Atlantic Diving Supply, Inc. v. Moses, No. 2:2014cv00380 - Document 13 (E.D. Va. 2014)

Court Description: OPINION and ORDER: Plaintiff's motion for a preliminary injunction is GRANTED. It is hereby ORDERED, DECREED, and ADJUDGED: Defendant, Heinrich Steve Moses, is restrained from attending the JOTC Equipment Vendor meeting on July 31, 2014 and, fro m the entry of this order until the end of the day on November 21, 2014, from having any further involvement in the pursuit of business directly from the 25th ID. Copies distributed to all counsel of record on 7/31/14. Signed by District Judge Mark S. Davis and filed on 7/31/14. (tbro)

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UNITED STATES EASTERN DISTRICT Norfolk ATLANTIC DIVING SUPPLY, DISTRICT COURT OF VIRGINIA Division INC., Plaintiff, Civil v. Action No. 2:14cv380 HEINRICH STEVE MOSES, Defendant. OPINION AND This matter Restraining Supply, July Order Inc. 28, motion construed filed the on Court ultimately as Defendant before the Court July on a Motion 25, 2014 ("ADS" or "Plaintiff") . 2014, and is ORDER a conducted determined Motion for second hearing. that Atlantic 3. hearings such Preliminary Heinrich Steve Moses of such motion, ECF No. by ("Defendant") for Temporary Diving On July 25 and on Plaintiff's motion should Injunction be because had received notice participating and testifying by telephone in the See July 28, 2014 Hr'g Tr., ECF No. 12. After considering the testimony and evidence presented at the hearing, as well as reasons all of the filings submitted by both parties, stated below, Plaintiff's motion for a for the preliminary injunction is GRANTED. I. Plaintiff FACTUAL is "a AND PROCEDURAL Virginia corporation place of business in Virginia Beach, SI 2, ECF No. 1. BACKGROUND Plaintiff 1 with Virginia." "specializes its principal Verified Compl. in equipment, procurement, and enforcement, first SI 6. support solutions responders, Defendant, "a and resident for the of the Hawaii," law industry." defense military, Id. was employed by Plaintiff in 2010 "as a Regional Account Manager for Hawaii and Korea." Id. SISI 3, Defendant with an Defendant contains states that In December 2011, Employment Agreement signed. Agreement 7.1 Verified a Answer "Jurisdiction "Employee hereby ("the Agreement"), SI 8, City of Norfolk, relating SI 17, to this ECF No. irrevocably Virginia, Agreement." 1-1. ECF and Venue" jurisdiction and exclusive venue of the in the Plaintiff presented 9.2 The provision, which submits to the Federal or State Courts in any ADS No. which Inc. action or proceeding Employment In a separate "Governing Law" Agreement section, the Agreement provides that it "shall be governed by and construed in laws SI accordance with the of the State of Delaware." Id. 19. 1 The Employment Representative. 2 The pro Agreement describes Defendant as a Sales See ADS Inc. Employment Agreement SI B, ECF No. 1-1. se Defendant filed a response entitled "Verified Answer," attached to which was an affidavit. ECF Nos. 9, 9-1. Because Defendant included on each document an electronic signature, rather than an original signature, Defendant's submissions were filed "subject to defect due to lack of signature." See Fed. R. Civ. P. 11(a) (requiring signature by unrepresented party, but allowing the party to promptly correct). At the July 28, 2014 hearing on Plaintiff's motion, Defendant affirmed that he had filed such Answer with the Court and affirmed the accuracy of the Affidavit attached to his Answer. See Fed. R. Civ. P. 11(b). Thus, although Defendant has not yet submitted the properly sworn documents to the Court, the Court considers both the Verified Answer and the attached Affidavit as by Defendant. 2 sworn Non-Solicitation of Customers Paragraph 5 of the Agreement, Customers," provides, entitled "Non-Solicitation of in relevant part: (a) Employee will not, for a period of one year following the last day of Employee's employment ("Restricted Period"), compete with ADS by soliciting, participating in soliciting, and/or accepting Competing Business from (i) any person or entity that was a customer of ADS at any time during the one-year period prior to the last day of Employee's employment, from whom or which Employee solicited and/or accepted business on behalf of ADS or to whom or which Employee provided products and/or services during the one-year period preceding Employee's last day of employment with ADS; (ii) any person or entity that was a customer of ADS at any time during the one-year period prior to the last day of Employee's employment about whom or which Employee acquired proprietary and/or confidential information during the oneyear period prior to the last day of Employee's employment with ADS; or (iii) any person or entity with whom or which Employee on behalf of ADS was actively seeking to provide products or services in the last six months of Employee's employment; ADS Inc. Employment Agreement SI 5, ECF No. 1-1. defines "customer," in the context of "a state, government entity, department, command center, conducted Employee business acquired or any on agency thereof," The Agreement federal or local as "the office, and/or individual with whom Employee behalf of propriety ADS [sic] or about and/or whom or which confidential information within the one-year period preceding the last day of Employee's employment." Id. Defendant's last day of employment 3 with Plaintiff was November 21, No. 2013. Verified Compl. SI 18, ECF "the years of spent a 1. Plaintiff alleges [Defendant's] employment significant amount Division the of Hawaii. two Id. years that, of SI 15. of with his United during ADS, time States [Defendant's] two [Defendant] visiting" Army Plaintiff last ("the contends the 25th that, 25th ID"), Infantry located in the "last Defendant employment," during was also "working on a significant future opportunity with the 25th ID," in which the "25th ID anticipated a substantial procurement for additional for the 25th training ID's Plaintiff's related training Verified to facility." Complaint, amounts of time and efforts as to learn about procurement," was and their at actively working with the 25th ID." On July from the Vendor 22, "25th Meeting July 22, on of 2014, Plaintiff ... the to needs for ECF No. the received JOTC/Lightning 1-2. environment petition to significant this jungle employment, jungle training attend in to "spent [Defendant's] future individual quality of like According he opportunity Id^ SISI 17-18. 