The opinion of the court was delivered by: Mitchell, M.J.
The matter is before the Court for a hearing on the plaintiff's motion for a preliminary injunction (Docket No. 2). The parties have not consented to a consolidation of this matter for trial on the merits (F.R.Civ.P. 65(a)(2). Hearing commenced on January 12, 2010, and upon consideration of the evidence presented we make the following:
1. The plaintiff in this action, Gray Holdco, Inc., ("Gray") is a Delaware Corporation with its principal place of business in the State of New York. Gray is a holding company which through its various holdings owns 100% of the stock of GWSI which provides cased-hole wireline services to the oil and gas industry. It has been acknowledged by the plaintiff that it engages in a highly open industry in which there are very few, if any, operational trade secrets and that all those involved in the field know who the providers are as well as who are the users and equipment providers.
2. Defendant Randy Cassady ("Cassady") is a resident of Texas. He has a limited formal educational background and with the exception of short periods of time has been engaged in the wireline industry for over thirty years. He entered that industry as a laborer and worked his way up to the management level.
3. Defendant RWLS, LLC ("RWLS") is a limited liability Texas Company formed on or after October 6, 2009 with its principal place of business located in Levelland, Texas and maintains a facility in Mansfield, PA.
4. The cased-hole wireline industry is a small industry with three or four dominant providers and a number of small participants. There is a great amount of interaction between the workers for the various companies and frequent movement of workers and management occurs between the various participating firms. There is very little if any technical operational propriety information in the industry and most end users contract with several providers at the same time.
5. Contracts are not necessarily awarded to the lowest bidder because prior experience plays a part in these decisions.
6. The identity of potential customers is gained from a publically available service which secures the information from public filings. In addition, there is much communication within the industry.
7. In June, 2006 Cassady who had previously worked for a competitor of GWSI was hired by GWSI as District Manager at its Granbury, Texas facility and charged with the day to day operation of that facility. At that time Cassady did not receive an employment contract, either written or verbal, and his continued employment was entirely open-ended.
8. On December 4, 2006, six months after he commenced his employment, Cassady and GWSI completed the execution of a New Hire Plan Option to Purchase Stock ("the Plan") (PX-3) which granted him options to purchase 90 shares of Gray at $1850 per share over a five year period in return for his agreement to respect certain terms and conditions set forth in the restrictive covenants. Prior to receiving the agreement, he had no knowledge of the existence of a decision to offer stock options. He subsequently learned that GWSI had granted similar options for 2,688 shares and that none had been exercised. The latest independent consolidated financial statement for Gray demonstrates that these shares are essentially worthless due to the negative net worth of the company.
9. Section 19 of the Plan specifically provides that all rights created under the agreement are to be construed in accordance with the laws of the State of New York. In addition, the prefatory recitation in the agreement provides: "For value received and subject to the provisions hereinafter set forth..."
10. An essential element of the Plan is the provision in Section 12 that Cassady "agrees to be bound by the non-competition, non-solicitation, standstill, non-disparagement and/or confidentiality provisions as set forth [therein]..." (PX-3).
11. Other GWSI employees who were subjected to the same restrictions received large cash payments as a result of the 2006 merger-acquisition of GWSI by Gray, as well as fixed terms of employment with specified salaries, bonus opportunities and promises of generous severance packages from which they greatly profited. No such incentives or benefits were extended to Cassady in exchange for ...