SCCAr.

Action No. INDEX

NO. 11777-

Action No. INDEXNO. 2512-

SUPREME COURT - STATE OF NEW YORKIAS TERM PART 18 NASSAU COUNTY

PRESENT:HONORABLE LEONARD B. AUSTINJustice Motion RID: 8-12-

Submission Date: 8-23-Motion Sequence No. : 001 002 003,004,

005/MOT DENV SERVICES, INC.

Plaintiff,

- against -

PHILIP ALESIA, YVINX MAXIMECRAIG GUTMANN, MYRA YABLONSKYand TECHNICAL SAFETY SERVICES,INC.

Defendant,

----------(Action NO. 1 )--------------------------x

ENV SERVICES, INC.Plaintiff

- against -

CARLOS BAUX and TECHNICALSAFETY SERVICES, INC.,

Defendants,(Action No.

COUNSEL FOR PLAINTIFFCertilman, Balin , Adler & Hyman, LLP90 Merrick AvenueEast Meadow, New York 11554

COUNSEL FOR DEFENDANTS(for Philp Alesia)Kraus & Zuchlewski, LLP500 Fifth Avenue - Suite 5100New York, New York 10110

(for Technical Safety Services, Inc.Law Office of Arnold Pedowitz1501 Broadway - Suite 800New York, New York 10036

(for Myra Yablonsky, Craig Gutmann,Yvinx Maxime and Carlos Baux)Filppatos Risk LLP60 East 42 Street - 47 FloorNew York, New York 10165

ORDER

The following papers were read on Defendant Alesia s motion for summaryjudgment; Defendant Technical Safety Services , Inc.'s motion for summary judgment;Plaintiff' s motion for leave to serve an amended complaint; Plaintiff's cross-motion for

ENV SERVICES, INC. v. ALESIA et al.Index No. 11777-ENV SERVICES, INC. v. BAUX, et ano.Index No. 02512-

summary judgment and leave to serve an amended complaint; and the motion ofDefendants Myra Yablonsky, Craig Gutmann , Yvinx Maxime and Carlos Baux (ActionNo. 2) for summary judgment:

Motion Sequence #

Notice of Motion dated June 24 , 2005;Affidavit of Philp Alesia sworn to on June 23, 2005;Affirmation of Geoffrey A. Mort, Esq. dated June 22, 2005;Defendant' s Memorandum of Law;

Motion Sequence # 2

Notice of Motion dated June 28, 2005;Affirmation of Arnold H. Pedowitz, Esq. dated June 28, 2005;Defendant's Memorandum of Law;

Motion Seauence # 3

Notice of Motion dated July 27, 2005;Affidavit of M. Brian Walcott sworn to on July 26 , 2005;Affirmation of Douglas E. Rowe, Esq. dated July 27, 2005;Plaintiffs Memdrandum of Law;

Motion Sequence # 4

Notice of Motion dated August 5 , 2005;Affidavit of Brian Walcott sworn to on August 3, 2005;Affidavit of David Philips sworn to on August 4 , 2005;Affirmation of Dbuglas E. Rowe, Esq. dated August 4 , 2005;Affirmation of Mfltthew J. Bizzaro, Esq. dated August 5, 2005;

Motion Seauence # 5

Notice of Motion dated July 26, 2005;Affidavit of Myr Yablonsky sworn to on July 28, 2005;Affidavit of Craig Gutmann sworn to on July 28 , 2005;Affidavit of Yvinx Maxime sworn to on August 3 , 2005;Affidavit of Carlos Baux sworn to on July 30 , 2005;Defendants Memorandum of Law;

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Other Papers

Affidavit of David S. Philips sworn to on August 3, 2005;Affirmation of Mark D. Risk, Esq. dated August 4, 2005;Affidavit of Steven Gonzales sworn to on August 5, 2005;Affirmation of Robert D. Kraus, Esq. dated August 8, 2005;Affidavit of Steven Gonzales sworn to on August 17, 2005;Affirmation of Douglas E. Rowe, Esq. dated August 12, 2005;Affirmation of Mark D. Risk, Esq. dated August 17 , 2005;Affirmation of Robert D. Kraus, Esq. dated August 18, 2005;Affidavit of Philip Alesia sworn to on August 17, 2005;Affirmation of Douglas E. Rowe, Esq. dated August 22, 2005;

Memorandum of Law of Defendant Technical Safety Services, Inc. in opposition toPlaintiffs motion for leave to serve an amended complaint;

Memorandum of Law of Technical Safety Services , Inc. in support of motion forsummary judgment and in opposition to cross-motion to Plaintiff's cross-motion forsummary judgm:ent and leave to serve an amended complaint;

Plaintiffs Memo'randum of Law in opposition to Defendants motion for summaryjudgment and in' support of Plaintiff's cross-motion to amend the complaint and todismiss Technidal's counter-claim.