2014 Email, jungle SI 17. Defendant "to discuss a operations an ADS employee with the 25th ID end the jungle Id. anticipated "the ID G4 at improving that Army the 4 email first invitation JOTC Academy." Equipment Mark Folkerts The purpose of the meeting is life and protection equipment [Plaintiff for an and purchase in its vendors] the next would coming years." Id. lessons learned Plaintiff Plaintiff can from help will several be provided jungle "identify ways with school to "comments rotations" close and that gaps." those so Id. The email provided that the meeting "could lead to a return to Schofield Barracks Interchange show on 3-5 Meeting," [its] items where can operations environment assist the 2014 for Plaintiff to Army wide [Plaintiff] clarified, Sep more would agencies Army with the as Jungle have well "a as performing effectively." Equipment chance discuss in to how the jungle The email Id. "No one at this meeting is authorized to purchase for the government or permit the execution of any contract. This meeting is purely for discussion and determination as to the way forward." Id. Also invited Defendant, who & Company [that] offers PL's Supp. Mot. Plaintiff asserts that resources in the that it the for it 25th "will "has ID be products working as [Defendant] Inj . invested opportunity irreparably Plaintiff through 25th with ECF significant continues to pursue this jungle opportunity on 5 4, harmed provided the has at Plaintiff 1. with is for W.S. those ECF No. involvement Prelim. Meeting competitor of SI 22, Agreement Vendor currently direct similar "[Defendant's] violates and "a is Verified Compl. opportunity time," Equipment learned substantially that Mem. JOTC ("Darley"), [Plaintiff]." contends the Plaintiff Darley by to ID ADS." No. time 4. and [Defendant's] if [Defendant] behalf of Darley due to the developed unfair while advantage being paid from a knowledge of ADS's pricing." the salary relationships by ADS Verified Compl. as well SISI 27, [he] as his 30, ECF No. 1. Defendant "denie[s] that the or entity with whom [he] worked." 9. Defendant asserts that companies in the 25th ID, different duties Affidavit of and Moses 25th ID is a single customer Verified Answer SI 15, ECF No. "[t]here are approximately 91 and each company may have drastically therefore SI 17, ECF No. different 9-1. equipment Thus, needs." Defendant alleges that "most companies or other command sub-units with unique and distinct roles and duties staff." Id. Defendant units within say that higher SISI the the up 25th 25th the ID each concedes ID were was command will that [his] [his] chain have their "[s]everal customers," ^customer' is own absurd just and procurement of those id. , but because sub"[t]o it meaningless." was Id. 17-18. Specifically alleges, regarding the JOTC " [a] pproximately two years before to [sic] opportunity, ago, my termination by ADS, Defendant and more than one year I was asked by a Command Sergeant Major of 25th ID to put together an equipment list for a proposed Jungle Operation Training Course SI 40. Defendant asserts that which was never adopted." he "heard anything about (*JOTC) he "proposed a Id. unit." Id. list of equipment, The next time Defendant alleges the JOTC 6 unit was when [he] was contacted on July 8, 2014 by personnel at the US Army Pacific G4 Supply and Services completely separate Defendant claims information unit," office that about from Id. Defendant the 25th "first the JOTC three weeks ago." which time equipment SI 45. ID claims G4." [he] requirements was is Id. "a SI 43. received any approximately Defendant asserts that he is "not attending the July 31, 2014 meeting"3 and has "not conveyed any information or advice to [Darley's representative] other than the publicly available information from the invitations and the information provided to vigorously alleges [him] that . . . in violation of he [his] by has JOTC." "not Id. SI 52. solicited any Defendant customers employment agreement with ADS." Id. SI 53. Non-Solicitation of Vendors and Suppliers Paragraph 6 of the Agreement, entitled "Non-Solicitation of Vendors and Suppliers," provides: Employee further agrees that during the Restricted Period, Employee shall not compete with ADS by soliciting the trade of, or trading with, any "partner supplier" of ADS with whom Employee had contact and/or conducted business during the one-year period preceding Employee's last day of employment with ADS for purposes of securing products, services and/or merchandise that are the same as or competitive with those Employee procured during his employment with ADS for or on behalf of any individual engaged in a Competing Business. 