JOHN A. WOODCOCK, JR., Chief District Judge.
The Court denies OfficeMax Incorporated's (OfficeMax) motion for temporary restraining order, concluding that although a noncompetition agreement may be assigned with the consent of the employee to a successor business and may be assumed upon merger by another successor business, OfficeMax failed to establish that immediate enforcement of the agreement is necessary to avoid irreparable harm, that the balance of equities favors immediate injunctive relief, and that the public interest would benefit from such an order.
On March 18, 2010, OfficeMax filed a complaint for a temporary restraining order (TRO), injunctive relief, and damages against County Qwik Print, Inc. (County), David A. Levesque, and Dana Rattray for alleged violations of Confidential Information and Noncompetition Agreements and of the Maine Uniform Trade Secrets Act.
On April 13, 2010, the Defendants moved to dismiss the Complaint and on April 15, 2010, they responded to the motion for preliminary injunction. Defs.' Mot. to Dismiss Pl.'s Compl. for TRO, Injunctive Relief, and Damages (Docket # 16, 17) (Defs.' Mot. to Dismiss); Defs.' Pl.'s Mot. for TRO and Preliminary Inj. (Docket # 18) (Defs.' Opp'n). On April 16, 2010, OfficeMax replied to the Defendants' Response to the motion for TRO. Pl.'s Reply to Defs.' Opp'n to Pl.'s Mot. for TRO and Preliminary Inj. (Docket # 19) (Pl.'s Reply).
On February 9, 1996, Boise Cascade Office Products Corporation (BCOP) purchased the stock of Loring, Short and Harmon, Inc. (LS & H), and OfficeMax is the successor in interest by merger to the property and assets of BCOP. Compl. ¶ 1. David A. Levesque of Caribou, Maine began working for LS & H in 1982 and by 1996, he was employed as a Business Relationship Manager. Id. ¶¶ 4, 8. Dana Rattray of Fort Fairfield, Maine, began working for LS & H on August 31, 1987, and by 1996, he was also employed as a Business Relationship Manager. Id. ¶¶ 5, 17. On February 7, 1996, Mr. Levesque and Mr. Rattray executed a Confidential Information and Noncompetition Agreements under which they agreed that for twelve months following termination of employment: I "will not, either for my own purposes or as an employee of or for the benefit of any other entity or person in a capacity that directly or indirectly includes responsibility for developing and maintaining customers relationships, engage in the sale or distribution of office supplies, office furniture, or related office products or services, engage in the sale of janitorial supplies, or otherwise engage in the type of work that I perform for LS & H within sixty (60) miles of any county in which I performed services for LS & H in the 12 months prior to my termination, of employment." Id. ¶¶ 8, 9, 17, 18.
Mr. Levesque and Mr. Rattray continued working for BCOP after it purchased LS & H and continued working for Office-Max after it purchased BCOP. As Business Relationship Manager for OfficeMax, Mr. Levesque and Mr. Rattray acted as "the face of OfficeMax to its corporate and organizational customers and prospective customers by soliciting and selling office supplies and related products and services to customers, by establishing customer trust and goodwill, and by maintaining personal relationships with key procurement and purchasing managers in order to maintain and develop OfficeMax's customer relationships." Id. ¶¶ 10, 19. Further, while employed at OfficeMax, Mr. Levesque was exposed to "an extensive amount of OfficeMax information that is highly confidential and should not be revealed to competitors" and he "gained unique insights into the corporate and organizational clients he solicited and served." Id. ¶¶ 11, 12, 20, 21. OfficeMax says that due to a reorganization of the company, Mr. Levesque's last day of employment with OfficeMax was November 23, 2009. Id. ¶ 14. As a result of this reorganization, OfficeMax offered Mr. Rattray
Since on or about December 31, 2009, County has done business as CQP Office Solutions and has competed with Office-Max in the office supply, office furniture, copier services, and related business in Aroostook County, Maine. Id. ¶ 3. After their employment with OfficeMax ended, Mr. Levesque and Mr. Rattray began working and have continued to work for County, soliciting customers, and competing against OfficeMax, using the knowledge of OfficeMax's confidential information they acquired during their OfficeMax employment. Id. ¶¶ 15, 16, 25, 26.
