O'Sullivan Films, Inc. v. Neaves, No. 5:2017cv00031 - Document 83 (W.D. Va. 2018)

Court Description: MEMORANDUM OPINION. Signed by Chief Judge Michael F. Urbanski on 10/18/2018. (jv)

Download PDF

CLERK: OFFICE U,S.DSST . COURT AT ROANO KE,VA FILED IN T H E U N ITED STATES D ISTRICT CO U RT FO R TH E W E STE RN D IST M CT O F W RGIN IA H ARRISO N BU RG D IW SION O 'SULLIVD 0CT 19 2212 JUL BK FILM S, IN C. Plaintiffy . D L&rGLERX e DEPUW CLEQ'< Case.N o.5:17-cv-00031 V. DAW D N E AVE S, By: V chaelF.U rbansld ClziefUited StatesDisttictJudge D efendant. M EM O RAN D U M O PIN IO N W hen D efendantD avid N eavesstarted hisem ploym entwith PlaindffO 'Sullivan Films,Inc.(Tfo'sullivan''l heagreedtoalimitednoncompeteagreement(the TfNoncompete'')with O'Sullivan.Neavesconcedesthathehaswillfullyviolated theterm sof the N oncom pete,butinsiststhatthe N oncom peteisinvalid underVitginialaw.O 'Slxllivan disagzeesand asksthe courtto enforcetheN oncompete. Thism attercom esbeforethecourtseveralm odons.O 'Sullivan hasfled aM otbn forSummaryludgmentttheffo'sullivan Modon'l,ECF No.50.NeaveshasflledaModon forSllmmaryludgmentRegardingtheEnfotceabilityoftheNon-compete(theffNeaves EnforceabilityM oéon'),ECF No.54,andaModon fozSlzmmaryludgmentRegarding DamagesttheTfNeavesDnmagesModon'),ECFNo.55.Forthereasonsdescdbedbelow, O&#039;Sullivan Films, Inc. v. Neaves Doc. 83 the O 'Sullivan M otbn willbe GRAN TED in partand D EN IED in part,theN eaves EnforceabilityM odon willbe D EN IED ,and theN eavesD am agesM oéon willbe GM N TED in partand D EN IE D in patt. Dockets.Justia.com Summ aryJudgm entStandards PursuanttoRule56(a),thecout'tmustffgrantslpmmaryjudgmentifthemovant showsthatthere isno genuine clispute asto any m aterialfactand the m ovantisendtled to judgmentasamatteroflam ''Fed.R.Civ.P.56(a);CelotexCo .v.Catretq477U.S.317, 322(1986);G1nnv.EDO Cor .,710F.3d209,213(4thCir.2013).W henmakingthis detetm inaéon,thecolzrtshould considqrf<thepleaclings,deposidons,answetsto interrogatories,and admissionson ftle,togetherwith ...(anyjaffdavits''ftledby thepnt-ries. Celotex,477 U.S.at322.W hethera factism atezialdependson therelevantsubstandvelaw . Andersonv.LibertyLobby,lnc.,477U.S.242,248(1986).ffonlydisputesoverfactsthat rrlightaffectthe outcom e ofthe suitunderthegovetning 1aw willproperly precludetheentty ofsummaryjudgment.Factualdisputesthatareirrelevantorunnecessarywillnotbe counted.''Lda(citaéon omitted).Themovingpattybearstheinidalburdenofdemonstradng the absence ofagenuine issue ofm aterialfact.Celotex,477 U.S.at323.Ifthatburden has been m et,the non-m oving pazty m ustthen com e forward and establish the specihc m atedal factsin disputeto sutvivesummaryjudgment.MatsushtaElec.Indus.Co.v.Zenith Radio C-IJ. IP..,475U.S.574,586-87 (1986). . In detetm ining whethetagenlpineissueofm atetialfactexists,thecotutview sthe factsand clraw sallreasonableinferencesin the lightm ostfavorable to the non-m oving pazty.. G1pqn,710F.3dat213 (cidngBondsv.Leavitq 629F.3d 369,380 (4th Cir.2011)). Indeed,ffgijtisan faxiom thatin tqlling on amodon forsummaryjudgmentatheevidenceof thenonmovantistobebelieved,andalljuséfiableinferencesareto bedrawninhisfavon''' McAidaids Inc.v.Kimberl-cla. rk Co .,756F.3d 307,310(4th Cir.2014)(internal 2 altetadonomitted)(cidngTolanv.Cotton,134S.Ct.1861,1863(2014)@ercuriaml). M oreover,Tflcjreclibilitydeterminadons,theweighingoftheevidence,and thedrawing of legitimateinferencesfrom thefactsarejuryfuncdons,notthoseofajudge.''Anderson,477 U .S.at255.The non-m oving patty m ust,however,ffsetforth