Allegis Grp., Inc. v. Zachary Piper, LLC

Allegis Grp., Inc. v. Zachary Piper, LLC, 2014 NCBC 37.

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
COUNTY OF DURHAM 12 CVS 2984

ALLEGIS GROUP, INC., AEROTEK, )
INC. and TEKSYTEMS, INC., )
)
Plaintiffs, )
)
v. )
)
ZACHARY PIPER LLC, ZACHARY ) ORDER ON MOTION FOR
PIPER, LLC NORTH CAROLINA, ) SUMMARY JUDGMENT
PIPER ENTERPRISE SOLUTIONS )
NORTH CAROLINA, LLC, JUSTIN )
JORDAN, DANIEL CURRAN, and )
MICHAEL NICHOLAS, )
)
Defendants. )
)

{1} THIS MATTER is before the court on Defendants’ Motion for Summary
Judgment (“Motion”) pursuant to Rule 56 of the North Carolina Rules of Civil
Procedure (“Rule(s)”). For the reasons stated below, Defendants’ Motion is
DENIED.

Littler Mendelson, P.C. by Ryan R. Crosswell, Paul J. Kennedy (pro hac vice),
and Jacqueline C. Johnson (pro hac vice) for Plaintiffs.

Jordan Price Wall Gray Jones & Carlton PLLC by Lori P. Jones and Paul T.
Flick, and Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. by Jillian M.
Collins (pro hac vice), Katherine O. Beattie (pro hac vice), and Donald W.
Schroeder (pro hac vice) for Defendants.

Gale, Judge.

I. NATURE OF THE MATTER

{2} This is one of two lawsuits filed following the departure of five
employees from their employment with Plaintiff Aerotek to accept employment with
companies formed by Defendant Jordan, a former high-level Aerotek employee. The
other litigation is before the United States District Court for the District of
Maryland, (“Maryland Litigation”). The Maryland court issued a summary
judgment order relating to breach of certain employment contracts. The same
employment contracts underlie Plaintiffs’ tortious interference claim in this
litigation. Allegis Grp., Inc. v. Jordan, No. GLR-12-2535, 2014 U.S. Dist. LEXIS
78567 (D. Md. June 10, 2014). The court addresses the effect of that order below.
Regardless of whether the Maryland court has found certain breaches of contract,
material issues of fact remain regarding claims pending before this court that
preclude entry of summary judgment.

II. PROCEDURAL
PROCEDURAL HISTORY

{3} Plaintiffs initiated this action on May 3, 2012. The matter was
designated as a mandatory complex business case on May 16, 2012, and assigned to
the undersigned on May 21, 2012.
{4} Plaintiffs filed an Amended Complaint on June 13, 2012, bringing
claims for (1) tortious interference with contract; (2) misappropriation of trade
secrets; (3) unfair and deceptive trade practices; and (4) breach of fiduciary duties.
By its February 25, 2013 Order, the court dismissed the breach of fiduciary duty
claims.
{5} Plaintiffs have also requested leave to amend their Amended
Complaint in order to abandon trade secret claims, some of which were ruled on in
the Maryland Litigation. Consequently, the court does not address Plaintiffs’ trade
secret claims in this Order.1
{6} On August 30, 2013, Defendants moved for summary judgment on all
remaining claims. Following full briefing, the court heard oral argument on March
5, 2014. The court subsequently accepted letters regarding the Parties’ positions on
the effect of the June 10, 2014 decision in the Maryland Litigation. On July 17,
2014, Plaintiffs filed their proposed Second Amended Verified Complaint. Except as

1 The deadline for responding to Plaintiffs’ Motion for Leave to File Second Amended Verified

Complaint is August 11, 2014, should Defendants wish to oppose the motion.
to trade secret claims, the proposed amendment does not affect the Motion, which is
now ripe for disposition.

III. STATEMENT OF RELEVANT FACTS

{7} The court does not make findings of fact in ruling on a motion for
summary judgment. Hyde Ins. Agency, Inc. v. Dixie Leasing Corp., 26 N.C. App.
138, 142, 215 S.E.2d 162, 164–65 (1975). For context, the court summarizes the
following facts which it believes are either uncontested or are construed in
Plaintiffs’ favor as the party opposing summary judgment.