The OfficeMax Complaint against County, Mr. Levesque and Mr. Rattray contains three counts: Count I is a breach of contract claim against Mr. Levesque, Count II is a breach of contract claim against Mr. Rattray, and Count III is a Trade Secrets Act claim against County, Mr. Levesque, and Mr. Rattray. Id. ¶¶ 27-46.
County, Mr. Levesque, and Mr. Rattray agree that in February 1996, just before the BCOP purchase, LS & H presented Mr. Levesque and Mr. Rattray with a Confidential Information and Noncompetition Agreement and that they each signed it. Defs.' Opp'n at 1-2. They say they understood the agreement was "in contemplation of LSH's anticipated transaction with BCOP" and if BCOP completed its purchase of LS & H, BCOP would offer each a job. Id. at 2. If that happened and if BCOP wanted to prohibit them from competing, BCOP would then require them to sign another noncompetition agreement with BCOP as their employer. Id. They contend that the LS & H Confidential Information and Noncompetition Agreement did not apply to their subsequent employment with BCOP. Id.
The LS & H transaction was completed and Mr. Levesque and Mr. Rattray were required to file employment applications with BCOP. Id. BCOP accepted their applications and required them to execute employment agreements, which did not contain any noncompetition provisions. Id. When BCOP merged with OfficeMax, Mr. Levesque and Mr. Rattray were presented with employment offers with OfficeMax, which they each accepted. Id. at 3. They each signed new offers of employment, which did not contain noncompetition provisions. Id. Mr. Levesque and Mr. Rattray remained employed with OfficeMax through the fall of 2009, but as a result of a reorganization of the company, OfficeMax terminated both of them. Id. Three weeks after termination, OfficeMax offered Mr. Rattray a different position and he was given another written offer of employment, which did not contain a noncompetition agreement. Id. Mr. Rattray remained employed at OfficeMax until January 25, 2010. Id. Mr. Levesque and Mr. Rattray say that upon leaving OfficeMax, neither of them retained any price lists, customer lists, or other OfficeMax documents relating to sales or customers. Id.
In its Reply, OfficeMax asserted that "[t]he silence of Defendants' Opposition brief and accompanying papers was deafening concerning the central issue at hand, as Defendants' did not deny that they are directly competing against OfficeMax for the identical customers that they called upon and served for OfficeMax over the course of many years in Aroostook County, Maine." Pl.'s Reply at 1 (emphasis in
Id. at 2 (emphasis in memorandum). Further, OfficeMax says that Mr. Levesque and Mr. Rattray were paid an extra $2,500.00 in 1996 for entering into this agreement. Id. at 2. Finally, OfficeMax highlights another provision:
Id. at 3.
To determine whether to issue a temporary restraining order, the Court applies the same four-factor analysis used to evaluate a motion for preliminary injunction. Northwest Bypass Group v. United States Army Corps of Eng'rs, 453 F.Supp.2d 333, 337 (D.N.H.2006). The movant must demonstrate the following:
Esso Standard Oil Co. v. Monroig-Zayas, 445 F.3d 13, 18 (1st Cir.2006); Kelly Servs., Inc. v. Greene, 535 F.Supp.2d 180, 183 (D.Me.2008). A preliminary injunction is "an extraordinary and drastic remedy, one that should not be granted unless the movant, by a clear showing, carries the burden of persuasion." Mazurek v. Armstrong, 520 U.S. 968, 973, 117 S.Ct. 1865, 138 L.Ed.2d 162 (1997) (quoting 11A C. Wright, A. Miller & M. Kane, Federal Practice and Procedure § 2948, pp. 129-30 (2d ed.1995) (emphasis added in opinion)). To support or oppose a motion for injunctive relief, "the parties must present [e]vidence that goes beyond the unverified allegations of the pleadings. . . .'" Kelly Servs., 535 F.Supp.2d at 181, n. 1 (quoting 11A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 2949 (2d ed.1995)). Here, the parties have presented affidavits in support of their respective positions.
