Massachusetts Judge: “Goliath” Can’t Enforce Nonsolicit Against “David”

While it remains quite difficult to predict whether a Massachusetts judge will enforce any given restrictive covenant in a particular case, close observers of recent Massachusetts noncompete decisions would note that judges increasingly are reluctant to enforce post-employment restrictions against "the little guy" — as contrasted with senior, highly-compensated managers.  A recent insurance-industry dispute exemplifies this trend.  In Banc of America Corporate Insurance Agency, LLC v. Verille, Banc of America’s corporate insurance agency sought an injunction enforcing a client non-solicitation restriction against a former employee, Mr. Verille, who was described as a "Producer" and who took a similar position with a competitor.  Central to the injunction request was evidence that the employee’s new company was involved in providing services to two of the clients previously serviced by the employee.  Verille did not dispute that his new company was providing competitive services to those clients and did not dispute that he had spoken with those clients at the time of his departure.  He denied, however, that he had ever solicited those clients to shift to his new company and asserted that they independently decided to move upon learning of his departure.  Judge Thomas Connors found that Banc of America’s allegation of solicitation was undermined by affidavits from the clients at issue stating that Verille had not solicited them. 

However, Judge Connors found that the agreement at issue prohibited not only solicitation but also apparently barred Verille from servicing such clients on behalf of a third party, in this case his new employer.  Nevertheless, the court accepted Verille’s argument that the restriction should not be enforced, for several reasons.  First, the court concluded that there was some question whether Banc of America could articulate a good will interest with respect to the clients at issue, suggesting that the good will in this instance belonged either to its predecessor, Fleet Bank’s insurance company, or Verille himself.  In addition, Judge Connors concluded that Banc of America’s claim of irreparable harm was not compelling.  On this issue, Judge Connors described Banc of America as "a major corporation with a significant client base," which brought the case based on the loss of "just three clients, a number later whittled down to two."  Under the circumstances, the judge concluded, Banc of America’s legal recourse was only a claim for money damages, rather than an injunction that would affect Virelle’s "ability to pursue a livelihood."

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