specihcfactsthatgo beyond theTmereexistenceofascintillaofevidence.'''G1lm,710F.3dat213(quodngAnderson, 477U.S.at252).Instead,thenon-movingpartymustshow thatTftheteissufhcientevidence favoringthenonmovingpartyforajuryto return averdictforthatpartp''Res.Bankshares Co .v.St.PaulMerc Ins.Co.,407F.3d631,635(4thCir.2005)(quodngAnderson,477 U.S.at249).ffln otherwords,tograntslnmmaryjudgmentthegclourtmustdetetminethat noreasonablejuty couldfindforthenonmovingpartyontheevidencebefoteit.''Mossv. ParksCo .,985F.2d 736,738(4th Cit.1993)(quodng PeriniCo .v.PeriniConstr.Inc., 915F.2d 121,124 (4th Cir.1990)). II. B ackground The factsin thiscase areundisputed.PlaindffO 'Sullivan Film s,Inc.isa m anufactlltet ofardfkialleather,wllich itsellsto the autom otive industry,am ong otherclients. DeclatadonofRichardJ.Till(fCTillDecl.'),ECFNo.60Ex.A,!1.O'Sullivansellsovet$17 m illion in nrfificialleathetpzoductsannually,and its:nancialitw es% entin m achinery, equipment,and tradesecretsisgreatetthan $20million.. J. da!! 5-6.O'Sllllivan'sautomobile businessistatgeted to m anufactutersin theU nited States,M exico,and Canada.D eposidon ofScottlc ueger,ECF N o.60 Ex.B.,at10:2-9,11:20. DefendantD avid Neaveswashiredby O'Sullivan inlune2013andworkedO ough D ecem ber2016.N eavesfttstworked asaN ew ProductD evelopm entChemistin Ardhcial 3 Leather,andthenwaspromotedtoArdfkialLeatherFilm R&D Manager.TZ Decl.!!2-3. Asarequitementofhisemploymentwith O'Sullivan,onlune17,2013,Neavesenteredinto aConfidentialInformaéon,Invendon,and Non-solicitation Agreement(theffAgreement'), ECF N o.60 Ex.C,with O 'Sullivan.TheAgreem ent,including theN oncom pete,is goveznedbyVitginialaw.Agzeement!19. Paragraph 8 oftheAgteem entcontainstheN oncom pete: For one yeatafter my em ploym entwith O'Sullivan ends,eithervoluntntily or forcause,Iagree thatlwillnot(a)sell,attemptto sell,or assistothetsin selling orproviding productsor services in com pedtbn with the Business of O'Sullivan attheRestdcted Contacts;ot(b)help,financiallyorotherwise,any person or endty to com pete with the Business of O 'Sullivan by using or contacting theRestdcted Contacts. Id.! 8.fflkesttictedContacts''isdefmed as: actazal and potendal custom ezs, agents, distributors, vendors, business pnt'tners, and persons or enddes thato duting the tv o years before m y employm entwith O 'Sullivan ends,I had direct contactwith or that I had indirect contact with, including indirect contact by suppotdng or being responsible for the acdvities of other O 'Slzll1 'van employees who had ditect contactwith the Restdcted A ccounts. J-daAdditionally,theffBusinessofO'Sullivan''isdefmed asffthedevelopm ent, m anufacnlting,m arkedng,and sale ofplasdc engineered film scom pounds,serdcesrelated to thismarket,and othetbusinessthatO'Slxllivan engagesin dlntingmyemploym ent.''J.I .L !(2. Further,N eaves acknowledgegdj and agreegdj thatthe informadon,including the idendty and size ofand the contactinfotvnadon atthese Restricted Contacts and sim ilar inform adon that O 'S'nllivan has obtnined about other actual and potenéal customezs,agents,distdbutors,vendors,business partners Lsic! atany time consdtutesO 'Slxllivan'sConhdendalInfotvnadon. Lda!J8.TheAgreementdefinesffconhdenéalInformadon''as: 4 any kind ofinformadon thatisnotknown by the genetalpublic.Itincludesall doclzm entsoritem sthatreflectwhatIhave done with,orthoughtabout,the Conûdendal Inform adon ....Confidendal Infotmadon includes,butis not limited to,technicalinfotmadon (such as formtzlas,trade secrets,itwentions, and designs);financialinfotvnadon (such asptojecdons,fotecasts,budgets, and plans); and business and manufacnlting informadon (such as plans, stzategies, pzocesses, com pedéve analyses, and lists and info= adon about customers, potendal customers,vendors,and employees).AII Confidenéal lnfot-m ation is rotected b thisA eem entre ardless ofhow itislearned b m e ordisclosed to m e. Id.! 1. Finally,Patagtaph 12oftheAgreementprovidesforbothinjuncdvezeliefandfee shifdng should N eavesviolate any partoftheA gteem ent: lagreethattheremediesavailableatlaw forbreach ofmy oblkadonsundet this Agreem ent m ay be inadequate and that O 'Sullivan willneed im m ediate reliefto protectitsrightsunderthisAgreem ent.Iagzee that,in addidon to any rightsand rem edies available to O 'Sullivan atlaw or in equity,tem pozary and permanentinjuncdve reliefmay be gtanted in any proceecling broughtto enfotce m y obligaéons under this Agreem ent,without the need to ptove actualdam age.I agree thatI willbe responsible fot allattorneys'fees,costs, and expensesincutred by O 'Slxllivan by reason of any acdon reladng to tllis Agreem ent,and thatO 'Sullivan willbe enétled to such addiéonalreliefthata cout'tdeem sappropriate. ' Id.!12. In N eaves'variouspositions,hereO ed O 'Slpllivan'snt-rilkialleather.D eposidon of DavidNeavesrfNeavesDep.''),ECFNo.60Ex.D,50:14-17.Neavesalsohad managementresponsibilityovermorejuniornt-rifkialleatherresearch and development em ployees.1d.68:14-65:7.According to O 'Sullivan,and notdisputed by N eaves: N eaveshad accessto the chem icalform ulasused by O 'Sullivan foritsatdhcial leather, constantly refined O 'Slxll1 'van's ardficial leather products, and perform ed hisow n testing and superdsed tesdng ofO 'Sllll1 'van's products to improve perfo= ance. Neaves Dep. 28:11-14. He made adjus% ents to fotvntzladonsforczents,N eavesD ep.34:20-35:4,and drafted instrucdonsand tese g plansforllissuborclinates.N eavesD ep.39:8-11. 5 O'SullivanMSJBr.9. N eavesadm itted thatthe autom odve com panieshew orked and comm unicated with whileatO'Sullivanincluded Tesla,GeneralMotors(f<GM') and Chrysler.NeavesDep. 59:1-5.In pardclalar,N eaveshad prim ary responsibility for O 'Sullivan'sattem ptto win a GM pzojectnamedPINKAD.Lt. la109:21-110:3.Additionally,Neaves,thtoughO'Sllllivan, worked asasubcon'ttactorforFord on certain artfcialleatherproducts.Lda79:5-7.Under Paragraph 8 oftheAgreem ent,Tesla,GM ,Chrysler,and Ford are fflkestricted Contacts''to which theN oncom peteapplies. OnDecember12,2016,NeavestesignedhisposidonatO'Sullivan.O'SullivanMSJ Br.12.H einform ed O 'Sullivan thathe had accepted aposition asD itectorofResearch and DevelopmentwitllnonpartyUniroyalGlobalEngineering,Inc.tffunitoyal''l.LdaUniroyal also m anufacturesartificialleatherforthe autom odveindustry,and,assuch,isa direct competitorofO'Sullivan.Li;D eposidon O 'Stzllivan Film sByandThtough ItsDesignated RepresentadveScottIc uegerrfo'sullivan 30q$(6)Dep.''),ECFNo.60Ex.B,at16:15-229 Uniroyal2017 10-1< AnnualReport,ECF N o.60 Ex.K.11 pardctzlar,Uniroyal'stwo largest clientsareFotd and G M .ListofGlobalOEM SServed,U niroyalG lobalEngineered Productsylanuary2017,ECF No.60Ex.J,at1-2. NeaveshasbeenheavilyinvolvedinthePINKAD projectforUniroyal- thesame projectforwbich heheldprimatyresponsibilityatO'Slxllivan.D ef.'sAnswersP1.'s Interrogs.,ECF N o.60 Ex.L,atN o.7.M oreover,an em ailshow sthatwhile atUniroyal, N eaveshashad contactwith ChrisdnaH cks,iliscontactwith GM atO 'Suzivan.Em ailfrom 6 D .N eavesto C.J' Iicksdated Septem ber27,2017,ECF N o.60 Ex.N .N eavesalso perform s som e work atUniroyalforFord.O 'Sullivan M ot.Br.13. 