Pollack v. Goodwin & Assocs. Hosp. Servs.

Andrea Pollack and Angela Garozzo Scopelianos, Plaintiffs v. Goodwin & Associates Hospitality Services, LLC d/b/a Goodwin Recruiting, Eric Goodwin, and Scott Gaba, Defendants

No. 20-cv-825-SM

Opinion No. 2021 DNH 132

United States District Court, D. New Hampshire

August 25, 2021

ORDER

Steven McAuliffe United States District Judge

Plaintiffs Andrea Pollack and Angela Garozzo Scopelianos, filed suit against defendant Goodwin & Associates, LLC, d/b/a Goodwin Recruiting, and its officers, Eric Goodwin and Scott Gaba, asserting wage claims under federal and state law, as well as a panoply of additional state law claims. For their part, defendants have asserted multiple counterclaims against the plaintiffs, including claims for breach of contract misappropriation of trade secrets, intentional interference with economic relationships, negligent interference with contract, conversion, unjust enrichment, and violation of New Hampshire's Consumer Protection Act.

Plaintiffs have moved to dismiss all defendants' counterclaims. Plaintiffs have also moved for sanctions and ask the court to strike certain allegations set forth in defendants' counterclaims. Plaintiffs' motion for sanctions is denied; their motion to dismiss is granted in part and denied in part.

BACKGROUND

The facts are drawn from defendants' answer and counterclaims, taking the well-pleaded allegations as true for purposes of evaluating the motion to dismiss. See Ruivo v. Wells Fargo Bank, 766 F.3d 87, 90 (1st Cir. 2014).

Defendant Goodwin Recruiting (“Goodwin”) is an employee recruiting firm based in New Hampshire. Eric Goodwin and Scott Gaba serve as officers of the company - Goodwin as President, and Gaba as Chief Operating Officer. Goodwin recruits candidates to fill job openings on behalf of its clients, employers in the hospitality industry.

Defendants allege that, in its 21 years of operation, Goodwin Recruiting has invested heavily in establishing, developing, and maintaining confidential and propriety information and materials, business strategies, client contacts, business contacts, markets, and products. Counterclaim ¶ 7. The company has developed customer goodwill through its employees and independent contractors “who are entrusted with confidential, proprietary, and/or trade-secret information and access to customers as part of the essential functions they provide” to Goodwin Recruiting. Counterclaim ¶ 9. To secure that information, the company requires independent contractors partnering with Goodwin to enter into agreements that contain nondisclosure, noncompete, and non-solicitation provisions.

Andrea Pollack lives in Florida. She joined Goodwin Recruiting as an independent contractor on May 12, 2015. Angela Scopelianos lives in Arizona. She joined the company as an independent contractor on November 6, 2017. Both plaintiffs executed multiple agreements with the company, including an independent contractor agreement, a nondisclosure agreement and a noncompete agreement. Under the independent contractor agreement, both plaintiffs agreed to affiliate their recruiting businesses with Goodwin Recruiting in return for payment of commissions based on percentages of fees generated from the placement of candidates with clients. Over the course of their affiliation, Scopelianos and Pollack received and retained commissions paid by Goodwin Recruiting.

Scopelianos and Pollack also agreed to “various nondisclosure non-solicitation, and other protective provisions” included in the agreements they executed, and they “acknowledged that Goodwin Recruiting has invested substantial labor and financial capital in the establishment of its reputation, intellectual property, confidential and proprietary information and materials, business strategies, client contacts and business contacts.” Counterclaim ¶¶ 38-39. Scopelianos and Pollack agreed they would keep all “confidential and trade secret information”^[1] relating to the company “strictly confidential”; agreed that, after termination of their business relationship with the company, “all client lists, fee agreements, training materials, marketing materials, candidate files, and any and all materials essential to the operations of Goodwin Recruiting” could not be used except for the benefit of Goodwin Recruiting; and agreed not to “use, compete or profit from any contacts or relationships with clients that [they have] developed based upon Confidential Information.” Counterclaim ¶¶ 41, 45.

Under the noncompete agreements, Pollack and Scopelianos also agreed “to refrain from soliciting other independent contractors and employees of Goodwin Recruiting, ” and to “refrain from soliciting or contracting with any client that [they] serviced and that engaged Goodwin Recruiting for any purpose during the” duration of their affiliation with the company. Counterclaim ¶ 47.

