Columbia Tech. Corp. v. Yoo
| Docket Number | 653273/2013 |
| Decision Date | 22 January 2022 |
| Citation | 2022 NY Slip Op 30226 (U) |
| Parties | COLUMBIA TECHNOLOGY CORPORATION, Plaintiff, v. JOHN YOO, UNITED TECH CORP. D/B/A JYOOSEARCH.COM, J-SEARCH, EJR SEARCH PARTNERS, ERIC ROSS, JACK ROTH, EVAN HECHT, EVAN GARY CAPITAL INC. D/B/A QUANTITATIVE SYSTEMS, ERIC SULTZER, JOHN DOE DEFENDANTS 1-100 Defendants. |
| Court | New York Supreme Court |
DECISION + ORDER ON MOTION
The following e-filed documents, listed by NYSCEF document number (Motion 007) 209, 210, 211, 212, 213, 214, 215, 216, 217 218, 219, 220, 221, 222, 223, 224, 225, 226, 227, 228, 229 230, 231, 232, 233, 272, 276, 277, 282, 283, 289, 290, 291, 292, 293, 294, 295, 296, 297, 298 were read on this motion to/for SUMMARY JUDGMENT .
The following e-filed documents, listed by NYSCEF document number (Motion 008) 234, 235, 236, 237, 238, 239, 240, 241, 242, 243, 244, 245, 246, 247, 248, 249, 250, 251, 252, 253, 254, 255, 256, 257, 258, 259, 260, 261, 262, 263, 278, 279, 284, 285, 288, 300, 304 were read on this motion to/for SUMMARY JUDGMENT.
The following e-filed documents, listed by NYSCEF document number (Motion 009) 264, 265, 266, 267, 268, 269, 270, 271, 280, 281, 286, 287, 299, 301 were read on this motion to/for SUMMARY JUDGMENT .
In this case, plaintiff Columbia Technology Corporation ("CTC"), an IT recruiting and staffing firm, alleges that defendant John Yoo ("Yoo"), its former employee, violated his duty of loyalty by taking CTC candidates and covertly forwarding their information to defendants Eric Ross ("Ross"), Jack Roth ("Roth"), their company EJR Search Partners ("EJR"), Evan Hecht ("Hecht"), Evan Gary Capital, Inc., d/b/a Quantitative Systems ("Quantitative"), and Eric Sultzer ("Sultzer"). CTC alleges that defendants would place those candidates with their own clients, costing CTC tens of thousands of dollars in commissions in every instance. CTC further alleges that defendants improperly obtained and used information regarding CTC's clients and hundreds of candidates that was proprietary to CTC and that CTC had spent had spent years identifying, gathering, culling, and documenting. CTC alleges that defendants did this to gain an advantage over CTC, steal CTC's business, and increase their own profits at CTC's expense.
The court consolidates Motion Seq. Nos. (MSQ #) 007, 008, and 009 for disposition. In MSQ #007, defendants Ross, Roth, and EJR (collectively, the "EJR defendants" or "EJR") move, pursuant to CPLR 3212, for summary judgment dismissing the third amended complaint as against them. In MSQ #008, defendants Hecht and Quantitative (together, the "Hecht defendants") move, pursuant to CPLR 3212, for summary judgment dismissing the third amended complaint as against them. In MSQ #009, defendant Sultzer moves, pursuant to CPLR 3212, for summary judgment dismissing the third amended complaint as against him.
CTC is an IT recruiting and staffing firm targeting the financial sector (Joint Statement of Undisputed Material Facts [JSMF] [NYSEF Doc No. 233], ¶ 1). In 2010, CTC had written agreements with about 10 to 12 financial firms, including J.P. Morgan, Goldman Sachs, Barclays Capital, Societe Generale, Deutsche Bank, UBS, BNP Paribas, and Citigroup, that enabled it to submit applicants to certain open positions (id.). David Vitiello ("Vitiello") is CTC's president (id.).
Roth and Ross work together as recruiters at EJR, an IT staffing firm, and specialize in placing IT candidates. EJR focuses on placing candidates with financial firms, including J.P. Morgan Chase, Morgan Stanley, and UBS (id., ¶ 3).
The IT staffing industry is highly competitive, with many recruiters competing to place candidates in available positions (id., ¶ 5). As such, at times, recruiters at a firm may contact candidates with whom they have previously communicated while at the firm (id., ¶ 6).
From 2010 to 2013, CTC was a vendor for, and had written agreements with, approximately 10 to 12 financial firms. This allowed CTC to supply information about potential candidates for certain open positions at those financial firms (id., ¶ 7). However, CTC was not the only staffing firm permitted to supply those financial firms with information concerning candidates (id., ¶ 8). Many recruiters competed for limited available placements resulting in an extremely competitive environment (id., ¶ 9; see also Roth aff [NYSCEF Doc No. 229], ¶¶ 9-10).