111. Enforceability ofthe N oncom pete Thepardeshave sled dueling m odonson theenfotceability ofthe N oncom pete.A s discussed below,thecouttfm dsthattheN oncom pete com portswith Vitginia 1aw and is fully enforceable. A. In Virginia,ffrestricdve covenantsaredisfavored restrnintson ttadey''and as such,the validity ofanoncom peteisathreshold question.See Om ni 1ex W orld Servs.Co .v.U.S. Inves; adonsSews.Inc.,270Va.246,249,618S.E.2d340,342 (2005).W hethera defendantbteached anoncom pete becom esm ootifthenoncom peteisitw alid and unenforceable.See H om eParam ountPestControlCos.v.Shaffer,282 Va.412,420,718 S.E.2d762,766(2011)(ffBecausewehavefoundthecitcuitcourtdidnoterrinnxlingthe Provision unenforceable,H om ePatam ount'sevidenceofShaffet'sact'ualbreach wasnot relevant'). The Suprem e CourtofVirginiahasins% cted courtsto enforce noncom pete agreem entsonly ffifthe contractisnarrowly dtawn to pzotectthe em ployer'slegitim ate businessinterest,isnotunduly burdensom e on the em ployee'sability to earn a living,and is notagainstpublicpolicp''Omni1exW orld Servs.,270Va.at249,618S.E.2d at342.ffrllhe em ployerbearstheburden ofproofand any am biguitiesin the conttactwillbeconstm ed in favoroftheem ployee.''Id. 7 Nonetheless,acourtcannotadjudicatetheenforceabilityofanoncompetein a factualvacullm .A ssutanceD ata lnc.v.M alevac,286 Va.137,144,747 S.E.2d 804,808 (2013).A cotzrtshould ffconsidettheffuncdon,geographicscope,andduradon'elementsof the restricdon.''H om eParam ountPestControl,282 V a.at415-16,718 S.E.2d at764 (quodngSimmonsv.Miller,261Va.561,581,544S.E.2d666,678(2001)).Tvheseelements arefconsideredtogether'ratherthan<astllreeseparateanddisdnctissues.'''Id.(quodng Simmons,261Va.at581,544 S.E.2d at678).Assuch,asinglefactorthatmaybeotherwise unreasonable could be ffreasonable asconstrued in lightoftheother > 0.':Cantol,Inc.v. McDaniel,No.2:06CV86,2006W. L 1213992,at*4(E.D.Va.Apt.28,200$. Theftmcdon elementexapineswhetherthenoncompeteffrestdctgs)compeddon by determirling whetherthe prohibited acdvityisofthe sam e typeasthatactually engaged in by the form erem ployer.''H om eParam ountPestControl,282 V a.at416,718 S.E.2d at764. dfyjalidprovisionsprohibit(anemployeefrom engagingin activitiesthatactuallyor potentially com petewith the em ployee'sfot-merem ployer.'''1d.at417,718 S.E.2d at765 (quoéng Omni lex,270Va.at249,618S.E.2dat342).W hen anoncompeteffseeksto prolzibitga)form eremployeeqfrom wotkingforgtheformeremployer's)compedtorsin any capacity,gthefotmeremployerqmustprovealegitimatebusinessinterestfordoingso.''Id.at 417-18,718 S.E.2d at765. ffrllhegeographcscopeofacovenantnotto competemustbereasonablylimited.'' SpecialtyM arkedng,Inc.v.Lawrence,N o.CL09000928-00,80 V a.Cir.214,2010 W L 7375616,at*3 (Va.Cir.Ct.Mar.11,2010).Nonetheless,theabsenceofageograpllic lim itaéon isnotfatal.SeePreferted S s.Sols.Inc.v.GP Constzlén LLC,284V a.382,394, 8 732S.E.2d676,682(2012)(ffThelackofaspeciûcgeographiclimitationisnotfataltothe covenantbecausethenoncompeteclauseissonarrowlydtawntothispnttictzlarprojectand thehandfulofcompaniesin directcompeddon withPSS.'');Brainware,lnc.v.Mahan,808 F.Supp.2d820,827(E.D.Va.2011)rfAlthoughtheabsenceofageogtaphicallimitadon m ustbe considezed in evaluadng whethezanon-com pete provision isenfozceable,thelack ofsuch alimitadon doesnot,initself,renderthenon-competepzovision unenforceable.'l; fr. i M anTech Int'lCo .v.Analex Co .,No.