SATURN WIRELESS CONSULTING, LLC. v. AVERSA
REDACTED OPINION. Signed by Judge Kevin McNulty on 04/26/2017. (ek)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
Civ. No. 174637 (KMJJBC)
KEVIN MCNULTY, U.S.D.J.:
This matter comes before the Court on the application by order to
show cause (ECF no. 3) of the plaintiff, Saturn Wireless Consulting, LLC
(“Saturn”), for a preliminary injunction. Saturn asks this Court to enjoin
its ex-employee, defendant Frank Aversa, from soliciting, contacting, or
otherwise interfering with Saturn’s customer AT&T. The action is one for
breach of a written contract containing a restrictive non-solicitation
On Friday, March 10, 2017, 1 denied Saturn’s request for a
temporary restraining order but ordered expedited discovery and set the
matter down for a preliminary injunction hearing. On March 31St and
April 3rd, 2017, I held an evidentiary hearing. The court heard live
testimony from two witnesses: Manika Sood, who testified on behalf of
Saturn, and Frank Aversa, who testified on his own behalf. By the
parties’ stipulation, I accepted affidavits from witnesses in lieu of direct
testimony. Sood and Aversa were cross-examined and also gave re-direct
This Court exercises jurisdiction pursuant to 28 U.S.C. § 1332 as the
parties are diverse and the amount in controversy exceeds $75,000.
testimony. The parties submitted documentary exhibits, as well as
For the reasons set forth below, the Court is persuaded that
Saturn has met its burden of showing that injunctive relief is warranted,
although not to the extent requested. Subject to the Court’s 4 pencil”
modifications to the non-solicitation provision, Saturn’s motion for a
preliminary injunction enforcing that provision will be GRANTED.
FINDINGS OF FACTS
A. Saturn’s Business
Saturn is a New Jersey-headquartered Limited Liability Company in
the business of providing wireless communications support and
training, and selling accessories to complement wireless devices.
Certain record items repeatedly cited are abbreviated as follows:
Compl. = Verified Complaint, filed March 10, 2017 (ECF No. 1).
Aversa Deci. = Declaration of Frank Aversa, dated March 24, 2017,
submitted in opposition to Saturn’s order to show cause for a temporary
restraining order and preliminary injunction (ECF No. 12).
Sood Cert. = Certification of Manika Sood, dated March 24, 2017,
submitted in support of Saturn’s order to show cause for a temporary
restraining order and preliminary injunction (ECF No. 14).
Ex. P = Plaintiff’s Exhibit, entered into evidence at the preliminary
injunction hearing, held March 31, 2017 and April 3, 2017.
Ex. D_ = Defendant’s Exhibit, entered into evidence at the preliminary
injunction hearing, held March 31, 2017 and April 3, 2017.
Restrictive Agreement = Sales Representative Confidentiality, NonSolicitation, and Non-Compete Agreement between Saturn and Aversa, Ex. P2,
also Compl. Ex. A (ECF No. 1).
Alliance Agreement = Saturn’s AT&T Alliance Program Agreement with
AT&T, Ex. Dl, also Sood Cert. Ex. A (ECF No. 14).
P1. Br. = Application/Brief in Support of Plaintiff’s Order to Show Cause
for a Temporary Restraining Order and Preliminary Injunction by Saturn
Wireless Consulting, LLC (ECF No. 3).
Def. Opp. = Brief in Opposition to Plaintiffs Order to Show Cause for a
Preliminary Injunction (ECF No. 10).
2. Since 2001, Saturn has been a Solutions Provider for AT&T (an
3. The AT&T Alliance Program Agreement between AT&T and Saturn
(the “Alliance Agreement”), signed in December 2013 and effective as
of January 1, 2014, sets forth the terms and conditions of AT&T’s
relationship with Saturn. (See Alliance Agreement.)
4. The Alliance Agreement defines a “Customer” as a
(See Alliance Agreement
5. The Alliance Agreement defines Saturn, for purposes of the Alliance
(Id. § 4.1)
6. Additionally, the Alliance Agreement includes a non-exclusivity
provision, which provides that
7. Under the Alliance Program and Agreement, AT&T refers businesses
that subscribe to AT&T’s wireless network (“AT&T end-users”) to
Saturn for support services. Saturn then provides products and
services to those referred AT&T end-users in exchange for
compensation paid by AT&T. (Sood Cert.
8. For example, Saturn receives a commission from AT&T when it helps
an AT&T end-user activate a new line of service from AT&T. (Id. ¶ 14)
9. AT&T and Saturn consider this relationship, pursuant to AT&T’s
Alliance Program, to be a business “partnership.”
10. Because AT&T compensates Saturn for the services it provides to
AT&T end-users, Saturn also considers AT&T a customer or client of
Saturn. And, because Saturn provides services and products directly
to the AT&T end-users, it considers those businesses to be customers
or clients of Saturn as well. (Id.
11. Saturn derives 95% of its business from the referrals it gets from
AT&T. Saturn’s relationship with AT&T is therefore critical to its
continued viability. (Id.
5, 14, 39)
12. Saturn’s relationship with AT&T is also critical because Saturn must
compete for AT&T’s referrals against hundreds of other AT&T SPs
throughout the country. (Id. ¶ 16; Aversa Deci. ¶ 12)
13. Saturn builds and maintains its relationship with AT&T by fostering
individual relationships and goodwill between Saturn’s Regional
Account Managers (“RAMs”) and AT&T sales representatives. (Sood
Cert. ¶ 2)
14. AT&T employs a hierarchy of sales representatives, e.g., officers,
general managers, sales executives, and sales consultants. (Aversa
¶ 18) The AT&T employees who serve as the primary liaisons
between AT&T and its SPs are called Channel Managers. (Id. ¶ 16)
15. As Saturn’s CEO, Manika Sood testified credibly that “Saturn’s
relationships with AT&T sales representatives have been cultivated
through more than 15 years of relationship building, travel,
entertainment, in-person meetings, the provision of prompt and
accurate service and the preparation of marketing materials to
promote the unique services that Saturn provides to its customers.”
16. Sood also represented that “Saturn is.
one of the only [AT&T SPs]
that provides full end-to-end solutions for corporate customers
looking for wireless services including, by way of example and
without limitation, orders processing, buyback of used equipment,
non-stocked devices that AT&T does not carry, professional services
and mobility consulting.” (Id.)
17. Saturn’s success has led AT&T to honor Saturn as a “platinum
champion” partner for several years running, most recently in 2017.
¶ 16 & Ex. C)
18. In recent years, Saturn has employed between five and six RAMs to
build and maintain relationships with and sell Saturn’s services to
AT&T sales representatives, with each RAM having responsibility for
several neighboring states in the United States. (Id.
¶f 3, 16)
3. Aversa’s Employment By Saturn And Restrictive
Agreement with Saturn
19. Saturn hired Aversa as a RAM on August 16, 2013, giving him
responsibility for sales in Alabama, Florida, Georgia, Louisiana, North
Carolina, South Carolina and Tennessee (the “Greater Southeast”)
through December 2014. Beginning in January of 2015, however, his
territory was reduced to Florida, Louisiana and Alabama (the
“Southeast”) (Sood Cert.
20. Before accepting his position with Saturn, Aversa worked for Verizon
Wireless from 2001 to 2006, and then for Chase Bank. (Aversa Deci.
¶j 5—6) He had general sales and wireless experience before coming
to Saturn, but no experience with the AT&T Alliance program or
relationships with AT&T sales representatives.