Between 2009 and 2010, CTC increased from 6 to 27 employees, including recruiters and "sourcers," whom Vitiello referred to as "junior recruiters" (id., ¶ 10, citing Vitiello dep [NYSCEF Doc No. 255], at 11-12; 14). According to Vitiello, sourcers "find candidates" and "aid the recruiters" by "look[ing] through the [CTC] database" for "appropriate candidates" (id., citing Vitiello dep at 14-15). To find candidates, CTC recruiters or sourcers would search the internet, including websites such as Monster.com or Dice.com, or within CTC's own database (id., ¶ 11).
CTC did not have agreements with candidates to work only with CTC (id., ¶ 12). That a candidate appeared in CTC's database did not restrict the candidate from seeking employment through other recruiters, but candidates could choose to work exclusively with CTC (id.).
In 2009 and 2010, CTC used software called "MaxHire" to store and search candidate information and résumés it accumulated from various sources (id., ¶ 13). The system was password protected (id.). At his deposition, Vitiello estimated that CTC's database contained over 10, 000 candidates (id., citing Vitiello dep, at 254). CTC recruiters received a salary or were on a combined salary and commission basis (id., ¶ 14).
Yoo began working in recruiting in or about 2003, when Open Systems Technologies ("OST") hired him (id., ¶ 18). At OST, Yoo also met Sultzer, Roth, Ross, and Hecht (id., ¶¶ 16, 18). Yoo worked at OST for approximately five years, until 2007 or 2008, and later worked at Solomon Page for approximately one year (id., ¶ 19).
Sultzer has worked as a technology recruiter for more than 27 years (id., ¶ 15). For approximately eight months, beginning in October 2009, Sultzer worked at CTC and was in charge of the job requirements for the Barclay's Capital account (id., ¶ 16). He recruited Yoo, whom CTC hired in January 2010 (Sultzer dep [attached to the Diana Sterk aff, NYSCEF Doc No. 283, as exhibit 82], at 49). Yoo and Sultzer worked together on a "day-to-day basis" to place CTC candidates (id. at 57-58). Sultzer left CTC in June 2010 and started his own technology recruiting business, ESultzer & Associates (JSMF, ¶ 17).
In January 2010, Yoo began working at CTC (id., ¶ 19). By employment letter dated January 4, 2010 (NYSCEF Doc No. 212), CTC hired Yoo as a recruiter, with a "salary" that was a "draw against commissions" of $80, 000 per year (id., ¶ 20).
Duty of loyalty or confidentiality agreements are common in the recruiting industry (Vitiello aff [NYSCEF Doc No. 276], ¶ 28; Vitiello dep at 37). All CTC employees, including Yoo and Sultzer, were required to sign a Duty of Loyalty Agreement ("Loyalty Agreement") as a condition of employment and a prerequisite to accessing CTC's database and systems (Vitiello aff, ¶¶ 15, 17, 31; JSMF ¶ 21). When Yoo was hired, Sultzer told Yoo to call "if [he] [had] any questions" about the agreements (see 12/24/2009 email from Sultzer to Yoo with subject line "John Yoo Offer Letter" [Sterk aff, exhibit 4]). The Loyalty Agreement required employees to "keep confidential all Confidential Information" and prohibited them from taking "any Confidential Information with him/her upon leaving the employ of CTC" (Loyalty Agreement [NYSCEF Doc No. 213], ¶¶ 3 [b], 3 [b] [1]). "Confidential Information" was defined as:
(id., ¶ 1).
CTC regarded all its candidate information to be confidential information under the Loyalty Agreement (Vitiello aff, ¶ 27).
The Loyalty Agreement also required that the employee "will not directly or indirectly, as a director, officer, employee . . . perform any acts intended to advance, reasonably likely to advance or having the effect of advancing the interest of any person or entity in any way that will or may injure CTC" during their employment and for twelve months after their employment ceased, (Loyalty Agreement [NYSCEF Doc No. 213], ¶ 4). The Loyalty Agreement also prohibited employees from "solicit[ing] or call[ing] upon any candidate or potential candidate that the Employee placed or attempted to place on behalf of CTC" for twelve months (id., ¶ 5).
Yoo read and signed the Loyalty Agreement (JSMF, ¶ 22). Sultzer also signed a Duty of Loyalty Agreement when working at CTC (id.; see signed Sultzer Duty of Loyal Agreement [Sterk aff, exhibit 7]). Yoo worked at CTC for a total of approximately nine months (id., ¶ 24).
Vitiello alleges that CTC has achieved success through its development of a proprietary database of highly skilled IT professionals and its parallel development of...
To continue reading
Request your trial