(21,-2008-5845,75Va.Cir.354,2009W L 6759967,at*2(Vk.Cit.Ct.July18,2008)(noéngthatffthelackofageograpllicallimitadon isnotin itselffatal,''butitw alidadng the noncom petebecause itTfcontainsno lim itadons''at al1);butseeStrate 'cRes Inc.v.Nevin,No.1:05CV992 GCC),2005WL 3143941,at*3 (E.D.Va.Nov.23,2005)(pre-preferred S stemsSolutionscasefincling thatanoncompete thatdidnothaveageograplùclimitaéonwasperseunreasonable).Instead,cout'tsffmust considertogethertheintended function ofthe agreem entand itsdlzradon asw ellaswhether itcontainsageogtaplaic lim itadon.''M atket*Accesslnt'l,Inc.v.KM D M edia,LLC,72 V a. Cir.355,2006R 3775935,at*3(Vk.Cit.Ct.Dec.14,2006). B. N eavesarguesthattheN oncom pete failstwo ofthe three elem entsin therequired noncompete analysis:ftm céonallim itadonsand thegeograpllic scope.l 1N eavesdoesnottakeissuewith the N oncom pete'sone-yearduzadon,nordoesthe com tperceive anylegalissueswitlz theduradon.SeePreferredS s.Sols.,284Va.at394,732S.E.2dat681(holdingthataoneyearnoncompetewas ffnarrowl ydrawn'');Tradestaff& Co.v.No 'ec,No.CL08-1512,77Va.Ciz.77,2008WL 8201050,at*3(7k.Cir.Ct. Sept.4,2008)tfrvirginiacourtswilltypicallyenforcecovenantsofuptotwoyears.... '' );Devnew v.Ra shi G .Ltd., No.CH05-3173,75Va.Cir.436,2006WL 6345732,at*7(Va.Cir.Ct.Dec.29,2006)tXldl 'ngatwo-yearte= zeasonable).Moreover,ashorterdtuadoncaninform thereasonablenessofthegeographicscopeand6lncdon componentsofanoncompete.SeeAdvancedM ar.Enters..Inc.v.PRC.Inc.,256Va.106,119,501S.E.2d 14% 155-56 (1998). 9 FunctionalLim itations N eavescontendsthatthe funcdonallim itadonsin theN oncom peteate overbroad.In pnrticular,N eavesarguesthatwhile he worked only asachemistforO 'Sullivan,the N oncom pete ffprolùbitsa m uch broaderrange ofacdvities:he shallnotTsell,attem ptto sell, orassistothersin selling otproviding products'otfhelp,hnancially orotherwise,any person orentityto compete'with O'Sullivan.''Def's.M em.Law Supp.M ot.Summ.J.Regarding EnforceabilityNon-competerfNeavesEnforceabilityMot.Br.?),ECF No.63,at7(quodng Agteement!8.). N eavesm ainly takesissue with thelanguageheportraysasthesecond clauseofthe Noncompete:ffhelp,financiallyorotherwise,anyperson orendtyto compete.''LdaNeaves cbim sthatthç second clause ffcould coverany m annerofThelp'v sw eeping the floors, working in theaccoundng departm ent,m aintaining theplantfaciH es,providing legal services,stocldng the em ployee kitchen,in addiéon to being achenlist.''Id. Neaveswouldhavethiscourtapplythetjanitortest7':Tflfaclauseissobroadasto prohibitw ork itw olving em ptying tzash foracom petitor- so long asthey did notwork asa jazlitorattheirpriorjob- thentheclauseisunenforceableandvoidasamatteroflam ''Id. at8(citingRoto-DieCo.v.Lesser,899F.Supp.1515,1520(W .D.Va.199$). N otably,however,N eavesreadsoutqualifying languagein theN oncom pete,which language readsin 6:11: I willnot (a)sell,attempt to sell,or assist others in selling or provicling products or serdces in com peddon with the Business of O 'Slall1 'van at the Restticted Contacts;or$)help,fmancially orotherwise,anyperson orendty to com pete with the Business of O 'Sullivan by using or contacdng the Restdcted Contacts. 