Defendants Phillip Alesia and Technical Safety Services Inc. move for summary

judgment dismissing the complaint in its entirety.

Defendant Technical Safety Services, Inc. also moves for partial summary

judgment on its counterclaim against Plaintiff on the issue of liability.

Plaintiff ENV Services, Inc. moves for an order pursuant to CPLR 3025(b),

granting it leave to amend the complaint to allege four additional causes of action.

Plaintiff also cross-moves for summary judgment dismissing the counterclaim of

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Defendant Technical Safety Services, Inc. and for further leave to amend the complaint

to add Medical Repair Laboratories, Inc. as a party Plaintiff.

BACKGROUND

Plaintiff ENV Services Inc.

Defendants Myra Yablonsky, Craig Gutmann, Yvinx Maxime, and Carlos Baux

move for summary judgment dismissing all causes of action against them by Plaintiff.

Plaintiff ENV Services , Inc. ("ENV" ) is a nationwide company engaged in the

business of testing, certification and calibration of contamination control equipment

laboratory equipment and process control instrumentation. Some of its technicians

obtained accreditation for certifying bio-safety cabinets from the National Sanitation

Foundation , although such accreditation is not required (Wickward Tr. at 243). ENV

conducts business in every state in the continental United States. It lists its significant

clients on its website.

In March; 2003, ENV purchased all of the stock of Medical Repair Laboratories,

Inc. ("MRL"), a smaller company in the same business with clients in the Northeast and

Middle Atlantic egions. MRL has not been dissolved because it had a contract with the

National Institute of Health. This contract could not be assigned to ENV for payment

purposes due to internal regulations. It is not disputed that MRL is no longer operating

as an independent entity.

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All of the individual Defendants in both actions were employees of MRL. They

became employees of ENV by virtue of the sale of stock. At issue in this action

commenced by ENV is enforcement of restrictive covenants found in the employment

agreements between MRL and all of the individual Defendants. (Alesia Moving Papers,

Ex. E)

The restrictive covenants (1) preclude competition for 1 year after termination of

the employmen within a 100-mile radius of any geographic area where MRL is engaged

in business; (2) preclude solicitation of MRL's active accounts for 3 years following

termination; (3) preclude disclosure of "confidential information" for 3 years from

termination; and (4) preclude contacting any MRL employees for the purpose of

inducing them to leave for 3 years from termination. The employment agreements do

not provide that they are assignable. No assignment of these agreements from MRL

to ENV has been submitted. ENV alleges, according to its Technical Manager, David

Phillips, ENV's trade secrets at issue consist of customer lists, customer contact

information , customer relationships, service schedules, salary information, information

about employee morale and information about employee qualifications.

fendant Philip Alesia

Defendant Philip Alesia ("Alesia ) joined MRL in late 2000. He is a dispatcher or

scheduler. His duties involved coordinating the scheduling of visits by technicians to

customers. He states that the job of scheduler does not require any special education

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or training. He was required to sign the employment agreement with MRL when he was

hired, and was informed that his employment depended on signing the agreement.

After MRL was absorbed by ENV, Alesia states that he became disilusioned.

He states that promised raises to former MRL employees never materialized, while

long-time pre-MRL staff did receive bonuses. He states that he saw an advertisement

on HotJobs.com for position openings at Defendant Technical Safety Services , Inc.

("TSS"), a California company engaged in the same business that was looking to

expand into the Northeast market. He met with representatives of TSS in February,

May and June of 2004. He was hired by TSS in July 2004. Alesia denies that he

solicited fellow employees, solicited any former customers or disclosed any confidential

information.

