Proudfoot Consulting Co. v. Gordon
| Decision Date | 30 July 2009 |
| Docket Number | No. 08-14075.,08-14075. |
| Parties | PROUDFOOT CONSULTING COMPANY, a Delaware corporation, Plaintiff-Appellee, v. Derrick GORDON, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
Beverly A. Pohl, Broad & Cassel, Ft. Lauderdale, FL, Daniel A. Miller, Broad & Cassel, West Palm Beach, FL, Randall L. Hagen, Law Office of Randall L. Hagen, LLC, Columbia, MD, for Defendant-Appellant.
Patrick Lee Coyle and Christopher C. Marquardt, Alston & Bird, LLP, Atlanta, GA, Mark Vasco, Alston & Bird, Charlotte, NC, for Plaintiff-Appellee.
Appeal from the United States District Court for the Southern District of Florida.
Before BARKETT and FAY, Circuit Judges, and TRAGER,* District Judge.
This case arises out of an employment agreement ("Agreement") between appellant Derrick Gordon ("Gordon" or "appellant") and appellee Proudfoot Consulting Company ("Proudfoot" or "Proudfoot North America" or "appellee") that contains a number of restrictive covenants. The Agreement prevents Gordon, for six months after his employment with Proudfoot ends, from working for a direct competitor or client of Proudfoot, contacting Proudfoot's clients and soliciting Proudfoot's employees. The Agreement also bars Gordon from using or disclosing Proudfoot's confidential information and from retaining Proudfoot materials after his employment ends. After Gordon left Proudfoot in June 2006 to work for the Highland Group ("Highland"), a direct competitor, Proudfoot brought suit to enforce the restrictive covenants.
Following a bench trial, the district court held that all of those restrictions ("Restrictive Covenants") were enforceable under Florida law. Based on Gordon's breaches of the Restrictive Covenants, the district court concluded that Proudfoot was entitled to a statutory presumption of irreparable harm. Because Gordon failed to rebut that presumption, the district court entered an injunction against Gordon, preventing him, for six months, from working for Highland and from soliciting Proudfoot's clients and employees. Since the district court's decision was handed down over a year-and-a-half after Gordon began working at Highland, in order to grant this injunctive relief, the district court had to rely on a tolling provision in the Agreement, which provides that the six-month restrictive period is to be tolled during any period where Gordon is in breach of the non-compete and non-solicitation covenants. The district court found that Gordon's continuous work for Highland, which breached the Agreement's bar against employment with a direct competitor, justified tolling the six-month restrictive period. In addition to granting injunctive relief, the district court also awarded Proudfoot attorney's fees and $1,659,000 in damages stemming from a project performed by Highland for Bombardier, a Proudfoot client that Gordon both worked on and helped solicit for Highland.
On appeal, Gordon seeks to reverse the damages award. In addition, although Gordon has not appealed the attorney's fees award, he challenges the validity of the injunction, which has expired, in the hope of revisiting the attorney's fees award before the district court if the injunction is invalidated. For the reasons explained below, we conclude that the injunction was not improper. However, we reverse the damages award. Proudfoot failed to establish that Gordon's solicitation of Bombardier for Highland resulted in Proudfoot's loss of the project that was the basis of the damages award.
(1)
Proudfoot North America is a management consulting firm that provides consulting services to improve clients' work processes by eliminating redundancies, streamlining processes and implementing systems of management. Proudfoot North America, which is headquartered in West Palm Beach, Florida and has offices in Atlanta and New York, operates and markets its services in the United States and Canada and has clients located in both countries. Management Consulting Group ("Proudfoot Global"), a publicly-traded company based in the United Kingdom, is the parent company of a number of Proudfoot affiliates across the globe, including an affiliate in Europe ("Proudfoot Europe") as well as Proudfoot North America.
Gordon worked at Proudfoot North America from March 1999 through May 2006. From March 1999 though October 2001, Gordon was a Senior Process Consultant. Process Consultants, who are supervised by a Project Manager, work directly with a client's first- and second-level supervisors. From October 2001 through January 2005, Gordon was a Project Manager. As a Project Manager, Gordon had overall responsibility for a specific client project and supervised five to ten Process Consultants. Project Managers are responsible for achieving results for a client, obtaining repeat business from a client and convincing a client to provide referrals and to serve as a reference.