3 The July 31, 2014 meeting is scheduled to take place in Hawaii at 0830-1230, which is 2:30-6:30 p.m. 7 EST. ADS Inc. does Employment Agreement not defines provide a "Competing services SI 6, ECF No. definition Business" 1-1. The Agreement for supplier," "the as "partner provision of substantially similar to but products those provided by ADS." or Id. SI 5(c) . Plaintiff Plaintiff's Blue Force alleges "partner Gear, the Agreement, Darley with that suppliers, ESS, has improperly approached including and Harris but Corporation," the promise opportunities Verified Compl. that that for their SISI 24-25, Defendant he ECF has will be products SI 29. limited to violation in of No. 1. In approached discounts Plaintiff [Defendant] contends harmed if [Defendant] suppliers on behalf that "is to his generate customers." addition, Plaintiff s earned it able with "sought to have the vendors provide Darley, functional not "and tried to solicit their business on behalf of business alleges Defendant Plaintiff vendors and instead of ADS, the while likely to at ADS." be Id. irreparably . . . continues to work with ADS's partner of Darley, a direct ADS competitor." Id. SI 26. Defendant supplier' by "[d]enie[s] that ADS has any exclusive ^partner relationship with any vendor currently being solicited [Defendant]." Verified Answer SI 28, ECF No. 9. Defendant asserts that "Blue Force Gear and Harris Corporation are vendors who work Record] with system all to Prime Vendors determine and utilize preferential 8 the DOR pricing." [Dealer Id. of SI 25. Defendant explains that "many vendors, including Blue Force Gear and the Harris Corporation, offering a offering preferential vendor discount then and Id. their as on exclusive pricing to the the DOR - DOR system, company, Prime that Vendor has by rather by which but not the - brought them an Although Defendant admits that he "has vendors products," Harris one Id. SI 28. solicited these in to identifies opportunity." operate to try to Defendant Corporation are obtain DOR status maintains [not] that ^partner for "Blue Darley Force Gear of ADS." suppliers' SI 25. Injunctive Relief Paragraph Relief," injury any provides will result restrictive paragraphs Agreement 12 5-9 of the Agreement, that the parties Employer in to covenant of SI 12(a), the event ECF No. irreparable Employee ADS 1-1. "Injunctive that obligation Agreement." violates contained Inc. in Employment Furthermore, "Employee law for any breach . . . will inadequate and that Employer shall be entitled to injunctive acknowledges that the remedies at be "agree or affirmative this entitled relief against Employee, available, at law or in addition to any other remedy that is in equity." Id. Paragraph 12 also includes a provision providing "that the non-disclosure and non solicitation obligations contained herein the length of time which Employee any of said provisions." Id. SI 12(b). 9 shall shall be have been extended in by breach of Breach of Contract Claim Count One of of Contract" Plaintiff by Plaintiff's Verified Complaint alleges "Breach Defendant. asserts that Verified Defendant "is Compl. SI 31, violating ECF No. Paragraph 1. 5 of the Agreement by his involvement in soliciting business from the 25th ID on behalf of Darley," as well as "other ADS customers." Id. SI 36. Plaintiff asserts that Paragraph 6 of the Agreement by ADS's suppliers partner on Plaintiff requests injunctive relief soliciting or accepting customers" and "temporary restraining suppliers "temporary, [Defendant] to specifically requests of competitive and with that Darley." preliminary, [Defendant] from compete "is violating continuing to do business with behalf against Defendant ADS." the Thus, permanent business him from with relief ADS's SI 38. enjoin partner Plaintiff Defendant "attending the JOTC Equipment Vendor meeting on July 31, id. , where generate the approximately over the next would far monetary related seven few years" exceed damages appropriate." business and the $75,000.00," and "any to id. opportunity ten 10 from 2014," expected dollars in to sales "profit margin on these sales at additional Id. million "is from ADS's injunctive Id. Court and restraining permanent working Id. 4. Plaintiff relief the also Court seeks may deem II. A. "A federal STANDARD OF REVIEW Governing Law Standard court sitting in diversity is required to apply the substantive law of the forum state, including its choice-of- law Co., rules." (4th Cir. 313 U.S. 64, 79 Francis 2013) 487, Allstate (citing 496-97 (1938)). conflicts v. Klaxon (1941); Co. v. Erie R.R. "Virginia has principle Ins. 709 Stentor Co. v. the 362, Elec. Mfg. Tompkins, long adhered to that F.3d the 'nature, 369 Co., 305 U.S. traditional validity and interpretation of contracts are governed by the law of the place where made, intention of unless the 902 (4th 177 S.E.2d 610, upon Cir. choice effect except the parties.'" 613 Conlee, v. Celina 1999) ) . the purpose parties' S.E.2d If of choice 207, 211 established that, to apply U.S. 460, the the (Va. a contract, 275 selected "state F.2d 896, Mut. Ins. Co., agreement, [the law." 1988). Of (1965). 11 giving them Colgan Air, 2007) reasonably court] Hooper course, when sitting in diversity, 'procedural' favorably 166 F.3d 614, is law." express 745 (4th Cir. Signet Bank, substantive . . . federal 471 in circumstances." v. the "Virginia law looks 507 F.3d 270, Corp. of 1970)). clauses unusual Hitachi Credit Am. be v. (Va. law in to (quoting Woodson 1984) of appears Crosson Raytheon Aircraft Co., Cir. contrary will v. it full Inc. v. (citing 624 (4th related to apply the Musolino, 364 has long been "federal courts are Hanna v. Plumer, 380 B. Preliminary Injunction Standard "A Winter preliminary v. injunction Natural Res. is Def. an extraordinary Council, Inc., (2008) , the purpose of which "is to protect to prevent irreparable ultimately to meaningful judgment preserve Antitrust Litig., plaintiff seeking he is likely suffer that to during the on 517, a preliminary harm balance of on the equities 525 United requires to States merits, in on 649 F.3d 287, A merits." 290 555 U.S. (4th Cir. 555 305, U.S. 313 chancellor is injunction at (1982) must "must consider 24; cf. is "A and 555 the that U.S. it Century to relief, an at 20. Fourth that that likely Circuit is likely Aluminum (alterations omitted) the "never awarded Weinberger Co., (quoting v. as of right." Romero-Barcelo, 456 (observing that "a federal judge sitting as not mechanically for every violation discretion, 2011) v. is a Corp. establish favor, "'clearly show' Dewhurst render 2003). he Winter, for lawsuit preliminary his 24 at 22. preliminary Winter, U.S. the Appeals a to Cir. of 7, Microsoft that absence tips of the moving party to succeed Winter, Court re (4th injunction is in the public interest." The of ability In U.S. status quo and injunction must the in the pendency merits," F.3d succeed the court's the 333 irreparable the harm 555 remedy," of law") . balance effect obligated to Rather, the the competing on each 12 party grant an court, claims of injunction in its of the sound injury and granting or withholding Gambell, of 480 the U.S. requested 531, relief." 