The "sine qua non of this four-part inquiry is likelihood of success on the merits: if the moving party cannot demonstrate that he is likely to succeed in his quest, the remaining factors become matters of idle curiosity." Bl(a)ck Tea Soc'y v. City of Boston, 378 F.3d 8, 15 (1st Cir.2004) (citation omitted). Under Maine law, noncompetition agreements are "contrary to public policy and will be enforced only to the extent that they are reasonable and sweep no wider than necessary to protect the business interests in issue." Lord v. Lord, 454 A.2d 830, 834 (Me.1983). Whether a noncompetition agreement is reasonable "is a question of law to be determined by the court." Chapman & Drake v. Harrington, 545 A.2d 645, 647 (Me.1988) (citations omitted). The reasonableness of a specific covenant must be
The Defendants argue that OfficeMax is not likely to succeed on the merits because the 1996 noncompetition agreement with LS & H has been supplanted and subsumed by subsequent employment contracts with BCOP and OfficeMax. Defs.' Opp'n at 4-5. They contend that the last employment contracts they signed with OfficeMax are the operative documents and they contain no provision against post-employment competition with OfficeMax. Id. at 5. Further, the Defendants argue that noncompetition provisions are generally non-assignable. Id. at 5-6. OfficeMax replies that the 1996 LS & H agreement was expressly made for the benefit of BCOP and that the Agreements expressly allow for assignment from LS & H to BCOP. Pl.'s Reply at 3.
The parties have raised a narrow question: whether a noncompetition provision in an employment contract is assignable to a successor employer. The parties have not cited any Maine or First Circuit law on point and the Court has found none.
A review of Maine law on noncompetition agreements and the assignment of contracts is in order. Under Maine law, noncompetition agreements are "contrary to public policy and will be enforced only to the extent that they are reasonable and sweep no wider than necessary to protect the business interests in issue." Lord, 454 A.2d at 834. "The reasonableness of a noncompetition covenant is a question of law that must be determined by the facts developed in each case as to its duration, geographic area, and the interests sought to be protected." Brignull v. Albert, 666 A.2d 82, 84 (Me. 1995); Wausau Mosinee Paper Corp. v. Magda, 366 F.Supp.2d 212, 220 (D.Me. 2005). Protecting an employer from business competition "is not a legitimate business interest to be advanced by such an agreement." Id.; Chapman & Drake, 545 A.2d at 647. Maine law distinguishes between noncompetition agreements and restrictive covenants, and requires durational limits for noncompetition agreements, but not for restrictive covenants. Bernier v. Merrill Air Eng'rs, 2001 ME 17, ¶ 18, 770 A.2d 97, 103. The Maine Supreme Court has stated that a "covenant not to compete may be reasonable . . . when the employee during his term of employment has had substantial contact with his employer's customers and is thereby in a position to take for his own benefit the good will his employer paid him to help develop for the employer's business." Chapman & Drake, 545 A.2d at 647. Thus, a covenant not to compete may be reasonable "when the employee . . . has had access to his employer's confidential information, including customer lists, and is in a position after leaving his employer to take advantage of that information." Id.
Against the general rule favoring assignments, however, Maine law carves out an exception for "[a]n executory contract for personal services, or a contract otherwise involving personal credit, trust, or confidence." Salmon Lake Seed Co. v. Frontier Trust Co., 130 Me. 69, 74, 153 A. 671, 673 (1931). These contracts "cannot be assigned by the sole act of one of the parties thereto." Id.; Goldberg Realty, 669 A.2d at 191. Maine law defines a personal services contract as one involving the "exercise of individual skill and judgment, which can be performed only by the person named." Pinkham v. Libbey, 93 Me. 575, 577, 45 A. 823, 824 (1900). A contract to plow snow may not be a personal services contract, but a contract to build a home "unquestionably" is. Compare Sturtevant, 1999 ME 84, ¶ 34, n. 10, 732 A.2d at 273, (Dana, J., dissenting) (stating that the court "concluded that a snowplowing contract is not a service that involves a type of personal service, trust, or confidence that would require the Town's consent"); with Craft Works Constr. v. Nest, Civil Action Docket No. RE-03-12, 2003 WL 22765942, at *2, 2003 Me.Super. LEXIS 223, at *4 (Me.Super. Nov. 14, 2003) (stating that "[a] contract to build a home is unquestionably a contract for personal services which entails trust and confidence in the builder"). "An example of a personal service contract is where an artist is engaged to paint a portrait — this type of contract cannot be assigned because it involves the unique talents of the artist and assigning the contract affects the adequacy of the product bargained for." Katahdin Ins. Group v. Elwell, Civil Action Docket No. CV-00-198, 2001 WL 1736572, at *4 n. 1, 2001 Me.Super. LEXIS 180, at *9 n. 1 (Me.Super. Jul. 9, 2001) (citing Motel Services v. Central Maine Power Co., 394 A.2d 786, 789 (Me.1978)). The Court assumes that sales work, dealing directly with a business's customers, could constitute a personal services contract within the Maine definition.
