In re Bartock
| Decision Date | 09 December 2008 |
| Docket Number | Bankruptcy No. 08-20174-TPA.,Adversary No. 08-2045 TPA. |
| Citation | 398 B.R. 135 |
| Parties | In re Paul BARTOCK, Debtor, Paul Bartock, Plaintiff, v. Bae Systems Survivability: Systems, LLC, as successor in interest to O'Gara-Hess & Eisenhardt Armoring Co., L.L.C., Defendant. |
| Court | U.S. Bankruptcy Court — Western District of Pennsylvania |
Michael Kaminski, Esq., Pittsburgh, PA, for Plaintiff.
John R. Gatoskie, Jr., Esq., for Defendant.
On October 14, 2008, the Debtor, Paul Bartock ("Bartock") filed an Emergency Motion to Enforce Settlement and for Sanctions ("Emergency Motion") at Document No. 46, with reference to a settlement which previously resolved the within Adversary Proceeding. The Emergency Motion essentially asks for an order providing under the terms of the settlement that the Bartock is free to go to work for a company called Ibis Tek, Inc. ("Ibis Tek"), a competitor of Defendant BAE Systems Survivability Systems, Inc. ("BAE").
On October 20, 2008, the Court originally convened a hearing on the Emergency Motion. At that time the matter was stayed without decision, pending the results of a judicial mediation which the Parties had previously agreed to undertake in an effort to resolve a number of open matters. In that mediation, completed on October 28, 2008, the Parties were successful in reaching an agreement resolving many of their differences but the particular issue which is the subject of the Emergency Motion was not among them. As such, Counsel for Bartock requested that this Court resume the hearing on the Emergency Motion.
On November 13, 2008, an evidentiary hearing on the Emergency Motion was held and both sides given a full opportunity to present their cases. There was little in the way of factual dispute, at least in regard to the issue relevant to the Emergency Motion. The undecided issue pertaining to the Emergency Motion centers around the effective, legal extent of the settlement agreement that was reached by the Parties and subsequently reduced to an Order of this Court. At the conclusion of the evidentiary hearing the Court informed Counsel for the Parties that it would defer making a decision on the Emergency Motion for a short time to allow them one last opportunity to try to amicably resolve the issue presented by the Emergency Motion. That time has now passed with no such agreement. The Court must therefore decide the Emergency Motion. For the reasons stated below, the relief requested by Bartock will be granted.1 However, before providing an analysis of the Emergency Motion resulting in this Court's decision, it is necessary to first give a rather lengthy recitation of the history which led up to it.
Bartock was formerly employed by a company called O'Gara-Hess & Eisenhardt Armoring Co., L.L.C. ("O'Gara"), a predecessor in interest to BAE, at a facility in Fairfield, Ohio. During his employment with O'Gara, Bartock worked on different projects and for a time held the job title of Program Manager of the "Up-Armored High Mobility Multi-Purpose Wheeled Vehicles" program at O'Gara. While thus employed, on September 6, 1996, Bartock and O'Gara entered into an agreement ("Noncompete Agreement") that included the following provision:
The Employee hereby covenants and agrees to refrain, during his employment by the Corporation and for a period of two (2) years after the date of termination of the Employee's employment by the Corporation, from directly or indirectly owning any interest in or engaging in or performing any service for any person, firm, or corporation that directly or indirectly engages in any business which competes with any aspect of the business of the Corporation either as an individual on his own behalf, or as a partner, employee or agent for any person or partnership, or as an employee, officer, agent, director or shareholder of a corporation. The Employee will not at any time during the period of the Employee's employment by the Corporation and for a period of two (2) years thereafter induce or assist others to induce or attempt to induce, in any manner, directly or indirectly, any employee, agent, representative, customer or any other person or concern dealing with or in any way associated with the Corporation to terminate or to modify in any other fashion to the detriment of the Corporation such association with the Corporation. The Employee represents that his experience and capabilities are such at the provisions of this paragraph will not prevent him from earning a livelihood.
Noncompete Agreement at ¶ 4. See BAE Evidentiary Hearing Exhibit 3, Document No. 76. The Noncompete Agreement also contained a provision obligating Bartock to treat certain O'Gara material as confidential. Noncompete Agreement at ¶ 3. See BAE Evidentiary Hearing Exhibit 3, Document No. 76.
