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Kistco Co. v. Patriot Crane and Rigging, LLC

United States District Court, D. Nebraska

November 14, 2019

KISTCO COMPANY, a Nebraska Corporation doing business as KISTLER EQUIPMENT COMPANY; Plaintiff,
v.
PATRIOT CRANE AND RIGGING, LLC, a Nebraska Corporation; and JAMES GLODOWSKI, an individual; Defendants.

          PRELIMINARY INJUNCTION

          Brian C. Buescher United States District Judge

         This matter came on for hearing on Plaintiff's Motion for Preliminary Injunction on the 13th day of November, 2019. Filing 4. Both parties appeared by counsel of record and adduced evidence. For the reasons set forth herein, the Motion for Preliminary Injunction is granted in part and denied in part.

         I.BACKGROUND

         The following is a summary of facts alleged in Plaintiff's Complaint and accompanying supplement, Filing 1; Filing 10, as well as the evidence submitted at the preliminary injunction hearing: the affidavit and declaration of Laura McElligott, Filing 16; Filing 32; the declaration of Jack Tarr, Filing 30, and the declaration of James Glodowksi, Filing 31.

         Plaintiff, Kistco Company, doing business as Kistler Equipment Company (“Kistler”), is an Omaha-based company that provides design, installation, repair, maintenance, and inspection services for cranes and hoists. Filing 1 at 2, ¶7. Kistler hired Defendant, James Glodowski, as a technician in early 2016. Filing 1 at 2, ¶8. Glodowski was responsible for servicing Kistler's customers and developing and maintaining a relationship with those customers. Filing 1 at 2, ¶9. Glodowski was the face of Kistler for many of its customers, and customers contacted him directly to schedule service calls. Filing 1 at 2, ¶¶7, 10. Glodowski rose through the ranks at Kistler and became Kistler's key service-department employee and longest-tenured technician. Filing 1 at 4, ¶¶17, 18. Such longevity and reliability garnered Glodowski greater trust, responsibility, and access to confidential customer and internal financial information. Filing 1 at 4, ¶¶17, 19.

         As a condition of his employment with Kistler, Glodowski signed a contract agreeing to three relevant restrictions. The first, entitled “Post-Employment Competition” provided as follows:

For a period of one (1) year immediately following termination (for any or no reason) of employment with Employer, Employee will not seek or accept employment with, and will not call on or solicit the business of, or sell to, or service (directly or indirectly, on Employee's own behalf or in association with any other individual or entity), any of Employer's customers with whom Employee did business and had personal contact while employed by Employer, except to the extent such activities are unrelated to, and not competitive with, the business, products and/or services offered or provided by Employer or cannot adversely affect Employer's relationship or volume of business with such customers. Employee specifically acknowledges that this restriction is necessary and reasonable for the protection of Employer's customer goodwill, and that it will not prevent Employee from being gainfully employed following termination of employment with Employer because Employee will be free to engage in any occupation, and even to compete with Employer, as long as Employee honors the restrictions contained in this paragraph concerning contact with certain of Employer's customers.

Filing 10 at 1; Filing 1 at 3, ¶14.

         Second, the employment contract provided Glodowski would not solicit or hire-on his own behalf or on behalf of an entity-any of Kistler's employees with whom he worked for other employment in competition with Kistler. Filing 1 at 3-4, ¶¶15, 16.

         Lastly, the contract provided Glodowski would never use or disclose any of Kistler's private customer, financial, or business information for any purpose other than furthering Kistler's business interests. Filing 1 at 5, ¶21.

         The stated purpose of the first two restrictions was to protect Kistler's customer goodwill, and those two restrictions were to last for a one-year period following the termination of Glodowski's employment with Kistler. Filing at 1 at 3-4, ¶¶14, 15.

         On or about April 10, 2019, Glodowski resigned from his employment with Kistler and shortly thereafter started working for Defendant, Patriot Crane and Rigging, LLC (“Patriot”), one of Kistler's competitors. Filing 1 at 5-6, ¶¶21, 26. Another Kistler technician, Jeremy Bradford, left his employment at Kistler within a day of Glodowski's resignation and also began working for Patriot. Filing 1 at 6, ¶27. Glodowski later told one of Kistler's employees that he informed Patriot that he would not go work there unless he could bring Bradford with him. Filing 1 at 6, ¶29.