On April 27, 2020, Pollack and Scopelianos ended their affiliation with Goodwin Recruiting. On May 4, 2020, Pollack filed Articles of Organization with the Florida Secretary of State, establishing “A1A Recruiting LLC, ” which lists Pollack and Scopelianos as A1A's managers. A1A provides “meaningful options and recruiting strategies” for candidates and employers in many industries, including the hospitality industry. Counterclaim ¶ 54. According to defendants, A1A is in direct competition with Goodwin Recruiting.

Defendants allege that, by establishing and operating A1A, Pollack and Scopelianos have violated their contractual agreements with defendants by “using and misappropriating Goodwin Recruiting's confidential information and trade secrets, ” and by “utilizing confidential client information obtained in the course of working with Goodwin Recruiting to solicit business from Goodwin Recruiting clients.” Counterclaim ¶¶ 62-63. More specifically, defendants allege that Arooga's Grille House & Sports Bar (“Arooga's”) was an “active and lucrative” client of the Goodwin company since 2012. From April 2017, though April 2020, Pollack served as Arooga's principal contact at Goodwin Consulting. From June 2016, through April 2020, Goodwin Recruiting placed at least 21 candidates with Arooga's. However, since Pollack's and Scopelianos's departure in April 2020, the company says it has not placed any candidates with Arooga's. Moreover, Arooga's has informed representatives of Goodwin Recruiting that Arooga's is working with other recruiters. Defendants contend that Pollack and Scopelianos solicited Arooga's and are now performing recruiting services on Arooga's behalf.

Defendants further allege that Pollack and Scopelianos have violated their contractual agreements by contacting Patrick McKee, an independent contractor affiliated with Goodwin Recruiting, and discussing with him his contractual obligations to Goodwin Recruiting. Defendants surmise that plaintiffs were attempting to gauge McKee's loyalty to Goodwin Recruiting, and, potentially, to solicit him to work for A1A. Defendants further allege that plaintiffs have contacted other independent contractors affiliated with Goodwin Consulting, and attempted to solicit them to work at ¶ 1A as well.

Based on the foregoing, defendants assert claims for injunctive relief, specific performance, breach of contract, misappropriation of trade secrets, intentional interference with economic relationships, negligent interference with contract, conversion, unjust enrichment, and violation of New Hampshire's Consumer Protection Act. Plaintiffs promptly moved to dismiss all of defendants' claims against them.

MOTION FOR RULE 11 SANCTIONS

Plaintiffs also filed a separate motion for sanctions, asking the court to strike from defendants' counterclaims those allegations relating to Arooga's. Plaintiffs say that the Arooga's allegations are “objectively and demonstrably false, ” and that defendants either knew the allegations were false when they asserted them or asserted the allegations without sufficiently investigating their veracity. Pls.' Mem. in Support of R11 Motion at 1. In support of their argument, plaintiffs submit a sworn statement from Gary Heuther, Jr., the president of Arooga's, who oversees recruiting by outside agencies. In his affidavit, Heuther states that Arooga's has not done any business with A1A, and that Arooga's has not been solicitated by Pollack or Scopelianos. Heuther states that Arooga's has not worked with any outside recruiting companies since May 2020, due to the economic impact of the COVID-19 pandemic on its business. And, Heuther says, he has informed various representatives of Goodwin Recruiting of that fact on several occasions (i.e. that Arooga's did not require recruiting assistance because of COVID-19's impact). Both plaintiffs submit affidavits, as well. They attest that they have neither solicited nor worked with Arooga's since leaving Goodwin Recruiting, and they have not entered into any type of business relationship with Arooga's.

Plaintiffs argue that the affidavits from Heuther, Scopelianos, and Pollack - the three parties who possess firsthand knowledge about whether plaintiffs solicited or conducted business with Arooga's - demonstrate the “fallaciousness” of defendants' Arooga's-related allegations, and call into question the reasonableness of any pre-filing inquiry defendants may have conducted. Pls.'s Mem. in Support of R11 Motion at 7. And, plaintiffs say, by persisting with their counterclaims after it became apparent that those claims lacked evidentiary support, defendants are needlessly increasing litigation costs, and causing unnecessary delay. Accordingly, plaintiffs ask the court to strike all references relating to Arooga's from defendants' counterclaims. They also ask for an award of plaintiffs' fees and costs associated with filing their motion for sanctions.

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