At the end of September 2005, Bartock left employment with O'Gara and began to work for a company known as "Specialty Defense" at a facility located near Scranton, Pennsylvania.2 Bartock only worked for Specialty Defense for about three months when his employment was terminated on January 12, 2006. Shortly thereafter he was hired by Ibis Tek, a competitor of BAE, to work at a facility near Pittsburgh, PA.
On April 4, 2006, BAE filed an action in the Court of Common Pleas of Butler County, Ohio, at case number CV 2006 04 1157 ("the Ohio Action") against Bartok, Ibis Tek, and two of the owners of Ibis Tek ("the Buckners"), seeking monetary damages and injunctive relief, and alleging among other things, that Bartok had violated the Noncompete Agreement and misappropriated BAE trade secrets in connection with his employment by Ibis Tek. That same date the court in the Ohio Action issued an initial, temporary restraining order enjoining Bartok from being employed by Ibis Tek and enjoining Ibis Tek from employing him. As a result, Bartock was placed on paid administrative leave by Ibis Tek a few days later. On May 19, 2006, the Court in the Ohio Action entered an "Amended Agreed Order" which superseded the April 4, 2006 initial temporary restraining order. This Amended Agreed Order, which is indicated to have been entered by "agreement of the parties," includes the following pertinent provisions:
(a) That Defendant, Paul Bartock, is preliminarily enjoined from directly or indirectly owning any interest in or engaging in or performing any services of any sort for Ibis Tek, L.L.C. or any other person, firm or corporation that directly or indirectly engages in any business which competes with any aspect of the current business of O'Gara-Hess either as an individual or on his own behalf, or as a partner, employee or agent for any person or partnership or as an employee, officer, agent, director or shareholder of a corporation.
(b) That Defendant, Paul Bartock, is preliminarily enjoined from inducing or assisting others to induce or attempt to induce in any manner, directly or indirectly, any employee, agent, representative, customer or any other person or concern dealing with or in any way associated with O'Gara-Hess to terminate or to modify in any other fashion to the detriment of O'GaraHess such association with O'GaraHess.
This order shall expire upon further order of the court, following notice and hearing, or agreement of the parties.
Amended Agreed Order, see BAE Evidentiary Hearing Exhibit 1, Document No. 76.3 Without involving unnecessary detail, it suffices to say that thereafter the Ohio Action proceeded.
On July 28, 2006, Bartock received his last payroll check from Ibis Tek. Bartock alleges that on November 2, 2007, he filed a motion in the Ohio Action seeking to modify the Amended Agreed Order to allow him to seek employment with other companies that are competitors of BAE (excluding Ibis Tek, which was still an active defendant in the case at the time) on the ground that more than two years had then passed since he had left employment with O'Gara-Hess. However, BAE opposed that motion and the Amended Agreed Order was not modified.4
On December 4, 2007, a "Settlement and Release Agreement" in the Ohio Action was entered into by BAE on the one hand and Ibis Tek and the Buckners on the other (hereinafter referred to as the "BAE-Ibis Tek Agreement"). Among other covenants, the BAE-Ibis Tek Agreement provided that Ibis Tek and the Buckners would pay BAE $5,000,000 in damages payable in increments of $1,250,000 over a 4 year period in return for BAE terminating the Ohio Action as against them. As will become more apparent later in this Opinion, another provision of the BAE-Ibis Tek Agreement, Paragraph 11(d), may be significant with respect to the issues raised by the present Emergency Motion, and it provides in relevant part:
(d) ... Further, Ibis Tek, and each of the Buckners, on behalf of themselves and each of their respective Controlled Parties, agree that, after the Agreed Order of Dismissal is entered, Ibis Tek, and each of the Buckners on behalf of themselves and each of their respective Controlled Parties will not directly or indirectly employ Bartock nor will they permit Bartock to directly or indirectly engage in or provide services of any sort for Ibis Tek, either of the buckners or their Controlled Parties until the last to occur of the following (the "Non-Compete Period"): (a) the Agreed Restraining Order [or Amended Agreed Order as this Court is calling it in this Opinion] is no longer enforceable as to Bartock (b) any other court order preventing Bartock from being employed by, engaging in or providing services for ibis Tek or the Buckners is no longer enforceable as to Bartock; or (c) the term of any agreement which prevents Bartock from being employed by, engaging in or providing services for Ibis Tek or the Buckners expires.
BAE-Ibis Tek Agreement at ¶ 11(d), see BAE Evidentiary Hearing Exhibit 2, ...
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