         A few months after Glodowski resigned, a Kistler technician saw Glodowski at the place of business of one of its customers, Sioux City Foundry, and Sioux City Foundry stopped making frequent breakdown calls to Kistler despite previously making such calls several times a month. Filing 1 at 6-7, ¶¶31-32; Filing 16 at 1. Another Kistler technician saw Glodowski at the place of business of another customer, Valmont, and a third customer, Airlite Plastics, stopped calling Kistler for service and will not return phone messages left by Kistler's employees. Filing 1 at 7, ¶¶33-34; Filing 16 at 2. On October 30, 2019, Kistler Operations Manager Connie Skalka emailed Superior Industries (“Superior”), a prior customer of Kistler, to offer to schedule their annual hoist inspections. Filing 1 at 8, ¶38; Filing 16 at 2. Superior responded Patriot and Glodowski had already performed the inspection. Filing 1 at 8, ¶39. Kistler argues that Glodowski, with support, encouragement, and/or incentives from Patriot, continues to breach his contract by soliciting Kistler's customers and employees and using its confidential information. Filing 1 at 8, ¶40.

         At the preliminary injunction hearing, Kistler offered an affidavit and a declaration from Laura McElligott, co-owner of Kistler, in addition to its Verified Complaint and a copy of the employment contract between Kistler and Glodowski. McElligott listed eighty-four Kistler customers with whom Glodowski did business and had contact during his time with Kistler. Filing 32 at 3-4.

         Defendants submitted the declarations of Jack Tarr and James Glodowski in opposition to the motion for preliminary injunction. Filing 30; Filing 31. Tarr, Patriot's Operations and Sales Manager, averred that the crane-service business has “a limited universe of customers in the Midwest.” Filing 30 at 1. He further stated that while Glodowski is not responsible for sales at Patriot, his position as Service Manager “does require him to have contact with the customer in order to define the scope of work to be performed as well as to timely schedule the work.” Filing 30 at 2. Tarr stated that Superior was the only customer that previously did business with Kistler who started doing business with Patriot after Glodowski was hired. Filing 30 at 5. Tarr provided a list of eight customers, including Superior, who hired Patriot because they were unsatisfied with Kistler. Filing 30 at 5.

         Glodowski's declaration stated that he has not solicited any of Kistler's customers on behalf of Patriot. Filing 31 at 2. He averred the only Kistler customer to start doing business with Patriot after his hire was Superior and that he did not initiate the contact with Superior. Filing 31 at 3. Glodowski stated, “Superior Industries' Maintenance Manager, Heath Shalon, contacted me about services that could be performed by Patriot. . . . Mr. Shalon was unhappy with the services provided by Kistler and, for that reason, he sought work from Patriot.” Filing 31 at 3.

         II.DISCUSSION

         Kistler's motion states it seeks a preliminary injunction preventing Glodowski and Patriot from “directly or indirectly, soliciting, contacting, servicing, contracting with, or accepting business from customers of Kistler with whom Glodowski did business and had personal contact while employed by Kistler” for one year. Filing 4 at 2-3. However at the hearing, Kistler modified its request to only enjoin Patriot from working with prior Kistler customers if Glodowski has direct contact with the customers or plays a role in recruiting the customers to Patriot. As the Court understands its modified request, Kistler no longer seeks to enjoin Patriot from doing business with prior Kistler customers if Glodowski has no involvement with them. Kistler further seeks a preliminary injunction preventing Patriot and Glodowski “and all persons acting in concert or active participation with them for a period of two years from the date of the Court's order from directly or indirectly using, disclosing, or transmitting” confidential information Glodowski obtained during his employment at Kistler and preventing Glodowski and Patriot from destroying any data relevant to Kistler's claim. Filing 4 at 2-3.

         In deciding a motion for a preliminary injunction, the court must consider “(1) the threat of irreparable harm to the movant; (2) the state of the balance between this harm and the injury that granting the injunction will inflict on other parties litigant; (3) the probability that movant will succeed on the merits; and (4) the public interest.” Dataphase Sys., Inc. v. C L Sys., Inc., 640 F.2d 109, 113 (8th Cir. 1981). “A preliminary injunction is an extraordinary remedy . . . .” Roudachevski v. All-Am. Care Ctrs., Inc., 648 F.3d 701, 705 (8th Cir. 2011) (citing Watkins, Inc. v. Lewis, 346 F.3d 841, 844 (8th Cir. 2003)). The burden of establishing the propriety ...


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