# OFFICEMAX INC. v. Sousa

> District Court, D. Maine · March 24, 2011 · 773 F. Supp. 2d 190

URL: https://www.frixlaw.com/law-library/cases/2476007

## Case

- **Full name:** OFFICEMAX INCORPORATED, Plaintiff, v. Denis SOUSA, George Johnson and John Steele, Defendant
- **Court:** District Court, D. Maine
- **Decided:** March 24, 2011
- **Citations:** 773 F. Supp. 2d 190; 2011 U.S. Dist. LEXIS 31079; 2011 WL 1118486
- **Precedential status:** Published
- **Opinion:** Opinion by Woodcock
- **Judges:** Woodcock
- **Cited by:** 10 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/2476007

## How later opinions describe it (automated extraction)

- noting that “it is settled law in Maine that allegations made in pleadings are absolutely privileged” (internal quotation omitted)
- applying the canon against surplusage when discussing contractual ambiguity

## Opinion text

ORDER ON MOTIONS FOR SUMMARY JUDGMENT, TO STRIKE, FOR SANCTIONS, AND TO SUPPLEMENT
JOHN A. WOODCOCK, JR., Chief Judge.
In this civil action, OfficeMax filed suit against its former employees — now working for its competitor W.B. Mason — to prevent them from violating the terms of their
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non-competition agreements and to prevent them from revealing confidential OfficeMax trade information. The Defendants, Denis Sousa, George Johnson, and John Steele, have fought back, not merely denying OfficeMax’s legal claims but counterclaiming against OfficeMax, seeking a declaratory judgment and alleging that OfficeMax committed torts against them and violated state of Maine statutory law. What began as a skirmish devolved into a major dispositive motion battle with multiple charges and counterattacks. In this exhaustive order, the Court picks its way through the volleys, declares some minor victories, but for the most part orders the adversaries back to where they began.
I. STATEMENT OF FACTS
A. Procedural History
1. Complaints, Answers, Motions to Dismiss and Counterclaims
On December 18, 2009, OfficeMax Incorporated (OfficeMax) filed suit against Denis Sousa, George Johnson and John Steele, seeking recovery for alleged violations of nondisclosure and noncompetition agreements that the Defendants signed while they were employed by OfficeMax and its predecessor, Boise Cascade Office Products (BCOP).
Compl.
at 1 (Docket # 1). Johnson answered on February 3, 2010.
Answer, Affirmative Defenses and Jury Demand of Def. George Johnson
(Docket # 9)
(Johnson
Answer). On February 8, 2010, Mr. Steele moved to dismiss pursuant to Rule 12(b)(6).
Def. John Steele’s Mot. to Dismiss Pursuant to Rule 12(b)(6)
(Docket # 11)
(Steele Mot. to
Dismiss). On February 11, 2010, Mr. Sousa answered.
Answer, Affirmative Defenses and Jury Demand of Def. Denis Sousa
(Docket # 12)
(Sousa Answer).
On February 24, 2010, OfficeMax moved for preliminary injunction.
Mot. for Prelim. Inf
(Docket # 15). On March 1, 2010, OfficeMax responded to Mr. Steele’s Motion to Dismiss.
Pl’s Opp’n to the Mot. to Dismiss Filed by Def. Steele.
(Docket # 20)
{Opp’n to Mot. to
Dismiss). On March 19, 2010, District Court Judge Hornby denied Mr. Steele’s Motion to Dismiss, stating that “[tjhere may ultimately be a basis for summary judgment, but the allegations just barely survive a motion to dismiss.”
Order Den. Mot. to Dismiss
(Docket # 26). On April 2, 2010, Mr. Steele answered OfficeMax’s Complaint and asserted a counterclaim, alleging breach of contract, fraud, violation of the Maine Timely and Full Payment of Wages Law, 26 M.R.S. § 621-A et seq., abuse of process, and defamation, and requesting a declaratory judgment.
Answer, Affirmative Defenses, Countercl. and Jury Demand of Def. John Steele
(Docket #28)
{Steele Answer and Countercls.).