10 Agteement!8. Theonlyreasonablewaytoreadpart(b)issothatthepluasef%yusingorcontacting theRestdcted Contacts''m odihesffhelp,financially orotherwise.''Thephzase ffby using or contacdng theRestricted Contacts''doesnotm ake senseifitm odihesffany petson orenéty to com petewith the BusinessofO 'Sullivan.''Consequently,theonly way thatN eavescould violatepatt(b)isbyusing orcontacéng theRestticted Contactsto help anotherendty com petewith theBusinessofO 'Slxllivan. Tllisintemzetadon defeatsNeaves'appealto ajarzitoztest.Thecoutthndsitdiffklzlt toimagineanyscenarioinwhichajanitorwouldbecontacéngtheRestdctedContactsand ttying to com petewith O 'Sullivan unless,asO 'Sullivan aptly states,ffsuch em ploym entw ete a sham effortto obscureditectcom peddon,w llich the clausew otzld prevent.''P1.'sM em . Opp.Def.'sMot.S11mm.J.RegarclingEnforceabilityNon-compete,ECF No.67,at10. Instead,the courtholdsthattheN oncom pete isnatrowly tailored so thatN eavesisonly precludedfrom engaginginemploymentwherehe(1)worksinafieldthatisdirectly compeddvewith O'Sullivan,and (2) furthetsthatemploymentbyexploie gllistelaéonsllip with O 'Sllllivan'scEents. Similarly,NeavestakesissuewiththeTfassisdngothers''languageofpart(a).Likewith.. laisargumentaboutpazt(b)oftheNoncompete,Neavesclnimsthatpart(a)pzohibitshim from w orking in theartificialleathercapacity even indirectly.N eavesEnforceabilityM ot. Br.8 (quodng HomeParamount,282Va.at418,718S.E.2dat765).Butagnin,Neavesreads outthe qualifying language ffwith theBusinessofO 'Sullivan attheRestricted Contacts.'' Nothingin part(a)oftheNoncompetepreventsNeavesfrom wotkingin theardficial 11 leatherindustry---even in reladon to the autom obileindustry- aslong aslliswork isnot related to theRestricted Contacts,which theevidenceshowsislim ited to aselectgtoup of autom obile m anufacturets. In sum ,the couttholdsthatthe funcdonallimitaéonsin theN oncom pete,ded as they are to theRestticted Contacts,are narrowly tailoted to pzotectthelegitim ate business interestsofO 'Sullivan. 2. GeograpM c Scope N eavesalso com plainsaboutthelack ofgeograplnic scopein theN oncom pete. Neaves'atgumentdistillsdown to onesentence:rfl'helackofanygeographicscopein (the Noncompetej,which extendsto placesaround theworldwhereO'Se van hasno legitimate businesspurpose in suppressing com petidon,rendersitoverbroad and unenforceable.'' N eavesEnfozceabilityM ot.Br.6. O fcourse,theabsenceofgeogtaphic scopein theN oncom peteisnotdisposidve. See Brninw are,808F.Supp.2d at8279Preferred Sys.Sols.,284 Va.at394,732 S.E.2d at 682.Brainware,Inc.v.M ahan isinstructive.In Brainware,thecourtfound anoncom pete thatclid notcontain ageogzapllic lim itadon wasstillvalid.Brainwarewasa sm allcom pany in anichem azketwith aglobalzeach.The com pedng businessatw laich the form erem ployee wozkedwasanothermajorplayerinthatsmall,nichemarket.Thenoncompete'sfuncdonal lim itadonswere narrowly to ored. A sdiscussed in thebackground secdon,O 'Sullivan isin m uch the sam eposidon as wasBrainware.O 'Sullivan com petesin alzigl' zly specialized nichem azket:ne ficialleather. Though them arketissm all,O 'Sullivan hasaglobalreach.U niroyalcom peteswith 12 O'Sullivantowin thesameclientsforthesameprojects.Andthecourthasalreadyheldthat the N oncom pete'sfuncdonallim itatbnsare narrowly drawn to protectO 'Sllllivan against N eavesdirectly com peting with O 'Sullivan attheRestticted Contacts.Likein BrainFare,the courtholdsthatthe lack ofgeographic scopeisnotfatalgiven the circum scribed scope of the funcdonallim itadon and thezeasonable one-yeardtuadon. The five casesN eavescitesdo notdictate adifferentoutcom e.'Fhese casesare either distinguishableorabrogated byPreferred S stem sSoludons,in which theVitgitlia Suprem e Courtheld thatthe fflack ofa specihcgeograpllic lim itadon''wasnotfatalw here a noncompetewasffnarrowlydrawnto (a)pardcularprojectandthehandfulofcompaniesin directcom peddon with''the em ployer.284 Va.at394,732 S.E.2d at682.SeeA lston Smdios Inc.v.Llo dV.Gress& Assocs.,492F.2d279,283(4thCir.1974)(pre-preferreb