Builder Servs. Grp. v. Harkins

• Court: U.S. District Court — District of Massachusetts
• Writing for the Court: Denise J. Casper United States District Judge
• Docket Number: 23-cv-11375
• Decision Date: 21 July 2023
• Citation: Builder Servs. Grp. v. Harkins, 23-cv-11375 (D. Mass. Jul 21, 2023)
• Parties: BUILDER SERVICES GROUP, INC., Plaintiff, v. MICHAEL HARKINS et al., Defendant.

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BUILDER SERVICES GROUP, INC., Plaintiff, v. MICHAEL HARKINS et al., Defendant.

No. 23-cv-11375

United States District Court, D. Massachusetts

July 21, 2023

MEMORANDUM AND ORDER

Denise J. Casper United States District Judge

I. Introduction

Plaintiff Builder Services Group, Inc. (“BSG”) seeks injunctive relief against Defendants Michael Harkins (“Harkins”), Advanced Green Insulation, Inc. (“AGI”) and Israel Aparecido Barroso (“Barroso”) (collectively “Defendants”) enjoining them from allegedly violating contractual confidentiality and non-solicitation obligations, D. 4. After considering the motion Defendants' opposition and conducting oral argument on the motion, and for the reasons discussed below, the Court ALLOWS the motion, D. 4, and enters an Order of Preliminary Injunction.

II. Factual Background

A. BSG and AGI Employment

BSG distributes building insulation and building product materials for the residential and commercial end-markets through its affiliates throughout the United States, including New England. D. 1 ¶ 12. Harkins began working for BSG on April 5, 2021.^[1] Id. ¶ 15. According to BSG, in September 2021, he transitioned to an expanded role in sales and production based out of Middleboro, Massachusetts. Id.; see D. 29-1 (Offer letter to Harkins for this position, electronically signed by him on September 30, 2021). According to Harkins, he did not transition into this expanded role until March 2022. D. 30-1 ¶ 8. On or about April 4, 2023, Harkins changed roles again and began working as a sales consultant. D. 1 ¶ 17. As a sales consultant, Harkins had access to highly confidential information and trade secrets. Id. ¶ 21. Allegedly telling BSG that “he was going to work for a cable company,” Harkins resigned from BSG on May 8, 2023 and ceased working for BSG on May 22, 2023 and immediately commenced working for AGI. Id. ¶ 20. AGI, which BSG identifies as a direct competitor, also provides building insulation installation services in New England. Id. ¶¶ 13-14.

B. The BSG Agreement

While BSG alleges that Harkins signed an earlier contract when his employment by BSG began in April 2021, it relies upon the Confidentiality, Intellectual Property Assignment, NonCompete and Non-Solicitation Agreement (the “BSG Agreement”), D. 1-4, dated September 30, 2021, for the injunctive relief it seeks here. Accordingly, the Court turns to the relevant portions of the BSG Agreement.

The BSG Agreement, which Harkins denies entering into, D. 24-1 ¶¶ 9-11, includes both a non-disclosure clause (Section II) and a non-solicitation clause (Section VII). D. 1-4 at 1, 3-4. The non-disclosure clause provides that the employee agrees, during his employment or at any time thereafter, not to “disclose any Confidential Information^[2] to others or use the Confidential Information for Employee's own benefit or for the benefit of others....Upon the termination of Employee's employment, Employee agrees to promptly return all Confidential Materials and other records, files, documents and other materials relating to the TopBuild Group's business, whether in hard copy or electronic format.” D. 1 ¶ 30; see D. 1-4 at 1. The non-solicitation clause provides that the employee agrees, for a period of one year after the termination of his employment with BSG not to “[c]ontact or otherwise solicit any employee, consultant, or independent contractor of [BSG] with the intention of encouraging such person to terminate his or her employment or other relationship with [BSG] or any of its Affiliates, or employ or otherwise hire or engage any such person; [s]olicit, call upon, accept work and/or orders for product from, or initiate communication or contact with any Customer for the purpose of offering Competitive Products to such Customer, or otherwise offer Competitive Products to such Customer; [s]olicit, call upon or initiate communication or contact with any Customer, vendor or supplier of [BSG] or any of its Affiliates for the purpose of encouraging such person to terminate, place elsewhere or reduce the volume of its business with [BSG] or its Affiliates; or [o]therwise attempt to directly or indirectly interfere with [BSG's] or any of its Affiliates business or its relationships with its employees, independent contractors, vendors, suppliers or Customers.” D. 1 ¶ 31; see D. 1-4 at 3-4.

C. Alleged Misappropriation of BSG Confidential Information and Unlawful Solicitation of BSG's Customers

Between May 5, 2023 (three days before his resignation from BSG) and May 22, 2023 (the date of his last day at BSG), Harkins sent several offers for BSG to bid on projects in Massachusetts, a spreadsheet listing the labor rates that BSG pays its installers on piecework and several spreadsheets compiling all the permits pulled in Massachusetts (“Henry Reports”) which BSG purchased to generate sales leads, from his BSG email to his personal email. D. 1 ¶ 33. Harkins, on behalf of AGI and Barroso, has also allegedly solicited, called upon and accepted work and/or orders from BSG's customers, including diverting an order that Harkins had booked for BSG before his termination to AGI on June 15, 2023. Id. ¶ 35; see D. 28-3 (unredacted photo of AGI vehicle and forms for this work and order).

