Opinion
11777-04.
Decided November 28, 2005.
Certilman, Balin, Adler Hyman, LLP, East Meadow, New York, Counsel for Plaintiff.
Kraus Zuchlewski, LLP, New York, New York, Counsel for Defendants (for Philip Alesia).
Law Office of Arnold Pedowitz New York, New York, (for Technical Safety Services, Inc.).
Filippatos Risk LLP, New York, New York, (for Myra Yablonsky, Craig Gutmann, Yvinx Maxime and Carlos Baux).
Defendants Phillip Alesia and Technical Safety Services Inc. move for summary judgment dismissing the complaint in its entirety.
Defendant Technical Safety Services, Inc. also moves for partial summary judgment on its counterclaim against Plaintiff on the issue of liability.
Plaintiff ENV Services, Inc. moves for an order pursuant to CPLR 3025(b), granting it leave to amend the complaint to allege four additional causes of action. Plaintiff also cross-moves for summary judgment dismissing the counterclaim of Defendant Technical Safety Services, Inc. and for further leave to amend the complaint to add Medical Repair Laboratories, Inc. as a party Plaintiff.
BACKGROUND
A. Plaintiff ENV Services Inc.
Defendants Myra Yablonsky, Craig Gutmann, Yvinx Maxime, and Carlos Baux move for summary judgment dismissing all causes of action against them by Plaintiff.
Plaintiff ENV Services, Inc. ("ENV") is a nationwide company engaged in the business of testing, certification and calibration of contamination control equipment, laboratory equipment and process control instrumentation. Some of its technicians obtained accreditation for certifying bio-safety cabinets from the National Sanitation Foundation, although such accreditation is not required (Wickward Tr. at 243). ENV conducts business in every state in the continental United States. It lists its significant clients on its website.
In March, 2003, ENV purchased all of the stock of Medical Repair Laboratories, Inc. ("MRL"), a smaller company in the same business with clients in the Northeast and Middle Atlantic regions. MRL has not been dissolved because it had a contract with the National Institute of Health. This contract could not be assigned to ENV for payment purposes due to internal regulations. It is not disputed that MRL is no longer operating as an independent entity.
All of the individual Defendants in both actions were employees of MRL. They became employees of ENV by virtue of the sale of stock. At issue in this action commenced by ENV is enforcement of restrictive covenants found in the employment agreements between MRL and all of the individual Defendants. (Alesia Moving Papers, Ex. E)
The restrictive covenants (1) preclude competition for 1 year after termination of the employment within a 100-mile radius of any geographic area where MRL is engaged in business; (2) preclude solicitation of MRL's active accounts for 3 years following termination; (3) preclude disclosure of "confidential information" for 3 years from termination; and (4) preclude contacting any MRL employees for the purpose of inducing them to leave for 3 years from termination. The employment agreements do not provide that they are assignable. No assignment of these agreements from MRL to ENV has been submitted. ENV alleges, according to its Technical Manager, David Phillips, ENV's trade secrets at issue consist of customer lists, customer contact information, customer relationships, service schedules, salary information, information about employee morale and information about employee qualifications.
B. Defendant Philip Alesia
Defendant Philip Alesia ("Alesia") joined MRL in late 2000. He is a dispatcher or scheduler. His duties involved coordinating the scheduling of visits by technicians to customers. He states that the job of scheduler does not require any special education or training. He was required to sign the employment agreement with MRL when he was hired, and was informed that his employment depended on signing the agreement.
After MRL was absorbed by ENV, Alesia states that he became disillusioned. He states that promised raises to former MRL employees never materialized, while long-time pre-MRL staff did receive bonuses. He states that he saw an advertisement on HotJobs.com for position openings at Defendant Technical Safety Services, Inc. ("TSS"), a California company engaged in the same business that was looking to expand into the Northeast market. He met with representatives of TSS in February, May and June of 2004. He was hired by TSS in July 2004. Alesia denies that he solicited fellow employees, solicited any former customers or disclosed any confidential information.