21. As a condition of employment, on August 1, 2013, Aversa entered
into a Confidentiality, Non-Solicitation, and Non-Compete Agreement
with Saturn (the “Restrictive Agreement”), which contains a New
Jersey choice of law provision. (See Restrictive Agreement
22. Aversa signed the Restrictive Agreement. Before signing, he was given
the opportunity to, and did, read the Restrictive Agreement. He was
also given the opportunity to have an attorney review the Restrictive
23. The Restrictive Agreement prohibits Aversa from disclosing any of
Saturn’s confidential information to any third party, “except for the
benefit of ISaturn and in the course of Employee’s employment with
[Saturn].” It also prohibits Aversa from retaining or disclosing any
“written or other tangible material” containing confidential
information in the event his employment with Saturn ceases for any
reason. (Id. ¶ l(b)&(c))
24. The Restrictive Agreement defines Saturn’s confidential information
Confidential Information generally includes any and
all information concerning products and pricing;
pricing methods; existing customer and
prospective customer lists, budgets, needs, and
preferences; Information relating to services
used and preferred by [Saturn’sI clients and
prospective clients; historical sales Information;
supplier and vendor agreements; market research;
policies and other terms of business; marketing
practices; advertising strategies; unpublished
financial data; methods of operation; pending
proposals; business plans; processes; computer
software used or to be used by [Saturn]; computer
data information; information concerning [Saturn]’s
employees; proprietary training materials; and any
trade secrets or intellectual property. Employee
specifically acknowledges that [Saturn]’s
customer relationships were developed over
many years, at great expense and effort by
ISaturn], and as a result of [Saturn]’s
relationships with its vendors, customers, agents
and their respective employees, and that such
relationships are deemed to be protected
25. The Restrictive Agreement also contains a non-solicitation provision,
which provides, in relevant part:
As a specific condition of Employee’s employment
with [Saturn] and in consideration of the salary and
other compensation paid by [Saturn] to Employee,
Employee agrees that, from the date hereof and
during Employee’s employment with [Saturn], and
for one (1) year immediately after Employee’s
employment with [Saturn] ceases, regardless of
whether the termination of Employee’s employment
is initiated by [Saturn] or by Employee, is for cause
or without cause, Employee will not directly or
(iii) knowingly contact or solicit,
either directly or indirectly, any person, firm or
entity connected with Esaturn], including its
customers, clients, vendors, or suppliers for the
purpose of diverting work or business from
(Id. ¶2 (emphasis added))
26. Additionally, the Restrictive Agreement contains a covenant not to
compete, which provides, in relevant part:
As a specific condition of Employee’s employment
with [Saturn] and in consideration of the salary and
other compensation paid by [Saturn] to Employee,
Employee agrees that, from the date hereof and
during Employee’s employment with [Saturn], and
for one (1) year immediately alter Employee’s
employment with [Saturn] ceases, regardless of
whether the termination of Employee’s employment
with [Saturn] is initiated by [Saturn) or by
Employee, is for cause or without cause, Employee
shall not, directly or Indirectly: a) provide any
services to (whether as an employee, agent,
consultant, contractor, proprietor, partner,
manager, officer, director, stockholder, investor,
advisor, or otherwise), b) have any ownership
interest in, or c) participate in, either directly or
indirectly, the financing, operation, management, or
control of: any person, sole proprietorship, firm,
corporation, trust, joint venture, or other
business or entity that engages in a “Restricted
Business” in a “Restricted Territory,” as such
terms are defined below.
The term “Restricted Business” shall mean any
business. . . providing services that are similar
or related to the services provided by [Saturn].
Specifically, this term encompasses any and all
whose business objective, in
whole or in part, is to provide integrated wireless
solutions, services, products, support, and/or
applications providers and hardware providers.
The term “Restricted Territory” shall mean the
territory within a 50-mile radius of tSaturn]’s
Jersey City headquarters, or the territory within
a 50-mile radius of any location at which
113 (emphases added))
27. The Restrictive Agreement further provides:
Employee acknowledges that should Employee
breach any of the provisions of Sections 1, 2, or 3,
[Saturn] will suffer immediate and irreparable harm
and that money damages will be inadequate relief.
Therefore, Employee agrees that in the event that
Employee breaches or threatens to breach any of
the provisions of Sections 1,2, or 3, [Saturn]
shall be entitled to: (i) injunctive relief enjoining
Employee from committing or continuing to
commit any violation of this Agreement, and
employee consents to the issuance by a court of
competent jurisdiction of a temporary restraining
order, preliminary or permanent injunction to
enforce its rights under this Agreement; and (ii)
recovery from Employee of all gross profit earned by
the business entity on whose behalf Employee
conducted such activity in violation of Sections 1,2,
or 3. [Saturn] shall also be entitled to seek any other
damages or remedies available under law, in equity,
or by statute.
(Id. ¶5 (emphasis added))
28. Additionally, the Restrictive Agreement provided that, in the event of
Aversa’s termination, whether voluntary or not, he was to
immediately and without request surrender to Saturn all Saturn
equipment, documents, and data, including his cell phone and laptop
computer. (See id.
29. The Restrictive Agreement contains the following warning on the last
page, just above where Aversa and Saturn signed: “CAUTION: THIS
AGREEMENT RESTRICTS EMPLOYEE’S RIGNTS TO COMPETE
WiTH [SATURN] AND DISCLOSE OR USE [SATURN’S]
CONFID(ENJTIAL INFORMATION DURING AND SUBSEQUENT TO
EMPLOYEE’S EMPLOYMENT. EMPLOYEE HAS READ THIS
AGREEMENT CAREFULLY AND UNDERSTANDS ITS TERMS....”
30. Early in Aversa’s employment with Saturn, Saturn flew him from his
Florida home to New Jersey for an orientation. By Aversa’s account
this consisted of little more than having him shadow another Saturn
employee. Aversa says his real training occurred through online
learning modules that AT&T provided for free to AT&T SPs and which
taught him about AT&T systems, products, and services. (Id. 18)
31. By Sood’s account, Aversa’s training was more extensive, and
involved teaching Aversa everything he knows about the wireless
business, wireless systems and services, Saturn’s products and
unique solutions, relationship building, and sales and marketing.
¶ 17—2 1)
32. I accept factually that Aversa’s job required him both to learn about
AT&T’s products and services, and to learn about Saturn’s business
33. Throughout Aversa’s employment with Saturn, Sood introduced
Aversa to AT&T sales representatives, often making trips to Aversa’s
Southeast territory for that purpose. (Sood Cert.
¶[ 17, 19—20)
34. Aversa emphasizes the role of AT&T Channel Managers, who, at the
request of AT&T SPs, would furnish names and contact information
for AT&T sales representatives, which led to the building of
relationships. (Aversa IJeci.
¶ 18; see also Ex. D3)
35. Again, I accept factually that Sood’s introductions and preexisting
relationships, as well as the AT&T SP’s building of relationships, were
36. For the part of 2013 that Saturn employed Aversa, Aversa earned
$18,478. In 2014, he earned $102,251. Tn 2015, he earned $86,874,
and in 2016 (through November 15, when he left), he earned
$66,988. (Sood Cert.
C. Aversa’s Resignation and Formation of CCG
37. Aversa resigned from Saturn, giving two weeks’ notice by letter to
Sood, on November 15, 2016. (Sood Cert.
¶ 24 & Ex. 0; Aversa Deci.
38. Aversa had used a celiphone for Saturn-related business. On that
celiphone he had business-related contact information for, inter alia,
AT&T sales representatives and AT&T end-users. (Aversa Deci.
The phone itself had not been issued to him by Saturn. When Aversa
resigned, he “wiped” the celiphone clear (i.e., deleted all information
Aversa had downloaded onto it and restored it to its default settings)
and sold it. (Id.)
39. Aversa testified that he believed Sood deactivated his celiphone’s SIM
card, which would have cleared the celiphone of Saturn-related data
unless that data was also stored on the celiphone’s hard drive.
40. Aversa returned the laptop Saturn had provided to him. Before doing
so, Aversa wiped the laptop of all files, programs, and materials he
had downloaded or installed loca]ly, and reinstalled the laptop’s
operating system. (Id,
41. Aversa explained that he wiped his laptop because he had used the
laptop for personal matters, in addition to Saturn-related matters,
and wished to maintain his privacy. (Id.)
42. Wiping the laptop had the effect of deleting all local copies of e-mails
Aversa testified that he resigned, in part, because he caught wind that
Sood was committing fraud against AT&T and that for years she had been
cheating Aversa out of his full commissions. (See Aversa Deci. ¶ 25—29) The
Court declines to make any finding of fact as to these accusations, which, at
least as presented here, are based on hearsay and are not substantiated.
from the laptop. (Id.
43. Anyone at Saturn with administrative privileges, however, would have
been able to access Aversa’s deleted e-mails via Saturn’s GoDaddy
server, for a period of 60 days after Aversa deleted them.
44. After Aversa’s resignation, Saturn appointed Greg Bocchino, who had
previously taken over Georgia, North Carolina, South Carolina and
Tennessee from Aversa in December 2014, to cover Aversa’s
Southeast territory. Since December 2016 or January 2017,
Bocchino has been Saturn’s RAM for the entire Greater Southeast
45. At some point around December 2, 2016, Aversa set up his own
business. He created a limited liability company called Connected
Communications Group (“CCG”), which has entered into a contract
with AT&T to be an AT&T SP. Like Saturn, CCG specializes in
wireless solutions “within the AT&T suite of products and services.”
Thus, CCG competes with Saturn. (Sood Cert.
46. CCG competes primarily in Aversa’s former Southeast region, i.e.,
Florida, Alabama, and Louisiana, but also in Mississippi. (Def. Opp.
47. CCG works with a company called Think Creative, another AT&T SP.
Think Creative competes with Saturn as well as with CCG. Pursuant
to CCG’s partnership arrangement with Think Creative, under which
CCG operates as a subcontractor of Think Creative, CCG receives 70—
80% of the referral fees that Think Creative receives from AT&T.
48. CCG is also in the process of expanding its business in AT&T’s
wireline solutions space. (Aversa Deci.
¶ 41) The term “wireline” refers
to non-wireless communications systems. (Id.) During Aversa’s years
of employment with Saturn, Saturn did not compete in the wireline
D. Saturn’s and Aversa’s Relationships with AT&T Since
49. Aversa denies that, post-resignation, he retained any copies of
Saturn’s confidential information, including contact information for
AT&T sales representatives or AT&T end-users with whom he
regularly worked. While Saturn has its suspicions, and points
particularly to the “wiping” of the cell phone and laptop computer,
there is as yet no affirmative evidence that Aversa retained such
information. He testified that there are other means of obtaining such
information, such as contact information for AT&T sales
representatives and AT&T end-users serviced by Saturn.
50. It was established at the evidentiary hearing, for example, that while
at Saturn, Aversa had subscribed to a cloud-based service that let
him receive calls for at least two telephone numbers on his celiphone.
One number was his official Saturn business phone number (the
“404 number”), for which Saturn paid. The other was a number
Aversa had set up in 2015 and paid for personally, but which he also
used for Saturn business (the “561 number”).
51. Aversa included both the 404 number and the 561 number in the
signature block that appeared in his Saturn-related e-mails. Since
leaving Saturn, he has continued to use the 561 number (but not the
404 number) in his signature block for CCG. The court concludes
from this that Aversa’s contacts while at Saturn might seamlessly
continue to contact him at CCG using the 561 number.
52. On December 22, 2016, Aversa had contact with AT&T Channel
Saturn. From A.J.
with whom Aversa had not worked while at
he requested and received a list of the names
and contact information for AT&T’s current sales representatives in
the Southeast. (See Ex. D3; Ex. P11 (Aversa Deposition Transcript)
53. Aversa testified that he is also connected to many of his former
Saturn contacts through Linkedln.
54. Since Aversa’s resignation from Saturn, Sood has been able to access
and monitor new incoming emails to Aversa’s old Saturn e-mail
55. On December 20, 2016, Sood intercepted an e-mail sent to Aversa’s
Saturn e-mail address. This included an e-mail thread between
Aversa on behalf of CCQ, AT&T sales representative
and AT&T end-user
27 & Ex. D (also marked as Ex. P6>) Aversa had established a
relationship with both S.C.
while at Saturn.
28; see also Ex. P7)
56. Sood intercepted another e-mail sent to Aversa’s Saturn e-mail
address on March 1, 2017. That e-mail demonstrated that S.C.
had recently referred Aversa and CCG to provide services to an AT&T
end-user company called
had never done business with this company, Sood believes Saturn
would have received S.C.'s
Saturn at the time. (Sood Cert.
referral had Aversa still worked for
57. In 2015, Saturn sales generated in Aversa’s region were
From January through November 15, 2016, Saturn sales in Aversa’s
Between November 15, 2016 (the date of
Aversa’s resignation) and late March, 2017, Saturn sales in Aversa’s
former region were
58. Saturn attributes the post-November 15, 2016 drop in sales to
Aversa’s diversion of business from Saturn to CCG. (Id.) The court
notes, however, that there had already been a precipitous drop from
20 15—16, and that the lag in sales immediately after Aversa’s
resignation might be attributable in part to the interregnum between
Aversa’s resignation and Saturn’s appointment of Bocchino to the
Greater Southeast region.
59. During expedited discovery in advance of the evidentiary hearing,
Saturn produced lists of AT&T end-users within Aversa’s Southeast
region In 2015 and 2016 that generated business for Saturn. (See
Exs. P3, P3A). These lists also identi1r the AT&T sales representatives
that referred the business to Saturn. (Id.) (Exhibit P3 is organized by
name of AT&T sales representative; Exhibit P3A consists of the same
data, organized by name of end-user customer.)
60. Aversa, for his part, produced a list of AT&T customers with whom
Aversa has commenced and/or completed business since leaving
Saturn. (See Ex. P4) This list also indicates (1) whether Aversa has
commenced and/or completed business on behalf of CCG alone or in
conjunction with Think Creative; (2) the AT&T sales representative
that referred Aversa to the AT&T end-user; and (3) an alternative
referral source (i.e., someone who made the referral other than an
AT&T sales representative), if any. (Id.)
61. As for alternative referrals, only one individual named
is listed, J.J.
is no longer an AT&T sales representative,
but was an AT&T sales representative while Aversa worked for
Saturn. It was while working at Saturn that Aversa came to know
62. Of the 16 AT&T sales representatives listed on Exhibit P4 (Aversa’s
list of CCG business), all but two,
are individuals that Aversa came to know while working at
Saturn. Specifically, Aversa met them through introductions made by
Sood. (Ex. P11 pp. 158-59; Ex. P4)
63. Sood also introduced Aversa to the bosses of most, if not all of, the
AT&T sales representatives listed on Exhibit P4.
64. Sood testified that Aversa is using Saturn’s confidential business
strategies, including technical solutions and strategies for positioning
himself effectively with AT&T sales representatives so as to generate
referrals, which he learned at Saturn. Sood believes that he is using
these strategies to divert business from Saturn to CCG and/or Think
Creative. Sood was unable to point to any document on which the
relevant allegedly confidential information is memorialized, or to
articulate any specific confidential strategy. (See Ex. D 12 (Sood
Deposition Transcript) pp. 79:25—81:9, 106:9—107:1)
ANALYSIS/CONCLUSIONS OF LAW
“A plaintiff seeking a preliminary injunction must establish (1)
that he is likely to succeed on the merits, (2) that he is likely to suffer
irreparable harm in the absence of preliminary relief, (3) that the balance
of equities tips in his favor, and (4) that an injunction is in the public
interest.” Winter v. Natural Res. Def Council, Inc., 555 U.S. 7, 20 (2008)
(numbering added); accord American Express Travel Related Servs., Inc. v.
Sidamon-Eristoff 669 F.3d 359, 366 (3d Cir. 2012). Because a
preliminary injunction is “an extraordinary and drastic remedy,” the
plaintiff must establish each element by a “clear showing.” Mazurek v.
Armstrong, 520 U.S. 968, 972, 117 S. Ct. 1865, 1867 (1997) (quoting 1 IA
C. Wright, A. Miller, & M. Kane, Federal Practice and Procedure § 2948,
pp. 129—130 (2d ed. 1995)). Even then, a trial court’s decision to issue a
preliminary injunction is “an act of equitable discretion.” eBay Inc. v.
MercExchange, L.L.C., 547 U.S. 388, 391, 126 S. Ct. 1837, 1839, 164 L.
Ed. 2d 641 (2006).4
A Court will consider all four factors, but the first two are
essential. See Adams v. Freedom Forge Coip., 204 F. 3d 475, 484 (3d Cir.
2000); accord Hoxworth v. Blinder, Robinson & Co., 903 F.2d 186, 197
(3d Cir. 1990) (placing particular weight on the probability of irreparable
A federal court confronted with a request for a preliminary injunction
based on diversity jurisdiction applies the federal standard to the question of
whether a preliminary injunction is warranted, pursuant to Fed. R. Civ. P. 65.
Instant Air Freight Co. v. C.F. Air Freight, Inc., 882 F.2d 797, 799 (3d Cir. 1989).
harm and the likelihood of success on the merits, stating: “[Wie cannot
sustain a preliminary injunction ordered by the district court where
either or both of these prerequisites are absent.” (quoting In re Arthur
Treacher’s Franchisee Litigation, 689 F.2d 1137, 1143 (3d Cir. 1982));
Morton v. Beyer, 822 F.2d 364, 367 (3d Cir. 1987); Frei,cenet, S.A. v.
Admiral Wine & Liquor Co., 731 F.2d 148, 151 (3d Cir. 1984); American
Express, 669 F.3d at 366, 374. But see Conestoga Wood Specialties Corp.
v. Secretary of U.S. Dept. of Health and Human Services, 724 F.3d 377 (3d
Cir. 2013) (debating whether there is a “sliding scale” of the four factors).
Saturn argues that the four preliminary injunction factors weigh in
its favor and that, pursuant to the non-solicitation provision in the
Restrictive Agreement, this Court should enjoin Aversa from working
with AT&T in any capacity for a period of one year. (See, e.g., Compi.
p. 1) For the reasons explained below, I find that Saturn is entitled to
injunctive relief, but not to the full scope of relief that it seeks.
