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WEISSMAN v. TRANSCONTINENTAL PRINTING U.S.A. INC.

June 4, 2002

RICHARD WEISSMAN, PLAINTIFF,
V.
TRANSCONTINENTAL PRINTING U.S.A. INC., DEFENDANT.



The opinion of the court was delivered by: Marvin Katz, Senior District Judge.

  FINDINGS OF FACT AND CONCLUSIONS OF LAW

This case involves a written employment contract between plaintiff, Richard Weissman, and his former employer, defendant and counterclaimant Transcontinental Printing U.S.A., Inc. At issue are monetary payments and the viability of a restrictive covenant under New York law. After a hearing on the parties' cross-motions for summary judgment and a bench trial commencing May 29, 2002, the court makes the following findings of fact and conclusions of law:

Background

1. In 1987, Richard Weissman ("Weissman") was hired to work for Spectra Graphics, a company engaged in the business of printing direct marketing materials for large-volume customers.

2. In October 1999, Spectra Graphics was sold to Transcontinental Printing U.S.A. Inc. ("TPU"), a subsidiary of Transcontinental Printing, Inc. ("TPI").

3. TPU and TPI are both subsidiaries of G.T.C. Transcontinental Group Ltd., a Canadian corporation based in Montreal, Canada (collectively, G.T.C. Transcontinental Group Ltd. and all of its subsidiaries are referred to herein as "GTC").

4. As of October 31, 2000, GTC identified at least 68 companies as subsidiaries. The businesses of GTC, carried out through its subsidiaries, are a variety of printing, distribution, publishing and technology services.

5. After the acquisition of Spectra Graphics by TPU, Weissman was retained as President and General Manager of TPU. TPU prints direct mail advertising materials, both personalized and nonpersonalized, and also manufactures business forms.

6. This action arises out of the employment agreement entered into by Weissman and TPU on October 14, 1999 and later supplemented by a letter agreement of December 7, 2000 (collectively, the "Employment Agreement").*fn1 Weissman was represented by counsel in reviewing, negotiating and agreeing to the terms of the Employment Agreement

7. Section 9.1 of the Employment Agreement states that "[t]his Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the principles of conflict of laws thereof." Both parties agree that the interpretation of the Employment Agreement and whether it is enforceable should be decided in accordance with New York law.

8. Under the Employment Agreement, Weissman's term of employment with TPU was for three years.

9. In addition to a base salary of $150,000.00 per annum, TPU agreed to pay Weissman an annual incentive award pursuant to Section 5.2 of the Employment Agreement (the "Annual Incentive Award") and a supplementary bonus pursuant to Section 5.3 (the "Supplementary Bonus") at the end of each fiscal year during the term of employment.

10. During Weissman's employment with TPU, his responsibilities included promoting a more unified and cohesive approach to sales and service among GTC's several different direct mail subsidiaries, and encouraging the cross-marketing of these subsidiaries' services to each other's customers.

11. In brief, Section 7.1 of the Employment Agreement precluded Weissman, without the prior written consent of defendant, from using or disclosing any confidential information, including trade secrets, at any time during or after his employment with TPU.

12. In brief, Section 7.2 of the Employment Agreement precluded Weissman, without the prior written consent of defendant, from working for certain companies competing in certain ways with TPU, TPI, or any affiliates, parents or subsidiaries during his employment with TPU and for one year (or up to two years if so elected by the defendant) after any termination of Weissman without cause.

13. In brief, Section 7.3 of the Employment Agreement precluded Weissman, without the prior written consent of defendant, from diverting business from or soliciting customers or employees of TPU, TPI, or any affiliates, parents or subsidiaries during his employment with TPU and for one year (or up to two years if so elected by the defendant) after any termination of Weissman without cause.

14. In addition to his base salary of $150,000.00 per year during employment, plus bonuses, Weissman was entitled to additional base salary payments under Sections 6.3 and 7.4 after any early termination without cause. Such payments were to be paid, in the same manner as his salary had been paid while he was employed by TPU, for the duration of one year after such termination, as well as for any additional period for which the defendant elected to extend the terms of the noncompetition and nonsolicitation covenants.

15. In November 2000, TPU notified Weissman that his employment was to be terminated without cause.

16. Thereafter, Weissman and TPU negotiated and executed the letter agreement dated December 7, 2000 (the "Letter Agreement").

17. The Letter Agreement stated that Weissman was terminated without cause and that his employment with TPU ended on February 23, 2001.

18. In the Letter Agreement TPU agreed to pay Weissman, among other things, the Annual Incentive Award of $30,000.00 and a Supplementary Bonus in the amount of $70,000.00, both to be paid in January 2001.

19. In the Letter Agreement TPU also agreed to pay Weissman $150,000.00 in post-termination base salary payments for the year following his termination as provided ...


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