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IN THE UNITED STATES DISTRICT COURTNORTHERN DISTRICT OF MISSISSIPPI ABERDEEN DIVISION *****V.***** COMPLAINT FOR INJUNCTIVE RELIEF AND DAMAGES COMES NOW Plaintiff, *****, formerly doing business as ***** and *****, by and through its undersigned counsel, and files its Complaint for Injunctive Relief and Damages, showing the Court as follows: 1. This action is brought by ***** against Defendant ***** for his breach of his non-competition agreement, a copy of which is attached hereto as Exhibit "A": This action also is brought against *****, as *****'s former employee, for breach of contract, breach of duty of loyalty in performance of *****'s business in violation of the common law of Mississippi, tortious interference with business relations, and violation of the Mississippi Uniform Trade Secrets Act. 2. ***** is a corporation incorporated in the State of Delaware with its principal place of business in Pennsylvania. ***** supplies products, including paper, plastics, laundry chemicals, cleaning maintenance chemicals, and dry cleaning chemicals, to many types of customers, including large customers such as schools, municipalities, and health care institutions. 3. Upon information and belief, Laird is an individual residing at *, Columbus, Mississippi 39701. * is found regularly transacting business and deriving revenue from the sale of goods with the State of Mississippi. 4. Jurisdiction over the causes of action herein is conferred by 28 U.S.C. § 1332 and 28 U.S.C.§ 1367. The amount in controversy exceeds $75,000, and ***** and ***** are citizens of different states. Thus, * is subject to the jurisdiction of this Court. Venue is proper in this Court under 28 U.S.C. § 1391(a). 5 A substantial portion of the events giving rise to this Complaint occurred in the State of Mississippi. 6. On or about October 3, 1991, Century, a Texas corporation, executed an agreement for the purchase of * ("*") from its sole shareholder, *****, pursuant to which Century would acquire all of the business, assets, and properties of * for an amount in excess of $200,000. At the time of the acquisition of ***** was a subsidiary of *, which was subsequently acquired by *****, successor to both ***** and *****. 7. In the Assets Sale and Purchase Agreement executed by Jantek and Century, $30,000 of the purchase price was allocated for the purchase of *'s customer lists and goodwill. 8. The purchase of * by * was contingent upon *****'s agreement to become an employee of * after the sale and upon *****'s execution of the Employment and Non-compete Agreement (the "Agreement") attached hereto as Exhibit "A". 9. On or about November 4, 1991, ***** executed the Agreement and thereafter, until his termination on or about June 2, 1998, *****d worked for * and its successor ***** in a sales and supervisory capacity. 10. In the Agreement executed by Laird on or about November 4, 1991, ***** agreed to the following restrictions during the term of his employment and following the termination of his employment:For a period of three years from the date of this Agreement and for an additional period of two years after the Employee has ceased to be an employee of *, or of any subsidiary or affiliate of Century, whether or not pursuant to this agreement, the Employee shall not without the prior written consent of *; (a)directly or indirectly engage in, or(b)assist or have an active interest in (whether as proprietor, partner, investor, shareholder, officer, director or any type of principal whatever, provided that ownership of not more than 2 percent of the outstanding stock of a corporation traded on a National securities exchange or quoted on NASDAQ shall not of itself be viewed as assisting or having an active interest), or(c)enter the employment of or act as an agent for or advisor or consultant to any person, firm, partnership, association, corporation or business organization, entity or enterprise that is, or is about to become, directly or indirectly engaged in, any business in any area within a 125 mile radius of Columbus, Mississippi whether in operation or in the planning or development stage, that competes with or is substantially similar to any business that *, or any subsidiary or affiliate of * has operated, or had in the planning or development stage, during the 120-day period immediately prior to the Employee's ceasing to be an employee of * or any subsidiary or affiliate of *. 