A. Likelihood of success on the merits
To show a likelihood of success, Saturn must establish “a
reasonable probability, not the certainty, of success on the merits.” SK &
F, Co. v. Premo Phar,n. Labs., Inc., 625 F.2d 1055, 1066 (3d Cir. 1980).
Saturn bring claims against Aversa for: (1) breach of contract; (2)
misappropriation and conversion of trade secrets and confidential
information; (3) actual and threatened misappropriation under the New
Jersey Trade Secrets Act, N.J.S.A. 56:15-1 et seq.; (4) breach of fiduciary
duty and duty of loyalty; (5) unjust enrichment; and (6) unfair
competition. (Compi.) Saturn also brings a seventh count seeking
attorney’s fees pursuant to Section 6 of the Restrictive Agreement. (Id.)
The goal of Saturn’s request for injunctive relief, however, is to prevent
Aversa from breaching his Restrictive Agreement. I therefore focus my
analysis on Saturn’s breach of contract claim—specifically, with respect
to the non-solicitation provision in the Restrictive Agreement.
In general, to establish a breach of contract claim, a plaintiff must
demonstrate (1) “that the parties entered into a valid contract”; (2) “that
the defendant failed to perform [its] obligations under the contract”; arid
(3) “that the plaintiff sustained damages as a result,” Murphy v. Implicito,
920 A.2d 678, 689 (N.J. Super. Ct. App. Div. 2007).6 The parties do not
dispute that the Restrictive Agreement is a valid contract. Their
disagreement focuses on the second prong: Aversa’s alleged breach of the
non-solicitation provision. Aversa argues that (1) the language of the
non-solicitation provision does not prohibit him from conducting
business as an AT&T SI’, but rather, it forbids him only from soliciting
Saturn’s end-user customers for the narrow “purpose of diverting work
or business from [Saturn]”; and (2) the non-solicitation provision is
unenforceable, because it does not reasonably protect any legitimate
interest of Saturn.
The non-compete provision of the Restrictive Agreement is geographically
limited to a 50-mile radius around Saturn’s New Jersey headquarters. (See ¶
21, supra.) Although Saturn at first pressed a claim under the non-compete, it
no longer seeks injunctive enforcement of that provision with respect to
Aversa’s current operations, which are primarily in the southeastern United
The parties seem to agree that New Jersey law applies in this diversity
action, pursuant to the Restrictive Agreement’s choice of law provision. (See ¶
16, supra; Restrictive Agreement ¶ 12). “In evaluating whether a contractual
choice-of-law clause is enforceable, federal courts sitting in diversity apply the
choice-of-law rules of the forum state. Generally, when parties to a contract
have agreed to be governed by the laws of a particular state, New Jersey courts
will uphold the contractual choice if it does not violate New Jersey’s public
policy.” Nuzzi u. Aupaircare, Inc., 341 F. App’x 850, 852 (3d Cir. 2009) (internal
quotation marks omitted) (citing Homa u. Am. Express Co., 558 F.3d 225, 227
(3d Cir. 2009)) Neither party contends that the choice of law provision in the
Restrictive Agreement violates public policy, and I see no reason why it would
(unless of course it were applied overbroadly). Therefore, I will apply New Jersey
law as to the parties’ dispute over the non-solicitation provision.
The non-solicitation provision forbids Aversa from doing
business with AT&T sales representatives and end-user
clients that are customers/clients of Saturn
New Jersey courts tasked with interpreting a contract must
“examine the plain language of the contract and the parties’ intent, as
evidenced by the contract’s purpose and surrounding circumstances.”
State Troopers Fraternal Ass’n of New Jersey, Inc. v. State, 149 N.J. 38,
47, 692 A.2d 519, 523 (1997). “Contracts should be read ‘as a whole in a
fair and common sense manner.’” Manahawkin Convalescent v. O’Neill,
217 N.J. 99, 118, 85 A.3d 947, 958 (2014) (quoting Hardy ex rd. Dowdell
v. Abdul—Matin, 198 N.J. 95, 103, 965 A.2d 1165 (2009)). Thus, “[t]he
court’s role is to consider what is written in the context of the
circumstances at the time of drafting and to apply a rational meaning in
keeping with the ‘expressed general purpose.’” Paczflco v. Pacz:fico, 190
N.J. 258, 266, 920 A.2d 73, 77 (2007) (quoting Atlantic Northern Airlines,
Inc. v. Schwimmer, 12 N.J. 293, 302, 96 A.2d 652 (1953)).
Aversa raises two arguments as to why the language of the nonsolicitation provision does not restrict any of his business operations
with CCG and Think Creative.
First, comparing the non-solicitation and non-compete provisions
of the Restrictive Agreement, Aversa finds a sort of division of labor
between the two. He argues that only the non-compete provision refers to
doing business with “telecommunications companies” generally, while
the non-solicitation provision is more specifically directed to solicitation
of Saturn’s “customers, clients, vendors, or suppliers.” (Def. Opp. 15; see
§ 2-3). Reading the Restrictive Agreement as a
whole, Aversa concludes that the non-solicitation provision cannot have
been intended to restrict Aversa from working with a telecommunications
company such as AT&T. (Def. Opp. 14—15) This conclusion is reinforced,
he claims, by the fact that Saturn commonly refers to AT&T as its
partner, not its client or customer. (Id. 15—16; see generally CompL; see
also, e.g., Sood Cert. Ex. D pp. 000073—74, 000082—83, Ex. E p.
000131).7 In short, Aversa submits that interpreting both the non
compete and non-solicitation provisions to restrict Aversa from doing
business with AT&T would create redundancies in terminology and
purpose, violating canons of contract construction. (See Def. Opp. 14—17)
The point is illustrated, says Aversa, by the cautionary language at
the very end of the Restrictive Agreement, which specifically warns that
the agreement restricts an employee’s “right to compete” and to “disclose
or use [Saturn’s] confidential information.” (See
¶ 29, supra) Aversa
argues these two distinct warnings track the distinct purposes of the
non-compete and non-solicitation provisions. The non-compete broadly
restricts Aversa from engaging in the same business as Saturn (albeit
locally), while the non-solicitation provision prevents an employee from
diverting existing business from Saturn, for the narrow purpose of
protecting confidential information.
In analyzing Aversa’s argument, I rely primarily on the plain
language of the contract, but also take into consideration the record
evidence and findings of fact, supra, to discern its purpose. I think the
non-solicitation covenant’s phrase “any person, firm or entity connected
with [Saturn], including its customers, clients, vendors, or suppliers”
may fairly encompass (i) AT&T sales representatives; (ii) AT&T’s end-user
customers; and (iii) AT&T generally (I.e., as a company), but only within
the context of the wireless Alliance Program. Sood testified credibly, and
At the evidentiary hearing, Aversa’s counsel implied that the meaning of
“customer” should be construed with reference to the Alliance Agreement,
which defines customers as AT&T’s end users and does not use the term in
connection with AT&T’s relationship with Saturn. But this goes too far. The
Restrictive Agreement and Alliance Agreement govern the relationships between
different parties, do not cross-reference one another, and contain merger
clauses. There is simply no reason to conclude that the definition of terms in
the Alliance Agreement, entered into in December 2013, informs those in the
Restrictive Agreement, entered into earlier, in August 2013. And as a matter of
common sense, the same person or entity might be a customer in the context of
one relationship, but not another.
the exhibits support, that AT&T sales representatives fall within the plain
meaning of “clients” and “customers.” They engage the services of
Saturn, and Saturn is paid a commission in exchange. The sales
representatives may also be seen as “suppliers” of sales leads, although
this is less certain. AT&T’s end-user customers (i.e., the businesses to
which Saturn directly provided solutions), too, fall within the plain
meaning of clients or customers of Saturn. AT&T as a company, within
the confines of the Alliance Program, is a vendor of products and a
supplier of end-user customers for Saturn. (Restrictive Agreement
Additionally, I read the language “for the purpose of diverting work
or business from [Saturni” to serve a limiting purpose. In light of
Saturn’s actual practices, this language restricts Aversa only from
accepting referrals or any other form of business from the AT&T sales
representatives with whom Saturn works or has worked, and from selling
to or performing services for AT&T end-users that are current or past
customers of Saturn. In other words, I do not read the non-solicitation
provision to restrict Aversa from doing any and all business with the
telecommunications giant AT&T.
