NOTICE: Summary decisions issued by the Appeals Court pursuant to its rule 1:28, as amended by 73 Mass. App. Ct. 1001 (2009), are primarily directed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, such decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 1:28 issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258, 260 n.4 (2008).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
A judge of the Superior Court allowed a summary judgment motion filed by the defendants, Harriet Ware and South Shore Gymnastics Academy, Inc. The plaintiff, Head over Heels Gymnastics, Inc., appeals from the ensuing judgment, arguing that the judge erred because there existed genuine disputes of material fact as to key elements of the plaintiff's claims. We affirm, essentially for the reasons well explained in the motion judge's thoughtful memorandum of decision.
Background. Head Over Heels Gymnastics, Inc. (Head Over Heels) is an established gymnastics academy offering training and recreation activities to both high-level and less talented gymnasts. In 2006, Head Over Heels hired the defendant Harriet Ware as an "at will" employee to train mostly high-level gymnasts. When accepting the position, Ware acknowledged that she had received and understood the Head Over Heels employee handbook. Among other things, it specified that personnel were not to contact gymnasts training with Head Over Heels through social media. The handbook did not contain either a noncompete covenant or any mention of trade secrets.
Head Over Heels maintained a list of the persons who trained with Head Over Heels, along with their families. This listing included names, addresses, telephone numbers, and e-mail addresses; the information was available to all employees and was distributed to all trainees and their families so that they could communicate with each other directly. Head Over Heels never informed Ware or any other person that this list constituted confidential information or otherwise was a trade secret.
In the spring of 2012, while still employed by Head Over Heels, Ware began putting together a business plan for her own gymnastics academy, which later became known as South Shore Gymnastics Academy (South Shore); she also incorporated the business. Ware represented in an affidavit that she performed this work in her off hours and that she never contacted any Head Over Heels customers while employed there. Head Over Heels terminated Ware's employment in June, 2012, allegedly for violating its social media contact rule.
According to Ware's affidavit, after she was terminated, a number of parents of Head Over Heels gymnasts contacted her to find out what had happened. She responded, telling them that she had been "blindsided" by the termination. Eventually, about thirty customers left Head Over Heels and began training with Ware at South Shore.
In its complaint, Head Over Heels alleged that Ware: (i) misappropriated its trade secrets (the customer list); (ii) violated her duty of loyalty by contacting its customers while employed by Head Over Heels and then inducing them to switch to South Shore; and (iii) unfairly competed with it by, among other things, making disparaging remarks about Head Over Heels in her business plan.
The judge allowed the defendants' motion for summary judgment, first holding that, because Ware was an "at will" employee, she owed Head Over Heels no particular duty of loyalty and was free to "plan to go into competition with . . . her employer and take active steps to do so even while still employed." Ware's ability to compete with Head Over Heels was not constrained by a noncompetition agreement, as there was none. The judge determined that Ware did not misappropriate Head Over Heels' trade secrets or other proprietary information because Head Over Heels had none.
The judge ruled, "as a matter of law, the [c]ustomer [l]ists are not trade secret or confidential proprietary information. It is undisputed that the [c]ustomer [l]ists were available to all staff and employees and were distributed to Head Over Heels' gymnasts and their families. . . . The broad dissemination and availability of the [c]ustomer [l]ists indicates that Head Over Heels was not trying to guard the secrecy of the information. . . . Importantly, much of the information found in the [c]ustomer [l]ists was readily available in the public domain and could have been easily obtained."
The judge next addressed the remaining claims, concluding that Ware could not be found liable for interference with economic advantage because, among other reasons, there was no record support for the inference that Ware acted through improper motive or means. On the contrary, as the judge noted, "Head Over Heels contends that Ware acted out of a desire for personal and financial gain, which on its own, does not constitute improper motive."
Discussion. Confidential/proprietary information. Head Over Heels first argues that whether its customer lists were protected information is an issue of fact and, therefore, not properly adjudicated on summary judgment.
In determining whether information is proprietary to a business, we look to "the conduct of the parties and the nature of the information." Jet Spray Cooler, Inc. v. Crampton, 361 Mass. 835, 840 (1972). A determination about confidentiality is based on several factors, "including 'the extent to which the information is known outside of the business'; 'the extent of measures taken by the employer to guard the secrecy of the information'; and 'the ease or difficulty with which the information could be properly acquired . . . by others.'" Augat, Inc. v. Aegis, Inc., 409 Mass. 165, 169-170 (1991), quoting from Jet Spray Cooler, supra.
Head Over Heels appears to concede that: (i) it made its customer information available to all staff, employees and gymnasts and their families without restriction or limitation; and (ii) it never informed Ware or any other person to whom this information was distributed that the information was confidential. Nor, beyond vague generalities, does Head Over Heels identify any steps it took to ensure that its information remained confidential or secret. Its assertion that the parties understood that the customer lists were not intended for purposes other than Head Over Heels's business, and were neither publicly known nor available through other sources, is simply unrealistic.
Postemployment competition. Head Over Heels also argues that, had the case been allowed to continue to the discovery phase, it would have provided evidence as to Ware's wrongdoing. For instance, it contends that conducting Ware's deposition, or the deposition of some Head Over Heels customers, would have established that Ware solicited customers prior to her termination. This argument is speculative at best.
According to the lower court docket, the discovery deadline was set at June 2, 2013.
Head Over Heels filed its complaint in August, 2012. The defendants filed their motion for summary judgment in December, 2012, and a hearing on the motion was held on April 16, 2013; the judgment was entered on September 6, 2013. The defendants were permitted to move for summary judgment "at any time" as to all or any part of the claims against them. See Mass.R.Civ.P. 56(b), 365 Mass. 824 (1974). There is no indication in this record that Head Over Heels made an attempt to conduct discovery at any time while the case was pending. Nor did it seek a continuance in order to pursue depositions or other discovery. As a result, there was nothing to prevent the judge from ruling on the motion. See Mass.R.Civ.P. 56(c), as amended, 436 Mass. 1404 (2002), and 56(f), 365 Mass. 824 (1974).
Ware was an at-will employee and "no express covenant not to compete or non-solicitation agreement" was made a condition of her employment. It is well established that "[a]n at-will employee may properly plan to go into competition with [her] employer and may take active steps to do so while still employed." Augat, Inc. v. Aegis, Inc., supra at 172. As Head Over Heels contends, Ware formed her own gymnastics academy for personal and financial gain, rather than with an improper motive or by using improper means to compete with Head Over Heels. See KACT, Inc. v. Rubin, 62 Mass. App. Ct. 689, 698 (2004). In addition, on this record, Head Over Heels customers initiated contact with Ware only after her termination.
We have carefully considered the remaining issues raised in the plaintiff's brief and find them to be without merit.
The panelists are listed in order of seniority.
Clerk Entered: June 9, 2015.