WPC5 /BGR}FBXhhM-",ksRq!`b[TN+xUH9 7 l|1-IV+X.Jm-ȅL vKo*6̲(~@}}bdR:%15-H1)1$m븤=-\vޑ-hs8WXEX 0%UH6 0E 0<_ 0< 0  0 U. UJ8!UsJY 0 0c 04 0( D+- AQX"""""""D"f""""""2"T Bv 0C(UF"D"f"""&"&"&"'""'"D'"f'"''"+"++UF0"0"0 0: 1E2 0 U2# 3U N4 %5M 5($5NL5^ N5wZ54^5r5 mt5\  `&Times New Roman' GLASS, LEWIS & CO Training0Training .   6u m4Heading 1K<6X9`(Courier NewK        S\  `&Times New RomanS<6X9`(Courier New6u b4Heading 2K<6X9`(Courier NewK      S\  `&Times New RomanS <:Default Para<:Footnote Ref<qk :Body Text In X K<6X9`(Courier NewK   S\  `&Times New RomanS X <\l:documentbodyC  $VerdanaCS\  `&Times New RomanS $Verdana $ Netmanage PCkIA`2WP TypographicSymbols   ')..      A XAX A   XX XѻXXX *m XXѻ  *mWGCz h  p @X@Ex  x@ !!   !!XX   !!!!  (#(#!!?+ 4 <DL!X? XX(2'$ ?X!..      AXAXA  ݃ Level 1 Level 2 Level 3 Level 4 Level 5(2'$ ?X!..      AXAXA  (2'$ ?X!..      AXAXA  ($'dxdC<< c '"..      A XAX A     XX Ԅ  2  ڄ                                                                         d($      ?X!..      A XAX A   ?+ 4 <DL!X? X  XX (XXXX   1  ?   XRXh(X  X XRInhisfilings,Defendanthasdancedaroundthelawthatshould  beappliedontheissueoftherestrictiveemploymentagreement,citing  Maryland,CaliforniaandNewYorkcases.Astothisissue,theparties O agreedintheircontractthatNewYorklawwouldapply.UnderMaryland  [ lawitisgenerallyacceptedthatthepartiestoacontractmayagreeas  tothelawwhichwillgoverntheirtransaction,andevenastoissues  goingtothevalidityofthecontract.Nat { =  {lGlassv.J.C.Penney,336 ?  Md.606,610(1994);Kronovetv.Lipchin,288Md.30,43(1980).In  K lightofthis,theCourthasnotroubleconcludingthatitshouldlook   toNewYorklawastothevalidityoftherestrictiveemployment s   agreement. /     X  ;  7\  `.Times New Roman TUR                      ?X!..      A XAX A   ?+ 4 <DL!X?  X  XX (XXXX   2   ?  ( X(X (  ManyofthecasescitedbythePlaintiffeitherprecedethe  opinioninBDOSeidmanordealwithsocalled { A  {learnedprofessions { @  {Ԁsuch  aslawyersorphysicians,orothersocalled { A  {uniqueemployees { @  {Ԁwhere  theNewYorkcourtshavebeensubstantiallymoretolerantofrestrictive `e employmentprovisionsandtendtoenforcethemifotherwisereasonable. ! Inthiscase,Defendantasasalesmanofproxyservicesisnotengaged  ina { A  {learnedprofession { @  {,andnodemonstrationhasbeenmadeofhis   peculiar { A  {uniqueness { @  {Ԁintheproxyservicebusiness. P U                                            ?X!..      A XAX A   ?+ 4 <DL!X?  X  XX (XXXX   3   ?  ( X(X (  ItisalsoofsomenotethattheAdditionalAgreementprepared  byGlass,Lewisenvisionsanactual { A  {breach { @  {ԀbytheDefendantofthe  restrictionsondisclosureofproprietaryinformationbeforean  injunctionwouldbeentered.SeeSection10oftheAdditional `e Agreement.!              ?X!..      A XAX A   ?+ 4 <DL!X?  X  XX (XXXX   4   ?  ( h(X: ,( *m :  Thereisa { *mA*m  {publicinterest { *m@*m  {Ԁcomponentindecidingwhetherto  enterapreliminaryinjunction.Inprivatepartylitigationsuchas  this,thebroadpublicinterestconcernsaregenerallynotatstake  excepttotheextentofcorrectlyenforcingthepolicyconcerns @E  expressedintheapplicablelawdiscussedearlierinthisopinion.:  *m  :  .\  `.Times New Roman TUR          (2;$ ?X!..      AXAXA  X  0  #|x(X$..      AXAXAHP LaserJet 5/5M PostScript0(9 Z6Times New Roman RegularAX2>3 Kd43iswwwU ?X!..      A XAX A   _         XX  XRXXXGLASS,LEWIS&CO.,LLC,    * D INTHE  Ѐ Plaintiff <     * D CIRCUITCOURT v vs. 4    <     * D FOR < JOHNJ.McMAHON, <     * D HOWARDCOUNTY  R  Defendant    * D CaseNo.13C0561604    * 4 * * * < *  *  * D *  *  * L *  *    XѻXX XR      & j   MEMORANDUMANDORDER  >Ԍ T  Ќ   XRXXXѻ  XѻXX XR      C  B  ԍMEMORANDUMANDORDER  C  C݌̌   XRXXXѻ  XѻXX XR     z  I. 4 Introductionz  Ԍ j  Ќ XRXXXѻ  B   XRXX XRXѻXX XR  ԍI.Introduction  C   4 BeforetheCourtisthemotionofPlaintiffGlass, M  Lewis&Co.,LLC,( XXXXѻAXѻXX XPlaintiff XXXXѻ@XѻXX XԀor XXXXѻAXѻXX XGlass,Lewis XXXXѻ@XѻXX X)seekinga 0 preliminaryinjunctionenjoiningitsexemployee,JohnJ.  