So interpreted, the non-solicitation provision is not redundant of or
inconsistent with the non-compete provision. Setting aside its geographic
limitation, the non-compete language is vexy broadly directed to
preventing a current or former employee from competing with Saturn in
any way, shape, or form within the wireless industry. The nonsolicitation restriction, by contrast, is limited to exploitation of Saturn’s
actual, current sources of business.
Second, Aversa argues, since leaving Saturn, he has never made
the initial contact with an AT&T sales representative or an AT&T enduser with whom he previously had a relationship while at Saturn.
On the limited record, the Court does not make any decision as to the
applicability of this language to individuals and entities in the non-AT&T 5% of
Rather, he claims, the AT&T Sales Representatives and AT&T end-users
with whom he has been in communication while at CCG (see Ex. P4) all
contacted him first. (Def. Opp. 17—18, 26; Aversa Deci.
Therefore, Aversa concludes, he has not “solicited” any of Saturn’s former
customers, clients, vendors, or suppliers at all, let alone for the specific
purpose of diverting business from Saturn. (Id.; see Restrictive
“Merely being in contact with former clients,” in Aversa’s view,
“does not constitute solicitation.” (Def. Opp. 17 (quoting ING Ljfe Ins. &
Annuity Co. v. Gitterman, No. CIV. 10-4076 DMC JAD, 2010 WL
3283526, at *4 (D.N.J. Aug. 18, 2010)). This argument falls flat. Aversa is
relying on the title of the provision, not its substance; it is not limited to
“solicitation,” but also includes direct or indirect “contact.”
Surely being in contact with former clients—even if one is returning,
rather than placing, a call—falls within the definition of “contact.”
The case on which Aversa relies for this unconvincing proposition,
ING Lfe Ins. & Annuity Co. v. Gitterman, interpreted a non-solicitation
clause that did not prohibit “contact,” but only actual attempts to induce
current policy holders to cancel. At any rate, Gitterman primarily turned
on the insufficiency of the record evidence; the only evidence of
solicitation the plaintiffs provided was an employee’s affidavit containing
vague and unsubstantiated assertions.’°
The Gitterman clause restricted the financial advisor defendants from
“advising1, induc[ingj, or attempt[ingj to induce” clients who held annuities
issued by the plaintiff company ‘ cancel, replace or allow to lapse” those
annuities. Gitterman, 2010 WL 3283526, at *2.
Aversa also relies on Meyer-Chatfleld v. Century Bus. Servicing, Inc.,
where a court in the Eastern District of Pennsylvania, interpreting a nonsolicitation provision, looked to the dictionary definition of “solicit”:
To appeal for something; to apply to for obtaining
something; to ask earnestly; to ask for the purpose of
receiving; to endeavor to obtain by asking or
pleading; to entreat, implore, or importune; to make
petition to; to plead for; to try to obtain; and though
I do not accept Saturn’s position that any contact with AT&T
violated the agreement. But here, the evidentiary record establishes with
a reasonable probability that, since leaving Saturn, Aversa has actually
violated the non-solicitation provision as more narrowly interpreted by
rt’ It is of no significance that Aversa returned calls from,
rather than placed calls to, AT&T sales representatives and AT&T endusers with whom he has worked since resigning. Nor is it relevant for
this purpose whether Aversa acquired contact information for these
individuals afresh or underhandedly held on to information he had from
The non-solicitation provision may be reasonably
enforced as to AT&T sales representatives and clients
with whom Aversa worked when in Saturn’s employ.
I have an additional reason for adopting the limited interpretation
of the non-solicitation clause outlined above. Even where the literal
wording of such a clause would sweep broadly, public policy requires
that I limit it so as not to unduly restrict the employee’s ability to work in
the word implies a serious request, it requires no
particular degree of importunity, entreaty,
imploration, or supplication. To awake or incite to
action by acts or conduct intended to and calculated
to incite the act of giving. The term implies personal
petition and importunity addressed to a particular
individual to do some particular thing.
732 F. Supp. 2d 514, 520 (E.D. Pa. 2010) (quoting Black’s Law Dictionary,
p. 1392 (6th ed. 1990)).
I do not dispute that this is an appropriate definition of “solicitation,” but
again, Aversa’s reliance on Meyer-Chatfield ignores the critically broader term,
“contact” in the non-solicitation provision to which he contractually agreed.
I make this finding without regard to Saturn’s unsubstantiated and
largely controverted argument that Aversa squirreled away Saturn’s confidential
information for weeks in advance of his resignation and then wiped his laptop
and cell phone clean to cover his tracks. (See ¶ 35-40, supra; Compi. ¶J 29,
31; Sood Cert. ¶ 34, 38) I do, however, find persuasive Aversa’s use of the
same 561 phone number at Saturn and CCC, the intercepted e-mails between
Saturn customers and Aversa, and of course Aversa’s admission that he has in
fact conducted or contemplated business with former Saturn customers, (see
his chosen field.
Restrictive covenants, such as the non-compete and nonsolicitation provisions in the Restrictive Agreement here, may be
enforced. They must be scrutinized closely, however, because they stifle
free competition and the individual’s right to exploit his skills and labor.
A non-solicitation provision is not valid if its sole purpose is to restrict
competition, but it may be valid to the extent it furthers some other
legitimate goal of the employer. See Solari Indus., Inc. u. Malady, 264
A.2d 53 (N.J. 1970); Whitmyer Bros. v. Doyle, 274 A.2d 577 (N.J. 1971);
see also A.T. Hudson & Co., Inc. v. Donovan, 216 N.J. Super. 426, 432—
34, 524 A.2d 412 (App. Div. 1987) (analyzing a non-solicitation clause
under Solari, and recognizing Solari as “the seminal case”).
Under the approach of the Solari/ Whitmyer line of cases, a nonsolicitation provision is enforceable to the extent it is reasonable under
the circumstances of the case. Karlin v. Weinberg, 390 A.2d 1161, 1166
(N.J. 1978). A non-compete will be found reasonable if it “(1) protects the
legitimate interests of the employer, (2) imposes no undue hardship on
the employee, and (3) is not injurious to the public.”12 Id. (numbering
added; internal quotations and citations omitted). See also The
Community Hasp. Grp., Inc. v. More, 869 A.2d 884, 897 (N.J. 2005) (citing
Karlin). Furthermore, New Jersey law authorizes the Court to modify, or
“blue pencil” a restrictive covenant to a reasonable “scope of activity” if it
crosses the line into unreasonableness. Kadi u. Massotto, No. A-255507T2, 2008 WL 4830951, at *8 (N.J. Super. Ct. App. Div. Nov. 10, 2008)
(internal quotation marks and citation omitted).
Subject to certain “blue pencil” limitations, I find that the nonsolicitation provision in Aversa’s Restrictive Agreement is reasonable and
likely to be found enforceable, because (a) it serves legitimate interests,
Because of substantial overlap, I address whether this public interest
prong at the same time that I address whether a preliminary injunction would
be in the public interest. Section Il(A)(2)(c), infrcz.
(b) imposes no undue hardship, and (c) is not injurious to the public.
a) Saturn’s Legitimate Interests
Saturn submits that the non-solicitation provision serves three
legitimate business interests: (1) protection of trade secrets and other
confidential information; (2) protection of the time and resources Saturn
invested in Aversa’s training; and (3) protection of “key relationships with
AT&T team members built by Saturn over the past 16 years,” and, by
extension, Saturn’s goodwill with AT&T’s end-users.
Aversa replies that the non-solicitation covenant is unenforceable
under the case law because Saturn has not articulated any confidential
information it serves to protect; because the non-solicitation provision
cannot restrain him from using skills he developed on the job, especially
those he learned from AT&T, not Saturn; and because Saturn has not
demonstrated that its customer relationships are so unique as to be
proprietary. (DeL Opp. 21—24)
Aversa’s arguments are not unfounded. He is correct that Saturn
has failed to identify with specificity any trade secrets or confidential
information, but has largely spoken in generalities about its relationships
with AT&T sales representatives and the services it provides end-user
customers. He is likewise correct that Saturn may not restrict Aversa
from using skills that he acquired or developed while employed by
Saturn. Nevertheless, Saturn has established legitimate interests in
protecting a limited scope of confidential information as well as certain
customer relationships and business goodwill. 13
Because Saturn has established both Interests, I need not address
Aversa’s argument that the protection of confidential information is the sole
valid basis for enforcement of a non-solicitation provision. I note, however, that
either interest would likely be sufficient to render the non-solicitation provision
enforceable. See, e.g., Whitmyer Bros. u. DoyLe, 58 N.J. 25, 33, 274 A.2d 577,
581 (1971) (“[An] employer has a patently legitimate interest in protecting his
trade secrets as well as his confidential business information and he has an
equally legitimate interest in protecting his customer relationships.); Solari
Trade Secrets and Confidential Information
New Jersey courts considering restrictive covenants “recognize as
legitimate the employer’s interest in protecting trade secrets, confidential
information, and customer relations.” Campbell Soup Co. u. Desatnick,
58 F. Supp. 2d 477, 489 (D.N.J. 1999) (quoting Ingersoll-Rand Co. v.
Ciavcztta, 542 A.2d 879, 888 (N.J. 1988)). “[I]nforrnation need not rise to
the level of a trade secret to be protected.” Lamorte Bums & Co. v.