In this case, however, it is OfficeMax's position that Mr. Levesque and Mr. Rattray actually signed an agreement allowing for the assignment of the covenant not to compete. To the extent states limit the assignment of noncompetition agreements, they commonly address whether such a covenant is assignable without the employee's consent, not with consent. See Sogeti, 606 F.Supp.2d at 1082 (framing the question as to the assignability of restrictive covenants absent employee's express consent); Katahdin Ins., 2001 WL 1736572, at *4, 2001 Me.Super. LEXIS 180, at *11 (stating that "because non-compete provisions are freely assignable and Elwell expressly consented to the assignment of her employment contract, the contract was effectively assigned"); Adam Schneid, Note, Assignability of Covenants Not To Compete: When Can A Successor Firm Enforce A Noncompete Agreement?, 27 Cardozo L.Rev. 1485, 1485 (2006) (stating that "[c]ourts generally enforce the assignment of a covenant not to compete that expressly permits assignment to a purchaser. However, the validity of an assignment of a covenant not to compete that does not address assignability generates controversy in American courts") (footnotes omitted).
OfficeMax points to language in the two noncompetition agreements to press its contention that Mr. Levesque and Mr. Rattray agreed to assign the covenant not to compete. The assignment language in the LS & H noncompetition agreement is found in paragraph 6:
Pl.'s Mot. Attach. 1, 2 at 2. The Agreement also contains a preamble:
Id. at 1. The Court readily concludes that, in signing these agreements, Mr. Levesque and Mr. Rattray knew that the purpose of the Agreements was to bind them not to compete with BCOP. There is, in the Court's view, no other reasonable interpretation. The Court further concludes that Maine's policy against noncompetition covenants would not prohibit an employee, who is hired by the assignee employer, from agreeing not to compete with the assignee employer or prevent an assignee employer from enforcing the agreement.
The Defendants contend that the 1996 agreements contemplate that BCOP would present them with another contract, which included a covenant not to compete, that BCOP failed to do so, and therefore they are not bound by the noncompetition restriction. As quoted above, paragraph six of the Agreement provides that "if requested by BCOP," they "will sign a noncompetition agreement in substantially the same form as this Agreement and which names BCOP as the employer." Pl.'s Mot. Attach. 1, 2, at 2. The Court does not view this contingent clause as requiring a new Agreement in order to maintain enforceability.
Finally, the Defendants say that they were presented with employment contracts by both BCOP and by OfficeMax, that they signed the contracts, and that the contracts did not contain noncompetition agreements. Defs.' Opp'n at 5. The contention is that the new employment contracts took the place of the LS & H noncompetition agreement and that OfficeMax has no right to sue under the provisions of agreements that have been subsumed by later agreements. Id. At least for purposes of the motion for temporary restraining order, the Court is not convinced. The "agreements" that the Defendants have attached to their response are not comprehensive employment contracts. Id. Attach. 2, 3, 4, 6, 7, 8. They are commitment letters, specifying only the essential terms of an offer and acceptance of employment. The Court does not view these documents are superseding and replacing the earlier Agreement.
The Court concludes that OfficeMax has demonstrated a reasonable likelihood of success in its claim that the February 7, 1996 covenants not to compete were enforceable by BCOP against Mr. Levesque and Mr. Rattray.