C. Defendant Myra Yablonsky
Defendant Myra Yablonsky ("Yablowsky") joined MRL in 1984 as an office worker. She signed an employment agreement (Moving Papers of the four individual Defendants, Ex. I) in 1998 as the Office and Personnel Manager for MRL. When ENV took over MRL, she states she was told that, at $65,000 per year, she was overpaid and could expect not to receive any further raises at ENV. She claims that her duties were reduced essentially to data entry. She concluded she had no future at ENV. She found TSS through the internet and e-mailed them. A dinner meeting was scheduled with TSS representatives at a restaurant in Syosset, for ENV employees who had contacted TSS. A second meeting was held later in Uniondale.
In early June, 2004, some former MRL employees received raises. Yablonsky did not. A meeting was held at the ENV office on Sunday, June 13, 2004. All of the individual Defendants attended. In addition, one ENV employee, Brian Walcott, who ultimately decided not to leave ENV, attended. ENV learned of the meeting and scheduled its own meeting on June 21, 2004. At that time ENV Chief Executive Officer Ben Thamarus ("Thamarus"), allegedly told employees that, if they were not happy at ENV, "there's the door."
Yablonsky states that she received a written offer of employment at TSS at the same salary she was receiving at ENV. After she received the offer from TSS and before she accepted it, ENV offered her the position of Region Manager for the Northeast Region. She accepted the TSS offer because she saw the opportunity to have more duties and grow with TSS.
Although ENV accuses Yablonsky of violating the MRL Employee Manual (Complaint, 16th and 17th causes of action), the record does contain an MRL employment agreement executed by Yablonsky in July 1998.
D. Defendant Craig Gutmann
Defendant Craig Gutmann ("Gutmann") started working as a technician at MRL in January, 2001. He states that he was presented with the employment agreement (Moving Papers of the four individual Defendants, Ex. H) on his first day of work and was told that he had to sign it. He further states that he was never given a copy of the employment agreement. When ENV took over MRL he became "technician 921." Notwithstanding his wife's job as a dental assistant, and extra weekend jobs, his family of five lived from paycheck to paycheck. He found the TSS advertisement for employees on the internet and responded, when he learned that no raises would be forthcoming at ENV. Gutmann attended the restaurant meeting in Syosset and told TSS that he was asking for a salary of $50,000. He has been earning $42,000 at ENV. He attended the June 21 meeting at ENV, wherein he was told "the door's right there" by CEO Thamarus. It is claimed that Thamarus also said that ENV had non-accredited employees who were just as good. Thereafter, he accepted TSS's offer to work for $50,000.
Gutmann states that customer service orders are faxed to his home and he goes from home to job site every day. He does not negotiate with customers, and is not aware of prices.
E. Defendant Yvinx Maxime
Defendant Yvinx Maxime ("Maxime") is a technician who was hired by MRL in 1998.
He states that he was paid $250 to sign the employment agreement (Moving Papers of the four individual Defendants, Ex. G), and was not given a copy of it.
Maxime received accreditation from the National Sanitation Foundation in 2000. He has three children, and earned $43,000 at ENV. He was disillusioned by the lack of a raise when ENV took over. He states that he e-mailed TSS after seeing their advertisement on the internet. He attended the dinner in Syosset, and later met with a TSS representative at a hotel. Maxime asked for a salary of $50,000.
Maxime also attended the meeting of disgruntled ENV employees on June 13, and the June 21 meeting with Thamarus. When complaints were made about the small raises belatedly given, Maxime relates that Thamarus said "there's the door" and stated further that ENV could not pay more money. Maxime further states that Thamarus said he did not think the technicians' NSF accreditations were very important. After the meeting, Maxime states that Joseph Wickward, the Director of Operations for ENV, apologized for the "way the meeting had gone."
Maxime was offered $50,000 from TSS and he began work there on July 28, 2004. He works from home. Customer service orders are faxed to his house. He states that he does not develop relationships with the customers. A large percentage 90% of his work at ENV was with Yale University. He has not been back to Yale since joining TSS.
