Syncom Industries, Inc. v. Wood

Facts

Wood executed a key employment contract in June 2001 to serve as Plaintiff’s vice-president of sales, and Hogan executed a similar agreement in September 2001 to serve as an area manager and later a regional manager. Each contract was for three years and contained two restrictive covenants that prevented the employee from directly or indirectly soliciting business from any of Plaintiff’s customers while employed by Plaintiff and for 36 months after termination. Additionally, the covenants stated that employees would not become interested in or associated, directly or indirectly, as principal, agent, or employee, with any person, firm, or corporation which might solicit business from such customers.

In November 2001, while still employed by Plaintiff, Defendants began plans to establish a new movie theater cleaning company to compete with Plaintiff. During December 2001, Defendants negotiated with three of Plaintiff’s customers and lined them up as customers once they departed from Plaintiff. On January 02, 2002, Wood’s superiors at Plaintiff confronted him about their suspicions that he was forming a rival company, but Wood denied it and said he would consider doing so.

After the meeting on January 02, Plaintiff’s VP of operations sent Wood a memo that Wood would be suspended without pay for a week, but Wood resigned on January 14, 2002. Two days after quitting, Wood filed articles of organization for Big E. Within two weeks of Wood’s resignation, Big E was performing services for three former customers of Plaintiff, and by the end of February, Big E displaced Plaintiff at several theaters.