This does not end the discussion. The LS & H agreement clearly provides that the noncompetition provision is assignable to BCOP, but it fails to mention OfficeMax. The next question is whether OfficeMax as the corporate successor to both LS & H and BCOP can enforce the noncompetition clause in the LS & H Agreement. Unlike the BCOP assignment, OfficeMax has made no showing that either Mr. Levesque or Mr. Rattray anticipated that OfficeMax would be the beneficiary of their 1996 Agreement.
OfficeMax has established that it acquired BCOP by merger. Pl.'s Reply, Attach. 3. In their motion to dismiss, the Defendants rely on Traffic Control Services, Inc. v. United Rentals Northwest, Inc., 120 Nev. 168, 87 P.3d 1054, 1057-59 (2004) as holding that "because a non-competition
HD Supply, 210 P.3d at 183-84. The HD Supply Court observed that "[a]s the majority of courts have concluded when considering this issue, in a merger, the right to enforce the restrictive covenants of a merged corporation normally vests in the surviving entity." Id. at 187 (citing UARCO Inc. v. Lam, 18 F.Supp.2d 1116, 1122 (D.Haw.1998); Corporate Express Office Prods. v. Phillips, 847 So.2d 406, 412 (Fla. 2003); Alexander & Alexander, Inc. v. Koelz, 722 S.W.2d 311, 313 (Mo.Ct.App. 1986); Aon Consulting Inc. v. Midlands Fin. Benefits, Inc., 275 Neb. 642, 748 N.W.2d 626, 637 (2008); Farm Credit Servs. v. Wysocki, 243 Wis.2d 305, 627 N.W.2d 444, 450-53 (2001)).
Hess v. Gebhard & Co., 570 Pa. 148, 808 A.2d 912, 914 (2002), the other case the Defendants have relied upon, articulates an opposing view. Tracing judicial disfavor of restrictive employment noncompetition covenants to the fifteenth century, the Hess Court observed that an early prohibition against noncompetition covenants was generally replaced in the eighteenth century by a balancing test, which examined "an individual's right to work, the public's right to unrestrained competition, and the right to contract." Id. at 917. A general prohibition gave way to a view that upheld noncompetition agreements so long as the restraints were partial and reasonable. Id. According to Hess, the question presented here — whether an employee noncompetition covenant may be assigned to a new owner in the event of a sale — has generated "a wide disparity of treatment among the jurisdictions." Id. at 918. Hess says that a majority of states has concluded that restrictive covenants are not assignable either because the covenants are personal to the parties or because employment involves personal services, which are not assignable. Id. at 918-19. Hess says that a few jurisdictions have concluded that an employment contract is assignable in the same manner as any other contract, unless there is a clause prohibiting its assignment. Id. at 919.
Hess also cites a United States Supreme Court opinion authorized by Justice Oliver Wendall Holmes, which declined to enforce a noncompetition covenant upon the sale of a business:
Hess refused to enforce the noncompetition covenant. Hess held that "a restrictive covenant not to compete, contained in an employment agreement, is not assignable to the purchasing business entity, in the absence of a specific assignability provision, where the covenant is included in a sale of assets." Hess, 808 A.2d at 922. The Pennsylvania Supreme Court concluded that enforcement was not reasonably necessary to protect the current, nonprotectible business interests of the selling business and that an assignment of a restrictive covenant without the consent of the assignee otherwise offends public policy. Id. at 924.
However, in 2010, addressing a stock sale, not a sale of assets, the Third Circuit concluded that "the Pennsylvania Supreme Court would hold that the transfer of some or all of the stock of a corporation has no effect on its ability to enforce a non-compete agreement." Zambelli Fireworks Mfg. Co. v. Wood, 592 F.3d 412, 423 (3d Cir.2010). The Zambelli and HD Supply decisions eclipse each case upon which the Defendants rely to support their contention of nonassignability. The Third Circuit's Zambelli decision is consistent with HD Supply: for determining the enforceability of a noncompetition agreement, a sale of assets is different from a merger or stock sale.
As OfficeMax merged with BCOP, the Court concludes that OfficeMax has demonstrated a reasonable likelihood that the noncompetition agreements will be enforceable against Mr. Levesque and Mr. Rattray.
