Onward Search, LLC v. Noble

• Decision Date: 11 July 2022
• Docket Number: 3:22-cv-00369 (VAB)
• Parties: ONWARD SEARCH LLC, Plaintiff, v. J. DOUGLAS NOBLE, Defendant.
• Court: U.S. District Court — District of Connecticut

ONWARD SEARCH LLC, Plaintiff, v. J. DOUGLAS NOBLE, Defendant.

No. 3:22-cv-00369 (VAB)

United States District Court, D. Connecticut

July 11, 2022

RULING AND ORDER ON MOTION TO DISMISS AND MOTION FOR TEMPORARY RESTRAINING ORDER, PRELIMINARY INJUNCTION, AND EXPEDITED DISCOVERY

VICTOR A. BOLDEN, UNITED STATES DISTRICT JUDGE.

Onward Search LLC (“Onward” or “Plaintiff”) has sued J. Douglas Noble (“Defendant”), alleging breach of contract, breach of the implied covenant of good faith and fair dealing, and unfair competition arising from Mr. Noble's alleged breach of the non-compete non-solicitation, and non-disclosure provisions of his employment contract with Onward. Compl., ECF No. 1 (Mar. 9 2022) (“Compl.”).

Pending before the Court are Onward's motion for a temporary restraining order, preliminary injunction, and expedited discovery, see Mot. for TRO, Prelim. Inj., and Expedited Disc., ECF No. 3 (Mar. 9, 2022), and Mr Noble's motion to dismiss for lack of jurisdiction and failure to state a claim, see Def. J. Douglas Noble's Mot. to Dismiss for Lack of Personal Jurisdiction and Failure to State a Claim, ECF No. 12 (Mar. 14, 2022).

For the following reasons, Onward's motion for a temporary restraining order and preliminary injunction is DENIED, and motion for expedited discovery is DENIED as moot.

Mr Noble's motion to dismiss for lack of personal jurisdiction and failure to state a claim is GRANTED in part and DENIED in part. The implied covenant of good faith and fair dealing claim will be dismissed, without prejudice to seeking leave to amend the operative Complaint, but all other claims will remain.

I. FACTUAL AND PROCEDURAL BACKGROUND

A. Factual Allegations

On April 8, 2022 and April 20, 2022, the Court heard evidence relating to Onward's motion for a temporary restraining order and preliminary injunction.^[1] Min. Entry, ECF No. 47 (Apr. 8, 2022); Min. Entry, ECF No. 59 (Apr. 20, 2022). During the hearings, forty-six exhibits were entered into evidence, see Joint Ex. and Witness List, ECF No. 48 (Apr. 8, 2022); Ex. and Witness List, ECF No. 68 (Apr. 20, 2022), and three witnesses testified: Ken Clark, Chief Executive Officer of Talivity, Inc.; Eliana Hassen, Chief Executive Officer (“CEO”) of Onward Search LLC; and Mr. Noble, see Joint Witness List, ECF No. 42 (Apr. 7, 2022).

Based on the information gathered during the evidentiary hearings and the parties' written submissions, including their post-hearing submissions, the Court finds the following:

1. Onward Search LLC

Onward is a national firm that “specializes in the recruitment and placement of digital, creative, and marketing professionals in permanent and temporary assignments with employers across all industries[.]” Compl. ¶¶ 1, 22; Tr. of Mot. Hr'g at 12:5-13:9, ECF No. 50 (Apr. 15, 2022) (“Tr. of Apr. 8, 2022 Hr'g”). Onward's customers, or clients, are businesses and employees within these industries “who recruit and retain candidates for open positions.” Compl. ¶ 23.

To conduct its business, Onward allegedly “relies upon confidential and trade secret information,” which Onward defines as:

its candidate and customer contact information, customer needs and preferences, candidate skill profiles, pricing models, cost structures, terms of commercial agreements with customers, current and prospective business plans, information about its current and prospective lines of business, talent or individuals placed at Onward's customers, and targeted customers, industries and markets.

Id. ¶ 26; Tr. of Apr. 8, 2022 Hr'g at 149:23-151:2.

Onward “stores its confidential information and trade secrets in an internal database called Bullhorn with limited access for its employees.” Compl. ¶ 37; Tr. of Apr. 8, 2022 Hr'g at 151:4-14, 152:4-23. Only Onward employees, each of whom has a “unique login credential[],” have access to Bullhorn. Compl. ¶ 37; Tr. of Apr. 8, 2022 Hr'g at 152:4-23 (describing employee access permissions as “based on roles and geography”).

At the start of the COVID-19 pandemic, Onward closed its Boston office. Compl. ¶ 52; Tr. of Apr. 8, 2022 Hr'g at 50:23-51:4. The only office Onward currently maintains is its corporate headquarters in Wilton, Connecticut. Tr. of Apr. 8, 2022 Hr'g at 53:12-14.

2. J. Douglas Noble

On June 18, 2008, Onward hired Mr. Noble as a Recruiter in its Wilton, Connecticut office. Id. at 18:4-13; Ex. 1, ECF No. 44-1 (Apr. 7, 2022) (“Employment Agreement”). As a Recruiter, Mr. Noble managed a set of Onward client accounts and addressed staffing and recruiting needs for clients located in the northeastern United States. Tr. of Apr. 8, 2022 Hr'g at 18:14-23; Compl. ¶ 41.