Defendant Myra Yablonsky

Defendant Myra Yablonsky ("Yablowsky ) joined MRL in 1984 as an office

worker. She signed an employment agreement (Moving Papers of the four individual

Defendants, Ex: I) in 1998 as the Office and Personnel Manager for MRL. When ENV

took over MRL, she states she was told that, at $65,000 per year, she was overpaid and

could expect not to receive any further raises at ENV. She claims that her duties were

reduced essentially to data entry. She concluded she had no future at ENV. She found

TSS through the internet and e-mailed them. A dinner meeting was scheduled with TSS

representatives at a restaurant in Syosset , for ENV employees who had contacted TSS.

A second meetil1g was held later in Uniondale.

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In early June, 2004, some former MRL employees received raises. Yablonsky

did not. A meeting was held at the ENV office on Sunday, June 13, 2004. All of the

individual Defendants attended. In addition, one ENV employee, Brian Walcott, who

ultimately decided not to leave ENV, attended. ENV learned of the meeting and

scheduled its own meeting on June 21 2004. At that time ENV Chief Executive Officer

Ben Thamarus ("Thamarus ), allegedly told employees that, if they were not happy at

ENV, "there s the door.

Yablonsky states that she received a written offer of employment at TSS at the

same salary she was receiving at ENV. After she received the offer from TSS and

before she acc pted it, ENV offered her the position of Region Manager for the

Northeast Region. She accepted the TSS offer because she saw the opportunity to

have more duties and grow with TSS.

Although ENV accuses Yablonsky of violating the MRL Employee Manual

(Complaint , 16 ; and 17 causes of action), the record does contain an MRL

employment agreement executed by Yablonsky in July 1998.

Defendant Craig Gutmann

Defendant Craig Gutmann ("Gutmann ) started working as a technician at MRL in

January, 2001. He states that he was presented with the employment agreement

(Moving Papers'of the four individual Defendants , Ex. H) on his first day of work and

was told that he had to sign it. He further states that he was never given a copy of the

employment agreement. When ENV took over MRL he became "technician 921.

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Notwithstanding his wife s job as a dental assistant, and extra weekend jobs, his family

of five lived from paycheck to paycheck. He found the TSS advertisement for

employees on the internet and responded, when he learned that no raises would be

forthcoming at ENV. Gutmann attended the restaurant meeting in Syosset and told TSS

that he was asking for a salary of $50,000. He has been earning $42 000 at ENV. He

attended the June 21 meeting at ENV, wherein he was told "the door s right there" by

CEO Thamarus. It is claimed that Thamarus also said that ENV had non-accredited

employees who were just as good. Thereafter, he accepted TSS's offer to work for

$50,000.

Gutmann states that customer service orders are faxed to his home and he goes

from home to job site every day. He does not negotiate with customers, and is not

aware of prices.

Defendant Yvinx Maxime

Defendant Yvinx Maxime ("Maxi me ) is a technician who was hired by MRL in

1998. He states, that he was paid $250 to sign the employment agreement (Moving

Papers of the four individual Defendants, Ex. G), and was not given a copy of it.

Maxime received accreditation from the National Sanitation Foundation in 2000.

He has three children , and earned $43,000 at ENV. He was disilusioned by the lack of

a raise when ENV took over. He states that he e-mailed TSS after seeing their

advertisement on the internet. He attended the dinner in Syosset, and later met with a

TSS representative at a hotel. Maxime asked for a salary of $50,000.

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Maxime also attended the meeting of disgruntled ENV employees on June 13

and the June 21: meeting with Thamarus. When complaints were made about the small

raises belatedly given, Maxime relates that Thamarus said "there s the door" and stated

further that ENV could not pay more money. Maxime further states that Thamarus said

he did not think the technicians' NSF accreditations were very important. After the

meeting, Maxime states that Joseph Wickward , the Director of Operations for ENV

apologized for t e "way the meeting had gone.

Maxime Was offered $50,000 from TSS and he began work there on July 28,

2004. He works from home. Customer service orders are faxed to his house.

states that he does not develop relationships with the customers. A large percentage -

90% - of his work at ENV was with Yale University. He has not been back to Yale

since joining TSS.

Defendant Carlos Baux

Defendant in Action No. , Carlos Baux ("Baux ) is a technician accredited by

National Sanitation Foundation in the certification of biological safety cabinets. He

joined MRL in 1999. On his first day of employment he was instructed to sign an

employment agreement with MRL (Moving Papers of the four individual Defendants, Ex.

