Donovan v. Digital Equipment Corp.

• Decision Date: 13 December 1994
• Docket Number: Civ. No. 93-97-JD.
• Citation: 883 F. Supp. 775
• Parties: Francis H. DONOVAN v. DIGITAL EQUIPMENT CORP.
• Court: U.S. District Court — District of New Hampshire

883 F. Supp. 775

Francis H. DONOVAN v. DIGITAL EQUIPMENT CORP.

Civ. No. 93-97-JD.

United States District Court, D. New Hampshire.

December 13, 1994.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Francis G. Murphy, Jr., Nixon, Hall & Hess, Manchester, NH, for Francis H. Donovan.

David C. Casey, Peckman, Lobel, Casey, Prince & Tye, Boston, MA, Steven M. Gordon, Shaheen, Cappiello, Stein & Gordon, Concord, NH, for Digital Equipment Corp.

ORDER

DiCLERICO, Chief Judge.

The plaintiff, Francis Donovan, brings this action against defendant Digital Equipment Corporation ("Digital") to recover losses related to the termination of his employment with Windsor Communications International ("Windsor"). The plaintiff alleges that Digital is liable under federal antitrust law, state antitrust law, state consumer protection law and common law tort. The court's jurisdiction is based on federal question as provided by 28 U.S.C.A. § 1331 (West 1993) and diversity of citizenship as provided by 28 U.S.C.A. § 1332 (West 1993).

Before the court is Digital's motion for summary judgment on all four claims (document no. 13).

Background

The parties have stipulated to an agreed statement of facts for purposes of this motion. Facts to Which Parties Have Stipulated ("Statement").

The plaintiff worked for Digital as a public relations manager for eleven years. Statement at ¶ 3. In spring 1992, the plaintiff accepted an early retirement package from the defendant and, in so doing, signed a retirement contract ("agreement"). Id. at 4. In exchange for a lump-sum payment and other benefits, the plaintiff agreed to certain limitations related to his ability to work for a competitor of the defendant. Id. at ¶¶ 2, 14-15. The relevant language provides:

14. Employee agrees not to become employed by, consult for, or in a any way provide employee, consultant or contract worker services for, or on behalf of, any ... competitor of Digital before 1 December 1992. The restriction on Employee in the foregoing sentence shall apply only to services performed within the United States of America and only to services substantially similar to services he or she performed for or on behalf of Digital while an employee of Digital. Employee acknowledges that the restrictions set forth in this Paragraph 14 are reasonable in both geographical and temporal scope, as well as in all other respects.

15. Employee specifically acknowledges an obligation to protect Digital's proprietary rights and confidentiality as provided for in Digital's Employee Agreement and policies.

Agreement at ¶¶ 14, 15. The agreement also states:

13. This document includes all of the agreements of the parties relative to Employee's termination, and supersedes any prior agreements or representations between the parties as to subjects covered. Employee specifically agrees that nothing in this Agreement modifies Employee's obligations and responsibilities under any prior Employee Agreement ... previously executed by Employee, including without limitation, any non-competition, protection of confidential information of Digital or others, and employee obligation clauses except as specifically referred to herein.

Id. at ¶ 13. Digital maintains a set of purchasing policies and procedures ("purchasing policy"). See Statement at ¶ 20. Purchasing policy section 2.01 provides in relevant part:

No contract will be awarded to Digital employees or to members of their immediate families.... This policy applies to all Digital employees and continues in force for one year after an employee leaves Digital's employment.

*If the hiring of a former Digital employee by a supplier would give that supplier a competitive advantage over other firms, Purchasing may invoke a prohibition as regards the former employee dealing with Digital in a sales, sales engineering or marketing capacity for one year.

*Individual exceptions to the foregoing restrictions on business dealings with employees and former employees must be approved by the business or operational Vice President responsible for the organization seeking the exception, or by the Corporate Purchasing Vice President.

Purchasing Policy at § 2.01.

After leaving Digital, the plaintiff immediately began work as director of public relations for Windsor, a vendor to Digital. Statement at ¶¶ 6-9.¹ The bulk of Windsor's revenues came from performing public relations projects for Digital and, according to Windsor's written offer of employment ("offer"), one of the plaintiff's responsibilities would be the "identification of PR opportunities within Digital...." Id. at ¶ 9; Offer at 1. Prior to his final day at Digital the plaintiff discussed his intention to join Windsor with Digital's director of public relations and other public relations managers. Statement at ¶ 6. The plaintiff "asked for their support, which he received." Id. at ¶ 7.

