IT Firm Can Press Claims Workers Ignored Contract

(CN) - An information-technology support firm may can sue its former employees for offering competitive services to International Business Machines Corp., a federal judge ruled.

Base One Technologies, a New York-based "technology engineering services and support firm," says IBM hired it in December 2009 to staff a project with tech-savvy employees.

Upon determining IBM's needs, Base One recruited and hired - as its own employees - appropriately credentialed individuals to carry out the project, according to the complaint.

Thus far, about 32 Base One employees have worked on IBM's project, which is ongoing and fully funded through June 2015, with a total value of over $10 million, the complaint states.

Base One says it hired software engineers Mohammed Ali and Hossein Beyzavi to work on the project in February 2012 and December 2013, respectively.

The non-compete agreement the pair signed allegedly spelled out Base One's concern that at the close of a project, a client might want to do business directly with the employee.

Ali and Beyzavi thus agreed not to "market any competitive type services directly or indirectly to any Base One clients" that had been assigned to them, the tech firm claims.

Around June 2014, however, Base One learned that Ali and Beyzavi, had conspired to market their own services for full-time employment with IBM, the complaint states.

IBM hired the pair allegedly for the same services they had provided through Base One.

Base One sued Ali and Beyzavi in D.C. Federal Court on Sept. 5, asserting contractual, tort, and fiduciary claims.

U.S. District Judge James Boasberg partially dismissed the complaint Tuesday.

One of the contract's restrictions is "so vague and ambiguous as to render it unenforceable," Boasberg wrote. "The provision prohibits soliciting or contacting Base One employees and independent contractors. But solicit or contact for what? The agreement never says. Is an employee prohibited from contacting another employee about health insurance? From soliciting another employee to attend a political fundraiser? Although the court can perhaps guess that plaintiff meant to prohibit solicitation or contact for the purpose of employment elsewhere, the provision does not so specify."

Though the judge tossed Base One's claims for unfair competition, tortious interference, and "injunctive relief," he upheld the claim for unjust enrichment.

"According to the complaint, defendants intentionally misappropriated the relationship and good will between IBM and Base One in a manner that inured to their personal benefit via their new contract with IBM," Boasberg wrote. "This benefit was clearly acquired at plaintiff's expense: it had invested a great deal of time and effort in cultivating its relationship with IBM and providing it with qualified IT staff to satisfy its needs. Defendants' actions, moreover, resulted in the loss of substantial revenue for the firm."

The claim that Base One left the defendants "penniless" also failed, the ruling states.

"Ali and Beyzavi are free to offer their IT and engineering expertise to any company other than IBM, the only client either was assigned to, and they are free to market their services even to IBM only one year after the termination of their employment with Base One," Boasberg wrote.

It matters not that the defendants lacked "marketing" jobs with Base One, the judge ruled.

"The court is somewhat mystified as to why defendants' titles at Base One would have any bearing on whether they marketed competitive services to IBM, regardless of how narrowly or broadly the term 'market' is construed," Boasberg wrote. "Any employee - no matter his job description within Base One - could wrongfully engage in the marketing of competitive services to customers."

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit