United Salvage Corp. of America v. Kradin (Lawyers Weekly No. 12-159-16)
1 COMMONWEALTH OF MASSACHUSETTS SUFFOLK, ss. SUPERIOR COURT CIVIL ACTION NO. 16-03131 BLS 2 UNITED SALVAGE CORP. OF AMERICA d/b/a FRAMINGHAM SALVAGE CO., Plaintiff vs. RICHARD KRADIN, Defendant MEMORANDUM OF DECISION ON PLAINTIFF’S MOTION FOR A PRELIMINARY INJUNCTION Plaintiffs United Salvage Corporation, doing business as Framingham Salvage Company (Framingham Salvage), instituted this action against the defendant Richard Kradin seeking enforcement of noncompetition and nonsolicitation agreements negotiated when Kradin sold his salvage business to plaintiff. A hearing on plaintiff’s request for a preliminary injunction was held on November 3, 2016. Ruling from the bench, this Court allowed that Motion and entered the Order proposed by plaintiff. Although this Court did articulate the reasons for its ruling in open court, this memorandum is issued by way of further explanation. Framingham Salvage is in the scrap metal and metal recycling business. In January 2015, it purchased all the assets of a competitor, Industrial Metal Recycling Inc. (IMR), owned by the defendant Kradin. In connection with that transaction, the parties executed a series of agreements, all of which are attached to the Verified Complaint. Kradin was represented by 2 counsel in negotiating these agreements, which reference each other and therefore are construed as a whole. Pursuant to an Asset Purchase Agreement, Framingham Salvage obtained all the assets of IMR, including its goodwill, in return for assuming liabilities totaling over $ 500,000 and forgiving IMR’s own $ 152,607 debt to plaintiff. Pursuant to an Employment Agreement, Framingham Salvage agreed to employ Kradin for a term of 60 months at a $ 250,000 annual salary. The parties executed a third agreement, entitled Proprietary Information and Inventions Agreement (the PII Agreement), which contains the restrictive covenants at issue in this case. Those covenants prohibit Kradin from competing with Framingham Salvage or soliciting the business of any customer with whom he has had personal contact or learned about during the course of his employment with the plaintiff. The covenants applied not only during the period of Kradin’s employment but continue for a period of five years from the date of the termination of his employment, regardless of the reason for the termination. Section 4(i ) if the PII Agreement further stated: Each of my obligations to be performed under this Agreement shall be interpreted independent of any other provisions of this Agreement, the Asset Purchase Agreement or my Employment Agreement and any other obligation the Company [Framingham Salvage] may have toward me. The existence of any claims by me against the Company, whether based on this Agreement or otherwise, shall not be a defense to the enforcement by the Company of any of my obligations under this Agreement.” On July 25, 2016, Framingham Salvage terminated Kradin, alleging that […]