F. Defendant Carlos Baux
Defendant in Action No. 2, Carlos Baux ("Baux") is a technician accredited by National Sanitation Foundation in the certification of biological safety cabinets. He joined MRL in 1999. On his first day of employment he was instructed to sign an employment agreement with MRL (Moving Papers of the four individual Defendants, Ex. J).
Baux claims that he became frustrated with ENV, not only because of the belated, small raises, but also because ENV was making clear that the future of the business was in calibration work. Maxime and he did a small amount of calibration work from time to time. Gutmann did no calibration work. According to Baux, calibration is a separate skill, and his training was in certification.
Baux states that he learned of TSS from Alesia, who told him that TSS was willing to pay technicians in the range of $50,000. Baux' salary at the time was $38,500. He also attended the dinner at Syosset, and the second dinner in Uniondale. He attended the meeting at ENV on June 13, and the meeting with Thamarus on June 21. Baux also confirmed that Thamarus stated there was no money for raises, and said "there's the door." He received an offer from TSS at a salary of $48,500 in late June and resigned from ENV on July 19.
Baux testifies that he does not form relationships with the people in the labs where he is sent on service orders. Other than distributing TSS marketing postcards in various labs at Columbia University and Mount Sinai on one occasion, and sitting in a booth at a trade show on several occasions, he is not involved in marketing or sales.
Plaintiff's claims against Defendant Baux are set forth in Action No. 2, which according to Baux has been, or will be, consolidated with Action No. 1 .
G. Defendant Technical Safety Services, Inc.
TSS argues that its regional manager, John Dalto, solicited all new clients in the New York area. TSS insists that it did not use the former ENV employees to solicit customers of ENV. According to TSS Vice President Steven Gonzalez, TSS identified potential customers for solicitation by reviewing trade organization membership lists, mailing lists, information learned at trade shows, general industry contacts and internet searches. Gonzalez further states that TSS has learned that all of the business and financial data of ENV is fully available to each and every employee of ENV, regardless of their function, location, or status in the company.
DISCUSSION
1. Leave to Amend to Add MRL as Party Plaintiff
Defendants argue that the employment agreements at issue are agreements with MRL, and, therefore, cannot be enforced by ENV. Plaintiff's response is to seek leave to add MRL as a party Plaintiff.
Leave to amend a pleading shall be freely granted absent prejudice to the opposing party (CPLR 3025[b]), and the decision to allow amendment is committed to the court's discretion. Edenwald Contracting Co. v. City of New York, 60 NY2d 957, 959 (1983); and Aronov v. Regency Gardens Apartment Corp., 15 AD3d 513 (2nd Dept. 2005). In the interest of a complete record and resolution of all of the issues presented, this Court will allow the proposed amendment.
2. Restrictive Covenants Not to Compete
Restrictive covenants in the employment context are disfavored as there are "powerful considerations of public policy which militate against sanctioning the loss of a man's livelihood. " Columbia Ribbon Carbon Mfg. Co. v. A-1-A Corp., 42 NY2d 496, 499 (1977); Reed, Roberts Assoc., Inc. v. Strauman, 40 NY2d 303, 307 (1976); Purchasing Assoc. v. Weitz, 13 NY2d 267, 272 (1963); JAD Corp of America v. Lewis, 305 AD2d 545 (2nd Dept. 2003); and Savannah Bank, N.A. v. Savings Bank of the Fingerlakes, 261 AD2d 917, 918 (2nd Dept. 1999). The general public policy favoring robust and uninhibited competition should not give way merely because a particular employer wishes to insulate itself from competition. American Broadcasting Companies, Inc. v. Wolf, 52 NY2d 394, 404 (1981); and Walter Karl, Inc v. Wood, 137 AD2d 22, 29 (2nd Dept. 1988).