OfficeMax claims that it will suffer irreparable harm if an injunction is not granted. Pl.'s Reply at 5-6. It says that it has lost sales, goodwill, customer contacts, and referral sources. Id. at 5. It claims that Mr. Levesque and Mr. Rattray are using confidential OfficeMax information to compete against OfficeMax. Id. at 6. In support of its contentions, OfficeMax has proffered two sworn declarations of current employees. Pl.'s Mot., Attach. 3, Decl. of Deneen Morrotta (Morrotta Decl.); Attach. 4, Decl. of Rick Theriault (Theriault Decl.). They say that while Mr. Levesque and Mr. Rattray were employed at OfficeMax, they were exposed to highly confidential information that should not be exposed to competitors, including OfficeMax pricing, profit margins, products, strengths and vulnerabilities. Id. They say the Defendants also gained unique insights into the corporate and organizational clients that they solicited and served. Id. Ms. Morrotta says that she recently visited the Chief Financial Officer (CFO) of Pines Health Center, a client Mr. Rattray had serviced on behalf of OfficeMax and the CFO told her that they were now buying office supplies from County through Mr. Rattray, and not from OfficeMax, because of their pricing. Morrotta Decl. ¶ 10.
There are several strands of law on the question of irreparable injury. The Maine Law Court has commented that "protecting an employer from business competition is not a legitimate business interest to be advanced by [a noncompetition agreement]." Brignull, 666 A.2d at 84. At the same time, a covenant not to compete may be reasonable "when the employee during his term of employment has had substantial contact with his employer's customers and is thereby in a position to take for his own benefit the good will his employer paid him to help develop for the employer's business." Chapman & Drake, 545 A.2d at 647 (citations omitted). In such a situation, an employer may "prevent a former employee from using his trade or business secrets, and other confidential knowledge gained in the course of the employment and from enticing away old customers. . . ." Bernier v. Merrill Air Eng'rs, 2001 ME 17, ¶ 15, 770 A.2d 97, 103 (quoting Roy v. Bolduc, 140 Me. 103, 107, 34 A.2d 479, 480-81 (1943)).
It is a longstanding axiom that "economic harm in and of itself is not sufficient to constitute irreparable injury." Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Bishop, 839 F.Supp. 68, 74 (D.Me. 1993) (citations omitted). Speculative injury "does not constitute a showing of irreparable harm." Id. Moreover, if "the information the employer seeks to keep confidential could be obtained by legitimate means by its competitors, enforcement of the covenant on that basis is not appropriate." Hess, 808 A.2d at 924. For example, in Carl A. Colteryahn Dairy v. Schneider Dairy, the Pennsylvania Supreme Court stated that "equity will not protect mere names and addresses easily ascertainable by observation or reference to directories." 415 Pa. 276, 203 A.2d 469, 473 (1964).
Some of OfficeMax's allegedly confidential information is generally ascertainable. The noncompetition covenant's geographical reach is "within sixty (60) miles of any county in which I performed services for LS & H in the 12 months prior to my termination of employment." Pl.'s Mot. Attach. 1, 2 at 1-2. OfficeMax alleges that the Defendants have violated this clause within Aroostook County, Maine, which although geographically large is sparsely populated. Compl. ¶¶ 15, 25. The OfficeMax clients mentioned in the Morrotta and Theriault declarations, a hospital, chamber of commerce, school, and large potato processing enterprise, would be the "usual suspects" for any enterprising office supply business, and the Court is not impressed that Mr. Levesque and Mr. Rattray necessarily breached the
The allegations in the declarations that come closest to stating a claim of irreparable injury are that the Defendants have used their knowledge of OfficeMax pricing to convince OfficeMax clients to purchase office services from County. The Morrotta and Theriault declarations focus with specificity on two clients, Pines Health Service and Houlton Regional Hospital, and an inference can be drawn that Mr. Levesque and Mr. Rattray used their knowledge of OfficeMax pricing to attempt to lure those OfficeMax customers away by offering lower County pricing for similar OfficeMax services. "A business's interests in good will, customer contacts, and referral sources cannot be measured in numerical or monetary terms, and neither can the damages to these interests that the plaintiff will suffer without injunctive relief." Everett J. Prescott v. Ross, 383 F.Supp.2d 180, 192 (D.Me.2005) (quotation marks and citation omitted). Yet, here, OfficeMax has identified a universe of thirteen customers and the direct economic damage caused by the Defendants in this relatively small customer group would more readily be compensated by a monetary award for the brief period of time between the resolution of the temporary restraining order and the resolution of the preliminary injunction.