542 Amoco (1987). Prod. Indeed, Co. v. "'preliminary injunctions are extraordinary remedies involving the exercise of a very far-reaching Inc. , 245 Ltd. v. F.3d 335, power,'" 339 Breakthrough 1992)), and (4th Cir. Med. should MicroStrategy Corp., be 2001) 952 granted (quoting F.2d (alteration omitted) CF. Air Freight, Inc., 802, "'only circumstances which clearly demand it.'" at 811 Inc. v. Direx 816 in Direx Motorola, Israel, (4th the Israel, Cir. limited 952 F.2d (quoting Instant Air Freight Co. v. 882 F.2d 797, 799 (3d Cir. 1989)). Rule 65 of the Federal Rules of Civil Procedure governs the procedure for preliminary granting issued; an (B) issuing temporary injunctions. Fed. injunction" state reasonable detail its must R. Civ. P. orders "Every 65. and order state the reasons specifically; terms "(A) restraining why it and (C) describe in . . . the act or acts restrained or required." Id. III. A. DISCUSSION Governing Law The Court must first determine what law governs Plaintiff's request for injunctive relief. Because jurisdiction over this case pursuant to 28 parties are $75,000.00, Francis, 709 diverse it looks F.3d at and to 369. the the amount U.S.C. in 13 Court § 1332, controversy choice-of-law The Agreement the rules between of has as the exceeds Virginia. Plaintiff and Defendant contains a choice-of-law "the laws of the State Inc. Delaware" as Employment Agreement SI 2014 hearing, Delaware. to of the Plaintiff 19, asserted parties' of the 1-1. that Delaware agreement, which designates the governing ECF No. Because the state of purpose provision, [the At ADS "is law. the was ADS July 25, formed in reasonably related court] choice of substantive law," Hooper, will apply the 364 S.E.2d at 211, keeping in mind that all procedural issues will be governed by federal procedural law, Hanna, 380 U.S. at 471. B. Plaintiff's Request for Injunctive Relief Plaintiff requests injunctive relief based upon Defendant's alleged breach asserts is of "a 25th ID asserts by on Agreement that by suppliers on is in of Defendant in violation of alleges Compl. SI 32, "is involvement behalf that and Defendant his agreement, binding, Verified that Agreement employment valid, relationship." alleges his Darley." "is enforceable ECF violating in also No. "is continuing to SI 36. soliciting behalf of violation of Darley." either reiterating such denial violating do 14 Plaintiff 5 of from Plaintiff other ADS the the further customers Id. Plaintiff 6 of the 5 with ADS's partner Defendant Id. during his 1. Paragraph business Paragraphs contractual business Paragraph 5 of the Agreement." Defendant Plaintiff Paragraph soliciting Id^ which denies that or 6 of the he Agreement, sworn testimony at the July 28, 2014 hearing. 2014 Hr'g Tr. Verified at 74, ECF No. 1. As discussed Answer 290. of its Under claim are: the Court law, the elements the existence of a Lorenzetti v. (table decision) (citing VLIW Tech., success 606, on 612 (Del. of a 649 breach b) 28, whether of F.3d at contract the breach of an and c) resulting damages to Hodges, 62 A. 3d 1224 (Del. 2013) LLC v. Hewlett-Packard Co., 2003)). Plaintiffs breach-of-contract its July consider Dewhurst, contract; the plaintiff." A.2d 9; likely to succeed on the claim. obligation imposed by that contract; 840 must that it is breach-of-contract "a) No. Likelihood of Success above, Delaware ECF 12. Plaintiff "'clearly show[s]' merits" SI 36, likelihood claim depends, in part, of upon the enforceability of the restrictive covenants contained in the Agreement. law, In restrictive covenants a court looks to whether the contract contract law duration, requirements, both legitimate covenant, Pro evaluating Maids, LEXIS 116, geographically economic and (4) Inc. at *17 survive[s] v. Layton, (Del. parties do not Plaintiff and Defendant, Ch. [is] and interest a. The (2) the No. Civ. Existence dispute of A. in (3) party balance 10, general reasonable a Aug. Delaware meet[s] "(1) temporally, of under the 058-N, scope advance[s] a enforcing the equities." All 2004 Del. Ch. 2004). of that a Contract a contract exists although Defendant "[d]enie[s] 15 and between that the restrictive covenants valid, binding, No. 9. in both year or contained in enforceable." the Employment Agreement Verified Answer at time - and from business, about scope, soliciting to sought to months of he he had provide his or Defendant accepting had business provided obtained products employment. reasonableness - for from products or confidential of Del. Super. Jan. 14, one-year LEXIS 2011) permitted a they interest the market, and are then on of it only only one those services, or Serv., a is of the last six supports the restrictive covenants. No. 10C-03-108-JOH, at *5 courts and other non-compete averse to to protect some the an be prohibited a competitor 16 in legitimate if in any business employee from employee part of subject soliciting regardless have scopes covenant."). "the Ct. certain geographical the 2011 Super. jurisdictions broad scope, that (Del. covenant advantage appropriate behalf or actively 379300, WL or proprietary LLC, geographical agreement during law generally party trying to enforce employment non-competition customers not necessary absence the are services nationwide 2011 ("Delaware of the from 36, nationwide circumstances or Delaware See O'Leary v. Telecom Res. gain ECF from which Defendant had solicited or accepted which which restricting information during the last year of his employment, in SI 32, The Court finds that the Agreement is reasonably limited customers of ADS when are of Even would that to a those their geographic 12527, location." Research & Trading 1992 Del. Ch. LEXIS 234, at *32 Furthermore, a limited Corp. v. Pfuhl, (Del. Ch. Nov. restrictive No. 18, 1992). covenant in an employment agreement "is not void as against public policy when the purpose protect an of Bakers, Court agreement employer subsequent Cranston, such Inc. A.2d adequately v. Leahy, the serve "to protect out an employer's that, 465 A. of v. Ch. June protect Ch. 648, 649 the employee's profitable clientele." Id. at in 14, the employees"). No. 1983) good clauses in of Co. such v. Capital 1935)). The the Agreement a covenant," association 467; see with also the Pfuhl, former[] 1992 Del. (recognizing that employers have legitimate "protecting Palese, Ch. purposes & (citing (Del. to employee's Casson 1977) is employer from loss of business arising from through its employees, Co. (Del. effect which an Faw, non-solicitation the Ch. LEXIS 234 at *33 interests reasonable cause." 178 "one namely, of may 463, that finds its from sustaining damages competition 375 and 7128, it has created"); 1983 (observing will it misappropriation Ch. LEXIS that an employer Accordingly, finding and no goodwill Hammermill Paper Del. bought the 400, at has fostered evidence *14 a (Del. right through to its supporting Defendant's allegation that the "restrictive covenants contained in the Employment Agreement are 17 [not] valid, binding, or enforceable," Verified Answer at finds that Plaintiff existence of a would contract SI 32, likely under ECF No. succeed Delaware 9,4 the Court in proving the law. b. Breach of an Obligation The Court also finds that Plaintiff would likely succeed in proving a breach by Defendant of at least one provision of the Agreement. Defendant Agreement, in part, argues that because he the is 25th not in ID breach itself is of not the a "customer" as anticipated by the Agreement and because his prior involvement with "a proposed Jungle Operation Training Course" while he was employed by Plaintiff occurred "[a]pproximately two years ago, and more than one year [Plaintiff]." [prior] Affidavit of Moses SI 40, to my termination by ECF No. 9-1. i. 2013 Commission Report At 25th ID the July 28, was a hearing, customer business during his 4 Defendant 2014 also with Plaintiff contended that the whom Defendant had conducted last year of employment with Plaintiff. asserts that he received no consideration In in exchange for his signature. Defendant asserts that the first time he "signed any employment non-compete agreement with ADS" was not until he "had been working for ADS for a little less than two years" and that he "received no additional money, no bonus, no guaranteed period of employment, and no change in my compensation scheme." Affidavit of Moses at SISI 11-12, ECF No. 9-1. However, at the July 28, 2014 hearing on the motion for preliminary injunction, Plaintiff asserted that Defendant "would have signed [an Agreement] when he joined [ADS] in 2009" and "would have signed one each subsequent year of employment." July 28, 2014 Hr'g Tr. at 13, ECF No. 12. Plaintiff explained that it presented the Agreement to employees "every year," in order "to remind them of their ongoing commitments." Id. Plaintiff also presented evidence that, when Defendant signed the 2011 agreement, he was given additional territory with the consequent likelihood of an increase in his commissions. 2014 Hr'g Tr. See July 28, 18 at 13-14, ECF No. 12. support, 2013," July Plaintiff which 28, submitted Defendant's shows Hr'g Tr. Plaintiff's witness, the customer Id. at sales 2014 Defendant's is the 20. to 25th at 25th ID 19, report ID," as Specifically, the "sales and shows the its that ECF well 12. that in 2013." report units. One to "primary "subordinate commission for According Defendant's its subordinate report delivered No. as 2013 "commission units." shows sale in 36 the amount of $468,893.10 was delivered in 2013 to the "25TH ID" and 35 sales 25th were ID, "25TH delivered including ID 2ND SBCT "25TH 1ST and "25TH ID AVN." the single appears BN 2013 ID have to 2ND 21ST PL's Exh. $468,893.10 to in sale "subordinate BCT," INF HHC," 1. on ID "25TH However, delivered occurred "25TH to October report "Tx does Date" not of appear the 25th ID "was a "10/30/12"). to support customer of ADS the 30, Thus, ID HQ, " BCT HQ," 3RD 25th ID in or behalf which of Employee ADS," that solicited Defendant the 2013 1 commission contention accepted "acquired to See PL's Exh. any time during and/or 2013 prior that the one- year period prior to the last day of Employee's employment, whom the SBCT 2012, Plaintiff's at 2ND of the Court notes that Defendant's final year of employment with ADS. (showing units" from business proprietary on and/or confidential information" about the 25th ID "during the one-year period prior SI 5(a) (ii), to or the that last day Defendant of [Defendant's] "was actively employment," seeking to id. provide products or services" to the 25th ID "in the last six months of 19 [Defendant's] employment," id. SI 5(a) (iii). Agreement SI 5, ECF No. Inc. Employment 1-1. ii. However, ADS Email Thread the Court finds that the email thread submitted by Plaintiff at the July 28, 2014 hearing sufficiently demonstrates that customer the 25th [Defendant] ADS[,] ID a solicited to whom services," or or proprietary and/or which "about and/or one-year period ADS," "with or was ADS accepted [Defendant] whom or confidential preceding whom or of whom business provided which last on or day [Defendant] products of and/or acquired . . . during the employment with of on which behalf [Defendant] information [his] which "from behalf of ADS was actively seeking to provide products and/or services in the last six months According of the to [his] employment." email thread, Id. 25th ID Command Ray Devens, Jr. sent an email on May 31, Leaders" the 25th email in pictures clothing and and ID. PL's descriptions equipment, and the attached items to slideshow to "to discuss" Division." at Id. seek out other Offensive and Defensive