At the end of January, the United States District Court for the District of Connecticut issued a decision in the matter of Roth Staffing Companies, L.P. v. Thomas Brown, OEM ProStaffing, Inc., OEM of CT, Inc., and David Fernandez(Case No. 3:13cv216). Much of that opinion is devoted to analyzing the parties’ arguments about whether piercing the corporate veil was appropriate under the circumstances. However, the opinion also addressed the plaintiff’s motion for summary judgment on its breach of contract claim against former employee Thomas Brown. The Court previously issued a preliminary injunction holding that Brown’s restrictive covenants (noncompete, nonsolicit, and nondisclosure) were reasonable and enforceable. In its summary judgment opinion, the Court observed that, despite taking more extensive discovery since the preliminary injunction was issued, Brown had not introduced any additional evidence to support a contrary conclusion. Then, since Brown admitted that: a) he had retained in his memory information relating to his working relationships with clients that was not known throughout the staffing services industry; b) that he was working for his subsequent employer in a competitive role within the restricted territory; and c) that he had in fact successfully solicited at least two of the plaintiff’s clients on behalf of his new employer, the Court determined that Brown’s restrictive covenants were enforceable and had been violated and granted the plaintiff’s motion for summary judgment on liability.
As a result, parties losing a preliminary injunction hearing must be careful to develop and present sufficient new evidence to overcome the initial presumption of likelihood of success. With complete discovery, that should be easier to accomplish.