Walters, 167 N.J. 285, 299, 770 A.2d 1158, 1166 (2001).
[E]mployers may have legitimate interests in
protecting information that is not a trade secret
specialized, current information not generally
known in the industry, created and stimulated
by the research environment furnished by the
employer, to which the employee has been
‘exposed’ and ‘enriched’ solely due to his
Ingersoll-Rand, 542 A.2d at 894.
For example, in Platinum Management, Inc. v. Dahms, the court
explained that “[tjhe key to determining the misuse of information is the
relationship of the parties at the time of disclosure and the intended use
of the information.” 285 N.J. Super. 274, 295 (Law Div. 1995). There, the
defendant argued that the restrictive covenant the plaintiff sought to
enforce unreasonably prevented the defendant from using names of
customers that were already available in public trade directories. Id. But
the court determined that other information—inter alia, the fact that
customers were the defendants’ customers; those customers’ buying
Indus., Inc. v. Malady, 55 N.J. 571, 586, 264 A.2d 53, 61 (1970) (where plaintiff
did not claim that the defendant, its former employee, jeopardized trade secret
or confidential information but instead argued that the defendant threatened
the plaintiff’s customer relationships, the matter was remanded for fmal
hearing with the suggestion that the defendant might be restrained for one year
from dealing with plaintiffs actual or prospective customers with whom he had
substantial dealings while in plaintiffs employ).
habits; and the plaintiff’s merchandising plans, sales projections, and
product strategies—was entitled to judicial protection. Id. 295—96. See
also Lamorte Bums & Co., 167 N.J. at 299 (discussing Platinum Mgmt.
Inc. with approval).
On the other hand, “where customers are known in an industry or
are easily discern[ilble and personal contacts are taken from job to job,
the rule is different,” and customer information is not protectable.
Subcarrier Commc’ns, Inc. v. Day, 299 N.J. Super. 634, 643, 691 A.2d
876, 881 (App. Div. 1997). This is reasonable, as “matters of general
knowledge within the industry may not be classified as trade secrets or
confidential information entitled to protection nor will routine or trivial
differences in practices and methods suffice to support restraint of the
employee’s competition.” Whitmyer Bros., 58 N.J. at 33—34.
Here, Saturn has failed to make a clear showing that Aversa
possesses trade secrets or proprietary information concerning Saturn’s
business operations generally, or its business with AT&T specifically. As
examples of Saturn’s confidential solutions and strategies, Saturn
submitted only publicly-available marketing fliers. (See Ex. D1O) Sood
testified at the hearing that Aversa’s training in Saturn’s solutions and
strategies constitutes confidential information. She did not, however,
articulate any examples or point to any written document that describes
or memorializes the allegedly confidential information. She offered only
generalities; a common refrain was Saturn’s “secret sauce” being the key
to its Platinum Champion status and competitive success.
Likewise, at her deposition, Sood testified that she was unable to
“pinpoint” any confidential strategy Saturn sought to protect. She
explained that Saturn’s “confidential information” was passed along
orally during employee training, but did not explain what it was. She
stated that the essence of what Saturn considers confidential information
consists of strategies for building relationships with AT&T sales
representatives. (See, e.g., Ex. D12 pp. 79:25—81:9, 106:9—107:1) If any of
this goes beyond standard salesmanship, it was not clear from the
evidence, This evidence falls well short of establishing the type of
purportedly confidential information New Jersey law considers worthy of
protection. Cf. e.g., Nat’Z Reprographics, Inc. v. Strom, 621 F. Supp. 2d
204, 226 (D.N.J. 2009) (finding restrictive covenant designed to protect
proprietary and confidential information such as “knowledge of
Iplaintiff’sl marketing plans, sales projections, product strategies,
customer buying habits, and internal methods to bring profitability to
I have a different view, however, of any client-specific intelligence,
such as the buying habits of Saturn’s AT&T end-user customers or the
solution and pricing preferences of particular AT&T sales representatives.
That is specialized, confidential information that the non-solicitation
provision legitimately serves to protect. “A competitor’s knowledge of a
particular customer’s pricing and packaging requirements actually gives
the competitor the ability to design for that customer’s needs and to
obtain an advantage over competitors who do not have this information.”
Platinum Mgmt., Inc., 285 N.J. Super. at 295—96.
Aversa stresses that there is nothing confidential about the
identities of AT&T’s sales representatives; AT&T made contact lists
available to any SP who asked for them. (See ¶ 34, 52, supra; Ex. D3)
But Saturn submitted uncontroverted evidence that Aversa knew few if
any AT&T sales representatives or AT&T end-users when he first joined
Saturn. The evidence sufficiently established that Saturn invested
substantial resources in helping Aversa build those business
relationships. Especially at first, Sood routinely accompanied Aversa on
meet-and-greets, and Saturn always paid for Aversa’s marketing trips
and expenses. (See Sood Cert. ¶ 22 & Ex. D). New Jersey courts consider
this sort of expenditure of energy and money significant when
determining whether client information is worthy of protection. See, e.g..
Platinum Mgmt., Inc., 285 N.J. Super at 296; A.T. Hudson & Co., 216 N.J.
Super. at 434 (upholding non-solicitation agreement, noting that certain
employers “expend great energy and money in soliciting clients and
developing projects for their benefit. Each client that plaintiff is able to
attract represents a significant investment of time, effort and money
which is worthy of protection.”).
Aversa, on Saturn’s dime, came to understand the business habits,
preferences, and needs of AT&T sales representatives and AT&T endusers with whom he worked during his Saturn employment. This is more
than general knowhow that an employee takes with him; it is not akin to
“the tradesman who brings his tools to his employer and upon separation
leaves with them, or a scientist who has entered into an emp]oyment
relationship with a head full of scientific data which he used for the
benefit of his employer and then may use for the benefit of another upon
reemployment.” Coskeys Television & Radio Sales & Serv., Inc. v. Foti,
253 N.J. Super. 626, 637—38, 602 A.2d 789, 795 (App. Div. 1992).
Rather, Aversa came to Saturn as a virtual blank slate, and through
Sood’s tutelage acquired protectable information critical to Saturn’s
success. And Aversa specifically acknowledged it as such when he signed
the Restrictive Agreement. (See Restrictive Agreement ¶ 1 (defining
That said, a line must be drawn to ensure that Saturn’s interest in
protecting its confidential customer information does not encroach upon
Aversa’s legitimate use of his employable skills:’
See Ingersoll-Rand Co. v. Ciavatta, 110 N.J. 609, 638, 542 A.2d 879, 894
(1988) (“The line between such information, trade secrets, and the general skills
and knowledge of a highly sophisticated employee wifl be very difficult to draw,
and the employer will have the burden to do so. Nevertheless, we do not
hesitate to recognize what appears to us a business reality that modem day
employers are in need of some protection against the use or disclosure of
valuable information regarding the employer’s business,.
While the employer has an interest in protecting
its confidential information, the skills, expertise
and know-how cultivated in the course of
employment are not readily separated from the
former employee’s person. An employee therefore
remains free to put his expertise to use “in any
business or profession he may choose, including
a competitive business with his former
Synthes, Inc u. Gregoris, No. CV 16-06255, 2017 WL 75786, at *6 (E.D.
Pa. Jan. 9, 2017) (citing Campbell Soup Co., 58 F.Supp.2d 477, 489
(D.N.J. 1999) (internal citation omitted) (applying New Jersey law),
Indeed, “[i]t is a well settled rule of law that an employee, upon
terminating his employment, may carry away and use the general skill or
knowledge acquired during the course of the employment.” Boost Co. u.
Faunce, 17 N.J. Super. 458, 464, 86 A.2d 283, 286 (App. Div. 1952).
“Information is not protectable when it is merely the knowledge, skill, or
expertise learned or developed over an employee’s career or tenure with
the employer.” Nat’l Reprographics, Inc., 621 F. Supp. 2d at 226.