McMahon( XXXXѻAXѻXX XDefendant XXXXѻ@XѻXX XԀor XXXXѻAXѻXX XMcMahon XXXXѻ@XѻXX X),from:(1)beingemployed  byProxyGovernance,Inc.,oranyothercompanyorentity  thatprovidesservicesrelatedtocorporategovernanceand l proxyvotingissues;(2)fromotherwisecompetingwith O Glass,Lewis;and(3)fromdivulgingtoanyoneGlass,Lewis XXXXѻ=XѻXX X 2 tradesecretsandproprietaryinformation.Thepartieshave e fullybriefedtheissuesandahearingwasheldonJuly15, H 2005.ThisconstitutestheCourt XXXXѻ=XѻXX Xsruling.'j TV +  II. 4 StatementoftheCase   X ?+ 4 <DL!X? OnMarch28,2005,PlaintiffGlass,Lewisfiledits  complaintforinjunctionandbreachofemploymentagreement,  includingarequestforapreliminaryinjunctionagainst g DefendantMcMahon.Subsequently,onApril21,2005, J PlaintifffiledaseparateMotionforPreliminary - } Injunction.ThePlaintiffaccusedtheDefendantof !`  acceptingemploymentwithProxyGovernance,adirect !C! competitor,withindaysoftenderinghisresignationnotice "&" toGlass,Lewis,inbreachoftheemploymentagreement # # DefendantsigneduponacceptingapositionwithGlass, $$ Lewis.Thehearingforthepreliminaryinjunctionwas % % originallysetforJune17,2005,butwasresetatthe b&!& jointrequestofthepartiesandheldonJuly15,2005. E'"'  X III.StatementoftheFacts ((x#(  X A.BackgroundoftheParties  )[$) PlaintiffGlass,Lewis,basedinCalifornia,isinthe )>%* businessofprovidingcorporategovernanceandproxy *!&+ servicestoinstitutionalmembersofthefinancialand +', investingcommunity.Companiesintheproxyresearchand ,'- advisoryindustryofferanalysesofnationaland z-(.          internationalcompaniestoadviseinvestorsabouthowto  votetheirproxiesatcorporateshareholdermeetings.The  customersforsuchservicesincludefinancialservicefirms, v investmentadvisors,proxysolicitors,institutional Y investors,corporations,andsomehighnetworthindividual < investors.Plaintiffcontendsthattheindustryishighly  o competitiveandthatitcompetesinaworldwidemarket.  R Glass,Lewisrequiressenioremployees,asaconditionof  5 employment,toexecutean XXXXѻAXѻXX XOfferLetter XXXXѻ@XѻXX XԀthatcontainsa   noncompetitionclause.Inaddition,Glass,Lewisrequires    employeesitconsiderstohaveaccesstothecompany XXXXѻ=XѻXX Xs    valuabletradesecrets,asaconditionofemployment,to q  signanagreementtoprotectGlass,Lewis XXXXѻ=XѻXX XԀproprietary T  informationandinventions. 7  ProxyGovernance,theDefendant XXXXѻ=XѻXX Xscurrentemployer, j  alsoprovidesresearchandanalysisofcorporateproxiesto M  customers,whichincludeinstitutionalinvestors.Proxy 0 GovernancecompeteswithGlass,Lewis.  DefendantJohnJ.McMahonhadbeenemployedinthe  proxyandcorporategovernanceserviceindustryfor  approximatelyelevenyearspriortoexecutinganemployment l agreement(consistingofan XXXXѻAXѻXX XOfferLetter XXXXѻ@XѻXX XԀandan O incorporated XXXXѻAXѻXX XAgreementRegardingProprietaryInformation 2 andInventions XXXXѻ@XѻXX X)withGlass,Lewis&Co.,LLC.onOctober9, e 2003.Immediatelyprecedinghisemploymentwiththe H Plaintiff,theDefendanthadbeenemployedbyInstitutional + ShareholderServices( XXXXѻAXѻXX XISS XXXXѻ@XѻXX X)forfouryears.TheDefendant XXXXѻ=XѻXX Xs  employmentatISSwasterminatedfollowingthesaleofthe  businessunitbytheparentcompany,ThompsonFinancial.  AfterDefendantsignedtheAgreementtobeginworkingfor g Glass,LewisasDirectorofBusinessDevelopment,ISSfiled J suitintheCircuitCourtforHowardCounty(JudgeDianeO. - } Leasurepresiding)forbreachofcontractand !`  misappropriationoftradesecrets.Glass,Lewisprovided !C! fundingforMcMahon XXXXѻ=XѻXX Xslegalservicestodefendhimselfin "&" thesuit;McMahoncontendsthatGlass,Lewis XXXXѻ=XѻXX XԀCEO,Gregory # # Taxin,andPresident,KevinCameron,alsoactively $$ participatedindevelopinghisdefensestrategy.TheCourt % % foundthattherewasnosignedcontractineffectbetween b&!