On April 27, 2010, OfficeMax answered Mr. Steele’s counterclaims.
Answer of OfficeMax Incorporated to Countercl. of John Steele
(Docket # 38)
{OfficeMax Answer).
On July 23, 2010, Messrs. Sousa and Johnson filed an amended answer asserting a counterclaim, alleging abuse of process and seeking a declaratory judgment.
1
Countercl. of Def. George Johnson
(Docket # 68)
{Johnson Countercl.)-, Countercl. of Def. Denis Sousa
(Docket # 69)
{Sousa Countercl.).
On August 13, 2010, OfficeMax answered Mr. Johnson’s and Mr. Sousa’s counterclaims.
Answer of OfficeMax Incorporated to Countercl. of George Johnson
(Docket # 87);
Answer of OfficeMax
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Incorporated to Countercl. of Denis Sousa
(Docket # 88).
2. Defendants’ Motions for Summary Judgment, to Strike, and for Sanctions
On June 18, 2010, Messrs. Johnson and Sousa moved for Summary Judgment.
Mot. of Defs. Denis Sousa and George Johnson for Summ,. J.
(Docket # 47)
(Sousa and Johnson Summ. J. Mot).
Mr. Steele followed on June 24, 2010.
Def. John Steele’s Mot. for Summ. J.
(Docket # 50)
(Steele Summ. J. Mot.).
OfficeMax responded to Mr. Steele’s summary judgment motion on July 15, 2010, and to Messrs. Johnson and Sousa’s motion on July 16, 2010, opposing summary judgment or, in the alternative, requesting additional time for discovery.
PL’s Mot. for Extension of Time to Conduct Disc, and Opp’n to Summ. J. Mot. of Def. Steele
(Docket #59)
(Pi’s Opp’n to Steele Mot.); Pi’s Appl. Under Fed.R.Civ.P. 56(f) and Opp’n to Defs. ’ Mot. for Summ. J.
(Docket # 66)
(PL’s Opp’n to Johnson and Sousa Summ. J. Mot.).
On July 29, 2010, Messrs. Steele, Sousa and Johnson replied to OfficeMax’s opposition.
Def. Steele’s Reply in Supp. of His Mot. for Summ. J.
(Docket # 76)
(Steele Summ. J.
Reply);
Defs. Sousa and Johnson’s Reply in Supp. of Their Mot. for Summ. J.
(Docket #78)
(Sousa and Johnson Summ. J. Reply).
On the same day, Mr. Steele moved to strike Exhibit F from OfficeMax’s opposition.
Def. Steele’s Mot. to Strike Ex. Submitted by PL in Opp’n to Steele’s Mot. for Summ. J. on the Grounds that PL Withheld This Doc. in Disc. Claiming It Was Irrelevant
(Docket # 77)
(Steele Mot. to Strike).
OfficeMax responded to Mr. Steele’s Motion to Strike on August 23, 2010.
PL’s Opp’n to Def. Steele’s Mot. to Strike Ex. Submitted by PL in Opp’n to Steele’s Mot. for Summ. J.
(Docket # 93)
(PL’s Opp’n to Steele Mot. to Strike).
On September 7, 2010, Mr. Steele replied.
Def. Steele’s Reply in Supp. of Mot. to Strike
(Docket # 107)
(Steele Reply to Mot. to
Strike).
On December 6, 2010, the Court granted OfficeMax’s request to engage in Rule 56(d) discovery and, accordingly, OfficeMax submitted a supplemental opposition to Mr. Steele’s summary judgment motion.
Order on PI. ’s Appl. for Additional Time for Disc, and Mot. to Supplement its Opp’n to Def. Steele’s Mot. for Summ. J.
(Docket #218)
(Disc. Order); Pl.’s Supplemental Opp’n to Summ. J. Mot. of Def. Steele
(Doc. #220)
(PL’s Supp. Opp’n to Steele Mot.).
On December 24, 2010, Mr. Steele replied.