Restrictive covenants are judged by the standard of reasonableness as demonstrated in a three-prong test; to wit: if the covenant (1) is no greater than is required for the protection of the legitimate interest of the employer; (2) does not impose undue hardship on the employee; and (3) is not injurious to the public. BDO Seidman v. Hirschberg, 93 NY2d 382, 388-389 (1999). The cognizable employer interests under the first prong is limited to misappropriation of the employer's trade secrets or confidential client lists, or protection from competition by a former employee whose services are unique or extraordinary Id. at 389; and Reed, Roberts Assoc. v. Strauman, supra at 308.
Plaintiffs do not argue, nor could they, that the services of a dispatcher, an office manager, or technicians are unique or extraordinary. See gen'lly, Ken J. Pezrow Corp. v. Seifert, 197 AD2d 856 (4th Dept. 1993), lv. app. dmsd. in part and den. in part, 83 NY2d 798 (1994); Savannah Bank N.A. v. Savings Bank of the Fingerlakes, supra; and Accent Stripe Inc. v. Taylor, 204 AD2d 1054 (4th Dept. 1994). These employees certainly were not irreplaceable. Therefore, the Court turns to the analysis of trade secrets.
A trade secret is defined as any formula, pattern, device or compilation of information which is used in one's business, and which gives the owner an opportunity to obtain an advantage over competitors who do not know or use it. Ashland Mgt. Inc. v. Janien, 82 NY2d 395, 397(1993). See, Restatement of Torts § 757, comment b. A trade secret must first of all be secret. Where the information at issue is public knowledge, or could be acquired easily and duplicated, it is not a trade secret Ashland Mgt. Inc. v. Janien; supra; and Starlight Limousine Service, Inc. v. Cucinella, 275 AD2d 704 (2nd Dept. 2000).
Trade secret protection will not be accorded to customer lists where the names and addresses of the customers are readily ascertainable ( Leo Silfen, Inc. v. Cream, 29 NY2d 387) or where client information is scattered throughout the office in unlocked files. Frederic M. Reed Co., Inc. v. Irvine Realty Grp., Inc., 281 AD2d 352 (1st Dept.), lv. app. den., 96 NY2d 720 (2001). Information from publicly available sources is not entitled to trade secret protection. JAD Corp of America v. Lewis, supra. It is well settled that an employee's recollection of information pertaining to specific needs of particular customers is not confidential. Buhler v. Michael P. Maloney Consulting, Inc., 299 AD2d 190 (1st Dept. 2002); and Investor Access Corp. v. Doremus Co., Inc., 186 AD2d 401 (1st Dept. 1992), lv. app. den., 81 NY2d 706 (1993).
Here, ENV publishes its client list, in part, on its website and its Director of Operations testified that disclosure of the names of its customers was not a problem (Wickward Tr. at 124). Moreover, the customers for whose business ENV and TSS compete are readily ascertainable through sources outside the business such as the internet and trade publications. ENV does not refute TSS' claim that customer contact information, pricing and servicing information are easily obtained from internet sites or the would-be customers themselves. Ron Benoit, the ENV Northeast sales representative testified that "anybody can go on and do a search and find out who did certifications . . . Anybody can go in and get the business, even though we are in there and its our business" (Benoit Tr. at 32). In addition, Alesia has testified that all of the information he handles exists in ENV's database, which can be accessed without use of a password by any ENV employee. Suffice it to say, salary information, information about employee morale and information about employee qualifications, do not fall within the definition of "trade secret." See, Ashland Mgt. Inc. v. Janien, supra; and Restatement of Torts § 757, comment b.
The closer question is that of customer relationships. Protection of customer relationships that the employee acquired in the course of his/her employment may indeed be a legitimate protectible interest BDO Seidman v. Hirshberg, supra at 391. The problem here is one of proof. No affidavits from customers have been provided. Indeed, no names of the persons with whom the individual Defendants allegedly had relationships are submitted. CEO Thamarus testified that contacts were made with Columbia, Yeshiva, Mount Sinai and a company in Princeton, but he could not state the nature of the contact or which of the individual Defendants made the contact (Thamarus Tr. at 51). Joseph Wickward testified that ENV has a suspicion that Alesia disclosed confidential information to third parties, but that ENV had no specific information to support that suspicion (Wickward Tr. at 215). On this record, there has been absolutely no showing that the individual Defendants had, or misused, any customer relationships.
