland

March 8, 2018

Allegis Group, Inc., et al
Justin Jordan, et al.


          George L. Russell, III United States District Judge

          Dear Counsel:

         Pending before the Court are Plaintiffs Allegis Group, Inc. (“Allegis”), Aerotek, Inc. (“Aerotek”), and TEKsystems, Inc.'s Fourth Motion for Summary Judgment (ECF No. 124). The Motion is ripe for disposition, and no hearing is necessary. See Local Rule 105.6 (D.Md. 2016). For the reasons outlined below, the Court will grant the Motion.

         This matter involves six former Aerotek employees, including Defendants Justin Jordan, Daniel Curran, and Michael Nicholas, [1] and their activities before and after resigning.[2] Allegis selected Jordan, Curran, and Nicholas to participate in its Incentive Investment Plan (“IIP”), which awards participants Units, [3] equivalent to a common share of Allegis stock. (Am. Compl. ¶¶ 39, 40, ECF No. 26; see also Pls.' Cross-Mot. Summ. J. [“Pls.' Cross-Mot.”] Ex. 4 [“IIP”], ECF No. 75-6). While employed at Aerotek, participants receive cash dividends twice a year based on the value of their Units. (IIP at 7).

         Allegis awards Units through Award Agreements, which employees must sign each time they earn Units. (Pls.' Cross-Mot. Ex. 6 [“Award Agreements”] ¶¶ 1, 4, ECF No. 75-8). Of import here, the Award Agreements state that “the terms and conditions set forth in Section 9 [of the IIP] are material and essential terms of your award of Units and your eligibility to receive payment for any Units.” (Award Agreements ¶ 2). Section 9 includes non-competition and non-solicitation provisions and is effective for thirty months after termination of employment. (IIP at 5-6).

         Once an IIP participant's employment has ended, Allegis pays the participant the remaining balance of the value of his Units, known as “IIP payments, ” as follows: five percent of his balance is paid every quarter for ten quarters, and then the remaining fifty percent of his balance is paid after thirty months. (Am. Compl. ¶ 42). After termination and before receiving IIP payments, Allegis required participants to sign Acknowledgment Letters stating, inter alia, a breach of Section 9 terminates their ability to receive IIP payments and requires them to refund any IIP payments received. (See Pls.' Cross-Mot. Exs. 5, 23, 33, ECF Nos. 75-7, -25, -35). When Defendants resigned, each of them signed the Acknowledgement Letters. (Id.).

         Jordan resigned on February 21, 2009, and his Section 9 obligations expired on August 21, 2011. (Pls.' Cross-Mot. Ex. 5). Curran resigned on September 16, 2011, and his Section 9 obligations expired on March 16, 2014. (Pls.' Cross-Mot. Ex. 23). Nicholas resigned on January 3, 2012, and his Section 9 obligations expired on July 3, 2014. (Pls.' Cross-Mot. Ex. 33). At the time of their resignations, Curran was scheduled to receive $196, 470.00 in IIP payments and Nicholas was scheduled to receive $138, 268.00. (June 10, 2014 Mem. Op. at 7, ECF No. 85).

         Before Jordan's IIP obligations expired, he solicited Hadley to resign from Aerotek. (Am. Compl. ¶ 53). Similarly, before Curran and Nicholas' IIP obligations expired, they began working at PES, where they staffed IT positions in competition with Plaintiffs. (Id. ¶¶ 55, 59, 65). As a result, all three Defendants breached their Award Agreements. (June 10, 2014 Mem. Op. at 36-37). Allegis discontinued the IIP payments to Curran and Nicholas. (Defs.' Answer ¶¶ 46, 47, ECF No. 30). Curran only received two payments of $8, 851.00, and Nicholas only received one payment of $6, 195.00. (Am. Compl. ¶¶ 46, 47). Jordan, meanwhile, received all of his IIP payments, totaling over $1.45 million. (Am. Compl. ¶ 45).

         Plaintiffs brought claims for breach of contract, recession, and unjust enrichment against Defendants. (Am. Compl. ¶¶ 83-129). On December 23, 2013, Plaintiffs filed a Cross-Motion for Partial Summary Judgment on their breach of contract claim regarding the Agreements. (ECF No. 75). On June 10, 2014, the Court issued a Memorandum Opinion (ECF No. 85) and Order (ECF No. 86) granting Plaintiffs' Motion, concluding that Defendants breached their Award Agreements. (June 10, 2014 Mem. Op. at 36-40).

         On June 29, 2015, Plaintiffs filed a Second Motion for Summary Judgment on the issue of damages related to Defendants' breach. (ECF No. 102). On March 18, 2016, the Court issued a Memorandum Opinion (ECF No. 107) and Order (ECF No. 108) denying Plaintiffs' Motion without prejudice. The Court still concluded, however, that the IIP, Award Agreements, and Acknowledgement Letters were meant to be read and construed as a single contract (the “IIP Contract”). (Mar. 18, 2016 Mem. Op. at 12-13). The Court further concluded that Defendants' breach of the Award Agreements was material. (Id. at 7).

         On March 6, 2017, the Court ordered the parties to address whether Plaintiffs have met the requirements for rescission and restitution. (Mar. 6, 2017 Order, ECF No. 118).[4] In response, Plaintiffs filed the instant Motion on April 10, 2017. (ECF No. 124). On May 8, 2017, Defendants filed an Opposition. (ECF No. 127). Plaintiffs filed a Reply on May 30, 2017. (ECF No. 130).

         In reviewing a motion for summary judgment, the Court views the facts in a light most favorable to the nonmovant, drawing all justifiable inferences in that party's favor. Ricci v. DeStefano, 557 U.S. 557, 586 (2009); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986) (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59 (1970)). Summary judgment is proper when the movant demonstrates, through “particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations . . . admissions, interrogatory answers, or other materials, ” that “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a), (c)(1)(A). Significantly, a party must be able to present the materials it cites in “a form that would be admissible in evidence, ” Fed.R.Civ.P. 56(c)(2), and supporting affidavits and declarations “must be made on personal knowledge” and “set out facts that would be admissible in evidence, ” Fed.R.Civ.P. 56(c)(4).

         Once a motion for summary judgment is properly made and supported, the burden shifts to the nonmovant to identify evidence showing there is genuine dispute of material fact. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986). The nonmovant cannot create a genuine dispute of material fact “through mere speculation or the building of one inference upon another.” Othentec Ltd. v. Phelan, 526 F.3d 135, 141 (4th Cir. 2008) (quoting Beale v. Hardy, 769 F.2d 213, 214 (4th Cir. 1985)).

         A “material fact” is one that might affect the outcome of a party's case. Anderson, 477 U.S. at 248; see also JKC Holding Co. v. Wash. Sports Ventures, Inc., 264 F.3d 459, 465 (4th Cir. 2001) (citing Hooven-Lewis v. Caldera, 249 F.3d 259, 265 (4th Cir. 2001)). Whether a fact is considered to be “material” is determined by the substantive law, and “[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.” Anderson, 477 U.S. at 248; accord Hooven-Lewis, 249 F.3d at 265. A “genuine” dispute concerning a “material” fact arises when the evidence is sufficient to allow a reasonable jury to return a verdict in the nonmoving party's favor. Anderson, 477 U.S. at 248. If the nonmovant has failed to make a sufficient showing on an essential element of her case where she has the burden of proof, “there can be ‘no ...

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