S stem sSoludonscase finding noncom peteinvalid becauseofffitslim itlessgeograpllic application,and too-broad encompassmentofacdviéesinwhich gtheemployeejwasnot engaged');PowerDistdbution lnc.v.Em er enc PowerEn ' Inc.,569F.Supp.54,58 (E.D.Va.1983)(pre-preferredS stemsSoludonscaseûndinglackpfgeographiclimitation perseunreasonable);Simmonsv.Miller,261Va.561,58/, '544S.E.2d666,678(2011)@tePrefeêzed S stem sSolutionscase fm ding noncom peteinvalid because ofTftlze length dutaéon oftherestticéon,the expansion ofrestticted funcdons,and thelack ofgeogtaphical limitadon');New ltiverM ediaG Inc.v.1*11hton,245Va.367,370,429 S.E.2d 25,26 (1993)(upholdingnoncompetewith geographicscopelimited to areasserved by former employer);BlueRid eAnesthesia& CtidcalCatev.Gidick,239Va.369,389S.E.2d467 (1990)(same). 13 IV . D am ages N eaves'D am agesM otion seeksto dismissCount11ofthe Am ended Com plaint, whichseeksdamagesandinjunctivereliefforNeaves'bteachoftheNoncompete.Neaves clnim sthatCount11m ustbeclism issed forO 'Sllllivan'sfailure to establish act'ualdam ages. In pertinentpatt,Count11ofthe Am ended Com pleintprovides: 48. Pursuant to Paragraph 10 of the A greem ent, O 'Slzll1 'van seeks injuncdvereliefpreventingNeavesfrom worldng forUniroyalfora one-year period ftom the date ofentry ofa finalO tderin thiscase.In addidon,N eaves conductgsicjhasproximately caused O'Sullivan damagesin an amountthat exceeds$75,000. 49. Pursuantto Patagraph 12 ofthis Agreem ent O 'Sullivan also seeks to recover its costs and fees to enforce its rights lm der tllis Agreem enta anticipatedtoexceed $100,000. Am.Compl.!!48-49. N eavescontendstherecord dem onstratesthatO 'S''llivan hasn'tindento ed any dam agesadsing from N eaves'breach.ln pardculaq N eavespointsto O 'Slxllivan'sRule 30q$(6)deposidon: Q: Asfaraslossofbusiness,hasO'Sullivan lostanymoney asazesultof M r.N eaves? A: A slsaid previously,1can'ttellyou that. Q: HasO'Slxll: 'van lostanyaccountsto UnitoyalasaresultofM. r.Neaves? N o. O'Sullivan 304$(6)Dep.39:10-17. A sareslzltoftlzistestim ony,N eavesatgtzesthatO 'Sullivan'sffdam agesare speculadveand lim ited to the costsincurred in purslning theinstantacdon.'?D ef.'sM em . Law Supp.Mot.Summ.J.RegatdingDamagesro amagesM ot.Br.7'),ECFNo.62,at4. 14 Consequently,N eavesasksthecol'ttto dismissCount11forlack ofdam ages.Seeida Notably,however,NeavesignoresO'Slzllivan'srequestforinjuncdvereliefin CountII. O 'Sullivan doesnotdeny thatitisnotendtled to m onetary dam ages,othetthan attorney'sfees.Instead,itarguesthatitisendtledtoanitjunctionpreventingNeavesfrom w ozldng fozU nizoyalforoneyeatbecause ittfhassuffeted izzeprablehlt. m and hasan inadequaterem edy atlaw''- such asffwhen m onetary dam agesaredifficlzltto ascertain or areinadequatetocompensate(O'S1111ivan)fortheinjurycausedbyl eaveslbteachofa restdcévecovenant.''Pl.'sMem.Opp.Def.'sM ot.Summ.J.RegatdingDnmages,ECF No. 71,at 1. Thefout-elementtestaplnindffmustsadsfybeforeapetmanentitjunctionisissued iswellestablished.A plaindffm ustshow: (1)thatithassufferedanirreparableinjury;(2)thatremediesavailableatlaw, such asmonetary damages,are inadequate to compensate for thatinjury; (3)that, considering the balance of hardships between the plaindff and defendant,a temedy itl equity is warzanted;and (4)that the public interest wouldnotbedisservedbyapermanentitjuncdon. eBa Inc.v.MercExchan e L.L.C.,547U.S.388,391(200$. O'Sullivan establisheselements(1)and (2)viaParagraph 12 oftheAgreement.Undet Virginialaw,itisfçw ell-settled thatpardesto acontractm ay specify the events orprecondidonsthatwilltriggeraparty'srightto recovezfortheothetparty'sbteach ofthei. t agreement.''Ulloav.QSP,Inc.,271Va.72,79,624 S.E.2d 43,48(2006).Tllisincludes m onetarydamages,asffgnlo statuteorpublicpolicyisim plicated ...thatwould countervail the parées'freedom to elim inate dam agesasarequired elem entofabreach ofcontract acdon.''1d.;seealso W .Insuladon,L.P.v.M oore,316F.App'x 291,297 (4th Cir.2009). 