J).

Baux claims that he became frustrated with ENV, not only because of the

belated , small raises , but also because ENV was making clear that the future of the

business was in calibration work. Maxime and he did a small amount of calibration work

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from time to time. Gutmann did no calibration work. According to Baux, calibration is a

separate skil, and his training was in certification.

Baux states that he learned of TSS from Alesia , who told him that TSS was

wiling to pay technicians in the range of $50 000. Baux ' salary at the time was

$38,500. He also attended the dinner at Syosset, and the second dinner in Uniondale.

He attended the, meeting at ENV on June 13, and the meeting with Thamarus on June

21. Baux also confirmed that Thamarus stated there was no money for raises , and said

there s the door." He received an offer from TSS at a salary of $48 500 in late June and

resigned from ENV on July 19.

Baux testifies that he does not form relationships with the people in the labs

where he is sent on service orders. Other than distributing TSS marketing postcards in

various labs at Columbia University and Mount Sinai on one occasion, and sitting in a

booth at a trade show on several occasions, he is not involved in marketing or sales.

Plaintiff' s claims against Defendant Baux are set forth in Action No. 2, which

according to Baux has been, or wil be, consolidated with Action No.

Defendant Technical Safety Services. Inc.

TSS argues that its regional manager, John Dalto, solicited all new clients in the

New York area. TSS insists that it did not use the former ENV employees to solicit

customers of ENV. According to TSS Vice President Steven Gonzalez , TSS identified

potential customers for solicitation by reviewing trade organization membership lists,

mailng lists, information learned at trade shows, general industry contacts and internet

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searches. Gonzalez further states that TSS has learned that all of the business and

financial data of ENV is fully available to each and every employee of ENV, regardless

of their function, location, or status in the company.

DISCUSSION

Leave to Amend to Add MRL as Party Plaintiff

Defendants argue that the employment agreements at issue are agreements with

MRL, and, therefore, cannot be enforced by ENV. Plaintiff's response is to seek leave

to add MRL as a party Plaintiff.

Leave to amend a pleading shall be freely granted absent prejudice to the

opposing party (CPLR 3025(b)), and the decision to allow amendment is committed to

the court' s discretion. Edenwald Contracting Co. v. City of New York , 60 N.Y. 2d 957,

959 (1983); and Aronov v. Regency Gardens Apartment Corp. , 15 AD. 3d 513 (2

Dept. 2005). In the interest of a complete record and resolution of all of the issues

presented , this Court will allow the proposed amendment.

Restrictive Covenants Not to Comcete

Restrictive covenants in the employment context are disfavored as there are

powerful considerations of public policy which militate against sanctioning the loss of a

man s livelihood. " Columbia Ribbon & Carbon Mfg. Co. V. A- A Corp. , 42 N.Y. 2d 496,

499 (1977); Reed. Roberts Assoc.. Inc. V. Strauman , 40 N.Y. 2d 303, 307 (1976);

Purchasing Assoc. v. Weitz, 13 N.Y. 2d 267 , 272 (1963); JAD Corp of America V. Lewis

305 AD. 2d 545 (2 Dept. 2003); and Savannah Bank. N. V. Savings Bank of the

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Fingerlakes , 261 AD. 2d 917 , 918 (2 Dept. 1999). The general public policy favoring

robust and uninhibited competition should not give way merely because a particular

employer wishes to insulate itself from competition. American Broadcasting

Companies. Inc. v. Wolf, 52 N.Y. 2d 394 404 (1981); and Walter Karl. Inc v. Wood. 137

AD. 2d 22, 29 (2 Dept. 1988).

Restrictiye covenants are judged by the standard of reasonableness as

demonstrated in a three-prong test; to wit: if the covenant (1) is no greater than is

required for the .protection of the legitimate interest of the employer; (2) does not impose

undue hardship ion the employee; and (3) is not injurious to the public. BDO Seidman v.

Hirschberg , 93 N.Y. 2d 382 , 388-389 (1999). The cognizable employer interests under

the first prong is limited to misappropriation of the employer s trade secrets or

confidential client lists, or protection from competition by a former employee whose

services are unique or extraordinary Id. at 389; and Reed. Roberts Assoc. v. Strauman

supra at 308.