a of 2. individual Major Devens the attached pieces team of to the military leaders that he be on display to touch and on a "Jungle Devens Sergeant 2013 to several "team various informed "want[ed] [the] Exh. SISI 5 (a) (i) - (iii) . also Warfare instructed Soldier operations Id. 20 Capability in the team survivability the jungle day for leaders items for environment." Devens suggested that "units/vend[o]rs working items the already like (attached) jungle can provide their expertise what really works and what also indicates that between May 31, in the [him] email . . . Mr. during does Defendant he their proposed equipment Sergeants to CSMs the in for" 25th briefing." At the [he procurement 28, 2014 working . . . those and let us know Id. The email Devens's Id. with the email thread sometime Defendant stated some vendors to send "briefing with all Division." the Id. [Defendant did not] hearing, at which earnest on July 31." of they The have for Id. July was] so Infantry there is a "distinction between when specific for ADS, 2013. email also included "a list of gear [his] and those brief not." contact contact Moses the forwarded had "made leaders capabilities 2013 and June 11, that team instructors . . . who ADS is and the going Id. at 60. or Defendant to [he] testified saw as a customer customer be that getting in the JOTC started in Defendant explained that "all personnel at JOTC" with whom Defendant had engaged while he was employed at ADS "are no longer there." Id. at 61. with, when with those Thus, In addition, "[a]11 of [Defendant's] involvement [he] was employed with ADS with the 25th ID G4 personnel [who] Defendant reasoned, are no longer there." Id. [was] at 61. "as the commander of the 25th Infantry Division changed out and they have a new commander now and a new sergeant now . . . [a]nd with 21 everybody being new in both entities, with a "was the brand JOTC new and 25th ID, customer." it Id. notified of the JOTC representative" on "[July] 8 Defendant testified that is like starting brand Defendant testified opportunity" of he this as at that he "a Darley Id.5 year." "look[s] new Thus, this as a new opportunity with different commands and with different people in place. So it's a whole different worked with in the past." The Agreement department, conducted Employee defines on acquired than what [he] Id. at 61-62. command center, business opportunity a "customer" as "the office, and/or individual with whom Employee behalf of ADS propriety or [sic] about whom and/or or which confidential information within the one-year period preceding the last day of Employee's employment." No. 1-1 that (emphasis the 25th ID conducted of added). is business regardless the ADS Inc. the Plaintiff command regarding fact the and email Defendant from does Devens asserted jungle the with warfare between dispute, May 31, ECF hearing Defendant opportunity, are no longer because the evidence that 2013 the which individuals Accordingly, not at center that the same involved in the opportunity. shows, Employment Agreement SI 5, Defendant and June received 11, 2013, 5 The Court notes that Defendant testified at the hearing that he was contacted about this opportunity on January 8, 2014. However, Defendant asserted in his affidavit that he began working with Darley "on April 1, 2014," and learned of the current opportunity "on July 8, 2014." See Affidavit of Moses SISI 36, 43, ECF No. 9-1. discrepancy is probably an innocent misstatement, but bears noting. 22 Such indicating the Defendant worked worked on requirements the for ID was an business, which ADS to Plaintiff, opportunity for the briefing to Defendant by had JOTC contacting from Defendant the opportunity and because the 25th ID, customer, which for vendors the Court which had obtained Defendant and while actively preparing finds that the 25th Defendant provided had solicited services, proprietary or or about confidential information during the last year of his employment, and/or was actively seeking to provide products or services in the last six months of his employment.6 iii. Sub-Units of the 25th ID At this preliminary stage of the case, and based on the limited evidence currently before the Court, Plaintiff's view that all of the sub-units the Court of "customers" as anticipated by the Agreement. Hr'g Tr. that, at 22, "[b]ased ECF No. on 12 [his] the rejects 25th ID See July 28, are 2014 (testimony of Plaintiff's witness understanding of the agreement," Defendant is "prohibited from soliciting or doing business with . . . the 25th Infantry Division down") . commission report reflects, conducted business during 6 Because the Court and Defendant Certainly, the 2013 concedes, that he his last year of ADS employment with finds that Plaintiff would likely prove a breach of Paragraph 5 of the Agreement, thus satisfying the "likelihood of success" prong of the preliminary injunction analysis, the Court need not consider whether Plaintiff would also likely prove a breach of Paragraph 6 of the Agreement, especially since Plaintiff's proposed Order does not mention any restrictions with respect to Plaintiff's vendors or suppliers. See Proposed Order, ECF No. 11. 23 several sub-units of the 25th ID. ECF No. 9-1 simply such the SI 17, ("Several of those sub-units within the 25th ID were my customers."). that, See Affidavit of Moses However, because sub-units overall are an Plaintiff has not persuaded the Court entity is necessarily purpose of a sub-unit "customers." restrictive of the 25th Recognizing covenants in ID, that employment agreements is to prevent a former employee, for a limited period of obtained during time, from using protected employment the either detriment Plaintiff has to of the the advantage former submitted information no of a employer, evidence future the employer Court suggesting that or observes that to that Defendant received any protected information during his interactions with the 25th ID that would be either beneficial to Darley or detrimental to ADS during any interactions with sub-units of the 25th ID with which Defendant had not interacted during his final year of employment with ADS. Keeping in mind extraordinary remedy showing the Dewhurst, that that that a may plaintiff 649 F.3d at 290 "preliminary only is injunction be awarded entitled to (emphasis added), upon such is a xan clear relief,'" the Court finds that Plaintiff has failed to make a "clear showing" that sub-units of the 25th ID are units of the preliminary "customers" of ADS merely because they are sub25th ID. injunction, Thus, for the Court purposes of declines the present Plaintiff's invitation to consider restricting Defendant "from soliciting or 24 doing business July 28, reasons with . . . 