A. The Parties

{8} Aerotek, Inc. (“Aerotek”), TEKsystems, Inc. (“TEKsystems”), and
Allegis Group, Inc. (“Allegis”) (collectively, “Plaintiffs”) are all Maryland
corporations authorized to do business in North Carolina. (Am. Compl. ¶¶ 2, 4–5.)
Allegis is the parent company of Aerotek and TEKsystems, (Am. Compl. ¶ 5,) each
of which provides staffing services throughout the United States. (Am. Compl. ¶ 15;
Mem. Law Supp. Defs.’ Mot. Summ. J. (“Defs. Supp. Br.”) 4–5.)
{9} Defendant Zachary Piper, LLC (“ZP”) is a Virginia limited liability
company with a registered agent in Raleigh, North Carolina and regularly conducts
business in North Carolina. (Am. Compl. ¶¶ 6–7; Answer ¶¶ 6–7.)
{10} Defendant Zachary Piper, LLC North Carolina (“ZP-NC”) is a North
Carolina limited liability company with a principal office in Durham, North
Carolina. (Am. Compl. ¶ 8; Answer ¶ 8.)
{11} Defendant Piper Enterprise Solutions North Carolina, LLC (“PES-
NC”) is a North Carolina limited liability company with a principal office in
Durham, North Carolina (Am. Compl. ¶ 9; Answer ¶ 9.) Piper Enterprise Solutions,
LLC (“PES-VA”), a non-party, is a Virginia limited liability company. PES-NC and
PES-VA are occasionally referred to as “PES.”
{12} The court refers to ZP, ZP-NC, PES-NC, and PES-VA collectively as
“the Piper Entities.”
{13} Defendant Justin Jordan (“Jordan”) resides in Virginia and is the
founder, President, and Chief Executive Officer of the Piper Entities. (Am. Compl.
¶ 10; Answer ¶ 10.) Before founding the Piper Entities, Jordan worked for Aerotek
and its predecessor for approximately thirteen years until his resignation as
Regional Vice President in February 2009. (Am. Compl. ¶ 27; Answer ¶ 27.) In that
position, Jordan managed a team of national salespersons in Aerotek’s Mid-Atlantic
Region. (Jordan Aff. ¶ 18.)
{14} Defendant Daniel Curran (“Curran”) is a North Carolina resident.
(Am. Compl. ¶ 11; Answer ¶ 11.) Curran resigned from his position as Aerotek’s
Director of Strategic Sales for Government Services in September 2011. (Am.
Compl ¶ 28; Answer ¶ 28; Curran Aff. ¶ 7.)
{15} Defendant Michael Nicholas (“Nicholas”) is a resident of North
Carolina. (Am. Compl. ¶ 12; Answer ¶ 12.) Nicholas resigned from his position as
Aerotek’s Director of Strategic Sales for the Mid-Atlantic Region in January 2012.
(Am. Compl. ¶ 29; Answer ¶ 29; Nicholas Aff. ¶¶ 6–8.)
{16} Chris Hadley (“Hadley”), Ana Cristina Neto Rodrigues (“Rodrigues”),
and Alexander Ferrello (“Ferrello”) are not parties to the North Carolina litigation.
Each resigned from his or her position at Aerotek to begin employment at one of the
Piper Entities. (Am. Compl. ¶49, 51; Defs. Supp. Br. 8–9.) The court refers to
Curran, Nicholas, Hadley, Rodrigues, and Ferrello collectively as “the Former
Employees.”
{17} Hadley worked at Aerotek and its predecessor entity from February
2001 to April 2012. (Am. Compl. ¶ 49; Defs. Supp. Br. 8.) Hadley had a high-level
position and participated in Allegis’ Incentive Investment Plan, reserved for
management or highly-compensated employees. (Am. Compl. ¶ 31; Hadley Aff. ¶¶
7, 18.) After resigning from Aerotek, Hadley began work at PES-NC. (Am. Compl.
¶ 51; Hadley Aff. ¶ 17.)
{18} Rodrigues worked at Aerotek from January 2005 to March 2012, where
she served as a recruiter and then account manager. (Am. Compl. ¶¶ 31, 49;
Rodrigues Aff. ¶¶ 2–3, 5–6.) After resigning from Aerotek, Rodrigues began work at
PES-VA. (Rodrigues Aff. ¶ 3.)
{19} Ferrello worked for Aerotek from July 2007 to March 2012, where he
served in various recruiting positions. (Am. Compl. ¶¶ 31, 49; Ferrello Aff. ¶¶ 4–9,
15.) Three weeks after leaving Aerotek, Ferrello began working at PES-VA.
(Ferrello Aff. ¶ 23.)
{20} Plaintiffs’ first claim against Jordan, ZP, ZP-NC, and PES-NC is that
these Defendants tortiously interfered with the Former Employees’ contracts and
other restrictive covenants protecting Plaintiffs’ interests. (Am. Compl. ¶¶ 79–90.)

B. The Allegis Businesses

{21} The nature of the respective businesses of Aerotek and TEKsystems
and the effect of the scope of those respective businesses on the contracts and
covenants is disputed, and specifically, whether those contracts and covenants
extend to protecting TEKsystems because it, but not Aerotek, is engaged in IT
staffing. (Compare Opp’n Br. 15, with Supp. Br. Ex. 11.)
{22} Aerotek and TEKsystems locate, select, screen, mobilize, and place
candidates in employment positions throughout the United States. (Am. Compl. ¶
15.) Each entity claims to have developed extensive knowledge and methods in the
professional placement field, including identifying companies with a need for
professional placement services, maintaining close business relationships with
those companies, providing quality and innovative services to clients, and setting
competitive prices. (Am. Compl. ¶ 17.)
{23} Aerotek and TEKsystems largely focus on different industry segments.
Aerotek “concentrates primarily on a number of technical fields, including, but not
limited to satisfying the scientific, software engineering, and administrative needs
of its clients.” (Am. Compl. ¶ 15; Defs. Supp. Br. 5.) Aerotek also provides staffing
for certain governmental agencies and government contractors. (Am. Compl. ¶ 15;
Defs.’ Reply Pls.’ Resp. Mot. Summ. J. (“Defs. Reply Br.”) 12–13.) TEKsystems
targets businesses with information technology and communications staffing needs.
(Am. Compl. ¶ 15; Defs. Supp. Br. Ex. 11.) As explained below, while Aerotek’s
emphasis may not be on IT staffing, it contends that it does do IT staffing, thereby
triggering the restrictive covenants to which the Former Employees agreed.

C. The Former Employees’ Work at Aerotek

{24} While at Aerotek, the Former Employees participated in training,
including attending executive-level conferences where Aerotek’s “key confidential
business and financial information was discussed[.]” (Am. Compl. ¶¶ 36–37, 55;
Answer ¶¶ 36–37, 55; Opp’n Br. Exs. 29 ¶ 66, 54.) Plaintiffs contend the Former
Employees further had access to confidential documents which Defendants have, or
inevitably will impermissibly disclose or use.

1. Employment Agreements

{25} Each Former Employee signed an Aerotek Employment Agreement.
(Am. Compl. ¶¶ 30, 31; Answer ¶ 30; Curran Aff. ¶ 15; Nicholas Aff. ¶ 15; Hadley
Aff. ¶ 14; Rodrigues Aff. ¶ 11; Ferrello Aff. ¶ 13.) Each covenanted not to divulge
Aerotek’s confidential information. (Pls. Opp’n Br. Ex. 11, Employment Agreements
§ 6.) The Employment Agreements define Confidential Information as “information
not generally known by the competitors of Aerotek or the general public concerning
Aerotek’s Business that Aerotek takes reasonable measures to keep secret.” (Id.)
Unless the Confidential Information is also a trade secret, the restriction expires
three years after the employee’s termination. (Id.)
{26} The Employment Agreements for Nicholas, Rodrigues, and Ferrello
prohibit competing with Aerotek for eighteen months after termination within a 50-
mile radius from any office in which the employee worked during the two-year
period prior to termination. (Pls. Opp’n Br. Ex. 11, Rodrgiues Employment
Agreement § 3, Ferrello Employment Agreement § 3, Nicholas Employment
Agreement § 3.) These agreements also prohibit communications with any Aerotek
customers about whom the employee learned confidential information during the
two years preceding his or her termination for the purpose of (1) entering into a
competitive business relationship with them or (2) taking business away from
Aerotek. (Opp’n Br. Ex. 11, Rodrigues Employment Agreement § 4(a)(i–ii), Ferrello
Employment Agreement § 4(a)(i–ii), Nicholas Employment Agreement § 4(a)(i–ii).)
{27} The Employment Agreements for Curran and Hadley contain similar
restrictive covenants, but extend to a 100-mile radius from the offices at which each
worked, reported to, or had responsibilities over during the two years prior to
termination, and in “the geographic areas where [the employee] assisted Aerotek in
marketing its services during the two[-]year period prior to termination of
employment where such assistance involved customers for which [the employee]
had . . . responsibilities.” (Curran Employment Agreement § 4(a)(i–ii); Hadley
Employment Agreement § 4(a)(i–ii).)

