E.S.I. v. Clym

952 A.2d 999

181 Md. App. 1

ECOLOGY SERVICES, INC. v. CLYM ENVIRONMENTAL SERVICES, LLC.

No. 1287 September Term, 2007.

Court of Special Appeals of Maryland.

July 7, 2008.

Steven K. Fedder (Andrew L. Cole, Gordon S. Young, Lettess, Lettess, Friedberg, Fedder, P.C., on brief), Owings Mills, for Appellant.

Carl S. Silverman, Baltimore, for Appellee.

Panel: JAMES R. EYLER, MEREDITH and WRIGHT, JJ.

JAMES R. EYLER, Judge.

This case arises from a complaint filed by Ecology Services, Inc., appellant, in the Circuit Court for Frederick County against Robert Volkert, Kenneth Eubanks, Jerriel Neloms, and Osborne Raymond, all former employees of appellant, and Clym Environmental Services, LLC ("Clym"), appellees. In the complaint, appellant alleged that Clym's employment of appellees Volkert, Eubanks, Neloms, and Raymond at the campus of the National Institutes of Health (NIH) in Bethesda, Maryland, violated covenants not to compete that the appellee-employees had executed during their prior employment with appellant. Based upon these covenants not to compete, appellant requested that appellees Volkert, Eubanks, Neloms, and Raymond be enjoined from working for Clym at the NIH. Appellees filed a motion for summary judgment, which the circuit court granted.

On appeal, appellant raises the following issues: (1) whether the circuit court erred by resolving factual disputes against appellant when it granted appellees' motion for summary judgment; (2) whether the circuit court erred by failing to apply principles of Maryland law regarding enforceability of covenants not to compete; and (3) whether the circuit court erred when it held appellant did not have a protectable interest in the confidentiality of trade secrets, unique skills of the appellee-employees, and personal relationships between the appellee-employees and the NIH.¹

Finding no error below, we shall affirm.

Factual Background

Appellant, a Maryland corporation headquartered in Columbia, Maryland, is in the business of providing waste management services related to the treatment and disposal of low-level radioactive waste and hazardous waste materials. Appellee Clym, a Maryland limited liability company based in Frederick, Maryland, is in the same business and is a competitor of appellant. Appellee Clym is owned by Charles and Finley Watts, who are brothers, both formerly employed by appellant.

This appeal revolves around two contracts that appellant previously held with the NIH. Under the first contract, appellant was in charge of managing the delivery of radioactive waste and medical pathological materials to and from research buildings located on the NIH campus in Bethesda, Maryland, and from satellite facilities in the Baltimore-Washington metropolitan area ("Package Delivery Contract"). Under the other contract, appellant managed the transportation, processing and disposal of nuclear waste from research buildings on the NIH campus ("Radioactive Waste Contract").²

The Package Delivery and Radioactive Waste contracts with the NIH are competitively-bid contracts. Companies submitting bids on these contracts have to submit cost proposals as well as technical proposals to the NIH describing the practices and procedures to be applied in performing the contracts. These proposals are kept confidential by the NIH.³

In 2004, when the term of appellant's Package Delivery Contract was about to expire, the NIH started accepting bids on the contract. The Package Delivery Contract was designated to be set aside for a small business, and due to appellant's growth, by 2004 appellant no longer qualified as a small business. Therefore, it could not bid on the Package Delivery Contract. Clym successfully bid on the Package Delivery Contract and the NIH awarded the contract to Clym. Appellant's contract term expired in December 2004, and Clym took over the contract after that date.

In 2005, the term of appellant's Radioactive Waste Contract was about to expire when the NIH started accepting bids on the contract. Appellant submitted a bid to renew its contract term, but appellant lost the bidding to Clym. Appellant's contract term for the Radioactive Waste Contract expired in August 2005, and Clym took over the contract.⁴ Despite losing the Package Delivery and Radioactive Waste contracts, appellant still holds other contracts with the NIH.