Quantic Communications ("Quantic") competed with Windsor for Digital contracts. Statement at ¶ 11. Quantic was founded by former Digital employees in 1991 with the support of Digital, which wanted to subcontract out much of its marketing and communications work. Id. at ¶ 12. Digital provided extensive financing to Quantic and executed a contract to purchase approximately thirty million dollars in services from the company during the following three years. Id. at ¶ 13. Digital also guaranteed a three year, $2.4 million bank loan on Quantic's behalf. Id. at ¶ 14.

In late July 1992, Digital received a requisition for a $7,900 public relations project to be performed by Donovan at Windsor. Statement at ¶ 19. The purchasing department rejected the requisition on the grounds that Donovan was barred from working on Digital projects under section 2.01 of the purchasing policy. Id. at ¶ 20.

Digital informed Windsor that it could seek an exception to the purchasing policy which, if granted, would allow the plaintiff to work on Digital projects as a Windsor employee. Statement at ¶ 24. Digital had granted exceptions to the policy in the past. Id. at ¶ 27. However, Windsor elected not to seek the exception and instead decided to preserve its relationship with Digital by terminating the plaintiff. Id. at ¶¶ 22, 26. Aside from his inability to work on Digital projects, Windsor management was satisfied with the plaintiff's work performance during his two months of employment, June and July 1992. Id. at ¶ 18.

The plaintiff himself contacted Digital personnel to inform them that he was terminated because of the purchasing policy. Statement at ¶ 23. The plaintiff unsuccessfully sought an exception to the purchasing policy on his own behalf. Id. at ¶ 25.

Discussion

The plaintiff asserts that the defendant's conduct relative to the purchasing policy violates the Sherman Antitrust Act, 15 U.S.C. § 1, and the New Hampshire antitrust act, N.H.Rev.Stat.Ann. ("RSA") § 356 et seq., in that the defendant combined with Quantic and/or with Windsor to allocate or divide markets to the plaintiff's detriment. Complaint at ¶¶ 48-55. The plaintiff further asserts that the defendant's use of the purchasing policy to bar him from working on Digital projects violated the New Hampshire Consumer Protection Act, RSA § 358-A et seq. Id. at ¶ 44. The plaintiff further asserts that the defendant's conduct constitutes a tortious interference with his contractual relationship with Windsor. Id. at ¶¶ 38-40.

In its motion for summary judgment defendant asserts that the plaintiff lacks standing to maintain the antitrust claims and, in the alternative, has failed to state a cognizable antitrust claim upon which relief may be granted. Defendant's Motion for Summary Judgment ("Motion") at 1. The defendant further asserts that the plaintiff cannot proceed with a claim under the consumer protection act because disputes arising out of an employment relationship are beyond the scope of the act. Defendant's Memorandum in Support of Motion for Summary Judgment ("Memorandum in Support of Motion") at 15. The defendant also argues that the plaintiff cannot proceed with a common law tort claim because he has failed to demonstrate that Digital improperly interfered with his relationship with a third party. Motion at 1.

The role of summary judgment is "to pierce the boilerplate of the pleadings and assay the parties' proof in order to determine whether trial is actually required." Snow v. Harnischfeger Corp., 12 F.3d 1154, 1157 (1st Cir.1993), cert. denied, ___ U.S. ___, 115 S.Ct. 56, 130 L.Ed.2d 15 (1994) (quoting Wynne v. Tufts Univ. Sch. of Medicine, 976 F.2d 791, 794 (1st Cir.1992), cert. denied, ___ U.S. ___, 113 S.Ct. 1845, 123 L.Ed.2d 470 (1993)). The court may only grant a motion for summary judgment where the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). The party seeking summary judgment bears the initial burden of establishing the lack of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986); Quintero de Quintero v. Aponte-Roque, 974 F.2d 226, 227-28 (1st Cir.1992). The court must view the entire record in the light most favorable to the plaintiff, "`indulging all reasonable inferences in that party's favor.'" Mesnick v. General Elec. Co., 950 F.2d 816, 822 (1st Cir.1991) (quoting Griggs-Ryan v. Smith, 904 F.2d 112, 115 (1st Cir.1990), cert. denied, 504 U.S. 985, 112 S.Ct. 2965, 119 L.Ed.2d 586 (1992)). However, once the defendant has submitted a properly supported motion for summary judgment, the plaintiff "may not rest upon mere allegation or denials of their pleading, but must set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505, 2514, 91 L.Ed.2d 202 (1986) (citing Fed.R.Civ.P. 56(e)...