2. IIP Agreement
Agreements
greements

{28} Jordan, Nicholas, Curran, and Hadley each elected to participate in
Allegis’s Incentive Investment Plan (“IIP”) and received payments pursuant to the
Plan. (Pls. Opp’n Br. Ex. 7; Am. Compl. ¶¶ 31, 42–44; Answer ¶¶ 42–44; Hadley
Aff. ¶¶ 7, 18.) The IIP provides for post-employment payments, conditioned on
agreement to and compliance with certain restrictions. (IIP § 9.)
{29} The IIP has a broader reach to businesses within the Allegis family. In
exchange for post-employment payments, the IIP bars participants from entering
into any lines of business in which Aerotek, TEKsystems, or Allegis (collectively
“Allegis Entities”) engaged or was preparing to engage and in which the participant
“performed work or obtained knowledge and information during the two (2) year
period preceding his or her Separation from Service.” (IIP § 9(1).) An IIP
participant is further barred from soliciting any of the Allegis Entities’ clients about
whom the participant obtained knowledge through employment with one of the
Allegis Entities, (IIP § 9(2),) and from soliciting any of the Allegis Entities’
customers or employees in those lines of business. (IIP § 9(3–5).) According to the
IIP, participants forfeit payments if they “[u]se, divulge or disclose [the Allegis
Entities’] proprietary, trade secret or confidential information.” (IIP §9(6).)
{30} The IIP restricts participants for thirty (30) months following
termination of employment and encompasses a 250-mile geographic radius from any
office where the employee worked during the two years prior to termination. (IIP §
9.) The covenants extend to any Allegis line of business about which the participant
obtained knowledge or information. (IIP § 9.)2

D. The Piper Entities’
Entities’ Business and Activities

{31} Shortly after resigning from Aerotek, Jordan formed ZP and registered
it with the Department of Defense Central Contract Registry. (Jordan Aff. ¶ 31.)
Jordan then worked on a business plan for ZP, set up its infrastructure, and hired
employees, but contends he did not begin conducting business as ZP until February
2011. (Jordan Aff. ¶¶ 33–36.) Jordan formed PES-VA, ZP-NC and PES-NC shortly
after the restrictive covenants in his IIP Agreement expired in August 2011. (Am.
Comp. ¶ 46; Answer ¶ 46; Jordan Aff. ¶¶ 34, 38–39, 41.)
{32} PES-VA and PES-NC focus on IT staffing, IT infrastructure, software
development, and IT systems engineering, specializing in technology management,
project management, application development, (Jordan Aff. ¶¶ 4, 50,) and IT
infrastructure and communications support services for Fortune 500 businesses,
(Jordan Supplemental Aff. ¶6.) Defendants admit that PES directly competes with
TEKsystems but deny that PES’s line of business overlaps with Aerotek’s or that
the work by any of the Former Employees affects Aerotek or customers or business
lines about which the Former Employees were informed as a result of their Aerotek
employment. (Defs. Supp. Br. 6–7.) The significance is that Defendants contend
that Former Employees may work for PES without violating their Employment
Agreements.
{33} All of the Former Employees participate in the Piper Entities’ Profits
Interest Plan, which is based on all of the Piper Entities’ profits. (Opp’n Br. Ex. 27.)

2 The Maryland court held that the IIP restrictions include customers shared between Aerotek and

TEKsystems for whom each provided different staffing services if the participant formed a working
relationship with such a customer. Allegis Grp., Inc., 2014 U.S. Dist. LEXIS 78567, at *45–48.
{34} ZP is a defense subcontractor that performs specialized services in
“three core areas: intelligence analysis and support, information technology and
communications, and cyber solutions.” (Jordan Aff. ¶¶ 45–46.)

