United States District Court, E.D. Pennsylvania
F. KELLY, SR. JUDGE
Ardurra Group, Inc. (“Ardurra”) filed a motion
for preliminary injunction against Defendant Daniel Gerrity
(“Gerrity”), a former employee, on July 25, 2019.
(Doc. No. 2.) Ardurra sought to immediately enjoin Gerrity
from (1) working for or on behalf of a directly competitive
entity in violation of applicable restrictive covenants, (2)
soliciting or attempting to solicit or induce current and
prospective Ardurra clients and business partners, and (3)
use of Ardurra's confidential and proprietary information
for the benefit of third parties, namely Bernhard Capital
Partners (“Bernhard Capital”) and associated
entities. (Pl.'s Mem. Law in Supp. Mot. Prelim. Inj. 1.)
August 8, 2019, a hearing was held on Ardurra's motion
for preliminary injunction. (Doc. No. 18.) At the hearing,
Gerrity provided testimony and Ardurra submitted the
declaration of Kevin Brown (“Brown”),
Ardurra's Director of Human Resources, along with the
relevant portions of the Unit Purchase Agreement
(“Purchase Agreement”) and the King Engineering
Associates Inc. Employee Propriety Information and Inventions
Assignment Agreement (“Employee Agreement”).
During the hearing, Ardurra argued that Gerrity breached the
Purchase Agreement and Employee Agreement through his work
for Bernhard Capital, an investment firm which Ardurra
believes directly competes with, or provides assistance to
entities that directly compete with, Ardurra in several
aspects of its environmental engineering business. See,
e.g., Hr'g Tr. 8/8/19, 6:3-7; 6:18-7:17. Gerrity
contended that his work for Bernhard Capital was separate and
distinct from his work at Ardurra and did not compete with
Ardurra. See, e.g., id. at 24:2-4.
Alternatively, Gerrity argued that the scope of both of the
agreements was overbroad and should not be read to encompass
his current role at Bernhard Capital. See, e.g.,
reasons discussed below, at the close of the August 8, 2019
Hearing, the Court entered an Order in favor of Ardurra
enjoining Gerrity from working in any manner in breach of the
Purchase Agreement and Employee Agreement. (Doc. No. 11.)
Following a Motion for Reconsideration filed by Arudurra, the
Court amended its Order on September 9, 2019, broadening the
prohibition of Gerrity “from being employed by or
performing work for or on behalf of Bernhard [Capital] and
its portfolio and related companies and funds.” (Doc.
THE PARTIES AND RELEVANT AGREEMENTS
Ardurra, formerly known as King Engineering Associates, Inc.,
is an engineering and construction services company that
sells services to public and private entities throughout the
United States and abroad. Ardurra's focus is
infrastructure, including civil, water, wastewater, solid
waste, transportation, traffic, land planning, ecological,
landscape architecture, land surveying, and construction
management. (Pl.'s Mot. Prelim. Inj., Decl. of Kevin
Brown in Supp. Pl.'s Mot. Prelim. Inj. (“Brown
Decl.”), ¶ 4.)
Gerrity is the former Head of Sales at Ardurra and was a
member of the Board of Directors. (Id. ¶ 10.)
Gerrity was previously the CEO of Ardurra Group, LLC
(“Ardurra Group”) and its second largest
shareholder. (Id. ¶ 7.)
October 18, 2017, King Engineering Associates, Inc., Ardurra
Group (through its holding company Ardurra Group Holdings,
LLC), and Durra Holdings, LLC, entered into the relevant
Purchase Agreement to sell Ardurra Group to King Engineering.
(Id. ¶ 8.) Gerrity was instrumental in the
decision to sell Ardurra Group and was intimately involved in
the negotiation of the purchase price and terms of the
purchase price was $19.2 million. (Id.) Gerrity
received $4, 330, 854.00 from the sale proceeds.
Following the close of the sale, Gerrity signed the Employee
Agreement with the new Ardurra entity in conjunction with
starting his new position as Head of Sales. (Id.
Purchase Agreement contained a four-year non-compete and
non-solicitation agreement. Hr'g Tr. 8/8/19, 5:10-15. The
Employee Agreement contained a one-year non-compete and
non-solicitation agreement, effective upon the end of
employment at Ardurra. Id.
Under the Purchase Agreement, Gerrity was prohibited from
directly or indirectly engaging in or assisting others in
engaging (whether through employment, consultation, advisory
services, representation on a board of directors or other
similar governing body or by any financial or other
investment in) any line of business in which Ardurra or its
related entities were engaged. Id. at 4:8-25.
Under the Employee Agreement, Gerrity was prohibited from
using or disclosing Ardurra's Proprietary Information for
any purpose other than advancing Ardurra's interests.
(Brown Decl. ¶ 15.) Proprietary Information included,
without limitation, any and all confidential and/or
proprietary knowledge, data, information, or trade secrets.
(Id.) Such information included the identity of and
information regarding Ardurra's vendors, suppliers,
contractors, subcontractors, customers, identified
prospective customers, the existence of any business
discussions, negotiations, or agreements between Ardurra and
any third party. (Id.)
March 28, 2019, Ardurra terminated Gerrity's employment.
(Id. ¶ 21.)
Shortly after his termination, and well within the restricted
periods of the Purchase Agreement and the Employee Agreement,
Gerrity began working at Bernhard Capital in June or July
2019. Hr'g Tr. 8/8/19, 36:4-7.
Upon learning of Gerrity's new position, Ardurra filed
suit for breach of contract and tortious ...