15 In Paragraph 12,the pardesagtee thatO 'Sullivan would notneed to prove actual damagesin abreach oftheAgreement,includingtheNoncompete.Agreement! 12 (allowingabreachofconttactactiontoproceedffwithouttheneedtoproveactual damagçs').ThepardesalsoagteethatKftemporaryandpe= anentinjuncdverelief''is apptopziate foza breach.UnderVirginialaw,theseptovisionsoftheAgreem entare enforceableandsatisfyelements(1)and(2).SeeUlloa,271Va.at79,624S.E.2dat48. Elem ent(3),thebalanceofeqtlides,weighsin favorofO'Slnllivan.AstheEastern DisttictofVitgl 'nt 'ahasrecentlynotedinthepteliminaryinjuncéoncontext,ffgallthoughitis undoubtedlytruethatsubjec% ggaformeremployee)totherestdcdvecovenantmayimpair hisabilityto earn aliving,ltheemployerjhasan interestin ptotecdngitscustom etsfrom diversion pending tesoludon ofthe case.''U date Inc.v.Sam ilow,311 F.Supp.3d 784,796 (E.D.Va.2018).Neavesdoesnotsuggestotherwise.Finally,w1t. 1,1respectto element(4), publicpolicyweighsin favorofO'Slxllivan.Virginia1aw certninlyffencouragelsqthe enforcementofvalidnon-competeagreementsy''Ldx,and thecourthasalreadyheld thatthe N oncom peteisvaid and enforceableunderVirgirlia law . ln sum ,the couttholdsthattheN oncom peteisenforceable,N eaveshasbreached the N oncom pete,and undertheterm softlze N oncom pete,O 'Se van isendtled to an itjuncéonprevendngNeavesfrom conénuedvioladonsoftheNoncompete. Thecouu'sholdingsdonot,however,automadcally entailenjoiningNeavesfrom w orldng forUnitoyalin gsyposi tion.Cf.Am.Compl.!48tffo'sul1ivan seeksinjuncdve - reliefpreventing N eavesfrom working forU nitoyalfor aone-yearperiod from the date of entryofafinalOrderintlaiscase.'').Presumably,thereareotherposidonsatUniroyalthat 16 do notcom petewith the BusinessofO 'Sllllivan by using the Restdcted Contacts. Accordingly,thecourtwillorderthepartiestoconferandsubmitajointproposed permanentinjuncdon nolaterthan fourteen daysafterentryoftheaccompanyingorder. M oreover,N eavesdoesnotcontestthatO 'Sllllivan can tecoverattorneys'feesunder Paragraph 12'sfee-shifdngprovision.SeeDamagesM ot.Br.4r%tmost,(O'S1111ivan's) dnmagesarespectzladveandlimited to thecostsincurredinpursing gsicqtheinstant acéon.').ThecotutfindsthatO'Sllllivanisendtled to recoveritsreasonableattorneys'fees and costsin thisacdon.O 'Slall1 'van m ay subm itam odon forattorneys'feesand costs. V. Conclusion BecausetheN oncom pete'stem poralscope,funcdonallim itadons,and geograpllic scope are narrow ly tailored to N eaves'form erpositbn atO 'Sl'llivan,thecout'tholdsthatthe N oncom peteisvalid underVirgml ' 'alaw.M oreover,N eavesdoesnotcontesthe isvioladng theN oncom pete.N onetheless,O 'Sullivan hasfailed to prove actualdam ages,and the itjuncdvereliefsoughtbyO'Sllllivanisnotnatrowlytailoredtothetermsofthe N oncom pete.Accordingly,the O 'Sullivan M otion willbe GRAN TED in partand DENIED inpart,theNeavesEnforceabiW ModonwillbeDENIED,andtheNeaves D am agesM odon willbe GRAN TED in partand D EN IE D in part. Entered:/ohplz-.12 /./ zu mr4 . AA #--è'(-j z. 'à. -:-' M ichaelF.Urbàrfsld ' - ChiefUrzited Sta s strictludge '' , '. ,

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.