2
Def. Steele’s Supplemental Reply to PL’s Supplemental Opp’n to Summ. J. Mot. of Def. Steele
(Docket #228)
(Steele Supp. Summ. J. Reply).
On November 29, 2010, the Defendants moved for sanctions under Rule 37.
Defs. ’ Mot. for Sanctions Pursuant to F.R.C.P. 37
(Docket #211)
(Defs.’ Sanctions Mot.).
OfficeMax responded in opposition on December 30, 2010.
PL’s Opp’n to Defs.’ Mot. for Sanctions Pursuant to F.R.C.P. 37
(Docket #231)
(Pl.’s Sanctions Opp’n).
The Defendants replied.
Defs.’ Reply in Further Support of Defs. ’ Mot. for Sanctions Pursuant to F.R.C.P. 37
(Docket # 237).
3. Plaintiffs Motions for Summary Judgment and to Exclude
On August 13, 2010, OfficeMax moved for summary judgment on Mr. Steele’s
*199
counterclaims.
PI. ’s Mot. for Summ. J. on Counterds. of Def. John Steele
(Docket #122)
(Pi’s Steele Summ. J. Mot.).
On October 29, 2010, Mr. Steele filed an opposition and on November 17, 2010, OfficeMax replied.
Opp’n of Def. John Steele to Pi’s Mot. for Summ. J. on Counterds.
(Docket # 172)
(Steele Summ. J.
Opp’n);
Pi’s Reply to Def. Steele’s Opp’n to Pi’s Mot. for Summ. J. on Counterds.
(Docket # 186)
(PI. ’s Steele Summ. J.
Reply).
On September 13, 2010, OfficeMax moved for partial summary judgment against Messrs. Johnson and Sousa on Counts I and II of its Complaint and on Counts I and II of their counterclaims, and on October 29, 2010, it refiled a revised motion.
3
Mot. by PL for Partial Summ. J. Against Defs. Sousa and Johnson as to Counts One and Two
(Docket # 125);
Mot. by PI. for Partial Summ. J. Against Defs. Sousa and Johnson as to Counts I and II of the Compl. and Counts I and II of Defs.’ Counterds.
(Docket # 197)
(Pi’s Sousa and Johnson Summ. J. Mot).
On October 28, 2010, Messrs. Sousa and Johnson each filed an opposition and on December 6, 2010, OfficeMax filed a consolidated reply.
Opp’n of Def. Denis Sousa to Pi’s Mot. for Summ. J.
(Docket # 161)
(Sousa Summ. J. Opp’n); Opp’n of Def. George Johnson to PI. ’s Mot. for Summ. J.
(Docket # 166)
(Johnson Summ. J.
Opp’n);
Pi’s Reply to the Opp’ns of Def. Sousa and Def. Johnson to PI. ’s Mot. for Partial Summ. J.
(Docket # 200)
(PI. ’s Sousa and Johnson Summ. J.
Reply).
On December 24, 2010, OfficeMax moved to exclude two affidavits by Edmund Gagne and their attached exhibits, which Messrs. Sousa and Johnson had submitted in support of their opposition to OfficeMax’s motion for partial summary judgment.
PI. ’s Mot. to Exdude Defs. ’ Ex. A (Docket Nos. 16k, 16k-l, and 16k-2) and Rider Ded. Ex. F (Docket No. 165-9) from the R. in Relation to PI. ’s Mot. for Partial Summ. J. Against Defs. Sousa and Johnson
(Docket #208)
(Pi’s Mot. to Exclude ).
On November 30, 2010, Messrs. Sousa and Johnson opposed OfficeMax’s motion to exclude the Gagne declarations.
Defs.’ Opp’n to OfficeMax’s Mot. to Exclude Gagne Ded.
(Docket #213)
(Defs.’ Opp’n to Mot. to
Exclude). On December 6, 2010, OfficeMax replied.
PI. ’s Reply to Defs.’ Opp’n to Pi’s Mot. to Exclude
(Docket #223)
(Pl.’s Reply Mot. to Exclude ).
B. George Johnson and Denis Sousa
From 1972 through October 9, 2009, Denis Sousa worked for OfficeMax, BCOP, or their predecessors.