& theDefendantandISS,andsubsequentlytheCourtsigneda E'"' ConsentOrderfollowingasettlementagreementbetweenthe ((x#( partieslimitingtheDefendant XXXXѻ=XѻXX Xscontactforoneyearto  )[$) entitiesnotlistedinthesealedagreement.Additionally, )>%*     Defendantwasorderedtoreturnallpropertyandproprietary  informationbelongingtoISSandtorefrainfromdisclosing  anytradesecrets. v B.TheEmploymentAgreementbetweentheParties Y InOctober2003,PlaintiffofferedDefendantthe < positionofDirectorofBusinessDevelopment.OnOctober9,  o 2003,thePlaintiffandtheDefendantexecutedanatwill  R employmentagreement.McMahon XXXXѻ=XѻXX XssignatureontheOffer  5 Letterimmediatelyfollowsthestatement, XXXXѻAXѻXX XIhavereviewed   andunderstandthetermsandconditionssetforthinthis    letterandagreetothem. XXXXѻ@XѻXX XԀTheagreementconsistedofan    OfferLetterandadditionaldocumentsentitledAgreement q  RegardingProprietaryInformationandInventions T  ( XXXXѻAXѻXX XAdditionalAgreement XXXXѻ@XѻXX X).UnderMcMahon XXXXѻ=XѻXX Xssignatureonthe 7  AdditionalAgreementisthestatement: XXXXѻAXѻXX XCAUTIONTOEMPLOYEE: j  ThisAgreementaffectsimportantrights.DONOTsignit M  unlessyouhavereaditcarefullyandaresatisfiedthatyou 0 understanditcompletely. XXXXѻ@XѻXX XԀTheOfferLetterdescribedan  annualbasesalaryof$93,000,withemploymentincentive  bonusesof$12,500uponsigningand$12,500onOctober17,  2003,tobereturnedtothePlaintiffiftheDefendant l terminatedemploymentwithinsixmonths,aswellasan O additional$12,500onMarch31,2004,providedtheDefendant 2 wasstillemployedbythePlaintiffonthatdate.The e Defendantwaseligibletoparticipateinthecompany H commissionplanandwasgrantedtherighttopurchase15,000 + restrictedsharesofcommonstockinGlass,Lewisunderthe  termsofthecompanystockoptionplan.  PerthetermsoftheOfferLetter,theDefendantagreed  tothefollowingpostemploymentterms: g  X  <% 4 <DLX!<...youherebyagreethatyoushallnot J directlyorindirectlyprovide,or - } acceptemploymentwith(oractasa !`  consultantfor)anycompanyorother !C! entitythatprovidesorintendsto "&" provide,anyservicescompetitivewith # # thoseprovidedbytheCompanyfora $$ periodofoneyearafterthetermination % % ofyouremploymentrelationshipwiththe b&!& company. E'"'  X X ?(4 4 <DL! XL? ((x#(    )[$)      XB+ 4 <DL!44X!BThepartiesagreedintheOfferLetterthatthis   agreementwould XXXXѻAXѻXX XbegovernedbyNewYorklaw,without v respecttoNewYorkchoiceoflawprovisions XXXXѻ@XѻXX X.Offer < Letter,page3.  R PerthetermsoftheAdditionalAgreementinwhichthe   Defendantagreedtoprotectproprietaryinformation,the    followingtermswereincluded: T   X  ?( 4 <DLLX!?2.DefinitionofProprietary j  Information.Asusedherein,theterm M   XXXXѻAXѻXX XProprietaryInformation XXXXѻ@XѻXX XԀshallreferto 0 anyandallinformationormaterialofa  confidential,proprietary,orsecret  naturewhichisormaybeapplicableto,  orrelatedinanywayto:(i)the l businessoftheCompany;(ii)the O researchanddevelopmentor 2 investigationsoftheCompany;or(iii) e thebusinessofanyclientorsupplier H oftheCompany,ineachcaseasexisting + onthedateofthisAgreementorasit  maybeatanypointinthefuture.  ProprietaryInformationshallinclude,  withoutlimitation,tradesecrets, g processes,formulas,data,knowhow, J improvements,inventions,techniques, - } softwareprograms(includingwithout !`  limitation,objectcode,sourcecode, !C! flowcharts,algorithmsandrelated "&" documentation),listings,routines, # # manuals,specifications,products,con $$ cepts,customerlists,marketingplans % % andstrategies,personneldirectories b&!& andfilesandinformationconcerning E'"' customers,employeesorvendors. ((x#( Informationpubliclyknownthatis  )[$) generallyemployedbythetradeator )>%*       afterthetimeEmployeefirstlearnsof  suchinformation,orgeneric  information,knowledgeorskillwhich v Employeewouldhavelearnedoracquired Y inthecourseofsimilaremploymentor < workelsewhereinthetrade,shallnot  o bedeemedpartoftheProprietary  R Information.  5  X  B+ 4 <DL! XLB    XXXѻXXXѻ  X  ?