The Court notes additional problems with the employment agreements at issue. The geographic limitation in the non-compete clause, namely the 100-mile radius of "any geographic area where MRL is . . . engaged in business, or maintains sales or service representatives or employees," is unreasonably broad in scope. Rescomcleaning, Inc. v. Ulloa, 5 Misc 3d 1003 (A), 798 N.Y.S. 2d 712 (Sup Ct. Suff. Co. 2004).
Furthermore, Defendants are correct that MRL has no protectable interest in enforcing the restrictive covenants. There is no evidence that the parties intended the employment agreements to be assignable when they were originally executed. Archer Worldwide, Inc. v. Mansbach, 289 AD2d 349 (2nd Dept. 2001).
Based on the foregoing, the individual Defendants are entitled to summary judgment dismissing all causes of action based on the restrictive covenants, namely, the first 17 causes of action in the complaint in Action No. 1 and the first five causes of action in Action No. 2.
3. The Claims Against TSS for Tortious Interference
In Action No. 1, Plaintiff alleges claims against TSS for tortious interference with ENV's contracts with Alesia, Maxime, Gutmann, and Yablonsky. In Action No. 2, Plaintiff alleges a claim against TSS for tortious interference with ENV's contract with Baux. Even if the contracts at issue were with ENV, these causes of action are fatally flawed.
The culpable conduct necessary to state a cause of action to recover for interference with a contract terminable at will is "wrongful conduct," which is defined as fraudulent representations, threats or violation of a duty of fidelity owed to the plaintiff by reason of a confidential relationship between the parties. Jurlique, Inc. v. Austral Biolab Pty., 187 AD2d 637, 638-9 (2nd Dept. 1992). See also, Guard-Life Corp. v. Parker Hardware Mfg. Corp., 50 NY2d 183, 191 (1980). A relation of confidence has been found to exist where the Defendants were officers, directors or "key men" of the plaintiff corporation Duane Jones Co., Inc. v. Burke, 306 NY 172 (1954). Such a relationship has also been found to exist between a manufacturer and its distributor. A.S. Rampell, Inc. v. Hyster Co., 3 NY2d 369, 376-377 (1957).
As all of the individual Defendants were at-will employees, free to leave their employment at any time, and Plaintiff has not offered any evidence to establish fraud or threats on the part of TSS or any kind of confidential relationship, all of the causes of action for tortious interference with the respective employment agreements must be dismissed.
Similarly, in the 22nd cause of action in Action No. 1, ENV alleges a claim against TSS for tortious interference with business relations. This cause of action requires a showing that defendant's interference was accomplished by wrongful means or that defendant acted for the sole purpose of harming plaintiff. Snyder v. Sony Music Entertainment Inc., 252 AD2d 294 (1st Dept 1999). Again, there has been no evidence of any wrongful means used by TSS. ENV cannot show that TSS acted for the sole purpose of harming it. TSS' motivation, at least, in part, was to expand its operations to the Northeast. Accordingly, TSS is entitled to summary judgment dismissing the 22nd cause of action against it.
4. Misappropriation of Trade Secrets
In the 23rd cause of action in Action No. 1, Plaintiff seeks damages for Defendants' alleged misappropriation of Plaintiff's trade secrets, and, in the 24th cause of action, Plaintiff seeks injunctive relief enjoining such misappropriation. Also, in the 7th cause of action in Action No. 2, Plaintiff seeks injunctive relief with regard to alleged trade secret misappropriation by Baux. This Court has already determined that the subject matter of Plaintiff's claims does not merit trade secret status. Therefore, Plaintiff has no cause of action for misappropriation of trade secrets. The 23rd and 24th causes of action in Action No. 1, and the 7th cause of action in Action No. 2, must be dismissed. Hair Say, Ltd v. Salon Opus, Inc., 6 Misc 3d 1041 (A), 800 N.Y.S. 2d 347 (Sup Ct., Nassau Co, 2005).
