Partylite Gifts, Inc. v. MacMillan, Case No. 8:10–CV–1490–T–27EAJ.
| Court | United States District Courts. 11th Circuit. United States District Court of Middle District of Florida |
| Citation | 895 F.Supp.2d 1213 |
| Docket Number | Case No. 8:10–CV–1490–T–27EAJ. |
| Parties | PARTYLITE GIFTS, INC., Plaintiff, v. Tarie MacMILLAN, Defendant. |
| Decision Date | 11 September 2012 |
895 F.Supp.2d 1213
PARTYLITE GIFTS, INC., Plaintiff,
v.
Tarie MacMILLAN, Defendant.
Case No. 8:10–CV–1490–T–27EAJ.
United States District Court,
M.D. Florida,
Tampa Division.
Sept. 11, 2012.
[895 F.Supp.2d 1217]
Fiona C. McCormack, James Sandnes, Boundas Skarzynski Walsh & Black, LLC, New York, NY, Richard H. Martin, Akerman Senterfitt, Tampa, FL, for Plaintiff.
Kimberly J. Gustafson, Carlton Fields, PA, St. Petersburg, FL, for Plaintiff/Defendant.
Yolanda V. Paschal, Carlton Fields, PA, Miami, FL, for Defendant.
JAMES D. WHITTEMORE, District Judge.
BEFORE THE COURT are Defendant's Motion for Summary Judgment (Dkt. 49) and Plaintiff's Motion for Partial Summary Judgment as to Liability for Breach of Contract (Dkt. 51). Upon consideration, Plaintiff's Motion for Partial Summary Judgment as to Liability for Breach of Contract (Dkt. 51) is DENIED. Defendant's Motion for Summary Judgment (Dkt. 49) is likewise DENIED.1
Plaintiff, PartyLite, Inc. (“PartyLite”), filed this action against Defendant, Tarie MacMillan (“MacMillan”), alleging claims for breach of contract (Counts I and II), misappropriation of trade secrets (Count III), and tortious interference (Count IV).2 The claims at issue in the competing summary judgment motions deal primarily with MacMillan's alleged breach of non-compete, non-solicitation, and non-disclosure provisions in agreements between the parties.
PartyLite moves for summary judgment on Count I of its Complaint (breach of Leader Agreement), contending that the
[895 F.Supp.2d 1218]
undisputed facts demonstrate that MacMillan breached both the non-compete and non-solicitation provisions in the Leader Agreement. In response, MacMillan contends that she is entitled to summary judgment on Count I because the Leader Agreement lacks consideration, the restrictive covenants do not protect legitimate business interests, and the covenants are unreasonable in duration and geographic scope. Additionally, MacMillan argues that she is entitled to summary judgment on Count II because the misconduct in which she is alleged to have engaged is not prohibited by the Consultant Agreement.
PartyLite sells candles and related home products to consumers through the “home party plan” method of direct sales. “Hosts” conduct sales parties in their homes for “Guests.” Independent contractors known as “Consultants” demonstrate and take orders for PartyLite's products.
All Consultants, including MacMillan, signed a form Consultant Agreement. 3 The Consultant Agreement governs certain aspects of the relationship between a Consultant and PartyLite. For example, the Consultant Agreement outlines the Consultant's status as an independent contractor, the methods by which a Consultant will sell PartyLite's products, the procedures governing remittance of monies received by a Consultant to PartyLite, and provides that a Consultant will receive some form of compensation for products sold on behalf of PartyLite.
PartyLite argues that the Consultant Agreement also incorporates by reference certain policies and procedures contained in the PartyLite Consultant Guide, Policies & Procedures (the “Policies and Procedures”).4 If interpreted to include the referenced Policies and Procedures,5 the Consultant Agreement required that a Consultant agree to certain terms and conditions, including the following:
• Agree you will at all times positively promote and not disparage PartyLite, its products, programs, representatives or personnel.
• Agree not to promote or sell other products or services or recruit for other companies or other business activities at PartyLite Shows, meetings or other events.
• Agree that should you represent another company or participate in other business activities outside PartyLite, that any information, printed materials or other items obtained through your association with PartyLite be kept separate and not used to solicit, promote, market or sell at or for any non-
[895 F.Supp.2d 1219]
PartyLite activity. Any use of PartyLite information to promote non-PartyLite business activities constitutes “unfair business practice” which is legally actionable.
• Agree to keep PartyLite information confidential.