III. Standard of Review

Injunctive relief “is an ‘extraordinary and drastic remedy.'” Voice of the Arab World, Inc. v. MDTV Med. News Now, Inc., 645 F.3d 26, 32 (1st Cir. 2011) (quoting Munaf v. Geren, 553 U.S. 674, 689-90 (2008)). To obtain such relief, the Court must consider: (1) the movant's likelihood of success on the merits; (2) the likelihood of the movant suffering irreparable harm; (3) the balance of equities between the parties; and (4) whether granting the injunction is in the public interest. Corp. Techs., Inc. v. Harnett, 731 F.3d 6, 9 (1st Cir. 2013). A plaintiff “bears the burden of establishing that these four factors weigh in its favor.” Esso Standard Oil Co. (P.R.) v. Monroig-Zayas, 445 F.3d 13, 18 (1st Cir. 2006) (citation omitted).

IV. Procedural History

On June 20, 2023, BSG filed its complaint asserting claims for breach of contract, misappropriation of trade secrets, breach of fiduciary duty, tortious interference and unfair and deceptive trade practices, D. 1 at 11-20, and moved for a temporary restraining order against Defendants, D. 4. On June 27, 2023, the Court entered a temporary restraining order, in effect until the Court's hearing on the motion, enjoining Defendants from misappropriating BSG's confidential information and trade secrets, violating any of Harkins' obligations under the BSG Agreement or taking any action to spoliate any devices capable of performing computing devices that Defendants used or had access to that may contain BSG's confidential information or trade secrets. D. 18. On July 11, 2023, the Court heard the parties on the pending motion for injunctive relief, took the matter under advisement and extended the existing temporary restraining order until July 21, 2023 pending the Court's ruling on the motion. D. 25, 27.

V. Discussion

A. Injunctive Relief Factors

1. Likelihood of Success on the Merits

Although BSG also asserts other claims, the focus of its motion for injunctive relief is on its claims for breach of contract and misappropriation of trade secrets. D. 5 at 9-16. Accordingly, the Court's analysis of its reasonable likelihood of success on the merits will focus on these claims.

a) Breach of Contract (Count I)

To prevail in a breach of contract action under Florida law which governs the BSG Agreement, D. 1-4 at 5, “a plaintiff must prove: (1) a valid contract existed; (2) a material breach of the contract; and (3) damages.” Deauville Hotel Mgmt., LLC v. Ward, 219 So.3d 949, 953 (Fla. Dist. Ct. App. 2017) (citation omitted).^[3]

As a preliminary matter, Harkins claims that he never signed the BSG Agreement. D. 24-1 ¶ 11; D. 30-1 ¶ 5. Harkins also claims that he did not have access to his desktop computer at the time that BSG alleges he signed the BSG Agreement because he was on vacation. D. 30-1 ¶¶ 6-7. These claims are contradicted, however, by the appearance of Harkins' electronic signature on the face of the BSG Agreement. D. 1-4 at 6. Under Florida law, “electronic signatures are valid.” Mattson v. WTS Int'l, Inc., No. 20-cv-1245-CEH-AEP, 2021 WL 1060211, at *7 (M.D. Fla. Mar. 20, 2021) (citing Haire v. Fla. Dep't of Agric. & Consumer Servs., 870 So.2d 774, 789 (Fla. 2004) and Fla. Stat. § 668.004). Following a hearing on the pending motion for injunctive relief, BSG submitted additional evidence corroborating the authenticity of Harkins' electronic signature, including another copy of the BSG Agreement that includes an additional page showing that Harkins signed the document via DocuSign, an electronic document signing and verification software program. D. 28-2 at 7. BSG also submitted a DocuSign “Certificate of Completion” which verifies the date and time of Harkins' signature as September 30, 2021 at 9:26 a.m., along with the email and IP addresses he used to access the document. D. 29-3 at 1. Furthermore, a unique code below Harkins' signature on the BSG Agreement, “DA24B4C5982340C,” matches the code that appears below his signature on the DocuSign “Certificate of Completion.” Compare D. 28-2 at 6 with D. 29-3 at 1; D. 29 ¶¶ 9-14.

Additionally, Harkins' electronic signature, also dated September 30, 2021, appears on an offer letter addressed to him for a “Hybrid - Production/Sales position” (the “Offer Letter”). D. 29-1 at 1.

A separate DocuSign “Certificate of Competition” indicates that Harkins' signature was entered at 9:25 a.m. using the same email address and IP address that was used to access and sign the BSG Agreement under his name. Compare D. 29-4 at 1 with D. 29-3 at 1....