( 4 <DLLX!?EA  ...3.ProprietaryInformationtobe    KeptinConfidence...Employeeagrees    thathewillnotuseanyProprietary q  Informationtocontactorsolicit T  employeesorcustomersoftheCompany 7  forthebenefitofcompetingenterprises j  andactivitiesatanytimeduringor M  aftertheterminationofEmployee XXXXѻ=XѻXX Xs 0 employmentwiththeCompany.EA(B݌  ЌXѻXXXѻ X   B+ 4 <DL! XLB   X  B( 4 <DLLXXB...5.ReturnofMaterials.Intheevent  ofanyterminationofEmployee XXXXѻ=XѻXX Xsemploy l ment,whetherornotforcauseandfor O whateverreason,Employeewillpromptly 2 delivertotheCompany,alldocuments, e data,recordsandotherinformation H pertainingtoEmployee XXXXѻ=XѻXX Xsemployment,and + Employeeshallnottakewithhimany  documentsordataofanydescription,or  anyreproduction,excerptorsummaryof  anydocumentsordata,containingor g pertainingtoanyProprietaryInfor J mation. - }  X  B+ 4 <DL! XLB !`  ItwasagreedbythepartiestotheAdditional !C! Agreementthatitwould XXXXѻAXѻXX Xbegovernedbythelawsofthe # # StateofCaliforniawithoutregardtoanyprinciples % %  governingconflictsoflaws XXXXѻ@XѻXX X.AdditionalAgreement,p.5. E'"' WhileemployedbyGlass,Lewis,Defendantusedalaptop   computerandaTreopersonalinformationdeviceprovidedby v Glass,Lewis.Heworkedfromahomeofficeanduseda < passwordtoaccessinformationforatleastsomeofthe  R Glass,LewiscustomersontheGlass,Lewiscomputersystem.   Hiscustomerbaseincluded(butwasnotlimitedto)    customersfromNewYorkandCalifornia. T  C.Defendant XXXXѻ=XѻXX XsEmploymentwithProxyGovernance j   XXXѻXXXѻ   N  OnFebruary25,2005,ProxyGovernanceoffered 0 DefendantapositionasVicePresidentofSales.Perthe  ProxyGovernanceofferletter,ProxyGovernancestatedthat  itwasawarethatDefendanthadongoingobligationswith  thePlaintiffregardingproprietaryinformationandexpected l Defendantto XXXXѻAXѻXX Xstrictlycomplyingoodfaith XXXXѻ@XѻXX XԀwithprovisions O oftheAdditionalAgreement.Additionally,theProxy 2 GovernanceOfferstatedthatforoneyear,theDefendant e wouldnotsolicitanyclientsonbehalfofProxyGovernance H forwhichDefendanthadacurrentandongoingrelationship + solelyasaresultofsalesactivitiesatGlass,Lewis. NN݌  ЌXѻXXXѻ XX   XXXѻXXXѻ  R    OnMarch4,2005,DefendantresignedhispositionatGlass,  Lewis.Heassertsthatheimmediatelyboxedupall g proprietarymaterialsbelongingtoGlass,Lewistoprepare J forshipment.Glass,LewisprovidedFedExshippinglabels, - } andtheDefendantreturnedthematerialsanditemstoGlass, !`  LewisviaFedExapproximatelytwoweeksafterhis !C! resignation.Defendantmaintaineduseofthesamenumberon "&" hiscellphoneforbusinesspurposesthatheusedwhile # # employedbyGlass,Lewis.Defendantwascontactedbya $$ Glass,LewiscustomerthroughavoicemailmessageonApril % % 22,2005,andforwardedtheinformationtoGlass,Lewison b&!& April23,2005.RdS݌ E'"' ЌXѻXXXѻ XX  IV. StandardsforaPreliminaryInjunction ((x#(  XRXXXѻ Asnotedabove,theagreementsthatformthebasisfor  )[$) theclaimsaretobe XXX XRA XRXX Xgoverned XXX XR@ XRXX XԀbyeitherNewYorkor )>%*       Californialaw,accordingtothecontractstheparties  enteredinto.WhiletheCourtwillapplythesubstantive  lawofthosejurisdictionstothequestionsaboutthe v validityorconstructionoftheagreements,athreshold Y issuearisesaboutwhatlawgovernsthestandardsforentry < ofapreliminaryinjunction.Plaintiffhasassumedthat  o Maryland XXX XR= XRXX Xsstandardsapply.SeePl. XXX XR= XRXX XsMem.ofP.&A.In  R Supp.ofPl. XXX XR= XRXX XsMot.forPrelim.Inj.,at911.Defendant  5 hastakenamorecatholicview,citingcasesonthe   standardsforpreliminaryinjunctionsfromMaryland,New    York,andCalifornia,aswellasfederalcourtsthroughout    theland,buthasnotindicatedwhereitbelievesthisCourt q  shouldcometorest. T  TheCourtconcludesthatitshouldapplyMarylandlaw 7  astothestandardsforenteringapreliminaryinjunction. j  Therationalecanbegroundedoneitherthesubstance M  proceduraldichotomyortherightsremedydichotomy,which 0 havebeenanalyzedextensivelybyJudgeAlbertJ.  