Aerotek, Inc. v. Murphy et al
OPINION MEMORANDUM AND ORDER IT IS HEREBY ORDERED that Plaintiffs Motion for a Temporary Restraining Order, [Doc. No. 2], is DENIED.IT IS FURTHER ORDERED that Plaintiffs Motion for a Preliminary Injunction, [Doc. No. 2], is DENIED. 2 Signed by District Judge Henry Edward Autrey on 10/16/17. (CLA)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
JOEL T. MURPHY and BEACON HILL
STAFFING GROUP, LLC,
Case No. 4:17CV2469 HEA
OPINION, MEMORANDUM AND ORDER
This matter is before the Court on Plaintiff’s 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
Facts and Background1
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
Because the Complaint is not verified, the recitation of facts taken from the Complaint is set out for the purposes of
this motion only and in no way relieves the parties of the necessary proof thereof in later proceedings.
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
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
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 termination of EMPLOYEE’s employment for the purpose
(i) entering into any business relationship with such customer if
the business relationship is competitive with 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, or
(ii) reducing or eliminating the business such customer
conducts with AEROTEK; or
(b) Communicate with any person who has been a Regular Employee
within the two (2) year period preceding termination of
EMPLOYEE’s employment and about whom EMPLOYEE obtained
knowledge or had contact by reason of EMPLOYEE’s employment
with AEROTEK for the purpose of:
(i) providing services to any individual, corporation or entity
whose business is competitive with AEROTEK, or
(ii) leaving the employ of AEROTEK; or
(c) Communicate with any person who has been a Contract Employee
within the two (2) year period preceding termination of
EMPLOYEE’s employment and about whom EMPLOYEE obtained
knowledge or had contact by reason of EMPLOYEE’s employment
with AEROTEK for the purpose of:
(i) ceasing work for AEROTEK at customers of AEROTEK, or
(ii) refraining from beginning work for AEROTEK at
customers of AEROTEK, or
(iii) providing services to any individual, corporation or entity
whose business is competitive with AEROTEK.
As used in this Paragraph 4: “Regular Employee” means an employee of
AEROTEK who is not a “Contract Employee”; and “Contract Employee”
means an employee or candidate for employment of AEROTEK who is or
was employed to perform services or solicited by EMPLOYEE to perform
services at customers of AEROTEK.
The prohibitions contained in (a), (b) and (c) above 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.
6. COVENANT NOT TO DIVULGE CONFIDENTIAL
INFORMATION: EMPLOYEE covenants and agrees that, except as
required by the proper performance of EMPLOYEE’s duties for AEROTEK,
EMPLOYEE shall not use, disclose or divulge any Confidential Information
of AEROTEK to any other person, entity or company besides AEROTEK.
For purposes of this Agreement, “Confidential Information” shall mean
information not generally known by AEROTEK’s competitors or the general
public concerning AEROTEK and that AEROTEK take reasonable
measures to keep secret, including but not limited to: their financial affairs,
sales and marketing strategy, acquisition plans, pricing and costs; their
customers’ names, addresses, telephone numbers, contact persons, staffing
requirements, margin tolerances regarding pricing, and the names, addresses,
telephones numbers, skill sets, availability and wage rates of its temporary or
contract personnel; sales, recruiting, pricing and marketing techniques, sales
and recruiting manuals, forms and processes for acquiring and recording
information, financial controls, and management practices, procedures and
The Agreement also provides that “[t]he terms of Paragraphs 3 through 15 of
this Agreement (including the State Specific Appendix) shall survive the
termination of EMPLOYEE’s employment with AEROTEK.” The Agreement
further contains a notice requirement that Murphy provide Aerotek at least 14
days’ notice of any violation of the non-disclosure, non-compete and nonsolicitation obligations. The Agreement contains a choice of law provision to
apply Maryland law.