2014 Hr'g Tr. stated, succeed in the at the 22, Court 25th ECF No. finds showing a breach by Infantry 12. that Division Nonetheless, Plaintiff Defendant of down." for the would Paragraph likely 5 of the Agreement because Defendant conducted business with the 25th ID, specifically regarding the jungle warfare opportunity, during his last year of employment with ADS. c. Damages from the Breach The Court finds that Plaintiff would proving damages from Defendant's breach. through counsel, Defendant is at the familiar July 25, with 2014 likely succeed in Plaintiff asserted, ex parte Plaintiff's pricing, hearing that which would require Defendant to "take a different pricing strategy" with respect to the products and services it planned to offer at the JOTC meeting. Plaintiff's 2014 hearing that Defendant witness confirmed at the July 28, "understands [Plaintiff's] for jungle warfare ensemble" and "the pricing." Hr'g Tr. at 76, ECF No. 12. the 2014 through Defendant, ultimately JOTC bid over ADS. Accordingly, law, July 28, Plaintiff would also likely prove damages in the event that Darley, wins strategy Plaintiff because would the Court likely finds succeed that, in under proving Delaware that the Agreement is a valid contract, that Defendant would be in breach of the Agreement if he attends the July 31, and continues to solicit business 25 from the 2014 JOTC meeting 25th ID, and that Plaintiff would be damaged by Defendant's finds that Plaintiff has "'clearly show[n]' succeed on Dewhurst, the merits" of its breach, the Court that it is likely to breach-of-contract claim. 649 F.3d at 290. 2. Irreparable Harm The suffer Court next irreparable Winter, 555 U.S. considers harm in at 20. whether the Plaintiff absence of "is likely preliminary relief." Plaintiff asserted at the July 28, hearing that it "satisfied the irreparable harm to [prong] 2014 through the waiver provision in the contract," which the Court addressed above with respect to Plaintiff's damages. The harm" Court finds that Plaintiff satisfies the "irreparable prong of the preliminary injunction analysis. 12 of the Agreement clearly reflects parties' "agree[ment] that irreparable injury will result to [Plaintiff] in the event [Defendant] covenant violates any the Paragraph restrictive or affirmative obligation contained in paragraphs 5-9 of this Agreement." ADS Inc. Employment Agreement SI 12(a), ECF No. 1-1 (emphasis added). Delaware as to for "courts have long held that ^contractual irreparable harm alone suffice to the purpose of Marietta Materials, 1226 (Del. S.A. , 711 element 2012); A.2d of 34, the issuing Inc. see 44 v. establish that . . . injunctive Vulcan Materials also True (Del. N. Ch. injunction standard 26 Co., ("The is element relief.'" Commc'ns 1997) stipulations Inc. 68 Martin A.3d v. 1208, Publicis irreparable established harm by [defendant's] own contractual stipulation .... Defendants cannot now say there is no irreparable harm."). Even if recognized produced federal harm. under Court law, disregarded Delaware sufficient to law, evidence, meet its it the finds under burden of through Defendant, Plaintiff Darley's could not profits. that be Delaware demonstrating calculated or 2014 that, the damages by looking to Cable Co. v. F.3d 546, 551 Quality (4th Cir. (" [I]rreparable injury is suffered when monetary damages v. Local 275, 479 Nat'l Indus. Group (Holding) (Del. there 22 are difficult to ascertain or are inadequate." Danielson 383 Co., law Charlottesville 1994) Operating TV has irreparable the July 28, Multi-Channel Cable provision Plaintiff won the JOTC contract, possibly See waiver either Plaintiff's witness testified at if Darley, to the 2013) can be F.2d v. adequate 1037 (2d Carlyle Inv. Mgmt., ("Irreparable harm no 1033, (quoting Cir. 1973)); 67 A.3d 373, 'consists of harm for which recompense at law.'" (citation omitted)). Specifically, Plaintiff's witness has "upwards of 18 people in call on the Army," that call on 12. the Army." The witness supports covering the the where [the] claimed that Army is entire larger U.S. maybe 2014 27 at 28, at most ECF No. "Army team that Darley's military, two people Hr'g Tr. Plaintiff's than Plaintiff division that do nothing but "Darley has July 28, testified that entire federal sales just force government, international asserted, [it has] the sales." Id. at 32. In addition, the witness Plaintiff has "a much broader network of products that the ability to show a customer." contract views the where at "[o]nce issue, contract the the witness "very much contract as is a Id. explained license in With respect to place, to that hunt Plaintiff contract," [Plaintiff's] sales group is, all across the United States is going to be talking to Army units about the business through it." products that Id. at 29. are on here and driving The witness testified that if Darley was able to "reach 10 percent of what we were able to do, that would be success for them. come close would have to to compensating the So their profits would not even [Plaintiff] contract." Id. The for the witness loss that we testified that, "based on all previous indications on how ADS performs with the same contract more sales through would be very [as Darley], [Plaintiff] difficult ... contract." a given will Id. at 31. to come up with any do 20 times Thus, type of "it dollar value" and it "certainly couldn't be based upon what Darley did through that contract or what Darley's sales were or the sales that [Defendant] did through the contract." Accordingly, because the irreparable injury would result the Agreement, which the Id. parties stipulated that from a breach of Paragraph 5 of Court found Plaintiff would likely succeed in proving, and because, regardless of the stipulation, Plaintiff has shown that it "is 28 likely to suffer irreparable harm in the absence of preliminary relief," Winter, 20, the Court finds that Plaintiff has 555 U.S. satisfied at the "irreparable harm" prong of the preliminary injunction analysis. 