In the circumstances of this motion, the evidence of irreparable injury is too limited for the Court to conclude that if a temporary restraining order is not granted, OfficeMax will suffer irreparable harm.
If the Court had determined that OfficeMax had demonstrated irreparable injury, it would conclude that the balance of the equities favors denial of the motion for temporary restraining order. As earlier noted, the covenant not to compete covers all Aroostook County plus sixty miles, an extremely large geographic area. Aroostook County borders Canada on the west, north, and east, and there is no evidence that Mr. Levesque or Mr. Rattray could obtain work permits to sell office goods in Canada. This leaves only an area south of Aroostook County for the Defendants, and to reach a client not covered by the noncompetition agreement, Mr. Levesque and Mr. Rattray would have to travel for approximately two hours from their homes in Caribou and Fort Fairfield. As a practical matter, the net effect of the noncompetition covenant would be to deprive both Mr. Levesque and Mr. Rattray of their ability to perform the type of work they have both been doing for OfficeMax and its predecessors for decades. OfficeMax has not proffered areas of work Mr. Levesque and Mr. Rattray could perform, based on their level of training and experience that would not be covered by the noncompetition agreement. See Lord, 454 A.2d at 835 (observing that the plaintiff "would be totally precluded from her employment as a licensed insurance agent for over seven years within a sixty mile radius of Machias" and that this amounted to a "severe restriction").
The impact on OfficeMax is apparent. Its former employees, armed with information they garnered as employees, will seek out and attempt to ferret away its long
Here, in the context of a motion for temporary restraining order, where OfficeMax is demanding immediate injunctive relief, the Court concludes that the balance of equities favors the Defendants.
To complete the analysis, the Court concludes that the public interest factor is a draw. The Maine Supreme Judicial Court has declared that noncompetition agreements may, in appropriate circumstances, be enforced, a policy decision that it has upheld for over one hundred and forty years. Bernier, 2001 ME 17, ¶ 15, 770 A.2d at 103; Brignull, 666 A.2d at 84; Chapman & Drake, 545 A.2d at 646-47; Lord, 454 A.2d at 834; Roy, 34 A.2d at 480; Warren v. Jones, 51 Me. 146, 149 (1862). The Law Court has said that a covenant not to compete may be reasonable "when the employee during his term of employment has had substantial contact with his employer's customers and is thereby in a position to take for his own benefit the good will his employer paid him to help develop for the employer's business." Chapman & Drake, 545 A.2d at 647.
At the same time, Maine recognizes that "the enforcement of an employee's covenant not to compete with his former employer has the potential for greatly restricting that employee's capacity to support himself in his chosen occupation" and "we have emphasized that such covenants `are contrary to public policy and will be enforced only to the extent that they are reasonable and sweep no wider than necessary to protect the business interests at issue.'" Id. at 646-47 (quoting Lord, 454 A.2d at 834).
Here, the underlying policies both for and against noncompetition agreements are in equipoise.
The Court DENIES OfficeMax Incorporated's Motion for Temporary Restraining Order (Docket # 6) and OfficeMax Incorporated's Motion for Ex Parte Consideration of its Motion for Temporary Restraining Order (Docket # 11).
SO ORDERED.
This context avoids the question of whether there is any remaining difference between a TRO and a preliminary injunction once the opposing party has entered an appearance and has been fully heard. Graham v. Minter, 437 F.2d 427, 428 (1st Cir.1971); Saco Def. Sys. Div., Maremont Corp. v. Weinberger, 606 F.Supp. 446, 449 (D.Me.1985). The Court is aware that its Order on the motion for TRO may be followed in fairly short order by a more complete hearing, perhaps including evidence, on the merits of the motion for preliminary injunction, and, in evaluating the merits of the motion, the Court has considered whether OfficeMax has made its case for the need for urgent relief. The Court will confer with counsel to determine how they wish to proceed with the remaining motions, including the motion for preliminary injunction.