Murphy’s employment with Aerotek was terminated on July 19, 2017. By
the fact of his employment with Aerotek, and the knowledge he derived therefrom,
Murphy took with him upon his resignation Aerotek’s sensitive, confidential,
proprietary and trade secret information. In particular, Murphy took with him
knowledge regarding candidates’ preferences, work and salary histories, Aerotek’s
clients, the contact persons of those clients, the idiosyncrasies of the clients/contact
persons, the clients’ recruiting/placement needs, and the account managers’
assessment of the clients’ future needs and plans for meeting those needs.
Beacon Hill is engaged in the business of recruitment and placement of
employees to address clients’ staffing needs. Beacon Hill competes in the same
marketplace as Aerotek. Murphy became employed by Beacon Hill in the position
of Financial Account Executive in August 2017.
As a Financial Account Executive, Murphy is responsible for driving
profitability, networking with customers and prospects, developing contacts and
relationships with customers and prospects in a position to use Beacon Hill’s
services, and satisfying staffing requirements that customers and prospects request.
Murphy’s employment with Beacon Hill violates or has violated Paragraph 3
of the Agreement in that he has been working or has worked within the 50-mile
radius of Aerotek’s St. Louis office and is engaged in an aspect of Aerotek’s
Business in which he performed work during the two years prior to his termination.
Aerotek believes that Murphy’s position with Beacon Hill as a Financial Account
Executive in which he is responsible for the same or similar duties as in the
Account Manager position he held with Aerotek, has caused or will cause the
inevitable disclosure of Aerotek confidential and trade secret information in
violation of the Agreement.
Murphy also has violated his Agreement by communicating with at least six
(6) Aerotek customers with whom he did business on Aerotek’s behalf during the
two years prior to his separation for the purpose of entering into a competitive
business relationship for Beacon Hill’s benefit or reducing the business such
customers conduct with Aerotek.
In the course of these wrongful solicitations, Aerotek believes Murphy has
used and/or disclosed Aerotek’s confidential and trade secret information,
including, but not limited to, client contact information, for the purpose of
furthering his interests at the expense of Aerotek.
Murphy failed to provide at least 14 days’ notice to Aerotek, as required by
the Agreement, of his violation of his restrictive covenant obligations.
Murphy’s wrongdoing has caused and will continue to cause Aerotek
irreparable damage in excess of $75,000, exclusive of interest and costs.
Aerotek further alleges that Beacon Hill has encouraged, approved and/or
ratified Murphy’s unlawful and improper actions and has done so without privilege
to do so. Aerotek believes Beacon Hill’s business model is to hire employees from
competitors for the purpose of exploiting the contacts they developed at the
competitor to get new clients, disregarding competitors’ contractual rights in
protecting legitimate business interests.
Count I of Plaintiff’s Complaint alleges a breach of contract claim against
Murphy. Count II is brought for an alleged violation of the Missouri Uniform
Trade Secrets Act against Murphy. Count III is a claim for violation of Defend
Trade Secrets Act against Murphy and Count IV is a claim of tortious interference
with Contract against Beacon Hill.
Plaintiff seeks injunctive relief and damages.
The temporary and preliminary injunctive relief sought by the Plaintiff is the
same ultimate relief that it seeks in the Complaint, in addition to damages.
The Court has jurisdiction to resolve these issues under 28 U.S.C. §
“Whether a preliminary injunction should issue involves consideration of
(1) the threat of irreparable harm to the movant, (2) the state of the balance
between this harm and the injury that granting the injunction will inflict on other
parties litigant, (3) the probability that movant will succeed on the merits, and (4)
the public interest.” Dataphase Sys., Inc. v. C.L. Sys., Inc., 640 F.2d 109, 113 (8th
Cir. 1981). The same factors govern a request for a temporary restraining order.
Roberts v. Davis, 2011 WL 6217937, at *1 (E.D. Mo. Dec. 14, 2011). “No one
factor is dispositive of a request for injunction; the Court considers all the factors
and decides whether ‘on balance, they weigh towards granting the injunction.’”
Braun v. Earls, 2012 WL 4058073, at *1 (E.D. Mo. Sept. 14, 2012) (quoting Baker
Elec. Co-Op, Inc. v. Chaske, 28 F.3d 1466, 1472 (8th Cir. 1994)).