Appellee Neloms, while employed by appellant, worked at the NIH pursuant to the Package Delivery Contract, and his job title was "Delivery Person and Radioactive Materials Technician." Mr. Neloms' employment with appellant ended in December 2004, after the Package Delivery Contract expired.⁵

Appellees Raymond, Eubanks, and Volkert were employed by appellant to work at the NIH pursuant to the Radioactive Waste Contract. Appellee Raymond's term of employment with appellant started around 1995, and he worked in the position of "Radioactive Waste Specialist" at the NIH campus.⁶ Appellees Eubanks and Volkert both worked for appellant in the same position of "Radioactive Waste Technician" at the NIH campus. Before working for appellant, both Messrs. Eubanks and Volkert had originally worked at the NIH for "Radiation Services Organization" (RSO), the predecessor company to appellant on the Radioactive Waste Contract. When appellant first won the Radioactive Waste contract in 1992, Messrs. Eubanks and Volkert continued in their positions at the NIH, while employed by appellant.

Appellees Raymond, Eubanks, and Volkert stopped working for appellant in August 2005, when the Radioactive Waste Contract expired. Appellees argue Messrs. Raymond, Eubanks, and Volkert were terminated by appellant following expiration of the contract. Appellant asserts, however, that prior to expiration of the Radioactive Waste Contract, appellees Raymond, Eubanks, and Volkert were all informed of other employment opportunities with appellant.⁷

Within the terms of the Radioactive Waste Contract, the positions of "Radioactive Waste Specialist" and "Radioactive Waste Technician" are designated as "Key Personnel," and employees filling Key Personnel positions must be approved in advance by the NIH before they can be assigned to work on the contract. The two positions have specific job descriptions in the contract. Radioactive Waste Specialists are required to have

a degree in a natural science or engineering that includes at least 30 semester hours in health physics, engineering, radiological science, chemistry, physics, biology, mathematics, and/or calculus, or a combination of education and experience, such as courses shown above plus appropriate experience or other education certification as a health physicist by the American Board of Health Physics plus appropriate experience, and other education that provides an understanding of sciences applicable to health physics and radioactive waste management. In addition, the Contractor shall provide each Specialist with specific training in packing and shipping of radioactive wastes as required by DOT and NRC regulations.

Radioactive Waste Technicians are required to have "specialized experience" related to the work of the position that has equipped the technician with "the particular knowledge, skills, and abilities to perform the duties, or one full year of college education or an internship that is directly related to the work of the position, or a combination of specialized experience and education." Additionally, the contractor must train the technicians on the packing and shipping of radioactive waste as required by federal regulations.

The job requirements of Mr. Neloms' position as "Delivery Person and Radioactive Materials Technician" for the Package Delivery Contract were that he possess a valid commercial driver's license with a hazardous materials endorsement, and completion of an on-site radiation safety training course.

The actual job duties of Mr. Raymond, as a Radioactive Waste Specialist, involves the packaging and disposal of dry waste and radioactive waste collected from research buildings on the NIH campus. Mr. Raymond is in charge of compacting the radioactive waste into containers for disposal. NIH researchers place tags on the waste stating its level of radioactivity, and the waste is compacted according to federally mandated procedures for handling radioactive waste.

Appellees Volkert and Eubanks, as Radioactive Waste Technicians, work on the disposal of radioactive waste collected from the NIH campus and satellite facilities located in Baltimore, Lanham, and Rockville, Maryland. Messrs. Volkert and Eubanks travel in teams of two to different buildings on the NIH campus and to the satellite facilities to retrieve liquid and other waste, and then return with the waste to "Building 21" on the NIH campus. Upon returning with the waste, Messrs. Volkert and Eubanks enter data about the waste into a database and ensure that the waste is eventually disposed. Appellees assert the process for collecting and disposing of nuclear waste on the NIH campus and from the satellite facilities has not changed since the late 1980s.

As a Delivery Person and Radioactive Materials Technician, Mr. Neloms delivers packages containing small amounts of radioactive materials from "Building 21" on the NIH campus to researchers on the campus that have submitted requests for the materials. Mr. Neloms transports the radioactive materials around the campus in a van, and carries a "Geiger counter" during the deliveries to assess levels of radiation and contamination at different locations. Following deliveries, Mr. Neloms is responsible for entering data as to who received the materials and the timing of the delivery. Mr. Neloms then repeats this process as more packages arrive at the NIH campus.

The Covenants Not to Compete

In 1997, as a condition of their continued employment with appellant, appellees Raymond, Eubanks, Volkert, and Neloms were required to execute covenants of "non-disclosure and non-competition" w...