11. In addition to his specific agreement not to compete with * pursuant to the terms of the Agreement, ***** also specifically agreed that he would not solicit customers of *. Employee will not at any time, without prior written consent of *: (a)directly or indirectly solicit, request or advise any customer or client of; or other person, firm, partnership, association, corporation or business organization, entity or enterprise having business dealings with * or its business as continued by * to withdraw, curtail or cancel such business; or.... 12. ***** also agreed that he would not, without consent of *, use trade secrets and confidential information for his personal benefit or for the benefit of any other person or entity. The Agreement states in relevant part:Without the prior written consent of *, the Employee shall not at any time use for his own benefit or purposes or for the benefit or purposes of any other person, firm, partnership, association, corporation or business organization, entity or enterprise, or disclose . . . any trade secrets, information, data, know-how or knowledge (including, but not limited to, that relating to costs, products, equipment, marketing methods, suppliers, customers, personnel training programs, business expansion plans or financing) belonging to, or relating to the affairs of *, * or any subsidiary or affiliate of *. 13. In exchange for *****'s agreement to refrain from engaging in competitive and solicitation activities as defined and limited by Paragraphs 7 and 8 of the Agreement, * agreed to pay ***** a total of $40,000. The Agreement provided as follows:In consideration for all of the foregoing non-competition covenants contained in Section 7 and 8 hereof; * shall pay Employee $20,000 on January 2, 1992, $10,000 on January 2, 1993, and $10,000 on January 2, 1994.... 14. Pursuant to the terms of the Agreement, * paid ***** $40,000 for his agreement to refrain from competitive activities. 15. At the time the Agreement was entered, the parties contemplated and agreed that the terms and provisions of the Agreement, including the non-competition restrictions, would "inure to the benefit of * and its subsidiaries and affiliates, and their respective successors and assigns." The Agreement provided in relevant part:The Employee expressly agrees that * may assign this agreement and all of *'s rights and obligations hereunder without the consent of Employee (i) to *, or any parent or subsidiary of *, or (ii) to any successor in interest to the business and assets of *, or (iii) to any successor in interest to the business of * as continued by *.*****, through its acquisition of *, * and the business of * as continued by *, is the successor and assign of *. 16. * also agreed that in the event that he breached the non-competition and non-solicitation provisions of the Agreement, injunctive relief would be appropriate.The Employee acknowledges and agrees that *'s remedy at law for any breach of any of the Employee's obligations under Sections 4, 5, 6, 7 and 8 hereof would be inadequate, and agrees and consents that temporary and permanent injunctive relief may be granted in any proceeding that may be brought to enforce any provision of any of such Sections, without the necessity of actual damages. 17. The Agreement provides that its terms will be construed and enforced under the laws of the State of Mississippi. 18. During his employment with *, ***** solicited and serviced many ***** customers in the Columbus, Mississippi area and was charged with developing, maintaining, and strengthening the good will and customer relationships in his care. ***** also had contact with and supervisory, sales, and service responsibility for numerous customers, including industrial accounts, schools, municipalities, and health care institutions. 19. ***** was given access to and regularly utilized ***** confidential and trade secret business information including, but not limited to, long- and short-range business plans (including supply and marketing plans), methods of distribution, sales, sources of supplies; special supply pricing and arrangements for existing and target accounts, suppliers' pricing and cost information, customer information, including buying habits, needs, and requirements, buying preferences, customer pricing sensitivity, customer lists, confidential price policies, confidential price characteristics, profitability for all accounts, gross profits, regional sales results, policy and sales manuals, and customer financial and credit histories. 20. On or about October 1, 1997, ***** acquired the assets of * and its parent, *. As such, ***** acquired the rights and responsibilities set forth in the Agreement, and all obligations and promises previously owed to * by ***** are now owed to *****. 21. In or around May 1998, ***** learned that ***** engaged in activities in violation of the Agreement. Upon information and belief; ***** had reason to believe that ***** had entered into a personal business relationship with * ("*") to distribute products on behalf of * in competition with ***** within the 125-mile radius of Columbus, Mississippi. 22. ***** admitted to engaging in the aforementioned activities when confronted by ***** management. *****'s employment with ***** was terminated on or about June 2, 1998. 