Statement of Material Facts in Supp. of the Mot. of Defs. Denis Sousa and George Johnson for Summ. J.
¶ 1 (Docket # 48) (Sousa and Johnson SMF);
PI. ’s Resp. to Defs. Sousa and Johnson’s Statement of Material Facts
¶ 1 (Docket # 65) (Resp. to Sousa and Johnson SMF). On November 16, 2001, Mr. Sousa signed an agreement (the Sousa BCOP Agreement) with BCOP.
PI. ’s Opp’n to Johnson and Sousa Summ. J. Mot.
Attach. 4 at 2
(Sousa BCOP Agreement ).
Likewise, from 1996 through October 13, 2009, George Johnson worked for OfficeMax, BCOP, or their predecessors. Sousa and Johnson SMF ¶ 10; Resp. to Sousa and Johnson SMF ¶ 10. On February 5, 1999, Mr. Johnson signed a Noncompetition Agreement with BCOP (the Johnson
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BCOP Agreement).
4
Pi’s Opp’n to Johnson and Sousa Summ. J. Mot.
Attach. 6 at 2
(Johnson BCOP
Agreement).
In October 2009, “as part of a corporate reorganization plan,” OfficeMax terminated Messrs. Sousa and Johnson’s employment. Sousa and Johnson SMF ¶¶ 2, 11; Resp. to Sousa and Johnson SMF ¶¶ 2, 11. After the termination, in exchange for severance pay^ — 39 weeks for Mr. Sousa and 26 weeks for Mr. Johnson — they each executed agreements with OfficeMax entitled “WAIVER OF CLAIMS AND GENERAL RELEASE” (respectively, the “Sousa Release” and the “Johnson Release”). Sousa and Johnson SMF ¶¶ 3, 12; Resp. to Sousa and Johnson SMF ¶¶ 3, 12. Messrs. Sousa and Johnson further agreed to “refrain from soliciting ‘customers or prospective customers on which [they] called for OfficeMax for the purpose of selling or distributing products or services similar to or competitive with those sold or distributed by OfficeMax.’ ” Sousa and Johnson SMF ¶¶ 5,12; Resp. to Sousa and Johnson SMF ¶¶ 5,12.
The duration of the prohibition on solicitation remains in dispute. Messrs. Sousa and Johnson maintain that, pursuant to their General Releases, the restriction “lasted only so long as OfficeMax paid [them] severance,” 39 weeks for Sousa and 26 weeks for Johnson. Sousa and Johnson SMF ¶ 5;
PI. ’s Opp’n to Johnson and Sousa Summ. J. Mot.
Attach. 5 at 1
(Sousa
Release);
Pi’s Opp’n to Johnson and Sousa Summ. J. Mot.
Attach. 7 at 1
(Johnson
Release). OfficeMax asserts that these two Defendants remain subject to the 12 month noncompetition provision in their BCOP Agreements by virtue of paragraph 4.c of the General Release, which states that “[t]his Paragraph 4.e shall in no way restrict or limit other agreements between Associate and OfficeMax relating to non-competition and/or non-solicitation of customers.” Sousa and Johnson SMF ¶¶ 8,15; Resp. to Sousa and Johnson SMF ¶¶ 5, 8, 12, 15. In other termination agreements, OfficeMax has inserted a variation of the language in Paragraph 4.c, adding two final sentences:
This Paragraph 4.e shall in no way restrict or limit other agreements between Associate and OfficeMax relating to non-competition and/or non-solicitation of customers.
In exchange for the consideration provided in this Agreement, Associate reaffirms his/her obligations under any prior agreement relating to noncompetition and/or non-solicitation of OfficeMax customers; Associate agrees to abide by any such agreement.
Sousa and Johnson SMF ¶ 19; Resp. to Sousa and Johnson SMF ¶ 19 (emphasis in statements of fact).
C. John Steele
BCOP hired John Steele in 1992.
Statement of Material Facts in Supp. of Def. John Steele’s Mot. for Summ. J.