E. The Former Employees’
Employees’ Departure from Aerotek
Aerotek and Subsequent
Employment with the Piper Entities

{35} Jordan approached Curran, Nicholas, Hadley, and Ferrello with formal
employment offers between August 2011 and January 2012. (Defs.’ Resps. Pls.’
First Set Interrogs. (“Defs. First Interrogs. Resp.”) No. 3.) Rodrigues contacted
Jordan regarding employment in December 2011; and Jordan began discussions
with her in January 2012. (Defs. First Interrogs. Resp. No. 3.) Plaintiffs contend,
with some evidentiary support, that the Former Employees coordinated in order to
stagger their resignations. (Opp’n Br. Exs. 18, 19.)
{36} Curran became PES-NC’s Director of Business Development in
Raleigh, North Carolina on September 16, 2011. (Am. Compl. ¶ 48; Answer ¶ 48.)
Nicholas resigned from Aerotek on January 3, 2012 to become PES-NC’s Vice
President of IT Solutions. (Am. Compl. ¶ 49; Nicholas Aff. ¶¶ 17, 27.)
{37} Rodrigues and Ferrello joined PES-VA to work in the IT field.
(Rodrigues Aff. ¶ 33; Ferrello Aff. ¶ 23.) Rodrigues is PES-VA’s Vice President of IT
Infrastructure and Applications. (Rodrigues Aff. ¶ 33.) Ferrello is PES-VA’s
Director of Recruiting. (Ferrello Aff. ¶ 23.) Hadley left Aerotek in early April 2012
to become PES-NC’s Vice President of IT Infrastructure and Applications. (Hadley
Aff. ¶ 28.)
{38} Rodrigues and Ferrello work approximately ten miles away from their
former offices at Aerotek, within the 50-mile radius of the covenants provided in
their Employment Agreements. The parties have suggested a dispute whether
Hadley, Nicholas, and Curran maintain their office outside the IIP Agreements’
250-mile radius. PES-NC offices are 260 miles by car from the Aerotek office but
220 miles by “how the crow flies.” The record does not fully address the more
controlling question: whether their actual activities extend into the covenants’ radii
during their term.
{39} The Former Employees at least occasionally perform work for ZP even
though they are formally employed with either PES-NC or PES-VA. (Opp’n Br. 30–
31.) Curran testified that he was Vice-President of both ZP and PES. (Curran Dep.
77:11–12.) Defendants state this work is limited to certain government contracts
and if the client is already familiar with ZP, but deny that the Former Employees
do any staffing outside of “the IT arena.” (Jordan Supplemental Aff. ¶¶ 9, 13–14.)
{40} Plaintiffs dispute that the Former Employees’ new responsibilities are
confined to the IT arena, but further assert that any such limitation does not
insulate their liability, for Aerotek is also involved in competitive IT and
engineering areas. Aerotek’s Communications Engineering division staffs at least
four positions that PES also staffs: (1) .Net Developers, (2) Data Analyst, (3) Java
Software Engineers, and (4) Software Engineers. (Compare Hilger Aff. ¶ 19, with
Dunn Aff. (attaching screenshots of PES’s job postings).)
{41} Defendants hotly dispute whether Aerotek is sufficiently involved in IT
to trigger the application of the Former Employees’ restrictive covenants.
{42} During his employment at Aerotek, Curran worked with Northup
Grumman, SAIC, Raytheon Co. (“Raytheon”), DRS Technologies, Inc. (“DRS”), and
ManTech International Corporation (“ManTech”). (Curran Dep. 36:19–37:12.)
Curran and Hadley had access to Plaintiffs’ client database of government prime
contractors (“Seibel”), which provided information about Lockheed Martin Corp.
(“Lockheed Martin”), L-3 Communications Corp. (“L-3”), Boeing Co. (“Boeing”), and
Booz Allen Hamilton. (Hilger Aff. ¶¶ 18, 20, 22.) While at Aerotek, Nicholas
tracked Aerotek’s Lockheed Martin and SAIC accounts. (Opp’n Br. Ex. 43.) The
Piper Entities have targeted each of these accounts,3 (Opp’n Br. Exs. 10, 39–42,)

3 Plaintiffs point to record evidence that Jordan contacted a Senior Technical Recruiter from

ManTech, one of Curran’s former accounts, five days after Curran resigned from Aerotek. (Opp’n Br.
Ex. 42.) The record is unclear whether the email is social or business in nature. Construing the
communication in Plaintiff’s favor, the court accepts the email as evidence that Jordan was soliciting
business from ManTech.
and successfully obtained business from Northup Grumman and Lockheed Martin,
(Defs. First Interrogs. Resp. No. 1.)

F. Confidential Information

{43} The court no longer considers the trade secret claims, but the
employment contracts extend to confidential information which need not separately
rise to the level of trade secret. Plaintiffs have not yet indicated an intent to
abandon any claims related to the misuse of confidential information. At this
juncture then, the court believes that Plaintiffs continue to pursue claims grounded
on the possession or use of the following information: (1) TEKsytems’s Staffing
Service Agreement (Opp’n Br. Ex. 47;) (2) Allegis’s Internal Employee Handbook
(occasionally, “Handbook”) (Opp’n Br. Ex. 45;) (3) TEKsystems’s Authorized Federal
Supply Service – IT Technology Schedule Price List (Opp’n Br. Ex. 48;) (4)
TEKsytems CATS 2 Price Sheet (Opp’n Br. Ex. 49;) (5) a seventy-two (72) page excel
spreadsheet containing customer information (“Customer Spreadsheet”) (Opp’n Br.
Ex. 52;) (6) a territorial review of Birmingham, Alabama (“Birmingham Territorial
Review”) (Opp’n Br. Ex. 52;) (7) Aerotek training materials (“Aerotek Training
Manual” or “Manual”) (Opp’n Br. Ex. 52;) and (8) various information taken from
executive-level meetings and other training to which the Former Employees were
privy.
{44} The record indicates that Jordan used the Allegis Internal Employee
Handbook to create a virtually identical version for his own business. (Compare
Opp’n Br. Ex. 45, with Opp’n Br. Ex. 46.) Plaintiffs assert that Rodrigues, Ferrello,
and Hadley’s “suspicious” laptop activity is evidence that the Former Employees
misappropriated Plaintiffs’ confidential information. (Decl. Phillip A. Rodokanakis
Attachs. 3-B, 4-B, 5-B; Opp’n Ex. 53; Am. Compl. ¶ 49; Rodrigues Aff. ¶ 3; Ferrello
Aff. ¶¶ 15–19; Hadley Aff. ¶ 17.)4

4 See also Rodokanakis Decl. Attachs. 2-A, 3-A, 4-A, 5-A (suggesting that Rodrigues, Ferrello,
Nicholas, and Hadley increased their USB usage after they began contemplating working at the
Piper Entities); Rodrigues Aff. ¶ 13 (indicating she began employment discussions with Jordan in
{45} Defendants claim that none of the information upon which Plaintiffs
rely is confidential information because it was either publicly available, widely
known in the industry, or easily ascertainable.

IV. STANDARD OF REVIEW

{46} A party is entitled to summary judgment if the record shows “that
there is no genuine issue as to any material fact and that any party is entitled to a
judgment as a matter of law.” N.C. R. Civ. P. 56(c). The court views evidence in the
light most favorable to the nonmovant, drawing all reasonable inferences in the
non-moving party’s favor. Robinson, Bradshaw & Hinson, P.A. v. Smith, 129 N.C.
App. 305, 314, 498 S.E.2d 841, 848 (1998). The movant bears the initial burden of
demonstrating the absence of a genuine issue of material fact, which may be met by
proving that an essential element of the opposing party’s claim is nonexistent.
DeWitt v. Eveready Battery Co., 355 N.C. 672, 681, 565 S.E.2d 140, 146 (2002). If
the movant successfully makes such a showing, the burden then shifts to the
nonmovant to present specific facts establishing the presence of a genuine factual
dispute for trial. Lowe v. Bradford, 305 N.C. 366, 369–70, 289 S.E.2d 363, 366
(1982).

