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Getman v. USI
Holdings Corp., 19 Mass. L. Rep. 679, 2005 Mass. Super.
LEXIS 407
(Sept. 2, 2005) (Gants, J.). |
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This is a perfect example of a court
taking a “blue pencil” to the non-competition and
non-solicitation provisions of an employment contract.
Getman, an insurance agent, signed an employment
agreement in 1989 when he was employed by Hastings
Tapley. Hastings was acquired by USI Holdings in 2003.
Getman left to join a competing insurance agency in 2005
and his new employer brought a complaint for declaratory
relief in order to obtain a judicial determination of
the enforceability and scope of the non-competition and
non-solicitation provisions.
The Court refused to enforce the
non-competition provision, reasoning that Getman agreed
not to compete with Hastings Tapley, not the much larger
USI that had acquired Hastings Tapley. As to the
non-solicitation provision, the Court “blue penciled”
the restriction to strike the appropriate balance
between protecting USI’s good will and taking the good
will earned by Getman individually. First, the Court
refused to enforce the provision prohibiting Getman from
soliciting any of USI’s customers. The Court held that
such a provision was broader than necessary to
reasonably protect its legitimate business interests,
and therefore permitted Getman to solicit customers of
USI with whom he personally had no relationship. The
Court enforced the provision insofar as it prohibited
Getman from soliciting his own |
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customers with whom he had personally
worked while at USI. The Court, however, reduced the
length of the contract from three years to one year,
reasoning that one year was sufficient for USI to show
Getman’s former customers that it was USI’s operations
as a whole, and not Getman’s services, that led to
superior service.
The Court then held that certain conduct
in which Getman had engaged did not constitute
“solicitation.” Getman did not solicit USI’s customers
by sending an announcement that he was leaving USI to
join his current employer. Nor did Getman solicit USI’s
customers when, in response to contact initiated by the
customer, he explained why he left USI to join his new
employer and provided a general description of the work
performed by his new employer. The Court held that the
same discussion “may potentially constitute
solicitation” if Getman were to initiate such
discussion.
Finally, the Court preliminarily held
that Getman breached the agreement by emailing a list of
his former clients to his personal computer, along with
such customers’ essential insurance information. The
Court, however, refused to sanction Getman since it
would not have been a breach of his fiduciary duty to
notify his clients of his departure from USI. Instead,
the Court ordered Getman to return the information to
USI or provide an affidavit stating that the information
had been destroyed.
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