Matricciani,Jr.,inStandardReserveHoldings,Ltd.V  Downey,2004WL3316264,2004MDBT14(CircuitCourtfor  BaltimoreCity,July9,2004).Suchaconclusionisalso l consistentwithRestatement(Second)ofConflictofLaws, XXX XR'' XRXX X O 130,122.See,e.g.,ApacheVillage,Inc.v.Coleman 2 Company,776P.2d1154,1155(Colo.Ct.App.1989) e ( XXX XRA XRXX X[h]ence,becausepreliminaryinjunctionsareproceduralin H nature,andbecauseoftheinterestColoradocourtshavein + theiradministrativeprocesses,wewillapplyColoradolaw.  .. XXX XR@ XRXX X).  Marylandcourtsapplythefollowingfourparttestin  determiningwhethertograntamotionforapreliminary g injunction: J  X E. ` hp L!X!E1.  thelikelihoodthatplaintiffwillsucceed - } onthemerits; !`   X Q.` hp L! X L!Q !C!  X Q. ` hp L!X L!Q2. whetherplaintiffhasanadequateremedyatlaw "&" orwillbeirreparablyharmedifthe # # injunctionisnotissued; $$  X Q.` hp L! X L!Q % %  X Q. ` hp L!X L!Q3. the XXX XRA XRXX Xbalanceofconvenience, XXX XR@ XRXX XԀdeterminedby!!H! b&!&    h whethertheharmtotheplaintiffif E'"' the   h   injunctionisnotgranted ((x#( outweighstheharmtothedefendantifthe  )[$) injunctionisgranted;and, )>%*     X Q.` hp L! X L!Q   X Q.` ` hp L!X L!Q4. theinjunctionwillnotharmpublicinterest.   X Q.` hp L!` X L!Q v Foglev.H&GRestaurant,337Md.441,45556(1995) Y (quotingDep XXX XR= XRXX Xt.ofTransp.,MotorVehicleAdmin.v.  o Armacost,299Md.392,40405[1984][citingStateDep XXX XR= XRXX Xtof  5 Health&MentalHygienev.BaltimoreCounty,281Md.548,    55457(1977)]). q      X XR G      XC X  GXѻXX XC Theburdenofprovingthefactsnecessarytosatisfy 7  thesefactorsrestsonthepartyseekingtheinterlocutory M  injunction.Dep XXXXѻ=XѻXX XtofTransportationv.Armacost,299Md.  392(1984).Inaddition,thepartyseekingtheinjunction  mustprovetheexistenceofallfourofthefactorsset O forthinArmacostinordertobeentitledtopreliminary e relief.Id.Thefailuretoprovetheexistenceofevenone + ofthefourfactorswillprecludethegrantofpreliminary  relief.Id. g AstheCourtofAppealsmadeclearinLernerv.Lerner, - } 306Md.771(1986),acourt,whenevaluatingtheabove !C! factors,shouldnotvieweachoftheminisolationand # # shouldnotrequireaplaintifftoproveeachofthemlike XXXXѻAXѻXX Xa % % plaintiffinatortaction[must]proveeachoftheelements E'"' ofatort XXXXѻ@XѻXX X.Id.at77677.Rather,thecourtweighsall  )[$)        factorstogetherindecidingwhethertograntinjunctive  relief.Thus,forexample,the XXXXѻAXѻXX Ximportanceofprobability v ofsuccessincreasesastheprobabilityofirreparable < injurydiminishes. XXXXѻ@XѻXX XԀId.at784.TheLernercourtdetermined  R thistesttobethe XXXXѻAXѻXX Xbalanceofhardships, XXXXѻ@XѻXX XԀstating:    X!  H% ` hp X L!HWherethequestionspresentedbyan    applicationforaninterlocutory q  injunctionaregrave,andthe T  injurytothemovingpartywillbe 7  certainandirreparable,ifthe j  applicationbedeniedandthefinal M  decreebeinhisfavor,whileif 0 theinjunctiontotheopposing  party,evenifthefinaldecreebe  inhisfavor,willbe  inconsiderable,ormaybe l adequatelyindemnifiedbyabond, O theinjunctionusuallywillbe 2 granted. omafteXѻXXXѻ XRXXXѻ   e  X  H.` hp L! X H306Md.at732(citationsomitted). H  + N+ 4 <DL!X L!N V. LikelihoodofSuccessontheMerits   Plaintiffhassoughtaninjunctionthatwouldprohibit  Defendantfrombeingemployed XXX XRA XRXX Xinanymanner,whether J directlyorindirectly,asanemployeeorasaconsultant, !`  byProxyGovernance,Inc.oranyothercompanyorentity "&" thatprovidesservicesrelatedtoproxyvotingorcorporate $$ governance. XXX XR@ XRXX XԀPl. XXX XR= XRXX XsProposedPrelim.Inj.Order,at2. b&!& Plaintiffalsoseeksaninjunctionthatwouldprohibit ((x#( Defendantfromdisclosing XXX XRA XRXX Xanytradesecret,confidential )>%* !  ! !  