5. Leave to Amend to Add Four New Causes of Action
Plaintiff seeks leave to amend its complaint in Action No. 1 to allege new causes of action for breach of fiduciary duty by Alesia, Maxime, Gutmann and Yablonsky; to wit: intentional procurement by Alesia of breach of employment contracts by Maxime, Gutmann, Yablonsky and Baux; unfair competition; aiding and abetting by Alesia and TSS of the breaches of fiduciary duty by the individual Defendants.
Although leave to amend should be freely granted, it is incumbent on the movant to make some evidentiary showing that the claim can be supported. The court must examine the underlying merit of the proposed amendment, since to do otherwise would be wasteful of judicial resources. Butt v. New York Medical College, 7 AD3d 744 (2nd Dept. 2004); and Toscano v. Toscano, 302 AD2d 453 (2nd Dept. 2003).
As to the causes of action for alleged breaches of fiduciary duty and aiding and abetting such breaches, the Court has already found that the employer/employee relationship at issue herein did not give rise to a relationship of confidence. Therefore, the Court must analyze the proposed claims as alleging breach of the duty of loyalty and aiding and abetting breach of the duty of loyalty.
An employee owes his or her employer a duty of good faith and loyalty in the performance of his or her duties. Wallack Freight Line, Inc. v. Next Day Express, Inc., 273 AD2d 462 (2nd Dept. 2000); and Maritime Fish Products, Inc. v. World-Wide Fish Products, Inc., 100 AD2d 81 (1st Dept. 1984). In the absence of a restrictive covenant, an employee may freely compete with a former employer unless trade secrets are involved or fraudulent methods such as physically taking and copying files are employed. Pearlgreen Corp. v. Yau Chi Chu, 8 AD3d 460 (2nd Dept. 2004); and Starlight Limousine Service Inc. v. Cucinella, supra. An employee may create a competing business prior to leaving his employer without breaching any duty unless he makes improper use of the employer's time, facilities, or proprietary secrets in so doing. Wallack Freight Line, Inc. v. Next Day Express, Inc., supra; and Schneider Leasing Plus, Inc. v. Stallone, 172 AD2d 739 (2nd Dept.), app. dism., 78 NY2d 1043 (1991). See also, Fredric M. Reed Co, Inc. v. Irvine Realty Grp., Inc., supra.
Here, again, trade secrets are not involved. The only alleged use of ENV's facilities was the Sunday night meeting of disgruntled employees, which took place before the individual Defendants decided to leave ENV. As the office was not open for business on Sunday night, and it appears that the office was used only as a meeting place, this one-time use of the office space cannot be seen as rising to the level of a breach of the duty of loyalty.
As to theft of files or lists, the only employee as to whom such allegations are seriously made is Alesia. Brian Walcott, an ENV field supervisor, who did not leave ENV for TSS, has avered that he "believes" Alesia "took ENV's schedule and database with him." This belief is based upon the circumstantial evidence that after Alesia left his desk had been cleared out, the technicians' schedule was missing and ENV customers were solicited around the service due dates (Walcott aff., ¶ 17).
The Court notes that Walcott was made a counteroffer by ENV and his salary was increased to $56,000 (Wickward Tr. at 285).
Alesia categorically denies that he provided TSS with any information about ENV customers, customer contacts, customers' special needs, maintenance schedules or pricing data. He states that ENV's claims that he contacted the Center for Disease Control, Mt. Sinai, Yeshiva University, Yale University and Pfizer are baseless. At his deposition, Thamarus testified that he had no information to lead him to believe that ENV lost any business to Columbia, Mount Sinai, Yeshiva or a company in Princeton to TSS (Thamarus Tr. at 46). Director of Operations Wickward testified in May, 2005, that he had no specific information that would support his suspicion that Alesia disclosed ENV's confidential information to a third party (Wickward Tr. at 215). While ENV Technical Manager Phillips refers to Exhibit O annexed to the moving papers by the four individual Defendants for information about lost business, no connection is made between these customers and the individual Defendants.