“Although “no single factor is determinative,” Dataphase, 640 F.2d at 113,
the probability-of-success factor is the most significant, see Home Instead, Inc. v.
Florance, 721 F.3d 494, 497 (8th Cir.2013).” Sharpe Holdings, Inc. v. U.S. Dept.
of Health and Human Services 2015 WL 5449491, 4 (8th Cir. September 17, 2015)
In seeking a mandatory injunction that disrupts the status quo, the
Plaintiffs “must demonstrate not only that the four requirements for a preliminary
injunction are met but also that they weigh heavily and compellingly in their
favor.” Blankenship v. Chamberlain, 2008 WL 4862717, at *2 (E.D. Mo. Nov. 7,
2008) (quoting Kikumura v. Hurley, 242 F.3d 950, 955 (10th Cir. 2001)).
Plaintiff seeks the same, ultimate relief that it requests in its Complaint.
“The purpose of a preliminary injunction is not to give the plaintiff the ultimate
relief it seeks. It is . . . to keep the parties, while the suit goes on, as far as possible
in the respective positions they occupied when the suit began.” WarnerVision
Entm’t Inc. v. Empire of Carolina, Inc., 101 F.3d 259, 261-62 (2d Cir. 1996).
Plaintiff seeks a temporary restraining order and a preliminary injunction
that orders Murphy to cease working for Beacon Hill and enjoins Murphy and
Beacon Hill from soliciting its employees and its customers, and enjoins Murphy
and Beacon Hill from using its proprietary and confidential information supplied or
furnished by Murphy.
Both Aerotek and Beacon Hill are in the staffing industry and provide
temporary and contract employees to work for customers or clients. They employ
personnel in customer sales (“account managers”) and in recruiting candidates to
fill customers' needs (“recruiters”). At Aerotek, Murphy was a recruiter initially,
and was promoted to account manager. He signed an Agreement pursuant to which
he agreed, for a period of 18 months after terminating employment, not to solicit or
attempt to hire other Aerotek employees, and not to compete with Aerotek in a new
position in the staffing industry.
In its complaint and other materials supporting the temporary restraining
order application, Aerotek asserts claims against Beacon Hill and Murphy for
breach of contract (i.e., violation of the Agreements), tortious interference with
contract and violations of the Missouri and Federal trade secrets acts. Essentially,
the allegations are that the Agreement has been, and is continuing to be, violated
through the employment of Murphy in competition with Aerotek (particularly his
contacts with Aerotek’s present or past customers and recruits), and the use and
disclosure by Murphy of Aerotek’s trade secrets and confidential information.
The standard for issuance of the “extraordinary and drastic remedy” of a
temporary restraining order or a preliminary injunction is very high, see Mazurek
v. Armstrong, 520 U.S. 968, 972, 117 S.Ct. 1865, 138 L.Ed.2d 162 (1997), and by
now very well established.
Likelihood of Irreparable Harm
“The threshold inquiry is whether the movant has shown the threat of
irreparable injury.” Modern Computer Sys., Inc. v. Modern Banking Sys., Inc., 871
F.2d 734, 738 (8th Cir. 1989) (en banc). “The failure to show irreparable harm is,
by itself, a sufficient ground upon which to deny a preliminary injunction . . . .” Id.
Irreparable harm must be certain and imminent such that there is a clear and
present need for equitable relief. Iowa Utils. Bd. v. F.C.C., 109 F.3d 418, 425 (8th
Cir. 1996). Possible or speculative harm is not sufficient. Local Union No. 884,
United Rubber, Cork, Linoleum, & Plastic Workers of Am. v.
Bridgestone/Firestone, Inc., 61 F.3d 1347, 1355 (8th Cir. 1995). When there is an
adequate remedy at law, a preliminary injunction is not appropriate. Modern
Computer Sys., 871 F.2d at 738.