23. In a letter to ***** from ***** dated May 19, 1998, ***** was reminded of his obligations under the Agreement and under Mississippi law. ***** was asked to refrain from further non-compliant activities and to notify ***** within 10 days as to the steps ***** would take to remedy his conduct. Nonetheless, * has failed and refused to return to compliance with his obligations under the Agreement. COUNT I: BREACH OF CONTRACT 24. ***** realleges and reasserts all allegations and statements contained in Paragraphs I through 23 above as if set forth in full herein in Count I. 25. Despite receiving $40,000 from * for his specific, written agreement to not engage in direct or indirect competition with * and/or its successors and assigns, ***** has breached that agreement by engaging in prohibited competitive activity. 26. As a result of *****'s breach of contract, ***** is entitled to contract damages as may be proven, including, but not limited to, the $40,000 paid to ***** as consideration for his agreement not to compete. COUNT II: *****'S BREACH OF NON-COMPETITION AGREEMENT 27. ***** realleges and reasserts all allegations and statements contained in Paragraphs 1 through 27 above as if set forth in full herein in Count II. 28. *****'s employment with ***** terminated on or about June 2, 1998, such that the non-competition obligation of * runs through June 2, 2002. 29. Prior to the termination of his employment with ***** and subsequent thereto, ***** has engaged and is currently engaged in activities substantially identical to those he performed for * and ***** in direct competition with *****. 30. Prior and subsequent to the termination of *'s employment with *****, ***** has breached the terms of his noncompetition agreement by directly and indirectly, for his benefit and the benefit of *, engaging in the sale of; soliciting orders for, and providing services for products or goods in direct and/or indirect competition with ***** within the 125-mile radius of Columbus, Mississippi set forth in the Agreement. Upon information and belief; ***** avers that ***** has called upon other current and former ***** source customers within the 125-mile radius of Columbus, Mississippi. 31. The harm suffered by ***** as a result of *****'s aforesaid conduct is irreparable in nature and incapable of being measured solely in terms of monetary damages, thereby leaving no adequate remedy at law for said harm to *****. Such harm includes losses suffered by ***** as a result of *****'s breach of the Agreement and *****' s resultant loss of current and prospective business, customer goodwill and loyalty, and competitive advantage. New and further irreparable injury and damage will result to ***** during the pendency of this action. 32. The aforesaid violations of the non-competition agreement are causing and will continue to cause ***** to suffer irreparable harm unless ***** is immediately restrained and enjoined from further violations of his Agreement. COUNT III: INTERFERENCE WITH BUSINESS RELATIONS 33. ***** realleges and reasserts all allegations and statements contained in Paragraphs 1 through 32 above as if set forth in full herein in Count III. 34. ***** has violated the common law of the State of Mississippi by interfering with *****'s business relationship with *****'s customers. 35. *****, with knowledge of the business relationships of Unisource and its customers within the 125-mile radius of Columbus, Mississippi, has intentionally, wrongfully, and maliciously interfered with same. 36. The harm suffered by ***** as a result of the aforesaid conduct of ***** as set out in Counts III of this Complaint is irreparable in nature and incapable of being measured solely in terms of monetary damages, thereby leaving no adequate remedy at law for said same harm to *****. Such harm includes losses suffered by ***** as a result of *****'s inducement of ***** customers to discontinue their business relationship with ***** at the same level and prospective business, customer goodwill, customer loyalty, and competitive advantage. New and further irreparable injury and damage will result to ***** during the pendency of this suit. COUNT IV: BREACH OF DUTY OF LOYALTY 37. ***** realleges and reasserts all allegations and statements contained in Paragraphs 1 through 36 above as if set forth in full herein in Count IV. 38. As *****'s agent, ***** violated the common law of the State of Mississippi by breaching his duty to be loyal in the performance of *****'s business. 39. Upon information and belief; while employed by *****, ***** entered into a business relationship with * and began competing directly and/or indirectly with *****. COUNT V: VIOLATION OF TRADE SECRETS ACT 40. ***** realleges and reasserts all allegations and statements contained in Paragraphs 1 through 39 above as if set forth in full herein in Count V. 41. By virtue of his employment with *****, ***** had regular access and use of trade secrets and confidential proprietary information such as customer lists, credit information, product lists, cost data, price schedules, vendor lists, sales strategies, methodologies of operations, price characteristics, pricing strategies, long- and short-range pricing and marketing plans, customer purchase histories, customer financial and credit histories, and customer purchase tendencies.