Plaintiffs do not argue, nor could they, that the services of a dispatcher, an office

manager, or technicians are unique or extraordinary. See gen IIy, Ken J. Pezrow Corp.

v. Seifert, 197 A.D. 2d856 (4 Dept. 1993), Iv. app. dmsd. in part and den. in part, 83

Y. 2d 798 (1994); Savannah Bank N.A. v. Savings Bank of the Finaerlakes supra;

and Accent Stripe Inc. v. Taylor, 204 A.D. 2d 1054 (4 Dept. 1994). These employees

certainly were not irreplaceable. Therefore, the Court turns to the analysis of trade

secrets.

ENV SERVICES, INC. v. ALESIA et al.,

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A trade secret is defined as any formula, pattern, device or compilation of

information which is used in one s business, and which gives the owner an opportunity

to obtain an advantage over competitors who do not know or use it. Ashland Mgt. Inc.

v. Janien , 82 N.Y. 2d 395, 397(1993). See , Restatement of Torts 757, comment b. A

trad secret must first of all be secret. Where the information at issue is public

knowledge, or could be acquired easily and duplicated, it is not a trade secret

Ashland

Mgt. Inc. v. Janien supra; and Starliaht Limousine Service. Inc. v. Cucinella , 275 AD.

2d 704 (2 Dept. 2000).

Trade secret protection wil not be accorded to customer lists where the names

and addresses of the customers are readily ascertainable (Leo Silfen. Inc. v. Cream , 29

Y. 2d 387 (1972)) or where client information is scattered throughout the office in

unlocked files. FrederlQ. Reed & Co.. Inc. v. Irvine Realty Grp.. Inc. , 281 AD. 2d 352

Dept.), Iv. app. den., 96 N.Y. 2d 720 (2001). Information from publicly available

sources is not entitled to trade secret protection. JAD Corp of America v. Lewis supra.

It is well settled that an employee s recollection of information pertaining to specific

needs of particular customers is not confidential. Buhler v. Michael P. Maloney

Consultina. Inc.. 299 AD. 2d 190 Dept. 2002); and Investor Access Corp. v.

Doremus & Co. : Inc. , 186 AD. 2d 401 Dept. 1992), Iv. app. den., 81 N.Y. 2d 706

(1993).

Here, ENV publishes its client list, in part, on its website and its Director of

Operations testified that disclosure of the names of its customers was not a problem

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et ano.Index No. 02512-

(Wickward Tr. at 124). Moreover, the customers for whose business ENV and TSS

compete are readily ascertainable through sources outside the business such as the

internet and trade publications. ENV does not refute TSS' claim that customer contact

information, pricing and servicing information are easily obtained from internet sites or

the would-be customers themselves. Ron Benoit, the ENV Northeast sales

representative testified that "anybody can go on and do a search and find out who did

certifications. : . Anybody can go in and get the business, even though we are

there and its our business" (Benoit Tr. at 32). In addition, Alesia has testified that all of

the information he handles exists in ENV's database, which can be accessed without

use of a password by any ENV employee. Suffice it to say, salary information,

information about employee morale and information about employee qualifications, do

not fall within the definition of "trade secret." See, Ashland Mgt. Inc. v. Janien supra;

and Restatement of Torts 9 757, comment b.

The closer question is that of customer relationships. Protection of customer

relationships that the employee acquired in the course of his/her employment may

indeed be a legitimate protectible interest BDO Seidman v. Hirshberg supra at 391.

The problem here is one of proof. No affidavits from customers have been provided.

Indeed, no names of the persons with whom the individual Defendants allegedly had

relationships are submitted. CEO Thamarus testified that contacts were made with

Columbia, Yeshiva, Mount Sinai and a company in Princeton, but he could not state the

nature of the contact or which of the individual Defendants made the contact (Thamarus

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Tr. at 51). Joseph Wickward testified that ENV has a suspicion that Alesia disclosed

confidential information to third parties, but that ENV had no specific information to

support that suspicion (Wickward Tr. at 215). On this record , there has been absolutely

no showing that the individual Defendants had, or misused, any customer relationships.

The Court notes additional problems with the employment agreements at issue.