¶¶ 1, 2 (Docket # 51) (Steele SMF);
PI. ’s Resp. to Def. Steele’s Statement of Material Facts
¶¶ 1, 2 (Docket # 61) (Resp. to Steele SMF). After he was hired, Mr. Steele signed an agreement with BCOP entitled “Confidential Information and Noncompetitive Agreement” (Steele BCOP Agreement). Steele SMF ¶ 2; Resp. to Steele SMF ¶ 2. The Steele BCOP Agreement included “Attachment A,” which listed “ACCOUNTS EXEMPT FROM NON-COMPETITION CLAUSE.” Steele SMF ¶3; Resp. to Steele SMF ¶3;
Pi’s Opp’n
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to Steele Mot.
Attach. 10
(Steele BCOP Agreement).
Mr. Steele later became employed by OfficeMax.
5
Steele SMF ¶ 4; Resp. to Steele SMF ¶ 4.
Some time before November 12, 2009, OfficeMax told Mr. Steele and other sales persons that “some sales positions were being eliminated and that he could apply for continued employment ... [and] that he would be offered continued employment.” Steele SMF ¶ 6; Resp. to Steele SMF ¶ 6. OfficeMax offered employment to Mr. Steele on November 23, 2009. Steele SMF ¶ 6; Resp. to Steele SMF ¶ 6.
On the same day, Mr. Steele’s employment with OfficeMax ended.
6
,
7
Steele SMF ¶ 6, Resp. to Steele SMF ¶ 6. On that day, Mr. Steele called some of his OfficeMax customers and “left his laptop computer, Blackberry, ID badge and a portfolio of his notes in his desk at OfficeMax’s offices.” Steele SMF ¶ 7, 25; Resp. to Steele SMF ¶ 7, 25. Mr. Steele claims also to have “collected and returned to OfficeMax all property belonging to OfficeMax and all documents and information he had relating to OfficeMax or its customers,” including approximately twenty-four boxes of materials, except for his performance evaluations and related papers. Steele SMF ¶¶ 8, 9; Resp. to Steele SMF ¶ 8, 9. However, OfficeMax alleges that Steele did not return “two flash drives that he had connected to his laptop computer.” Resp. to Steele SMF ¶8;
Pl.’s Opp’n to Steele Mot.
Attach. 2 at 5
(PL’s Interrog. Resp.).
Also in dispute is whether Mr. Steele returned a list of customers he printed prior to his resignation from OfficeMax. Resp. to Steele SMF ¶ 8;
Pl. ’s Interrog. Resp.
at 5. Mr. Steele claims to have returned the list “no later than November 30 or December 1, 2009.”
7
8
Steele SMF ¶10, Resp. to Steele SMF ¶ 10. None of the customers that Mr. Steele called on his final day at OfficeMax has “completely stopped” buying OfficeMax supplies and products. Steele SMF ¶ 27, Resp. to Steele SMF ¶ 27.
II. DISCUSSION
A. Motions to Strike or Exclude
The Court considers the dueling motions to strike or exclude.
1. John Steele’s Motion to Strike Norway Savings Bank Document
John Steele moved to strike OfficeMax’s Exhibit F, filed in support of its opposition
*202
to his summary judgment motion.
Steele Mot. to Strike
at 1. Exhibit F is a July 14, 2010 Account Sales Summary for Norway Savings Bank (Norway), showing OfficeMax’s sales to Norway for 2009 and January-July 2010.
Id.; Norway Account Sales Summary
(Docket # 60). On March 18, 2009, Mr. Steele formally requested that OfficeMax produce documents that show the identity of Mr. Steele’s Assigned Customers, OfficeMax’s total sales to those customers from the two-year period before his termination through the date of its production of documents, and the details of each such sale from his termination through the date of the production.
Steele Mot. to Strike
at 2-3. OfficeMax objected to the production of these documents on the ground that the requests were overly broad, unduly burdensome, and that they sought information “that is not relevant for discovery.”
Id.
Yet OfficeMax voluntarily agreed to produce “documents reflecting total sales to the customers whom Steele serviced for OfficeMax on an annual basis for 2008-2009.”