Aerotek has not met its very high burden here. Assuming the validity and
enforceability of the Agreement, the evidence presently before the Court does not
clearly establish that Aerotek is suffering irreparable harm. Certainly Aerotek
contends that Murphy has been soliciting other Aerotek employees and its
customers, and has been using Aerotek trade secrets and other confidential
information, all of which could violate the Agreements. But Murphy has firmly
denied those contentions in his affidavit, and the record at this point does not
plainly favor Aerotek’s version of events. While the Court cannot resolve these
core issues on Aerotek's present motion, it is enough that at this stage of the
litigation Aerotek has not shown irreparable harm. There is no specific evidence,
as yet, that Murphy actually acquired and has been utilizing protected Aerotek
trade secrets or confidential information. Under the clear law in this circuit, the
injury in support of extraordinary preliminary injunctive relief must be both certain
and great; it must be actual and not theoretical, and of such imminence that there is
a clear and present need for equitable relief to prevent irreparable harm. Aerotek’s
alleged injury, however, remains at this time largely speculative, and far short of
the certainty and imminence that is required. Specific, concrete and imminent
claims of injury simply have yet to be established. Given this history, Aerotek has
not made on the current record the clear showing of irreparable harm that will
support the extraordinary injunctive relief it seeks. According to Murphy’s
affidavit, the information used in the staffing industry is readily available to
anyone who seeks the information through the internet, calls to prospective clients
and cold calls.
In so concluding, the Court does not intend to offer any firm assessment of
irreparable harm, or the overall balance of harms, other than to conclude that at this
time Aerotek has not met its burden on irreparable harm. If defendant is ultimately
shown to be in breach of the Agreement or otherwise liable on Aerotek’s claims,
those are serious matters that could warrant the conclusion that Aerotek is entitled
At no point has Plaintiff presented any concrete evidence of harm warranting
injunctive relief. Where “[t]he possible harm identified is wholly speculative . . . it
cannot be called irreparable harm.” Local Union No. 884 v. Bridgestone/Firestone,
Inc., 61 F.3d 1347, 1355 (8th Cir. 1995).
More significantly, Plaintiff’s alleged harm is not irreparable, as there are
other causes of action wherein money damages are a potential form of relief.
Alternative Med. & Pharmacy, Inc. v. Express Scripts, Inc., 2014 WL 4988199,
at *7 (E.D. Mo. Oct. 7, 2014) (“[T]he harm is purely economic and therefore not
Likelihood of Success on the Merits
Although at first blush it appears that Plaintiff has a compelling argument
that Murphy has breached the Employment Agreement, his affidavit reveals that he
is not performing the same work as he did with Aerotek. Further, he avers he has
not taken any trade secrets or confidential information, nor has he downloaded any
of Aerotek’s password protected information. This matter is not yet ripe for
factual determinations regarding the actions Murphy took or did not take and
whether the information was obtained from Murphy’s work at Aerotek or whether
he acquired information through publically available means.
The public interest favors both sides in this controversy. The integrity of
valid employment agreements must be maintained, while by the same token, the
public interest disfavors restraints on one’s ability to practice his or her trade.
Balance of Harms
Because Plaintiff seeks the ultimate relief it demanded in the Complaint,
Defendants will be harmed by the loss of its right to trial. Plaintiff, on the other
hand has failed to present evidence that monetary damages will not make it whole
in the event a breach has been established.
The Court has considered the entire record and the arguments presented at
the hearing on this matter. Based upon the foregoing consideration of all of the
Dataphase factors, Plaintiff’s demand for mandatory and ultimate relief and failure
to establish irreparable harm, Plaintiff is not entitled to a temporary restraining
order or a preliminary injunction.
IT IS HEREBY ORDERED that Plaintiffs’ Motion for a Temporary
Restraining Order, [Doc. No. 2], is DENIED.
IT IS FURTHER ORDERED that Plaintiffs’ Motion for a Preliminary
Injunction, [Doc. No. 2], is DENIED.
Dated this 16th day of October, 2017.
HENRY EDWARD AUTREY
UNITED STATES DISTRICT JUDGE
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