V. ANALYSIS

A. Plaintiffs’
Plaintiffs’ Claim for Tortious Interference

{47} The Motion raises an issue as to whether Plaintiffs have an actionable
claim that Jordan or his entities, without justification, induced the Former
Employees to breach their confidentiality, non-solicitation, and non-competition
covenants. (Am. Compl. ¶¶ 84–85.)
{48} A tortious interference claimant must demonstrate: (1) a valid contract
between the plaintiff and a third person which confers upon the plaintiff a

January 2012, just before her USB usage increased). Plaintiff’s forensic report, (Rodokanakis Decl.,)
does not conclusively indicate which, if any, confidential documents were downloaded.
contractual right against a third person;5 (2) the defendant knows of that contract;
(3) the defendant intentionally induces the third person not to perform the contract;
(4) in so doing, the defendant acts without justification; and (5) the plaintiff
consequently suffers actual damages. Robinson, Bradshaw, & Hinson, 129 N.C.
App. at 318, 498 S.E.2d at 850. A defendant acts without justification when he acts
with malice and for a reason not reasonably related to the protection of a legitimate
business interest. Sellers v. Morton, 191 N.C. App. 75, 82, 661 S.E.2d 915, 921
(2008). Defendants respond first that Plaintiffs’ claim fails because they have not
forecasted evidence that the Former Employees have breached their covenants.
(Curran Aff. ¶ 31; Nicholas Aff. ¶ 35; Hadley Aff. ¶ 37; Rodrigues Aff. ¶ 40; and
Ferrello Aff. ¶ 25 (each asserting that the affiant has complied and will continue to
comply with any post-employment restrictions).) They further argue that Jordan
and his entities enjoy a competitive privilege that insulates them from a claim of
tortious interference.
{49} After a careful review of the record, the court concludes there are
unresolved material fact issues as to whether the Former Employees actually
breached their restrictive covenants, whether Jordan had a competitive privilege to
induce any such breach, and whether Plaintiffs suffered damage from any such
breach. As such, the tortious interference claim cannot be resolved summarily.

1. Material Issues of Fact Remain as to Whether the Former Employees
Breached Certain Restrictive
Restrictive Covenants

i. Alleged Breach of Confidentiality Clauses
Clauses

{50} The Former Employees agreed not to disclose any of Aerotek’s
confidential information. (Employment Agreements § 6; IIP § 9(6).) As noted
above, the Employment Agreements define “Confidential Information” as

5 While any successful tortious interference claim requires that the underlying contract is valid, the

Parties have not put this in issue before this court. The court then assumes the contracts’ validity.
The Maryland court held that at least certain restrictive covenants at issue in this tortious
interference claim are enforceable as a matter of law. It further determined that Curran, Hadley,
and Nicholas actually breached certain of their non-solicitation covenants. Allegis Grp., 2014 U.S.
Dist. LEXIS 78567, at *31–32.
“information not generally known by the competitors of AEROTEK or the general
public concerning AEROTEK’s Business that AEROTEK takes reasonable measures
to keep secret.” (Employment Agreements § 6.) As noted above in Section III(F),
the claim primarily revolves around seven specific documents and the broad
category of information to which the Former Employees were exposed at executive
or training meetings.

1. Certain Information is Publicly
ublicly Available And Does Not
Support An Action

{51} After careful review, the court concludes that there is no material fact
issue as to whether the TEKsystems’s Staffing Service Agreement, TEKsystems’s
Authorized Federal Supply Service – IT Technology Schedule Price List, and
TEKsystems’s CATS 2 Price Sheet are publicly available and, therefore, not
confidential information. (Defs. First Interrogs. Resp. No. 4.)6 Defendants’
possession or use of these materials is not actionable under either the covenants of
the IIP or Employment Agreements.

2. The Allegis Group Internal Employee Handbook Does Not
Contain Confidential Information

{52} It appears clear that Jordan used the Allegis Internal Employee
Handbook to create a virtually identical version for his own business. (Compare
Opp’n Br. Ex. 45, with Opp’n Br. Ex. 46.) Defendants claim the Allegis Group
Internal Employee Handbook was available online, but has been removed. (Defs.
First Interrogs. Resp. No. 4 (responding the document was formerly available at the

6 The court confirmed Defendants’ Response. The Staffing Services Agreement, CATS 2 Price Sheet,

and IT Technology Schedule Price List are available at http://www.ct.gov/hix/lib/hix/TEK.pdf,
http://doit.maryland.gov/contracts/Documents/catsII_laborrates/TEKsystemsInc.pdf, and
https://www.gsaadvantage.gov/ref_text/GS35F0353L/0J3V85.29KF9K_GS-35F-
0353L_GS35F0353L.PDF, respectively.
following url: http://printfu.org/allegis+group+services+inc).) The Handbook7
begins with an “Important Notice”:
The information contained herein constitutes confidential and
proprietary information and/or a trade secret of Allegis Group, Inc.
Such information shall be used solely for the benefit of and in
furtherance of the business of Allegis Group, Inc. and its affiliates.
Any other use, disclosure, reproduction, modification, transfer, or
transmittal of this information for any other purpose or in any other
form or by any other means is strictly prohibited without the prior
written consent of Allegis Group, Inc.
(Opp’n Br. Ex. 45.) Such a notice is inconsequential if the information is not, in
fact, confidential or proprietary or a trade secret. Glaxo, Inc. v. Novopharm Ltd.,
931 F. Supp. 1280, 1302–03 n.23 (E.D.N.C. 1996)). After review, the court
concludes that the human resources provisions in the Handbook are information
that is generally known and not “Confidential Information” as defined in the
Employment Agreements or as contemplated in the IIP. Therefore, it is not a valid
basis for the tortious interference claim regardless of whether it has been published
publicly.

