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Deutsche Post Global Mail, Ltd. v. Conrad

United States District Court for the District of Maryland

November 14, 2003, Decided

CIVIL NO. JFM-03-863

Opinion

 [*749]  Plaintiff Deutsche Post Global Mail, Ltd. ("DPGM") has brought this suit against Defendants Gerard Conrad and Guy Gemmill, who are former employees of DPGM, and Postal Logistics International ("PLI"), a corporation formed by Conrad and Gemmill DPGM claims that Conrad and Gemmill violated restrictive covenants contained in their employment contracts by forming PLI after their departure from DPGM. 1

 [**2]   [*750]  At the same time that it filed the complaint, DPGM moved for a preliminary injunction to bar Defendants from soliciting or diverting any customers that were customers of DPGM at the time Conrad and Gemmill terminated their employment with DPGM. After holding a hearing, I denied the motion. Discovery has now been completed, and Defendants have filed a motion for summary judgment. DPGM has filed a cross-motion for partial summary judgment on the issue of liability. For the reasons stated below, Defendants' motion for summary judgment will be granted, and DPGM's cross-motion for summary judgment will be denied. The basis for my decision is that the portion of the restrictive covenants prohibiting solicitation of all customers of DPGM is overly broad and cannot be saved by "blue penciling."

Gemmill and Conrad were hired as sales managers by International Postal Consultants ("IPC"), in June 1997 and January 1999, respectively. IPC was an international mail company, engaged in the business of providing shipping services to customers who send a substantial volume of mail, parcels, and other items to destinations outside the United States. As sales managers, Conrad and Gemmill identified [**3]  and solicited potential customers who may have been in need of international mailing services, sold them IPC's services, and managed their accounts. Conrad and Gemmill worked out of IPC's Maryland headquarters, and their sales territory included Maryland, Virginia, and the District of Columbia. However, IPC permitted sales managers to solicit and obtain business outside their assigned territories, as long as they did not encroach on identified prospects or customers of the IPC manager assigned to that area.

When they began their employment with IPC, both Conrad and Gemmill executed employment contracts, each of which contained a section 5 entitled "Restriction and Covenant Not to Compete." Section 5 provides in pertinent part:

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292 F. Supp. 2d 748 *; 2003 U.S. Dist. LEXIS 21214 **

DEUTSCHE POST GLOBAL MAIL, LTD. v. GERARD CONRAD, et. al.

Subsequent History: Related proceeding at McGovern v. Deutsche Post Global Mail, Ltd., 2004 U.S. Dist. LEXIS 7503 (D. Md., Apr. 28, 2004)

Affirmed by Deutsche Post Global Mail, Ltd. v. Conrad, 2004 U.S. App. LEXIS 24249 (4th Cir. Md., Nov. 19, 2004)

Disposition:  [**1]  Defendants' motion for summary judgment was granted, and DPGM's cross-motion for summary judgment was denied. Judgment was entered.

CORE TERMS

customers, solicitation, restrictive covenant, covenant, mail, summary judgment, courts, employees, penciling, blue, geographic area, unenforceable, diverting, hardship, words, sales representative, blue pencil, territory, duration, Global, sales manager, market share, Cross-Motion, termination, contracts, resigned, merger

Civil Procedure, Summary Judgment, Supporting Materials, Discovery Materials, Judgments, General Overview, Evidentiary Considerations, Scintilla Rule, Evidentiary Considerations, Opposing Materials, Entitlement as Matter of Law, Appropriateness, Genuine Disputes, Legal Entitlement, Materiality of Facts, Business & Corporate Compliance, Contracts Law, Types of Contracts, Covenants, Labor & Employment Law, Conditions & Terms, Trade Secrets & Unfair Competition, Noncompetition & Nondisclosure Agreements, Employment Relationships, Employment Contracts, Real Property Law, Encumbrances, Restrictive Covenants, Customers of Former Employer