Upon his hiring in 2008, Mr. Noble signed an Employment Agreement with Onward that contained non-disclosure, non-competition, and non-solicitation provisions. Employment Agreement; Tr. of Apr. 8, 2022 Hr'g at 18:24-19:1. The Employment Agreement provides:

Disclosure of Information: You agree, during the term of this Agreement and at all times thereafter, to treat as confidential and, except as required in the performance of your duties under this Agreement, not to disclose, publish or otherwise make use of for yourself or for any other person, business, corporation or other entity or make available to the public, any trade secrets or other confidential information concerning the business, employees, clients, methods, operations, financing or services of the Company or any of its affiliates....

Covenant Not to Compete: [ ] You agree that you will not during the term hereof and for a period of one (1) year after termination of your employment, regardless of the cause of termination, in Wilton, CT or any other affiliated company office within a radius of sixty (60) miles from any such office engage in any business or perform any service, directly or indirectly, in competition with the business of the Company or any of its affiliates ....

In furtherance of the foregoing, and not in limitation thereof, you agree that you will not during the period of non-competition and within the geographical area herein set forth, directly or indirectly: [ ] solicit or service in any way, on behalf of yourself or on behalf of or in conjunction with others, any client, customer or employee, or prospective client, customer or employee, which has been solicited, serviced or engaged by the Company or any of its affiliates within twelve (12) months prior to the termination of this employment . . . [or] . . . induce or attempt to induce any employee of or consultant to Company to leave the employ of Company ....

Employment Agreement at 1-2 ¶¶ 4, 6.

On or about 2009, Mr. Noble moved to Boston, Massachusetts and continued working for Onward, first from Onward's Woburn, Massachusetts office, and then from Onward's Boston office. Tr. of Mot. Hr'g Vol. II at 269:9-270:3, ECF No. 63 (Apr. 24, 2022) (“Tr. of Apr. 20, 2022 Hr'g”).

On July 23, 2014, Onward promoted Mr. Noble to Senior Account Executive. Tr. of Apr. 8, 2022 Hr'g at 27:14-28:1. Mr. Noble subsequently was promoted to Regional Vice President of Operations on January 14, 2016, id. at 29:9-22, and Vice President of Client Services, Strategic Accounts, on July 20, 2020, id. at 36:4-22.

Following his promotion in 2016, Mr. Noble became a member of Onward's executive team. Id. at 31:19-32:10; Compl. ¶ 45. The executive team meets weekly or bi-weekly with the Onward President and/or CEO and “has responsibility for directing [Onward's] operations, culture, policy, and strategy.” Compl. ¶ 46. During these meetings, Mr. Noble was party to information regarding Onward's business strategies and methodologies and “specific client relationships.” Tr. of Apr. 8, 2022 Hr'g at 86:20-87:6.

Upon each promotion, Mr. Noble signed a letter which specified that it constituted an “addendum” to his “employment offer and confidentiality and non-compete agreement” with Onward. See Ex. 4, ECF No. 44-4 (Apr. 7, 2022) (role and compensation adjustment letter dated July 23, 2014); Ex. 6, ECF No. 44-6 (Apr. 7, 2022) (role and compensation adjustment letter dated January 14, 2016); Ex. 7, ECF No. 44-7 (Apr. 7, 2022) (bonus adjustment letter dated August 19, 2016); Ex. 9, ECF No. 44-9 (Apr. 7, 2022) (title, bonus, and direct reports letter dated July 20, 2020). Each of the addenda further stated that “[f]or all matters unrelated to the modification as stated herein, your employment offer and confidentiality and non-compete agreement shall continue to remain in full force and effect and shall govern any and all such matters.”^[2] Id.

In his roles as Vice President of Client Relations and Vice President of Client Services, Strategic Accounts, Mr. Noble managed client accounts in the northeastern United States to fulfill staffing needs and fill open positions in UX/UI, Design/Art Direction, Product Design, Project Management, Copy/Content, Front End Development, Mobile/Web Development, and Marketing. Compl. ¶ 49. As Vice President of Client Services, Mr. Noble also managed a team of twelve employees consisting of Account Executives and Recruiters. Id. ¶ 51.

After Onward closed its Boston office at the start of the COVID-19 pandemic in the United States in March 2020, Mr. Noble continued to work remotely for Onward from his home in Plymouth, Massachusetts. Id. ¶ 52; Tr. of Apr. 20, 2022 Hr'g at 270:2-12.

3. Mr. Noble's Resignation from Onward

On February 7, 2022, Mr. Noble resigned from Onward and, on February 15, 2022, began working remotely for a competitor Beacon Hill Staffing (“Beacon Hill”), as a Senior Recruiter from his home in Plymouth, Massachusetts. Tr. of Apr. 20, 2022 Hr'g at 284:23-285:3, 287:913; Compl. ¶ 62. Beacon Hill provides recruitment, staffing, and talent services in the digital, creative, and marketing...