Policies and Procedures (Dkt. 54), p. 59. The Policies and Procedures also defined confidential information to include personal and financial details about hosts, guests, Consultants, and leaders and provided:
Note: All information on PartyLite's Websites or on Websites hosted by PartyLite is confidential and proprietary to PartyLite. This information, such as consultant, Hostess, Guest and Leader information, must not be disclosed to any third party or used by you for any reason except for PartyLite Business.
Policies and Procedures (Dkt. 53–8), p. 21; see also Policies and Procedures (Dkt. 54), p. 77.
According to certain documents apart from the Consultant Agreement, including the Policies and Procedures and the PartyLite Profit Program, a Consultant may become a “Unit Leader” by achieving certain sales levels and recruiting new Consultants. Unit Leaders earn commissions from their own sales as well as “downline” sales by Consultants the Leader recruited. A Unit Leader may become a high-level “Leader” if downline sales and recruitment meet certain goals.
MacMillan qualified for the role of Unit Leader in or about July 1993. She eventually advanced to the highest-level “Leader” recognized by PartyLite, specifically that of “Senior Regional Vice President.” 6
On or about June 19, 2006, after her promotion to “Senior Regional Vice President,” PartyLite and MacMillan entered into a Leader Commitment Agreement (the “Leader Agreement”). The Leader agreement expounded on the terms of the Consultant Agreement and included the following relevant provisions:
Use of Proprietary and Confidential Information
I agree that, during the term of this Agreement and thereafter, I shall not use, or provide others, any Company proprietary or confidential information in any form (including, but not limited to, customer information, financial information or contact information regarding other Leaders or Consultants, as well as, Hostesses and Guests) to adversely affect the Company or to benefit any other company or myself. I further agree that, during the term of this Agreement and after the term ends and thereafter, I shall not solicit or otherwise attempt to persuade any PartyLite Consultant or Leader to sell, resell or promote products of any other direct sales company, or to cease to be a Consultant or Leader of the Company. (emphasis added)
Conflict of Interest
The Company and I acknowledge and agree that my efforts as a Leader may not require my full business time. During the term of this Agreement I may accept employment or other engagements and may participate in other activities without obtaining the Company's approval thereof; provided, however, that such employment, other engagements and activities do not violate this Agreement and do not involve selling, reselling, promoting products, or actively representing other direct sales companies that are similar to or competitive with the Company. This does not include
[895 F.Supp.2d 1220]
affiliation with other direct sales companies for personal use and/or consumption. I agree that the Company, at its discretion, can choose to terminate this Agreement immediately if I engage in any of the aforementioned activities. (emphasis added)
Leader Agreement, ¶¶ 8, 10 (Dkt. 53–1).7 MacMillan worked as a Leader for PartyLite for several years after executing the Leader Agreement and before engaging in the conduct that gave rise to this litigation.
In or about 2010, MacMillan joined the sales force of Park Lane Jewelry, Inc. (“Park Lane”), another direct sales company. Park Lane sells jewelry through a “home party plan” method of direct sales, similar to that employed by PartyLite. While there are differences between the organizational and compensation structures of Park Lane and PartyLite, and their products are dissimilar, it is undisputed that both entities are engaged in direct sales to consumers through a process known as multi-level marketing and rely primarily on “parties” arranged by their “consultants” or “hostesses” to sell their products.
While the inferences to be drawn from the facts giving rise to this litigation are disputed, many of the facts relating to MacMillan's departure from PartyLite are undisputed. For example, it is undisputed that MacMillan had contact with Park Lane representatives on numerous occasions before her relationship with PartyLite ended. Significantly, it is undisputed that prior to and after her departure from PartyLite, MacMillan had numerous meetings with PartyLite salespersons both inside and outside the State of Florida during which MacMillan discussed her reasons for joining ParkLane. At these meetings, MacMillan offered to refer anyone interested in joining Park Lane to a high-level Park Lane official, usually Park Lane National Director Shannon Pell. In most cases, Ms. Pell was conveniently available to meet with interested individuals almost immediately and irrespective of location. Similarly, there is undisputed evidence demonstrating that at least some of the individuals with whom MacMillan met left PartyLite and went to work for Park Lane shortly after meeting with MacMillan.
Additionally, PartyLite has submitted evidence, by affidavit and otherwise, indicating that MacMillan made false or misleading statements about PartyLite, its financial condition, and the enforceability of the restrictive covenants at issue in this litigation.
Summary judgment is proper if, following discovery, the pleadings, depositions, answers to interrogatories, affidavits and admissions on file show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. ...
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