The geographic limitation in the non-compete clause, namely the 100-mile radius of

any geographic area where MRL is. . engaged in business, or maintains sales or

service representatives or employees," is unreasonably broad in scope.

Rescomcleaning. Inc. v. Ulloa , 5 Misc. 3d 1003(A), 798 N. S. 2d 712 (Sup Ct. Suff. Co.

2004 ).

Furthermore, Defendants are correct that MRL has no protectable interest in

enforcing the restrictive covenants. There is no evidence that the parties intended the

employment agreements to be assignable when they were originally executed. Archer

Worldwide. Inc. v. Mansbach , 289 AD. 2d 349 (2 Dept. 2001).

Based on the foregoing, the individual Defendants are entitled to summary

judgment dismissing all causes of action based on the restrictive covenants, namely,

the first 17 causes of action in the complaint in Action No. 1 and the first five causes of

action in Action No.

The Claims Against TSS for Tortious Interference

In Action No. , Plaintiff alleges claims againstTSS for tortious interference with

ENV' s contracts with Alesia, Maxime, Gutmann, and Yablonsky. In Action No.

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Plaintiff alleges a claim against TSS for tortious interference with ENV's contract with

Baux. Even if the contracts at issue were with ENV , these causes of action are fatally

flawed.

The culpable conduct necessary to state a cause of action to recover for

interference with a contract terminable at will is "wrongful conduct," which is defined as

fraudulent representations, threats or violation of a duty of fidelity owed to the plaintiff by

reason of a confidential relationship between the parties. Jurlique. Inc. v. Austral

Biolab pty. , 187.A. D. 2d 637 638-9 (2 Dept. 1992). See also, Guard-Life Corp. v.

Parker Hardware Mfg. Corp. , 50 N.Y. 2d 183, 191 (1980). A relation of confidence has

been found to exist where the Defendants were officers, directors or "key men" of the

plaintiff corporation Duane Jones Co.. Inc. v. Burke , 306 N.Y. 172 (1954). Such a

relationship has also been found to exist between a manufacturer and its distributor.

AS. Rampell. Inc. v. Hyster Co. , 3 N.Y. 2d 369 , 376-377 (1957).

As all of the individual Defendants were at-wil employees , free to leave their

employment at any time, and Plaintiff has not offered any evidence to establish fraud or

threats on the part of TSS or any kind of confidential relationship, all of the causes of

action for tortious interference with the respective employment agreements must be

dismissed.

Similarly, . in the 22 cause of action in Action No. ENV alleges a claim against

TSS for tortious interference with business relations. This cause of action requires a

showing that defendant's interference was accomplished by wrongful means or that

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defendant acted for the sole purpose of harming plaintiff. Snyder v. Sony Music

Entertainment Iric. , 252 AD. 2d 294 (1 st Dept 1999). Again, there has been no

evidence of any wrongful means used by TSS. ENV cannot show that TSS acted for

the sole purpose of harming it. TSS' motivation , at least, in part, was to expand its

operations to the Northeast. Accordingly, TSS is entitled to summary judgment

dismissing the 22 cause of action against it.

Misappropriation of Trade Secrets

In the 23 cause of action in Action No. 1, Plaintiff seeks damages for

Defendants ' alleged misappropriation of Plaintiffs trade secrets, and, in the 24 cause

of action, Plaintiff seeks injunctive relief enjoining such misappropriation. Also, in the 7

cause of action in Action No. 2, Plaintiff seeks injunctive relief with regard to alleged

trade secret misappropriation by Baux. This Court has already determined that the

subject matter of Plaintiffs claims does not merit trade secret status. Therefore, Plaintiff

has no cause of action for misappropriation of trade secrets. The 23 and 24 causes

of action in Action No. 1, and the 7 cause of action in Action No. , must be dismissed.

Hair Say. Ltd v Salon Opus. Inc. , 6 Misc. 3d 1041 (A), 800 N. S. 2d 347 (Sup Ct.,

Nassau Co, 2005).

Leave to Amend to Add Four New Causes of Action

Plaintiff seeks leave to amend its complaint in Action No. 1 to allege new causes

of action for breach of fiduciary duty by Alesia, Maxime, Gutmann and Yablonsky; to wit:

intentional procurement by Alesia of breach of employment contracts by Maxime

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Gutmann , Yablonsky and Baux; unfair competition; aiding and abetting by Alesia and

TSS of the breaches of fiduciary duty by the individual Defendants.