Mr. Steele argues that OfficeMax refused to produce the Norway document and others like it in compliance with his Document Request Nos. 28(d)
9
and (e)
10
based upon relevancy objections, but then produced the document when it deemed the information useful to oppose summary judgment.
Id.
at 3. OfficeMax acknowledges its duty to supplement discovery responses but claims that its failure to produce the document was at most harmless error, that it would have eventually produced it, and that in any event, Mr. Steele suffered no prejudice.
PL’s Opp’n to Steele Mot. to Strike
at 2-3. On September 7, 2010, Mr. Steele replied.
Def. Steele’s Reply in Support of Mot. to Strike
(Docket # 107).
The Court takes a dim view of OfficeMax’s cagey responses to Mr. Steele’s Request for Production of Documents 28. In its Complaint, OfficeMax alleged that Mr. Steele had violated the terms of the NonDisclosure and Noncompetition Agreement by soliciting OfficeMax customers during the twelve month period following his termination of OfficeMax employment, which it said was November 23, 2009.
Compl.
at 20-21. It sought actual dam
*203
ages against Mr. Steele.
Id.
at 21. OfficeMax’s continued sales to the Mr. Steele’s customers are manifestly “relevant to” both OfficeMax’s claims and Mr. Steele’s defenses. Fed.R.Civ.P. 26(b)(1). The Court views OfficeMax’s responses to the requests for production of documents as frivolous and bordering on bad faith. The Court is skeptical about OfficeMax’s contentions that disclosure of this type of one-page document would have been “burdensome” and that the request was “overly broad”. These objections are belied by the fact that OfficeMax readily filed the document in support of its own motion. More troubling is OfficeMax’s time-limited disclosure of responsive documents only through December 31, 2009. The Court has little confidence that, if OfficeMax had not later viewed the production of post-2009 documents as advantageous, it would have voluntarily produced documents like the July 14, 2010 Norway document.
The Court finds OfficeMax’s conduct particularly egregious in view of its track record on discovery in this case. After July 15, 2010, Magistrate Judge Kravchuk was required to issue two separate orders directing production of documents by OfficeMax, and to intervene in a third dispute about the parties’ adherence to the confidentiality order.
Report of Telephone Conference and Order
(Docket # 92);
Report of Telephone Conference and Order
(Docket # 101);
Order
(Docket # 196). Furthermore, OfficeMax voluntarily disclosed the Account Sales Summary only when it thought it was to its advantage.
11
Nonetheless, the Norway document was dated July 14, 2010 and OfficeMax filed it the day after it was created. At that time, discovery had not yet closed and Mr. Steele had not sought to compel production from OfficeMax. It is therefore difficult to conclude that Mr. Steele has suffered any actual prejudice from the delayed production.
See Steele Reply to Mot. to Strike
at 2 (acknowledging that OfficeMax “produce[d] the same data for Steele’s customers other than Norway Savings Bank [on] August 31”). Accordingly, the Court denies John Steele’s request to strike Exhibit F.
2. The Defendants’ Motion for Sanctions
Pointing to OfficeMax’s actions with the Norway document and its alleged failure to respond to the Defendants’ discovery requests, the Defendants demand that the OfficeMax Complaint be dismissed.
Defs.’Sanctions Mot.
at 1. OfficeMax responded contesting most of the Defendants’ allegations and protesting its compliance with the rules and orders of discovery.
PL’s Sanctions Opp’n
at 1-2. The Court dismisses the Defendants’ motion without prejudice. In fairness to the parties, the Court is not in a good position to select between countervailing charges of deliberate non-compliance and protestations of innocence.
From the record, however, the Court is concerned that OfficeMax has not been fully complying with its discovery obligations and it warns OfficeMax counsel against any recurrence of what the Court views as the sharp practice of law. Because this conduct is inconsistent with the Court’s prior exposure to OfficeMax counsel, the Court will extend them the benefit of the doubt this time, but the Court reminds OfficeMax counsel that discovery in a civil case is a serious business with serious repercussions for the parties. The object is to disclose relevant documents so
*204
that the truth will come out and justice will be done, not to hide legitimately discoverable documents under the guise of legal objections in an effort to gain an unfair strategic advantage.
