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GARBER BROS., INC. v. EVLEK

September 29, 2000

GARBER BROS, INC., PLAINTIFF,
V.
ISMAIL EVLEK, DEFENDANT.



The opinion of the court was delivered by: Amon, District Judge.

MEMORANDUM AND ORDER

Introduction

Before the Court is Plaintiff Garber Bros., Inc.'s ("Garber") application for a preliminary injunction against its former employee, Defendant Ismail Evlek. Garber filed its Complaint and moved for a preliminary injunction by Order to Show Cause on September 11, 2000.*fn1 After an initial hearing on September 15, 2000, the Court issued a temporary restraining order: (1) enjoining Evlek from directly or indirectly soliciting any of Garber's customers that Evlek had any contact with during the time of his employment by Garber; (2) directing that Evlek return to Garber all of its property within his possession; and (3) directing Evlek not to attempt to recruit any Garber employees to work for his new employer, Howard Levinson Associates ("Levinson").

The Court held an evidentiary hearing on September 22, 2000, at which the defendant Evlek, Joseph Normand, a sales manager for Garber, and Marty Glick, a sales manager for Levinson, testified, and heard argument from the parties on September 26, 2000. Upon consideration of the evidence presented, the Court finds that Garber has demonstrated that it is likely to succeed on the merits of its breach of contract claim and that it will suffer irreparable harm absent the relief requested. Accordingly, Garber's motion for a preliminary injunction, as modified by the Court herein, is granted.

Findings of Fact

The following are the Court's findings of fact pursuant to Fed.R.Civ.P. 52(a):

Plaintiff Garber, a Massachusetts corporation, is a wholesale service company that services gas stations and convenience stores located in Connecticut, Maine, Maryland, Massachusetts, New Hampshire, New York, New Jersey, Rhode Island, and Virginia, and sells, among other things, tobacco, candy, groceries, and frozen foods to those stores. Cigarettes, whose prices are regulated in New York, account for 75 to 80 percent of Garber's sales volume.

Defendant Ismail Evlek was a sales representative for Garber from November 1, 1999 until September 5, 2000. Evlek's job responsibilities included ordering products for customers, dealing with customer problems, collections, and the overall maintenance and development of customer accounts. On September 6, 2000, Evlek went to work for a direct competitor of Garber's, Levinson, as a sales representative. Levinson operates in Connecticut, Massachusetts, New Jersey, New York, and Rhode Island and provides similar services and products to the same types of customers as Garber. Evlek entered into an Employee Confidentiality and Noncompetition Agreement ("Agreement") with Garber when he accepted his employment that contains three relevant restrictive covenants. First, the Agreement contains a "Confidentiality Covenant," which essentially provides that Evlek will maintain the confidentiality of Garber's proprietary information, including the "identity of all customers, vendors, suppliers and prospects and . . . pricing methods and other confidential trade secrets and techniques" and return any materials containing such information when his employment was terminated. (Agreement ¶ 1.)

Second, the Agreement contains a "Noncompetition Covenant" that prohibits Evlek from working in a business that competes with Garber for two years after the termination of his employment in "any area where any Garber customers are located and/or in which Garber now or at any time during the term of this Agreement conducts business and in any even in any geographical location within 500 miles of Stoughton, Mass." (Agreement ¶ 2.)

Finally, the Agreement contains a "Non-solicitation Covenant," which provides that Evlek, for a period of two years after the termination of his employment, "will not directly or indirectly . . . call upon, solicit, divert or take away or attempt to solicit, divert or take away, any of the customers, business, suppliers, or prospective customers, business or suppliers of Garber" and "will not solicit or discuss with any employee . . . of Garber the potential employment or other engagement of such Garber employee . . . by any business, firm, company, partnership, association, corporation or any other entity other than for the benefit of Garber. . . ." (Agreement ¶ 3).

Garber provided Evlek with a week of training at its headquarters in Stoughton, Massachusetts when he first started, and thereafter was provided with on the job training by Lou Troilo, an assistant sales manager for Garber, and Joseph Normand, a sales manager for Garber and Evlek's direct supervisor. Evlek was given a sales territory that encompassed Long Island and the five boroughs of New York City and consisted of approximately 29 individual gas stations and convenience stores that had been assigned to Evlek by Garber, 16 that were part of the "Keshtgar" chain, 2 that were part of the "Zorbas" chain, and 11 independent customers.

In the process of developing the Erol and Adnan and Empire chains as customers, Evlek introduced the owners of those chains to Normand. Normand assisted Evlek in developing the Erol and Adnan and Empire chains as customers for Evlek, including discussing those accounts with Evlek, having dinner with the principals of the Erol and Adnan chain and attending a meeting with the principals of the Empire chain, and helping with the merchandising of Erol and Adnan stores.

The process of developing customers for Garber is time consuming and costly as the business of supplying gas stations and convenience stores is highly competitive. For every ten prospects approached by Garber sales representatives, approximately one customer is obtained, and it takes 6 to 12 weeks to turn such a prospect into a customer. All told, Garber spends several thousand dollars to develop a customer.

In order to attract and retain customers, Garber provides a number of services to its customers. For instance, Garber sends merchandising crews to its customers to provide marketing, display, and promotional services in each gas station or convenience store, loans food services equipment, such as coffee makers and hot dog roller grills, to its customers free of charge, provides its customers with reports detailing order volumes and other business information, and runs various promotional programs that reward customers with free products, gifts, and vacations. In addition, Garber extends to its customers credit with which to make their purchases and assists customers in receiving special discounts and rebates from manufacturers.

Garber's sales representatives are the primary contact between Garber and its customers. Garber's representatives meet with its customers on a weekly basis at the customers' stores, and are often the first contact that prospective customers have with Garber. Indeed, one of a sales representative's job responsibilities is to develop new customers for Garber. In addition to paying his salary, Garber provided Evlek, as it does all of its sales representatives, with considerable support, including training them, developing and distributing to them various sales and presentation materials, assigning them established customers, and providing them with business cards, voice mail services, pagers, and hand-held scanning computers. Garber also reimbursed the ...


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