Although leave to amend should be freely granted, it is incumbent on the movant

to make some evidentiary showing that the claim can be supported. The court must

examine the underlying merit of the proposed amendment, since to do otherwise would

be wasteful of judicial resources. Butt v. New York Medical College, 7 AD. 3d 744 (2

Dept. 2004); and Toscano v Toscano , 302 AD. 2d 453 (2 Dept. 2003).

As to the causes of action for alleged breaches of fiduciary duty and aiding and

abetting such breaches, the Court has already found that the employer/employee

relationship at issue herein did not give rise to a relationship of confidence. Therefore,

the Court must analyze the proposed claims as alleging breach of the duty of loyalty

and aiding and abetting breach of the duty of loyalty.

An employee owes his or her employer a duty of good faith and loyalty in the

performance of his or her duties. Wallack Freight Line. Inc. v. Next Day Express. Inc.

273 AD. 2d 462 (2 Dept. 2000);and Maritime Fish Products. Inc. v. World-Wide Fish

Products. Inc. , 100 A.D. 2d 81 Dept. 1984). In the absence of a restrictive

covenant, an employee may freely compete with a former employer unless trade

secrets are involved or fraudulent methods such as physically taking and copying files

are employed. Pearlgreen COrD. v. Yau Chi Chu, 8 AD. 3d 460 (2 Dept. 2004); and

Starlight Limousine Service Inc. V. Cucinella supra. An employee may create a

competing business prior to leaving his employer without breaching any duty unless he

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makes improper use of the employer s time, facilities, or proprietary secrets in so doing.

Line. Inc. v. Next Day Express. Inc. supra; and Schneider Leasing

Plus. Inc. v. Stallone , 172 AD2d 739 (2 Dept.), app. dism., 78 N. 2d 1043 (1991).

See also, . Reeq & Co. Inc. v. Irvine Realty Grp.. Inc. supra.

Here, again, trade secrets are not involved. The only alleged use of ENV'

facilties was the Sunday night meeting of disgruntled employees, which took place

before the individual Defendants decided to leave ENV. As the office was not open for

business on Sunday night, and it appears that the office was used only as a meeting

place, this one-time use of the office space cannot be seen as rising to the level of a

breach of the duty of loyalty.

As to theft of files or lists, the only employee as to whom such allegations are

seriously made is Alesia. Brian Walcott, an ENV field supervisor, who did not leave ENV

for TSS, has avered that he "believes" Alesia "took ENV's schedule and database with

him." This belief is based upon the circumstantial evidence that after Alesia left his desk

had been cleared out, the technicians ' schedule was missing and ENV customers were

solicited around the service due dates (Walcott aff. , 11 17).

Alesia categorically denies that he provided TSS with any information about ENV

customers, customer contacts, customers ' special needs, maintenance schedules or

The Court notes that Walcott was made a counteroffer by ENV and his salary was increased to$56,000 (Wickward Tr. at 285).

ENV SERVICES, INC. v. ALESIA et al.

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pricing data. He states that ENV's claims that he contacted the Center for Disease

Control , Mt. Sinai , Yeshiva University, Yale University and Pfizer are baseless. At his

deposition, Thamarus testified that he had no information to lead him to believe that

ENV lost any business to Columbia, Mount Sinai , Yeshiva or a company in Princeton to

TSS (Thamarus Tr. at 46). Director of Operations Wickward testified in May, 2005, that

he had no specific information that would support his suspicion that Alesia disclosed

ENV' s confidential information to a third party (Wickward Tr. at 215). While ENV

Technical Manager Philips refers to Exhibit 0 annexed to the moving papers by the four

individual Defendants for information about lost business , no connection is made

between these customers and the individual Defendants.

On this record, the Court is compelled to find that ENV has failed to make the

requisite evidentiary showing of some underlying merit to the proposed cause of action

against Defendant Alesia for breach of the duty of loyalty. Walcott's testimony, like that

of Thamarus and Wickward , establishes suspicion only. Suspicion alone does not

suffice. See, Ray v. Brooklyn Union Gas , 304 AD. 2d 738 (2 Dept.), Iv. app. den.,

100 N. Y. 2d 510 (2003); and Zuckerman v. City of New York, 49 N.Y. 2d 557 (1980).

There has been no evidence presented to support Plaintiff's charge that Alesia, or any

of the other individual Defendants, unlawfully removed ENV's customer database

containing allegedly confidential information.

