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:
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,
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
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
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.
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
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 ...