informationorotherproprietaryinformationorknowledge  acquiredwhileintheemployofGlass,Lewis... XXX XR@ XRXX XԀId. v "Onthesurface,Plaintiffappearstobeinastrong < positioninseekingsuchenforcementsinceDefendant,a  R sophisticatedbusinessman,freelyandforadequatecompen   sationenteredintoanagreementinwhichheagreedto XXX XRA XRXX Xnot    directlyorindirectlyprovide,oracceptemploymentwith T  (oractasaconsultantfor)anycompanyorotherentity j  thatprovidesorintendstoprovide,anyservices 0 competitivewiththoseprovidedbytheCompany[Glass,  Lewis]foraperiodofoneyearaftertheterminationof l youremploymentrelationshipwiththecompany. XXX XR@ XRXX XԀPlaintiff 2 alsosignedwhatistermedthe XXX XRA XRXX XAdditionalAgreement XXX XR@ XRXX X,which H broadlyprotectedproprietaryinformationofGlass,Lewis  frombeingusedbyDefendantshouldheleaveGlass,Lewis.  ЀDefendantappearstohaveviolatedthefirstprovision J byacceptingemploymentwithProxyGovernance,acompetitor !`  ofGlass,Lewis,andPlaintiffwouldhaveunderstandable "&" concernsthattherestrictionsondisclosureofits $$ proprietaryinformationcouldbeathighriskwithDefendant b&!&  employedinaseniorpositionwithoneofitscompetitors. ((x#( "  " "  % l<` #$However,theapparentsurfacesimplicityofPlaintiff XXX XR= XRXX Xs   positionmustconfronttherealityofNewYorkcaselaw v whichiswary XXX XRB XRXX XԄsomewouldsayhostile XXX XRB XRXX XԄaboutenforcingpost < employmentrestrictivecovenants.  ' &  1        IntheleadingNewYork  R caseofBDOSeidmanv.Hirschberg,93N.Y.2d382,712N.E.2d   1220(N.Y.1999),theNewYorkCourtofAppealsstatedits    approachasfollows: T   X  ?( 4 <DLLX!?Themodern,prevailingcommonlawstan j  dardofreasonablenessforemployee M  agreementsnottocompeteappliesa 0 threeprongedtest.Arestraintis  reasonableonlyifit:(1)isnogreater  thanisrequiredfortheprotectionof  thelegitimateinterestoftheemployer, l (2)doesnotimposeunduehardshipon O theemployee,and(3)isnotinjurious 2 tothepublic.Aviolationofanyprong e rendersthecovenantinvalid. H  X  B+ 4 <DL! XLB + Id.at38889,712N.E.2dat1223(citationsomitted,   emphasisinoriginal).   # $  # $# $  TheBDOSeidmancourt,quotingitsearlierdecisionin   Reed,RobertsAssocs.v.Straumann,40N.Y.2d303,307,353  N.E.2d590,593(N.Y.1976)(citationsomitted)restatedthe  standard: M R  X  ?( 4 <DLLX!?Inthiscontext,arestrictivecovenant   willonlybesubjecttospecific    enforcementtotheextentthatitis    reasonableintimeandarea,necessary   toprotecttheemployer XXX XR= XRXX Xslegitimate   interests,notharmfultothegeneral   publicandnotunreasonablyburdensome ej  totheemployee. HM   X  B+ 4 <DL! XLB +0 93N.Y.2dat389,712N.E.2dat1223.  )*Despitethesebroadprinciples,thecourtrecognized  that XXX XRA XRXX Xtheapplicationofthetestofreasonablenessof  employeerestrictivecovenantsfocusesontheparticular `e factsandcircumstancesgivingcontexttotheagreement. XXX XR@ XRXX XԀ &+ Id.at390,353N.E.2dat1224.  Defendantarguesthatenforcementoftheclauseasit  appearsintheOfferLettercannotoccurunderthe x } standardsofBDOSeidmanandReed,Roberts.Ablanketban >"C! onworkingin any capacityfor any companythatcompetesin $ #  any waywithGlass,LewisisarguedbyDefendanttobe % %  overlybroadandbanshimfromworkinginhisfieldanywhere '"'  ) *  ) *) *  intheworld,sinceproxyadvisoryresearchservices  potentiallyhaveglobalreach.   Defendantalsoargues,relyingonBDOSeidman,that  preventingtheDefendantfromcontactingorserving M R customerswithwhomhehadnocontactorwithwhomhe   establishednorelationshipasaresultofemploymentwith    Glass,Lewisviolatesthefirstprongofthecommonlawrule   articulatedintheBDOSeidmancase,sinceitwould ej  constitutearestraintgreaterthanisneededtoprotect +0 Glass,Lewis XXX XR= XRXX XԀlegitimateinterests.  +,TheCourtmustagreewithDefendantatthisjuncture  thattheclausesoughttobeenforcedisoverlybroadunder } NewYorklawinthatitdoesnotmeettheBDOSeidmantest CH ofprotectingonlyGlass,Lewis XXX XR= XRXX XԀlegitimateinterestsandis   notnarrowlytailoredtomeetingthatobjective.UnderNew  Yorklaw,itdoesnotappearthatitis XXX XRA XRXX Xlegitimate XXX XR@ XRXX XԀfora  companytoprotectitselfbycontractfromhavingaformer [!