3. Plaintiffs Have Not Forecasted
Forecasted Evidence that the Former
Employees Have Used, Disclosed, or Divulged
Information from Training or Executive-
Executive-Level Meetings
Meetings

{53} Plaintiffs allege that Hadley, Ferrello, and Rodrigues attended a
National Sales Meeting in “late March,” (Am. Compl. ¶ 56,) at which they
participated in discussions involving strategic resources, sample “elevator speeches”
for landing prospective clients, specific areas for Aerotek’s future growth,
information on its top ten customers, and how to track projects within the
communications engineering division, (Opp’n Br. Ex. 54.) Nicholas also attended an

7 Specifically, the Handbook contains provisions regarding: (1) Equal Employment Opportunity; (2)

Sexual and Other Unlawful Harassment; (3) Inclement Weather; (4) Personal Appearance; (5)
Smoking/Tobacco; (6) Employee Conduct and Work Rules; (7) Progressive Discipline; (8) Employee
Communication and Conflict Resolution; (9) Conflicts of Interest; (10) Outside Employment Policy;
(11) nepotism and intra-office dating; (12) substance abuse and available rehabilitative programs;
(13) termination; (14) job posting; (15) benefits, holidays, and leave time information; (16) adoption
and foster care; and (17) short-term disability. (Opp’n Br. Ex. 45.)
executive-level meeting weeks before he resigned (“the Miami Meeting”) at which he
was privy to “key confidential business and financial information” about Aerotek.
(Am. Compl. ¶ 55; Answer ¶ 55; Opp’n Br. Ex. 29 (“Defs.’ Maryland Answer”) ¶65.)
{54} Even granting Plaintiffs an inference that this vaguely defined
information was “Confidential Information,” Plaintiffs have failed to forecast any
evidence from which a reasonable individual could conclude that the Former
Employees misappropriated or disclosed the information from these meetings.8
Therefore, this information does not support a tortious interference claim.

4. There Are Material Issues of Fact Regarding The Alleged
Misappropriation
Misappropriation or Misuse of Other Confidential
Materials

{55} There are material issues of fact regarding the Customer Spreadsheet,
Birmingham Territorial Review, and Aerotek Training Manual. The nature of the
material is such that a jury might conclude that it constitutes “Confidential
Information.” There is no direct evidence that this information was
misappropriated, and the court has seriously considered granting summary
judgment on the tortious inference claim on this basis. However, a forensic
examination of Hadley’s electronic devices reveals that he, and by inference, the
Defendants, possess these materials and accessed them in close proximity to their
resignations. (Opp’n Br. 21–22, Ex. 52.). That fact must be considered in the
context of evidence suggesting Former Employees’ increased USB usage preceding
their resignation, (Rodokanakis Decl. Attachs. 2-A, 3-A, 4-A, 5-A,) and Hadley’s
“last accessed dates” for the Customer Spreadsheet, Birmingham Territorial
Review, and Aerotek Training Manual, (Reply Br. Ex. 8; Hadley Aff. ¶¶ 13–14). The

8 Plaintiffs do offer evidence that Ferrello had documents from a national sales meeting on his laptop

after leaving Aerotek. (Rodokanakis Decl. Attach. 4-B.) However, by Plaintiffs’ own admission,
Ferrello last accessed the document four days before the actual meeting, (Compare Am. Compl. ¶ 56
with Ferrello Aff. ¶ 15, and Rodokanakis Decl. Attach. 4-B,) and has not accessed it since his
resignation.
court concludes these facts allow the tortious interence of contract claims based on
Confidential Information to survive on this limited basis.9

ii. Alleged
Alleged Breach of Non-
Non-Compete Clauses
Clauses

{56} Defendants contend that the Former Employees have not breached
their covenants if their efforts for Defendants are limited to IT staffing. (Def. Supp.
Br. 12.) This contention rests on two assumptions: (1) the Former Employees did
not work in or learn about IT during their Aerotek employment and (2) Aerotek is
not involved in IT staffing. It seems clear that Aerotek predominantly focuses on
work outside the IT area. For purposes of summary judgment, the court does not
inquire into the extent of Aerotek’s IT staffing business but asks whether Aerotek
has forecasted evidence adequate for a jury to determine whether its scope of
business involves IT staffing. Whether the degree of such involvement is sufficient
to hold that the Former Employees must remain entirely outside that field is a
mixed question of law and fact the court finds inappropriate for summary
adjudication. The court finds Plaintiffs have forecasted adequate evidence to
survive summary judgment claims of competition with Aerotek in the IT arena.
The court further notes, however, that save for allegations that certain Former
Employees had access to a shared database, Plaintiffs have not forecasted any
direct evidence that Defendants actually accessed or obtained confidential
information regarding TEKsystems’ operations. That evidence, without more, will
not be sufficient to sustain a tortious interference claim based on competition with
only TEKsystems.
{57} The evidence includes a list of positions which both Aerotek and the
Piper Entities staffed as of September 27, 2013: (1) Software Engineers; (2) Imagery

9 Even assuming North Carolina accepts the doctrine of inevitable disclosure as to trade secrets, the

court does not believe that it supports a tortious interference claim in this case. See FMC Corp. v.
Cyprus Foote Mineral Co., 899 F. Supp. 1477, 1482 (W.D.N.C. 1995) (declining to apply inevitable
disclosure doctrine to breach of contract claim because otherwise “no employee could ever work for
its former employer’s competitor on the theory that disclosure of confidential information is
inevitable”). Accordingly, Plaintiffs must show actual disclosure and use of their confidential
information to prevail on this claim.
analysts; (3) Java developers; (4) C++ Developer; (5) Android Mobile Developer; (6)
Embedded Engineer; (7) Jr. Controller CPA; (8) Systems Engineer; (9) Android
Developer; (10) .Net Developer; (11) Data Warehouse Engineer; (12) Network
Engineer; (13) Virtualization Programmer; and (14) Data Analyst. (Opp’n Br. 14–
15; compare Matthews Aff. (listing Aerotek’s posted positions), and Hilger Aff. ¶ 19
(listing positions Aerotek staffs), with Dunn Aff. (attaching screenshots of Piper
Entities’ job postings).) PES staffs at least four of these positions. (Compare Hilger
Aff. ¶ 19, with Dunn Aff.) The court cannot determine from the submitted record
whether Aerotek staffed these positions during the Former Employees’ employment
or that the Former Employees either staffed these positions or learned confidential
information about them. (Employment Agreements § 3.) The record does not allow
a summary determination.
{58} The evidence regarding a potential breach by Curran and Hadley is
perhaps stronger, for they worked in high-level positions in Aerotek’s Government
Services division, which provides staffing to government contractors and
subcontractors across each of Aerotek’s industries. (Curran Aff. ¶ 7; Hadley Aff. ¶
10; Opp’n Br. Ex. 2.) Defendants admit that Hadley and Curran do at least some
work for ZP, which staffs government subcontracting positions potentially in
competition with Aerotek. (Piper Entities 30(b)(6) Dep. 150:8–14; Defs.’ Maryland
Answer ¶ 59.)
{59} As to any potential defense that the Former Employees based in
Raleigh are insulated from liability because their office is outside the radii of the
covenants, there are two unresolved facts. First, it is uncertain how any radius is to
be measured.10 More importantly, the material inquiry is not merely the office
location, but whether actual activity during the term of the covenant extends into
the radius of the covenant.
{60} In sum, unresolved material issues of fact preclude a summary
determination as to whether the Former Employees have breached their non-