On this record, the Court is compelled to find that ENV has failed to make the requisite evidentiary showing of some underlying merit to the proposed cause of action against Defendant Alesia for breach of the duty of loyalty. Walcott's testimony, like that of Thamarus and Wickward, establishes suspicion only. Suspicion alone does not suffice. See, Ray v. Brooklyn Union Gas, 304 AD2d 738 (2nd Dept.), lv. app. den., 100 NY2d 510 (2003); and Zuckerman v. City of New York, 49 NY2d 557 (1980). There has been no evidence presented to support Plaintiff's charge that Alesia, or any of the other individual Defendants, unlawfully removed ENV's customer database containing allegedly confidential information.
Plaintiff's proposed cause of action against Alesia, for intentional solicitation "to procure the breaches of contract by Mazime, Gutmann, Yablonsky and Baux," is undermined by the absence of any employment contracts between the individual Defendants and ENV and the failure to demonstrate that the parties intended the employment agreements with MRL to be assignable.
Plaintiff's proposed cause of action for unfair competition appears to be based upon alleged "raiding and/or soliciting the individual Defendants to depart from Plaintiff's employ with intent to harm Plaintiff." The inducement of an at-will employee to join a competitor is not actionable, unless dishonest means are employed, or the solicitation is part of a scheme designed solely to produce damage. Headquarters Buick-Nissan, Inc. v. Michael Oldsmobile, 149 AD2d 302 (1st Dept. 1989). On this motion, there has been no showing of any dishonest means, nor has there been any showing of intent to harm Plaintiff. All of the individual Defendants left ENV for more pay and better career growth opportunities. TSS was looking to expand its into the Northeast. A loss of 5 people in a national company is not even roughly comparable to the raid of almost all the skilled employees and a majority of the workforce in Duane Jones Co. Inc. v. Burke 306 NY 172 (1954).
After all the discovery that has taken place in this action, Plaintiff still cannot produce evidence that the individual Defendants exploited the customer contact and pricing information that to which they were exposed while employed by Plaintiff. Under these circumstances, Plaintiff has failed to demonstrate that this proposed cause of action has demonstrable merit.
Based on the foregoing, Plaintiff has failed to demonstrate that any of the four new proposed causes of action have merit. Accordingly, the motion for leave to amend the complaint to add these causes of action must be denied.
6. The Counterclaim
Finally, Plaintiff cross-moves for summary judgment dismissing TSS' counterclaim for violation of General Business Law § 340. This statute prohibits contracts or agreements for monopoly or in restraint of trade. In its counterclaim, TSS alleges that ENV conspired with MRL to restrict the competitive employment opportunities of the individual Defendants and thereby restrict competition.
A parent corporation and its wholly-owned subsidiaries are considered a single entity under antitrust principles and, therefore, cannot engage in anticompetitive acts North Atlantic Utilities Inc. v. Keyspan Corp., 307 AD2d 342 (2nd Dept.), lv. app. den. 1 NY3d 503 (2003). Consequently, any contract or agreement between ENV and MRL does not run afoul of General Business Law § 340. For this reason, the application by TSS for partial summary judgment on its counterclaim must be denied, and Plaintiff's cross-motion for summary judgment dismissing the counterclaim must be granted.
Accordingly, it is,
ORDERED, that the motion by Defendant Phillip Alesia and TSS for summary judgment dismissing the complaint in its entirety is granted; and it is further,
ORDERED, that the motion by TSS for partial summary judgment on its counterclaim against ENV on the issue of liability is denied; and it is further,
ORDERED, that the motion by Plaintiff for leave to amend the complaint to allege four additional causes of action is denied; and it is further,
ORDERED, that the cross-motion by Plaintiff for summary judgment dismissing TSS' counterclaim and for leave to amend the complaint to add MRL as a party Plaintiff is granted; and it is further,
ORDERED, that the motion by Defendants Myra Yablonsky, Craig Gutmann, Yvinx Maxime, and Carlos Baux, for summary judgment dismissing all causes of action against them is granted.
This constitutes the decision and Order of the Court.