Accordingly, I find that Saturn has a protectable interest in the
customer-specific information that Aversa learned by way of Saturn’s
investment, and which Aversa is no doubt tapping to secure business for
CCG and Think Creative. But enforcement of the non-solicitation
provision is reasonable only insofar as it is limited to restricting Aversa’s
business with the AT&T sales representatives and end-user customers
with whom he personally worked during his employment at Saturn.
Key AT&T Relationships and Customer Goodwill
Closely related is Saturn’s interest in protecting its business
goodwill. “Nonsolicitation agreements are designed to protect an
employer’s existing client base.” NASC Servs., Inc. v. Jervis, No. CIV.A.
07-CV-5793DMC, 2008 WL 2115111, at *4 (D.N.J. May 19, 2008) Thus,
for largely the same reasons articulated above, Saturn has demonstrated
a legitimate business interest in protecting what the record shows is its
most valuable asset and investment: its long-fostered relationships with
AT&T sales representatives and AT&T end-users. (See ¶ 7—13, 15—18,
supra; see also Restrictive Agreement ¶1(a) (“Employee specifically
acknowledges that [Saturn’s] customer relationships were developed over
many years, at great expense and effort by ISaturn1)) See Ingersoll,
supra, 542 A.2d at 893; Karlin v. Weinberg, 77 N.J. 408, 417, 390 A.2d
1161, 1166 (1978); A.T. Hudson & Co., supra, 216 N.J. Super. at 433-34.
Aversa argues that Saturn has no protectable interest in its
customer relationships because competition for AT&T’s business among
AT&T SPs is fierce, and AT&T has sole discretion to choose the SPs to
which it will refer business. (Def. Opp. 23; see also ¶j 6, 12, supra;
§ 4.3) But Saturn’s Platinum Champion status (see ¶
17, supra), and (to some extent) the drop-off in Southeast region
revenues following Aversa’s resignation (see ¶1 57—58, supra) tell a
Saturn’s interest in protecting its customer base, if it were the only
relevant interest, might suggest that Aversa could be ejected from this
market altogether. But for the competing public policy reasons
articulated above, that goes much too far. Saturn’s reasonable interest in
its customer relationships and goodwill from poaching by Aversa extends
only so far as protecting the specific relationships that Aversa developed
while at Saturn. Accordingly, this interest, too, supports “blue penciling”
the non-solicitation provision to restrict Aversa from doing business with
AT&T sales representatives and end-user customers with whom he
personally worked during his employment at Saturn.
b) Undue hardship
Aversa argues that enforcement of the non-solicitation provision
would deprive him of his only source of business and livelihood, and
therefore would impose an undue hardship upon him. (Def. Opp. 28)
Aversa’s argument loses much of its force, however, in relation to the
non-solicitation provision as interpreted here. I have narrowed its scope
temporally, functionally, and (in effect) geographically. Aversa is
restricted from working with his former AT&T sales representative and
AT&T end-user contacts for one year. Assuming most sales
representatives and customers have not relocated, this restricts Aversa’s
work only in the Southeast region.
Who are the representatives and end users with which Aversa is
prohibited from doing business for a year? The only solid evidence of
their identities is contained in Exhibits P3 and P3A. Those exhibits list
the individuals and businesses with whom Aversa worked in the years
2015 and 2016. Aversa admitted at the evidentiary hearing that Saturn
introduced him to all but (at most) one of the listed AT&T sales
representatives. Saturn did not submit lists, and Aversa was not
examined regarding his contacts in earlier years. I would find at any rate
that Saturn’s interest in protecting information about relationships prior
to 2015 would be significantly diminished.
Although each covenant must be evaluated on its own terms, I
note that similar non-solicitation provisions have routinely been upheld
as reasonable. See, e.g., Chemetall US Inc. u. Lafiamme, No. CV 16-780
(JLL), 2016 WL 885309, at *15 (D.N.J. Mar. 8, 2016) (restricting former
employee “from soliciting (or assisting with the solicitation of) only his
[former] customers for the two years prior to the end of his employment
with the plaintiff]”); Platinum Mgmt., Inc., 666 A.2d at 1040 (enforcing a
restrictive covenant with a one-year term); Coskey’s Television & Radio
Sales & Seru., Inc., 253 N.J. Super. at 638—39 (vacating overbroad
preliminary injunction and instructing defendant’s counsel, on remand,
to prepare a form of preliminary injunction limiting the restrictive
covenant at issue to “restrain [defendant] from interfering with any
ongoing contract, including any modifications thereof, in which he had
participated on behalf of [employer] during his employment.”).
Saturn will have a year to consolidate the benefits of Aversa’s
relationships in which it specifically invested. In the meantime, Aversa
remains free to use the relationship-building skills and wireless-solutions
knowhow that he developed at Saturn. In doing so, however, he must
deal only with AT&T sales representatives and AT&T end-users not listed
on Exhibits P3 & P3A. And of course he may freely pursue business with
non-AT&T companies and clients. One year appears to be a reasonable
time for Aversa’s replacement, Greg Bocchino, to establish relationships
and goodwill with AT&T sales representatives and clients in the
Southeast region. Once that time has elapsed, Aversa may work
anywhere and with anyone that he chooses. I am therefore satisfied that
Saturn’s non-solicitation is “narrowly tailored to ensure the covenant is
no broader than necessary to protect the employer’s interests.” The Cmty.
Hosp. Grp., Inc. u. More, 183 N.J. 36, 58—59, 869 A.2d 884, 897 (2005).
Courts evaluating the hardship prong have considered “the
likelihood of the employee finding work in his field elsewhere.” Karlin,
390 A.2d at 1169. As to that factor, the employee’s own role in bringing
about his hardship is important:
The trial court should examine also the reason
for the termination of the relationship between
the parties to the employment contract. Where
this occurs because of a breach of the
employment contract by the employer, or
because of actions by the employer detrimental
to the public interest, enforcement of the
covenant may cause hardship on the employee
which may fairly be characterized as “undue” in
that the employee has not, by his conduct,
contributed to it. On the other hand, where the
breach results from the desire of an employee to
end his relationship with his employer rather
than from any wrongdoing by the employer, a
court should be hesitant to find undue hardship
on the employee, he in effect having brought
that hardship on himself. Ordinarily a showing
of personal hardship, without more, will not
amount to an “undue hardship” such as would
prevent enforcement of the covenant.
Id.; see also More, 869 A.2d at 898 (“If the employee terminates the
relationship, the court is less likely to find undue hardship as the
employee put himself or herself in the position of bringing the restriction
Aversa elected to resign from Saturn and immediately start a
copycat business in his old Saturn territory. But that is not his only
possible means of making a living. He testified that CCG is currentiy
expanding to provide services in AT&T’s wireline solutions space. While
at Saturn, Aversa did not operate in the wireline area, a business which
he now considers “a more complicated and profitable business than the
wireless solutions space.” (Aversa Deci. 41). He also stated that before
becoming an AT&T SP, CCG initiated a relationship with a company
called Intelysis, which would have given CCG “access to sell solutions
offered by over 150 suppliers, including Ring Central. . . .“ (Id. 39)
Further, he is both the owner and “National Account Manager” of CCG
(id. ¶ 3), and testified at the hearing that CCG provides services
nationwide. Clearly, Aversa will have abundant opportunities for working
and making a living in the solutions space over the next year, while still
complying with the non-solicitation provision.
Aversa subjectively knew he was subject to the non-solicitation
provision, as he testified to reading, understanding, and signing the
(J 22, supra) For present purposes, it is not of
primary importance whether Aversa retained Saturn’s confidential
information in advance of resigning, complied with Saturn’s laptop and
cell phone return policies, or initiated rather than responded to inquiries
made by AT&T sales representatives. When he starting doing business
with the same AT&T sales representatives and his former AT&T end-user
customers within a year of resigning, he knew or should have known that
he was potentially violating the non-solicitation provision. He simply took
a chance that Saturn or a court would not enforce it. For this reason,
too, any hardship Aversa may be suffering cannot be fairly characterized
For all these reasons, the “hardship” factor weighs in favor of
enforcing the non-solicitation provision.
c) Public interest
The public interest factor weighs in favor of enforcing the nonsolicitation provision.
Aversa argues that “[i]nasmuch as the public interest always favors
competition and abhors parties taking advantage of their own
wrongdoing, it, too, favors the denial of the injunction.” (Def. Opp. 28)
But “U]udicial enforcement of non-competition provisions of employment
contracts serves the public interest by promoting stability and certainty
in business and employment relationships.” Wright Med. Tech., Inc. u.