10 By car, the office is outside of the restricted area; by “how the crow flies,” the office is within the

radius.
competition covenants and, if so, whether Defendants tortiously induced such
breach.

iii. Non-
Non-Solicitation Covenants

{61} The Employee Agreements prohibit post-employment communications
with Aerotek customers as follows:
(a) [The EMPLOYEE shall not directly or indirectly]11
[c]ommunicate with any [AEROTEK customers] about which
EMPLOYEE obtained Confidential Information or with which
EMPLOYEE did business on AEROTEK’s behalf during the two (2)
year period preceding termination of employment for the purpose of:
(i) entering into any business relationship with such
customer if the business relationship is competitive
with any aspect of AEROTEK’s Business, for which
EMPLOYEE performed services or about which
EMPLOYEE obtained Confidential Information
during the two (2) year period preceding termination
of employment, or
(ii) reducing or eliminating the business such customer
conducts with AEROTEK[.]
(Employment Agreements § 4(a).)
{62} The IIP Agreement prohibits participants from

[a]pproach[ing], contact[ing], solicit[ing] or induc[ing] any individual,
corporation or other entity which is a client or customer of any of the
[Allegis Entities], about which Participant obtained knowledge by
reason of Participant’s employment by the [Allegis Entities] in an
attempt to:
(a) enter into any business relationship with a client or
customer of any of the [Allegis Entities] if the business relationship is

11 As noted, the court has assumed the validity of the various covenants. Under North Carolina law,
when reviewing a restrictive covenant, terms prohibiting “indirect” conduct raise concerns.
VisionAIR, Inc. v. James, 167 N.C. App. 504, 508, 606 S.E.2d 359, 362 (2004) (holding a restrictive
covenant prohibiting “directly or indirectly” competing with employer was overbroad and
unenforceable). However, where the restricted activity is solicitation rather than competition, these
concerns may not be as great. Triangle Leasing Co., Inc. v. McMahon, 327 N.C. 224, 228, 393 S.E.2d
854, 857 (1990) (holding “indirectly or directly” language was valid when it prohibited the employee
from soliciting the employer’s customers); Azko Nobel Coatings, Inc. v. Rogers, 2011 NCBC LEXIS
42, at *31–32 (N.C. Super. Ct. Nov. 3, 2011).
competitive with any aspect of [the Allegis Entities’] Business in which
Participant worked during the two (2) year period preceding his or her
Separation from Service, or
(b) reduce or eliminate the business such client or customer
conducts with the [Allegis Entities.]
(IIP § 9(2).) Section 9(5) of the IIP prevents the participant from diverting the
Allegis Entities’ goodwill or soliciting its customers about whom the participant
learned during employment, “[i]n any way.” (IIP § 9(5).)
{63} The Maryland court in its June 10, 2014 order held that Curran,
Hadley, and Nicholas breached Section 9(5) of their IIP Agreements. Allegis Grp.,
2014 U.S. Dist. LEXIS 78567, at *45. The court concludes that this finding is
binding on this court, but that the finding, alone, does not necessarily lead to an
adverse determination of tortious interference. Collateral estoppel is appropriate
where: (1) the prior suit resulted in a final judgment on the merits; (2) identical
issues are involved in both suits; (3) the issue was actually litigated in the prior suit
and necessary to the judgment; and (4) the issue was actually determined. Royster
v. McNamara, 723 S.E.2d 122, 126–27 (N.C. Ct. App. 2012). It applies even where
“the first adjudication is conducted in federal court and the second in state court.”
Strates Shows, Inc. v. Amusements of Am., Inc., 184 N.C. App. 455, 461, 646 S.E.2d
418, 423 (2007). Here, Defendants enjoyed a full and fair opportunity in the
Maryland Litigation to litigate whether Nicholas, Curran, and Hadley violated their
IIP restrictions; the final ruling on that issue was on the merits; the issue was
actually litigated and necessary to the judgment; and the District Court actually
determined the issue.
{64} Plaintiffs have additionally forecasted evidence that the Former
Employees violated other non-solicitation provisions. At Aerotek, Curran, Hadley,
and Nicholas worked with or had access to information regarding the following
Aerotek customers: Northup Grumman, SAIC, Raytheon, DRS, ManTech, Lockheed
Martin, L-3, Boeing, Red Hat, SAS Institute (“SAS”), and Booz Allen Hamilton.
(Curran Dep. 36:19–37:12; Hilger Aff. ¶¶ 18, 20, 22; Opp’n Br. Ex. 43.) The Piper
Entities have targeted each of these accounts, (Opp’n Br. Exs. 10, 39–42,) and
successfully secured contracts with Northup Grumman and Lockheed Martin. (Defs.
First Interrogs. Resp. No. 1.) One month before Hadley and Rodrigues resigned
from Aerotek, Curran emailed Jordan a list of “target customers,” with the subject
“Can You Send this to CH & CN.”12 (Opp’n Ex. 44.) The list included Lockheed
Martin, L-3, SAS and Red Hat. While Nicholas was still working at Aerotek and
tracking the Lockheed Martin and SAIC accounts, he emailed Jordan suggesting
that “we should line up a meeting with one of the head Lockeed guys at the
pentagon and figure out where we can best do business.” (Opp’n Br. Ex. 26.)
Though not conclusive, this evidence is adequate to support a finding that the
various customers fall within the scope of the restrictive covenants and supports an
inference that Jordan induced Curran, Hadley, Rodrigues, and Nicholas to violate
their non-solicitation covenants.