From January 2005 through May 2006, Gordon worked as a Project Director. As a Project Director, he supervised two to four Project Managers at a time and was responsible for multiple client projects. A Project Director is responsible for managing client relationships and is the most senior Proudfoot employee who interacts with individual clients on an ongoing basis. Project Directors report to the Vice President of Business Delivery.
On April 18, 2006, Gordon was offered a position by Highland, an operational management consulting firm that competes directly with Proudfoot. After Gordon tendered his resignation from Proudfoot on May 1, 2006, Proudfoot CEO Luiz Carvalho ("Carvalho") met with Gordon. At this meeting, Gordon lied to Carvalho about the offer that he had received, stating that the offer was from a private equity firm and never mentioning Highland. After Carvalho offered Gordon the position of Vice President of Business Delivery for Proudfoot Europe, Gordon accepted that position and withdrew his resignation. Vice President of Business Delivery is a critical position that has ultimate responsibility for all aspects of delivering services to clients and for defining strategy for each client account. While in this position, Gordon's office was located in London.
On June 12, 2006, Gordon again notified Proudfoot that he was resigning. This time he did not withdraw his resignation, which was voluntary and became effective on June 23, 2006. Gordon never informed Proudfoot that he was leaving to work for Highland.
During his tenure at Proudfoot North America, Gordon worked on many client projects in the United States and on a client project in Mexico. The district court found that Gordon traveled to a Proudfoot client project in Canada.1 The district court also found that during Gordon's tenure at Proudfoot North America, his "territory" included the United States and Canada.2
At Proudfoot, Gordon had access to, and received, information in various forms about specific Proudfoot clients and projects, as well as about Proudfoot's operations generally. Gordon received hard copies of a number of Proudfoot materials, including training manuals and videos from the numerous training sessions he attended, a list of Proudfoot Europe's employees, business cards of Proudfoot clients for whom he had worked, and a Proudfoot employee newsletter. Gordon retained these materials after leaving Proudfoot, but insisted that he did so unintentionally.
While at Proudfoot, Gordon also had access to information beyond the specific hard-copy materials that he retained. He had access to information about Proudfoot's clients, including pricing information.3 Moreover, during his tenure as Vice President of Business Delivery for Proudfoot Europe, Gordon conducted high-level reviews of the company's client projects in Europe and received information about those projects. In addition, Gordon also had access to information about Proudfoot's operations. At trial, he admitted, generally, that he had "access to confidential information about Proudfoot's business." Moreover, the district court concluded that Gordon was exposed to Proudfoot's "methodology for [providing] operational management consulting services" as well as to Proudfoot's "products and offerings and tools."
In addition, during his tenure at Proudfoot, Gordon accessed and downloaded information from the Knowledge Management database, a project database that contains information about all of Proudfoot's client projects, from around the world, dating back to the 1980s and other information about Proudfoot's business operations. Tools, studies, questionnaires and diagnostics from past projects are included in the Knowledge Management database so that Proudfoot employees can use that information "for other clients in similar situations anywhere around the world."
On June 26, 2006, Gordon started working at Highland. Highland, whose headquarters are located in the United States, does business and maintains offices in North America and Europe. At Highland, Gordon served as a Project Manager responsible for day-to-day delivery and execution of client projects and the direct supervision of process consultants. Gordon was promoted to Director of Operations in June 2007.
At Highland, Gordon worked on projects for different clients; one of those clients was Bombardier, who was also a client of Proudfoot Europe. In September 2006, Highland assigned Gordon to a project for Bombardier called "Bombardier Interiors." In February 2007, eight months after leaving Proudfoot, Gordon helped solicit a different Bombardier project for Highland called "Bombardier Logistics." Gordon was the Project Manager for that project until his promotion in June 2007.4 In addition to his specific client assignments, in the fall of 2006, Gordon was given the responsibility of training other Highland employees and coordinating the development of written training materials. Gordon performed this function for approximately "eight weeks." Also, around the...
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