`  employeegotoworkforacompetitorunlesstherestriction !#&" isnarrowlytailoredtoprotecttheexploitationofclient $$  contactsmadewhiletheformeremployeeworkedforthe &!&  +, + ,+ ,  companyortheactualdivulgingoftradesecretsor  proprietaryinformation.   Atthisjuncture,lookingatNewYorklaw  - &  2     \!&  ,theCourt  isnotconvincedthatPlaintiffwillsucceedonthemerits M R ofhavingthenoncompeteclause,aswritteninthe   Agreement,enforcedbywayofinjunction.Plaintiffhasnot    soughtinitspaperstoarticulateameansofpartial   enforcementthatwouldmeettheNewYorklawstandards. ej  ThecourtstatedinBDOSeidmanthatacourtwouldconsider +0 partialenforcement,butonlyundersomefairlystringent  criteria.   X./  ?( 4 <DLLX!?Underthisapproach,iftheemployer } demonstratesanabsenceofoverreaching, `e coerciveuseofdominantbargaining CH powerorotheranticompetitive &+ misconduct,buthasingoodfaithsought   toprotectalegitimatebusiness  interest,consistentwithreasonable  standardsoffairdealing,partial  enforcementmaybejustified.   X  B+ 4 <DL! XLB x } 93N.Y.2dat384,712N.E.2dat1226. [!`   >"C!  ./ . /. /  SincePlaintiffhasfailedtorequestalternative  relieforarticulatehowitmakesthedemonstrationneeded  forsuchdiscretionaryrelief,theCourtwillatthis  juncturedeclinetofillinthemissingargumentsorguess M R atanalternativeinjunctionthatwouldsurvivescrutiny   underNewYorklaw.    ThesecondpartofPlaintiff XXX XR= XRXX Xsrequestedinjunction   wouldenjoinDefendantfrom XXX XRA XRXX Xdisclosinganytradesecret, ej  confidentialinformationorotherproprietaryinformationor +0 knowledgeacquiredwhileintheemployofGlass,Lewis... XXX XR@ XRXX X.  DefendantarguesthatPlaintiffhasfailedtoestablishthat  Defendanthasinanywayunlawfullydisclosedany } informationthatwouldmeetthetestofbeingtradesecret, CH confidentialinformation,orotherwiseproprietary,andthat   themerepossibilitythatsuchdisclosurecouldoccurisnot  anadequatebasisforaninjunction.  01IntheaffidavitsfromGregoryP.Taxin,whoisthe [!`  ChiefExecutiveOfficerofGlass,Lewis,statementsaremade !#&" thatafterDefendantlefttheemployofGlass,Lewis,an $$ insurancecompanythathadnotmadeadecisionabout &!& purchasingGlass,LewisservicesinformedGlass,Lewisthat s(x#(  01 0 10 1  ProxyGovernance XXX XRA XRXX Xhadcontactedtheinsurancecompanyand  wasmakingacompetitivebidfortheirbusiness XXX XR@ XRXX X.Taxin  Aff., XXX XR& XRXX XԀ18.  Additionally,Mr.TaxinassertedthatinApril,2005, M R ProxyGovernanceacquiredanewcustomerinNewYorkwhohad   alsopurchasedservicesinthepastfromGlass,Lewis.It    wasassertedthatthiscompanywasanaccountofDefendant   whenhewasatGlass,Lewis.Mr.Taxinsaidthathe ej  receivedacallfromthatcompanyaskinghimtojustify +0 Glass,Lewis XXX XR= XRXX XԀpricing.Heclaimshewastoldbytheunnamed  companyrepresentativethatProxyGovernancewasattempting  togetthecompanytopayitthesameamountasthecustomer } waspayingGlass,Lewis.Mr.Taxinconcluded: CH  X  ?( 4 <DLLX!?Itappearedtomefromthecontextof   theconversationthatProxyGovernance  hadbeenmadeawareofourpricingto  thisclientandwasusingittoProxy  Governance XXX XR= XRXX Xscompetitiveadvantage.   X  B+ 4 <DL! XLB x } TaxinAff., XXX XR& XRXX XԀ19. [!`   >"C! InresponsetotheTaxinaffidavit,DefendantMcMahon !#&" hasfiledadetailedaffidavitdenyingthathehadengaged $$  inanyoftheconductallegedorsharedanyconfidential, &!& proprietaryortradesecretinformationofGlass,Lewiswith  ProxyGovernance.   23TheCourtisfaced,ontheonehand,withthemere  suspicionsofGlass,Lewiswhicharecounteredontheother M R handbythevigorousandspecificdenialsofDefendantby   swornaffidavit.Insuchacontext,theCourtcannot    concludeatthistimethatPlaintiffhasmetitsburdenof   showingabasisthatthematerialsoughttobeprotectedis ej  actuallybeingdisclosedbyDefendant.Themerepossibility +0 thatDefendantmayinthefuturetransgressisnot,inthis  Court XXX XR= XRXX Xsview,anadequatebasisforimposingaprophylactic  preliminaryinjunction. } TheCourtagreeswithDefendantthatPlaintiff XXX XR= XRXX Xsproof, CH atleasttothispoint,hasfailedtoshowthatDefendant   hasviolatedthecontractualtermspertainingtodisclosure  ofproprietaryinformation,orthathehasotherwise  disclosedtradesecretsorconfidentialinformation. [!