iv. Engaging in Conflicting Business

{65} Curran, Nicholas, Hadley, and Rodrigues each agreed to refrain from
entering into or engaging in “any conflicting business activity” while working for
Aerotek. (Employment Agreement § 1.)
{66} In September 2010, Curran gave Jordan some editorial advice
regarding ZP’s website. (Opp’n Br. Ex. 56.) In October 2011, Hadley provided
Jordan feedback on a compensation plan for one of Jordan’s potential new hires.
(Opp’n Br. Ex. 24.) One month later, Nicholas emailed Jordan suggesting that they
“line up a meeting with one of the head Lockheed guys . . . and figure out where we
can best do business.” (Opp’n Br. Ex. 26.) Email exchanges suggest that Curran,
acting as Jordan’s agent, coordinated with Rodrigues and Hadley to recruit and
interview Mike Wagner for employment with ZP. (Opp’n Br. Ex. 23; Hadley Dep.
34:3–36:3.) At the time, Rodrigues and Hadley were still working for Aerotek.
Ultimately, Jordan did not hire Wagner. (Hadley Dep. 36:7–8.)

12 Rodrigues used to go by “Cristina Neto.”
{67} Each communication indicates that while Rodrigues, Hadley, Nicholas,
and Curran were still working at Aerotek, each assisted Jordan with his potentially
competing businesses.
{68} The court believes this evidence is adequate to survive summary
judgment on the claim that Defendants induced a breach of the relevant contract
provisions. The court notes, however, that Plaintiffs’ claims may ultimately fail
absent further proof that they actually suffered damage from any such inducement
or breach.

2. There Are Material Fact Issues as to Whether Defendants Are
Protected By a Competitive Privilege

{69} A defendant acts without justification when he acts with malice and
for a reason not reasonably related to the protection of a legitimate business
interest. Sellers, 191 N.C. App. at 82, 661 S.E.2d at 921. A plaintiff must
demonstrate that the defendant acts wrongfully or exceeds his legal authority to
interfere with the contract. Robinson, Bradshaw, & Hinson, 129 N.C. App. at 318,
661 S.E.2d at 851. If an individual has a sufficient lawful reason for inducing the
breach, he is exempt from liability, regardless of his actual malice. Id. Whether a
defendant has acted without justification depends on “the circumstances
surrounding the interference, the [defendant’s] motive or conduct, the interests
sought to be advanced, the social interest in protecting the freedom of action of the
[defendant] and the contractual interests of the other party.” Barnard v. Rowland,
132 N.C. App. 416, 426, 512 S.E.2d 458, 466 (1999) (citing Peoples Sec. Life Ins. Co.
v. Hooks, 322 N.C. 216, 221, 367 S.E.2d 647, 650 (1988)). Where there is an issue as
to a defendant’s intent, summary judgment is inappropriate. Robinson, Bradshaw,
& Hinson, 129 N.C. App. at 318, 498 S.E.2d at 850.
{70} In Hooks, the defendant induced the plaintiff’s employees to leave the
plaintiff’s employ for defendant’s competing company. Hooks, 322 N.C. at 221–22,
367 S.E.2d at 650. The employees signed non-competes with the plaintiff, which
restricted them from competing with their former employer for one year following
their separation. Id. The Supreme Court determined that the defendant’s actions
were justifiable, as the defendant and the plaintiff were competitors and the
employees’ employment with the plaintiff was terminable at will. Id. at 222, 367
S.E.2d at 651.
{71} On the other hand, in Kuykendall, the Supreme Court determined that
there was a genuine dispute whether the competitor defendant acted with malice
when he induced plaintiff’s employee to leave plaintiff’s employ for his. United
Labs., Inc. v. Kuykendall, 322 N.C. 643, 663, 370 S.E.2d 375, 388 (1988). In finding
a fact issue as to malice, the Kuykendall court noted that (1) upon terminating his
employment, the employee solicited the same customers he serviced while employed
with the plaintiff, (2) the defendant knew the employee had signed covenants not to
compete, and (3) the defendant had actually agreed to pay any legal expenses the
employee incurred as a result of breaching his non-compete covenants. Id. at 662–
63, 370 S.E.2d at 387–88; see also Roane-Barker v. Se. Hosp. Supply Corp., 99 N.C.
App. 30, 39, 392 S.E.2d 663, 669 (1990) (finding malice where defendant’s new hire
solicited his former employer’s customers).
{72} Here, Jordan knew of the Former Employees’ restrictive covenants and
offered to pay their legal expenses for suits arising out of their Employment
Agreements and IIP Agreements. (Opp’n Br. Ex. 22 (“Piper Entities Employment
Agreements”) Curran Agreement §§ 1.11, 1.10; Nicholas Agreement §§ 1.10, 1.11,
Hadley Agreement §§ 1.11, 1.12, Rodrigues Agreement § 1.11, Ferrello Agreement §
1.10.) Moreover, the evidence supports a finding that the Former Employees
solicited their Aerotek clients for PES and ZP. (Opp’n Br. Ex. 26.)
{73} There is a reasoned basis for arguing that the facts of this case should
be governed by the holding in Kuykendall and that the court should refrain from
resolving the competitor’s privilege issue summarily. The court will not grant
summary judgment on the grounds of competitive privilege.
B. The Unfair and Deceptive Trade Practices Claim Must Await Resolution of
Other Claims

{74} To succeed on an unfair and deceptive trade practices claim, a
claimant must show “(1) defendant committed an unfair or deceptive act or practice,
(2) the action in question was in or affecting commerce, and (3) the act proximately
caused injury to the plaintiff.” Dalton v. Camp, 353 N.C. 647, 656, 548 S.E.2d 704,
711 (2001); N.C. Gen. Stat. § 75-1.1(a) (2013).
{75} A claim for tortious interference with contract can but does not
necessarily support a Section 75-1.1 violation. Sunbelt Rentals, Inc. v. Head &
Engquist Equip., LLC, 2002 NCBC LEXIS 2, at *47 (citing Roane-Barker, 99 N.C.
App. 30, 392 S.E.2d 663).
{76} There is adequate evidence to defeat Defendants’ Motion as to the
UDTPA claim.

VI. CONCLUSION

{77} For the foregoing reasons, Plaintiffs’ claims are narrowed, but
Defendants’ Motion is DENIED.

IT IS SO ORDERED, this the 7th day of August, 2014.