Somers, 37 F. Supp. 2d 673, 684 (D.N.J. 1999) (no harm to public in
prohibiting defendant from soliciting plaintiff’s customers on behalf of a
new employer where customers would still be free to choose the product
it desires). See also HR Staffing, 2015 WL 5719655, at *5 (“While the
public interest factor is not satisfied simply because enforcement of a
contract provision is generally a good thing, we nevertheless agree that
the public at large can be expected to gain from the enforcement of noncompetes that make it possible for staffing agencies to continue
performing their services for both employees and employers.”) (internal
citations and quotation marks omitted).
There comes a point, of course, when enforcement becomes so
broad that it violates public policy, but I have narrowed the scope of the
provision to take that into account. Within that scope, the public has an
interest in protecting Saturn’s confidential information and business
goodwill. See Ingersoll, 542 A.2d at 894 (recognizing the public’s interest
“in safeguarding fair commercial practices and in protecting employers
from theft or piracy of trade secrets, confidential information, or, more
generally, knowledge and techniques in which the employer may be said
to have a proprietary interest.”).
Additionally, the Karlin court identified two significant public
interest factors a court should consider in determining whether to
enforce a restrictive covenant: “the demand for the services rendered by
the employee and the likelihood that those services could be provided by
other [employees] already practicing in the area.” Karlin, 390 A.2d at
1169—70 (Karlin involved a physician). As to these, my concerns are not
significant. There is a substantial market and demand for the AT&T SP
services Aversa provides, a demand that is served by hundreds of
competing AT&T SPs. (fl 6, 12, supra) The public will not be deprived of
necessary services or even have its options significantly limited if the
non-solicitation provision is enforced by preliminary injunction. Cf, e.g.,
AT. Hudson & Co., 216 N.J. Super. at 433—34 (“covenant not
unreasonably injurious to the public” where “the record d[id] not indicate
that customers experienced any real difficulty locating other consulting
firms capable of rendering the same services as [defendant]”).
Therefore, I conclude that the public interest prong weighs in favor
of enforcing the non-solicitation provision, and doing so by preliminary
B. Irreparable harm
Harm is considered “irreparable” if it is not redressable by money
damages at a later date, in the ordinaiy course of litigation. Instant Air
Freight Co. u. C.F. Air Freight, Inc., 882 F.2d 797, 801 (3d Cir. 1989)
(citing Sampson u. Murray, 415 U.S. 61, 90 (1964)). Saturn has the
burden of proving a “clear showing of immediate irreparable harm”
absent injunctive relief. ECRI v. McGraw—Hill, Inc., 809 F.2d 223, 225 (3d
Cir. 1987). See also Winter v. Natural Resources Defense Council, Inc.,
555 U.S. 7, 21, 129 S. Ct. 365, 375 (2008) (holding it was error to water
down the irreparable harm requirement from “likelihood” to “possibility,”
even where likelihood of success was strong).
Courts in the Third Circuit and this district recognize that the loss
of business opportunities and goodwill constitutes irreparable harm. See,
e.g., Pappan Enterprises, Inc. v. Hardee’s Food Sys., Inc., 143 F.3d 800,
805 (3d Cir. 1998) (“Grounds for irreparable injury include loss of control
of reputation, loss of trade, and loss of goodwilL”); Laidlczw, Inc. v.
Student Transp. of Am., Inc., 20 F. Supp. 2d 727, 766 (D.N.J. 1998)
“Generally, the loss of good will, the disclosure of confidential and
proprietary information, and the interference with customer relationships
may be the basis for a finding of irreparable harm.”); Trico Equip., Inc.
Manor, No. 08-5561, 2009 WL 1687391, at *8 (D.N.J. June 15, 2009).
(“[w]here an employee solicits customers of his former employer on behalf
of his new employer,” there is irreparable harm). Likewise, New Jersey
courts recognize that “the diversion of a company’s customers may
constitute irreparable harm, [and that] [t]his is so because the extent of
the injury to the business as a result of this type of conduct cannot be
readily ascertained, and as such, does not lend itself to a straightforward
calculation of money damages.” Fluoramics, Inc. v. Trueba, No. BER-C
408-05, 2005 WL 3455185, at *8 (N.J. Super. Ct. Ch. Div. Dec. 16, 2005)
Pointing to the steep competition among AT&T SPs for referrals
and AT&T’s sole discretion over where to send business, Aversa argues
Saturn has not met its burden of showing irreparable harm because it is
impossible for Saturn to show that CCG has “divert[edj work or business
from [Saturn].” (Def. Opp. 25—27) I disagree.
First, Aversa has been exposed to confidential information
concerning the behaviors, preferences, and needs of Saturn’s AT&T sales
representative and AT&T end-user customers. (See
4, 13—15, 24, 33—
35, 49—51, 53, 62, supra) At Saturn’s expense, Aversa forged significant
relationships and goodwill with these customers. (Id.) Record evidence
demonstrates that, since resigning from Saturn, Aversa has completed or
contemplated doing business with these Saturn customers for CCG and
Think Creative’s benefit. (See
¶ 45—47, 55—56, 59-60, 62; Ex. P4) Surely
some of these customers would, through Aversa, have given business
Saturn, had Aversa not left and pursued their business on CCG’s
Think Creative’s behalves instead. The precipitous decline in Saturn
Southeast region revenues since Aversa’s departure supports this
Taking this altogether, I find that Saturn has made a clear showing
that Aversa’s behaviors have started, and will continue, to immediately
and irreparably harm Saturn by diverting certain confidential
information, business opportunities, and goodwill to CCG and Think
If anything, the causal uncertainty on which Aversa relies—i.e., the
difficulty in proving that any business opportunity Aversa now pursue
with a former Saturn customer necessarily diverts business from
Saturn—underscores the impossibility of ascertaining money damages.
Likewise, the loss of goodwill Saturn would likely suffer if Aversa’s
diversion of business were to impact its preferred Platinum Champ
relationship with AT&T cannot he quantified. And the relief must be
preliminary relief because the damage will be done (and the one-ye
period will have elapsed) by the time this Court is in a position to
consider permanent relief.
Thus, the irreparable harm prong favors granting a preliminary
C Balancing the equities and the public interest
The final two prongs, balancing of the harms and the interest of
the public, also weigh in favor of granting injunctive relief.
As I have explained in Section II(A)(2)(c), the public interest
warrants enforcement of the non-solicitation provision in Aversa’s
Restrictive Agreement with Saturn.
I have also discussed Aversa’s hardship in Section H(A)(2)(b),
supra. Within the next year, Aversa may solicit, receive, and conduct
business anywhere and with any customers or clients other than the
former AT&T sales representatives and AT&T end-users with whom he
did busmess on behalf of Saturn in 2015 or 2016. These excluded
individuals and businesses are listed in Exhibits P3 and P3A. The
opportunities beyond these exclusions are vast. And, after one year,
Aversa may solicit, receive, and conduct business with any individual or
entity he wishes.
For the reasons discussed above, Saturn has a legitimate interest
in keeping its customer-specific confidential information from
competitors like CCG and Think Creative and in protecting its
investment in customer relationships and goodwill. Equity therefore
favors granting injunctive relief.
Pursuant to the Federal Rules, this Court “may issue a preliminary
injunction. . . only if the movant gives security in an amount that the
court considers proper to pay the costs and damages sustained by any
party found to have been wrongfully enjoined... .“ Fed. R. Civ. P. 65(c).
Therefore, I will require Saturn to give security in the amount of
the portion of average annual salary Aversa earned at Saturn in 2015
and 2016 that is attributable to business he generated through the AT&T
sales representatives and for the AT&T end-users listed in Exhibits P3
and P3A. Aversa will document that amount to Saturn, if necessary.
In light of the foregoing, I will grant Saturn preliminary injunctive
relief in an order providing as follows:
Defendant Frank Aversa shall be restrained, for a perio
d of one
year from the date of his resignation, November 15,
violating the non-solicitation provision of his Rest
rictive Agreement with
Saturn, such relief being limited to AT&T Sales Repr
esentatives and end-.
users identified in Exhibits P3 and P3A.
For the foregoing reasons, Saturn’s motion for a preli
injunction (ECF No. 3) is GRANTED. By Friday, Apri
l 21, 2017, after
consultation with counsel for Aversa, Saturn’s counsel
(1) submit a form of preliminary injunction, which shall
relief granted and include the amount of bond, whic
h shall be posted
within 30 days;
(2) propose redactions so that a version of this seale
d Opinion may
be filed publicly.
Dated: April 18, 2017
United States District Ju
At the hearing, counsel for Saturn conceded that the
should run from that date. Any violation of the agreemen one year period
t thus far may be the
subject of a claim for damages, however.
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