3. Balance of Equities The Court next considers tips in [Plaintiff's] contends that [Plaintiff's] [Plaintiff] the favor. whether "balance of Inj . at 7, up issue, anything ECF No. tips Plaintiff decisively 4. that he that, the injunction issues, living in [his] "Korea, Japan, area," Okinawa, "to conduct business." Defendant PL's Br. in issue, and is Id. Defendant otherwise Defendant he that Mot. if the "would not obligated disagrees, to do arguing "wouldn't be able to earn a he Guam and the July 28, Supp. On the other hand, Plaintiff asserts, to the Agreement." would be equities injunction "does not 25th ID." pursuant 12. equities favor" because if the injunction does if of could lose the chance to competitively bid for this for Prelim. giving balance Winter, 555 U.S. at 20. important opportunity with the be "the would have to travel to Island of Saipan" in order 2014 Hr'g Tr. at 80-81, ECF No. further asserts that the financial impact to him "roughly a hundred thousand dollars a year." Id. at 81. Although financial the loss, it Court recognizes agrees with Defendant's Plaintiff that the potential requested injunction merely requires Defendant to do what he "is otherwise obligated to do pursuant to the Agreement." 29 PL's Br. Supp. Mot. for Prelim. that the Agreement months. Inj. at 7, expires Furthermore, Plaintiff's request ECF No. by its own Court the for 4.7 has injunctive The Court also notes terms in less narrowed the relief by than four scope of declining to restrict Defendant from soliciting business from all of the subunits of the 25th ID. favors 25th ID, Thus, the merely because they are Court that the balance of the equities Plaintiff. 4. The the finds sub-units of Court Public Interest considers interest." public finally Winter, whether 555 "an U.S. injunction at 20. is in Plaintiff asserts that "[p]ublic policy interests will be furthered by the issuance of [Defendant] "general a" to preliminary perform principle injunction under that the parties because Agreement" should "requiring furthers abide by the their agreements" and because "the public interest is furthered where the status quo is maintained and business interests are spared significant harm." 8, ECF No. public [if] 4. PL's Br. Supp. Mot. for Prelim. Inj. at 7- Defendant argues that it is not "good for the the Army [gets] less information instead of more." July 28, 2014 Hr'g Tr. at 74, ECF No. 12. 7 Defendant testified that, after he left Plaintiff's employment, he asked Plaintiff for a copy of his employment agreement so that he could examine the non-compete language, but that Plaintiff never provided such employment agreement. While the Court considers such unrefuted assertion, it does not relieve Defendant of his obligations under the Agreement. Any relevance of such unmet request may be developed later in the proceedings. 30 The their public interest agreements. someone the Furthermore, from Darley will public interest information is that is well-served not be in when Defendant attending the the Army a significant parties has asserted JOTC meeting. having issue. abide access at Thus, the Court Thus, more finds Winter, 20. IV. In accord with of Civil Procedure, Defendant, the CONCLUSION above and Rule 65 of the Federal Rules it is hereby ORDERED, DECREED, and ADJUDGED: Heinrich Steve Moses, is restrained attending the JOTC Equipment Vendor meeting on July 31, and, that to an injunction would be "in the public interest." 555 U.S. by from 2014 from the entry of this order until the end of the day on November 21, 2014, from having any further involvement in the pursuit of business directly from the 25th ID. Defendant involvement is also restrained from in the pursuit of business having any further from any of the units that make up the 25th ID for products or services similar to those offered by ADS, including providing any input, information, or documentation to anyone at Darley about the 25th ID and any of the units that make up the 25th ID, provided that, within the last year of his employment solicited or accepted business, or acquired proprietary or with ADS, Defendant provided products or services, confidential information, respect to such units making up the 25th ID. 31 with This does not restrict Defendant from soliciting, and/or from accepting which competing Defendant was participating in business not with units soliciting or of soliciting, the accepting 25th business, to which Defendant had not provided products and/or services, about which Defendant had confidential information from Nor ADS. does units of the 25th acquired during it the restrict participating in soliciting, with not ID year proprietary before Defendant his from ID or and/or departure soliciting, and/or accepting competing business to which Defendant was not actively seeking to provide products and/or services during the last six months before his departure from ADS. ADS shall post a bond of $25,000 to indemnify Defendant from any damages incurred by reason of this Order. The Clerk is REQUESTED to Order to It all is counsel of send a copy of this Opinion and record. so ORDERED. /s/^m^ Mark UNITED Norfolk, Virginia July 31 , 2014 13/.44 p.-w.EST 32 S. STATES Davis DISTRICT JUDGE

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