Plaintiff' proposed cause of action against Alesia, for intentional solicitation

procure the breaches of contract by Mazime, Gutmann , Yablonsky and Baux," is

ENV SERVICES, INC. v. ALESIA, et al.Index No. 11777-ENV SERVICES, INC. v. BAUX, et ano.Index No. 02512-

undermined by the absence of any employment contracts between the individual

Defendants and ENV and the failure to demonstrate that the parties intended the

employment agreements with MRL to be assignable.

Plaintiff' s proposed cause of action for unfair competition appears to be based

upon alleged "raiding and/or soliciting the individual Defendants to depart from Plaintiff'

employ with intent to harm Plaintiff." The inducement of an at-wil employee to join a

competitor is not actionable , unless dishonest means are employed, or the solicitation is

part of a scheme designed solely to produce damage. Headquarters Buick-Nissan. Inc.

v. Michael Oldsmobile , 149 AD. 2d 302 Dept. 1989). On this motion , there has been

no showing of any dishonest means, nbr has there been any showing of intent to harm

Plaintiff. All of the individual Defendants left ENV for more pay and better career growth

opportunities. TSS was looking to expand its into the Northeast. A loss of 5 people in a

national company is not even roughly comparable to the raid of almost all the skilled

employees and a majority of the workforce in Duane Jones Co. Inc. v. Burke 306 N.

172 (1954).

After all the discovery that has taken place in this action, Plaintiff stil cannot

produce evidence that the individual Defendants exploited the customer contact and

pricing informatitm that to which they were exposed while employed by Plaintiff. Under

these circumstances, Plaintiff has failed to demonstrate that this proposed cause of

action has demonstrable merit.

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Based on the foregoing, Plaintiff has failed to demonstrate that any of the four

new proposed causes of action have merit. Accordingly, the motion for leave to amend

the complaint to add these causes of action must be denied.

The Counterclaim

Finally, Plaintiff cross-moves for summary judgment dismissing TSS'

counterclaim for violation of General Business Law 9340. This statute prohibits

contracts or agreements for monopoly or in restraint of trade. In its counterclaim , TSS

alleges that ENV conspired with MRL to restrict the competitive employment

opportunities of .the individual Defendants and thereby restrict competition.

A parent corporation and its wholly-owned subsidiaries are considered a single

entity under antitrust principles and, therefore , cannot engage in anticompetitive acts

North Atlantic Utilties Inc. v. Keyspan Corp. , 307 AD. 2d 342 (2 Dept.), Iv. app. den.

1 N.Y. 3d 503 (2003). Consequently, any contract or agreement between ENV and

MRL does not run afoul of General Business Law 9340. For this reason, the application

by TSS for partial summary judgment on its counterclaim must be denied, and Plaintiff'

cross-motion for summary judgment dismissing the counterclaim must be granted.

Accordingly, it is,

ORDERED, that the motion by Defendant Phillp Alesia and TSS for summary

judgment dismissing the complaint in its entirety is granted; and it is further,

ORDERED, that the motion by TSS for partial summary judgment on its

counterclaim against ENV on the issue of liabilty is denied; and it is further,

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ENV SERVICES , INC. v. BAUX et ano.Index No. 02512-

ORDERED, that the motion by Plaintiff for leave to amend the complaint to allege

four additional causes of action is denied; and it is further,

ORDERED, that the cross-motion by Plaintiff for summary judgment dismissing

TSS' counterclaim and for leave to amend the complaint to add MRL as a party Plaintiff

is granted; and it is further,

ORDERED, that the motion by Defendants Myra Yablonsky, Craig Gutmann

Yvinx Maxime, and Carlos Baux, for summary judgment dismissing all causes of action

against them is granted.

This constitutes the decision and Order of the Court.

(S.Dated: Mineola, N.

November 28, 2005HON. LEONARD B. AUSTIN, J.

ENTEREONO'J 3 0 2005

AU COUN1"NASSCLERK' S OFFICL

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