47 F.3d 1165 (4th Cir. 1995), 94-1791, Source Services Corp. v. Bogdan

Docket Nº:94-1791.
Citation:47 F.3d 1165
Party Name:SOURCE SERVICES CORPORATION, Plaintiff-Appellant, v. Michael J. BOGDAN, Defendant-Appellee,and Chadwick Houck; Julius W. Schneider, Defendants.
Case Date:February 21, 1995
Court:United States Courts of Appeals, Court of Appeals for the Fourth Circuit

Page 1165

47 F.3d 1165 (4th Cir. 1995)



Michael J. BOGDAN, Defendant-Appellee,and

Chadwick Houck; Julius W. Schneider, Defendants.

No. 94-1791.

United States Court of Appeals, Fourth Circuit

February 21, 1995

Editorial Note:

This opinion appears in the Federal reporter in a table titled "Table of Decisions Without Reported Opinions". (See FI CTA4 Rule 36 regarding use of unpublished opinions)

Argued: Dec. 8, 1994.

Appeal from the United States District Court for the District of Maryland, at Baltimore. Frederic N. Smalkin, District Judge. (CA-93-840-S)



ARGUED: Mark Jay Swerdlin, SHAWE & ROSENTHAL, Baltimore, Maryland, for Appellant. Harry Patrick Stringer, Jr., MUDD, HARRISON & BURCH, Towson, MD, for Appellee. ON BRIEF: Stephen D. Shawe, Patrick M. Pilachowski, SHAWE & ROSENTHAL, Baltimore, MD; Daniel R. Price, STANWOOD & PRICE, Palo Alto, CA, for Appellant.

Before POWELL, Associate Justice (Retired), United States Supreme Court, sitting by designation, and RUSSELL and WILKINSON, Circuit Judges.



Appellant Source Services Corporation (Source) appeals the district court's granting of summary judgment in favor of Appellee Michael J. Bogdan on Source's various contract and tort claims arising from Bogdan's alleged breaches of his employment contract. We affirm.


Source, a national employment placement service, matches computer, accounting, finance, and engineering professionals (applicants) seeking jobs with employers (clients) in those fields. Source has operated a branch office in the Baltimore, Maryland, area since the mid-1970s. This case involves two of Source's four specialty divisions in its Baltimore office: Electronic Data Processing (EDP) and Virtual Help, a division providing temporary professional help.

For its own sales staff, Source trains EDP professionals, who become privy to information on applicants and clients collected and compiled by Source and maintained in extensive computer databases. Source keeps track of applicants' home addresses and telephone numbers, current work telephone numbers, educational backgrounds, current employment positions, prior experience, present salaries, acceptable positions, desired salaries, and commuting preferences. Source also stores information such as clients' hiring of EDP personnel, size of EDP staffs, nature of existing positions, hiring profiles, confidential descriptions of hiring criteria, key hiring decisionmakers, and interview techniques. Source also maintains job order lists describing clients' open positions and hiring requirements.

Deposition testimony by Source managers Robert Clawson and Jack Causa, however, indicated that Source obtained much of its information about applicants and clients from public sources. The managers testified that such sources include advertisements in the classified sections of newspapers, leads from company employees, directories of human resource personnel, and published books listing companies. Clawson and Causa also testified that Source personnel "drive by" companies and make cold calls to their placement officers and human resource persons. Furthermore, Source's databases include information on applicants and clients who have never used Source or whom Source has never contacted. 1

To protect its information on applicants and clients, Source requires each management employee to execute an employment contract. Source hired Bogdan on January 4, 1982, and at the inception of his employment on April 19, 1982, he signed a contract that included post-termination restrictive covenants. Bogdan entered into another employment contract with Source on July 29, 1983, which was modified on August 8, 1984. This dispute involves the terms of the 1983 contract as modified in 1984.

The contract restricts Bogdan from making any independent use of Source's "trade secrets," a term defined very broadly and essentially covering all applicant and client information. Joint Appendix (JA) at 435. Bogdan also agreed that, for one year after his termination from Source, he would not engage in any personnel placement business in fields in competition with Source within 50 miles of any Source office to which he had been assigned during the one-year period before his termination (i.e., Baltimore). JA at 441. He further agreed that, for one year after leaving Source, he would not solicit, divert, or attempt to solicit or divert from Source the business of any client or applicant with whom he had any business contact regarding personnel placement while employed at Source. JA at 437.

Bogdan eventually attained the position of Managing Director of Source's EDP branch office in Baltimore. He was the top EDP official at that location, where he...

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