`  WorkingataseniorlevelforacompetitorofPlaintiff XXX XR= XRXX Xs, !#&" DefendanthasplacedhimselfinapositionwherePlaintiff XXX XR= XRXX Xs $$ suspicionsandconcernsareunderstandable.Butthisisnot &!& asubstituteforproof,particularlywhereoneisseeking s(x#(  23 2 32 3  theextraordinaryremedyofapreliminaryinjunction.See,  e.g.,StateDep XXX XR= XRXX Xtv.BaltimoreCounty,281Md.548,554  (1977);NationwideMut.Ins.Co.v.Hart,73Md.App.406,  410(1988). M R 45AsDefendantnotes,thesocalled XXX XRA XRXX Xinevitable   disclosure XXX XR@ XRXX XԀdoctrineisgreatlydisfavoredunderNewYork    law,andinanyeventrequiresspecificproofofharmto   haveittriggered.MariettaCorp.v.Fairhurst,754 ej  N.Y.S.2d62(N.Y.App.Div.3dDep XXX XR= XRXX Xt2003);Colonize.com, +0 Inc.v.Perlow,No.03CV466,2003U.S.Dist.Lexis20021  (N.D.N.Y.Oct.23,2003).Onthisrecord,suchproofisnot  apparent.  6 &  3     ~!&   } Forthesereasons,theCourtisnotsatisfiedthat CH Plaintiffhasdemonstratedthatitwillsucceedonthe   meritstobeentitledtotheinjunctionithassoughtfrom  thisCourt.   VI. HarmtothePlaintiff [!`   45 4 54 5  78 Ifthepreliminaryinjunctionisnotgranted,Plaintiff   willbeharmedinthesensethatDefendantwillcontinueto  workforacompetitor,andPlaintiffwillcontinuetobe  concernedthattheconfidentialandproprietaryinformation M R thatDefendantmaypossesswillbeatriskfromhisholding   aseniorpositionwithacompetitor.Thesearesignificant    concerns.Butasdiscussedabove,itishighlydoubtful   that,underNewYorklaw,Plaintiffwouldbeableto ej  succeedonthemeritsoftotallypreventingDefendantfrom +0 workingforGlass,Lewis,andasfurtherindicatedabove,it  hasnotbeenshownatthisstagethatDefendanthasviolated  orwillviolatetherestrictionscontainedintheAgreement } RegardingProprietaryInformationandInventions. CH TheharmthatPlaintiffhasallegedlysufferedisthus   eithernotprovenornotcognizableunderNewYorklaw  pertainingtorestrictiveemploymentagreements.   VII. BalanceofHardship [!`   Thefinaltestforgrantingapreliminaryinjunctionis !#&" whetherthebalanceofhardshipstipsdecidedlytowardthe $$ movingparty.  9 &  4     !&  Defendantwillwithoutdoubtsuffer &!&  78 7 87 8  substantiallyifthepreliminaryinjunctionsoughtby  Plaintiffisentered.Hewouldhavetoleavethejobheis  inandwouldnotbeabletohaveajobintheindustryin  whichhehasworkedforthepasttwelveyears.Thiswould M R workasubstantialhardshipontheDefendantandhisfamily.   GiventhehighlyuncertainabilityofthePlaintiffto    prevailonthemeritsunderNewYorklaw,thespeculative   natureoflegallycognizableharmincurredbythePlaintiff, ej  andtheactualharmthatwouldbesufferedbytheDefendant +0 ifaninjunctionofthetypesoughtbythePlaintiffis  entered,theCourtfindsthattheoverallbalancedoesnot  weighinPlaintiff XXX XR= XRXX Xsfavor. } ;< Conclusion.  CH Forthereasonsstatedabove,Plaintiffhasnot   demonstrateditsentitlementtothepreliminaryinjunction  itrequested.Itistherefore,this_____dayofAugust,  2005, [!`  ORDERED,thatthePlaintiff XXX XR= XRXX XsMotionforaPreliminary !#&" Injunctionisdenied. $$ Ӏ   <     򀀀 &!&  XӀDennisM.Sweeney '"'  ;< ; <; <  hJudge   Xh   E.D LT\ !!X!E  CopiesMailed___________to:    AndrewC.White,Esq. j o SusanQ.Amiot,Esq. M R Silverman,Thompson&While 0 5 201NorthCharlesStreet   Suite2600    Baltimore,MD21201       JohnP.Isacson,Esq.   Foley&Lardner   3000KStreet,N.W. ej  Suite500 HM  Washington,DC200075109 +0   JohnP.Isa,Esq.  PaulHastingsJanofsky&Walker  87515thStreet,N.W.  Washington,DC20005   } VictoriaA.Cundiff,Esq. `e DanielleM.White,Esq. CH PaulHastingsJanofsky&Walker &+ 75East55thStreet   NewYork,NY10022   X X XR     E+ 4 <DL!X !E