As this matter progresses to trial, the Defendants are free to reinitiate their motion for sanctions and the Court will reexamine any instances of past noncompliance and any additional evidence of non-compliance that has taken place and will fashion an appropriate remedy.
3. OfficeMax’s Motion to Exclude Gagne Declarations
OfficeMax challenges Mr. Sousa’s submission of two affidavits and their attached exhibits by Edmund Gagne, the state of Maine Sales Manager for W.B. Mason, to support his opposition to OfficeMax’s partial summary judgment motion against him. An explanation of the significance of Mr. Sousa’s reliance upon the affidavits is in order. OfficeMax’s partial summary judgment motion against Sousa asserts that Mr. Sousa “now concedes that he retained two computer flash drives containing information belonging to OfficeMax for months after his termination of employment.”
PI. ’s Sousa and Johnson Summ. J. Mot.
at 6-8. In his opposition, Mr. Sousa attacked the business justification for any noncompetition or nondisclosure agreement, saying that customer goodwill is not a major factor in the office products business and there are no real trade secrets.
Sousa Summ. J. Opp’n
at 6. To support this claim, Mr. Sousa attached an October 28, 2010 affidavit from Mr. Gagne, which referred to an attached multi-page document entitled “Vision 2000.”
Decl. of Edmund Gagne in Opp’n to PI. ’s Mot. for Summ. J.
(Docket # 164)
0Gagne Oct. 28, 2010 Decl.)
Attachs. 1, 2
(Vision 2000 Study).
In addition, Mr. Sousa attached an affidavit from defense counsel Stephen Rider, addressing OfficeMax’s claim that Mr. Sousa had failed or refused to turn over the original OfficeMax flash drives.
Decl. of Stephen W. Rider with Respect to PI. ’s Mot. for Summ. J. Against Sousa and Johnson
(Docket # 165). Mr. Rider attached as an exhibit to his declaration the second Gagne declaration at issue.
Id.
Attach. 9
(Gagne June 80, 2008, Decl).
This affidavit was dated June 30, 2008 and was filed in a Cumberland County Superi- or Court case,
OfficeMax, Inc. v. W.B. Mason Co., Inc.,
Docket # 08-311.
Id.
Mr. Sousa refers to the June 30, 2008 Gagne affidavit to demonstrate that OfficeMax knew from prior litigation that W.B. Mason required transferring employees not to bring any documents or information from their old employers, specifically OfficeMax.
Sousa Summ. J. Opp’n
at 20. When OfficeMax filed suit against Mr. Sousa, it mailed a copy of the Complaint to W.B. Mason’s CEO, containing the allegation that, contrary to what OfficeMax knew was W.B. Mason policy, Mr. Sousa had retained confidential OfficeMax information.
Id.
Mr. Sousa says that by sending W.B. Mason’s CEO a copy of the Complaint, OfficeMax was attempting to encourage W.B. Mason to fire Mr. Sousa for what OfficeMax knew W.B. Mason would consider a firing offense.
Id.
This, in Mr. Sousa’s view, amounted to abuse of process.
Id.
Turning to OfficeMax’s Motion to Exclude the June 30, 2010 Gagne Affidavit, OfficeMax’s first point in favor of exclusion is that the Gagne Affidavit is not dated June 30, 2010, as Mr. Sousa claims, because it is identical to a Gagne Affidavit dated June 30, 2008, which had been filed in the prior Cumberland County Superior Court litigation involving OfficeMax.
PI. ’s Mot. to Exclude
at 2. Second, OfficeMax says that Mr. Sousa failed to produce the Gagne declaration in response to discovery
*205
that should have elicited its revelation.
Id.
at 2-3. Third, OfficeMax says that Mr. Gagne’s opinions are expert opinions and Mr. Sousa has never designated Mr. Gagne as an expert witness.
Id.
at 3-5. Fourth, OfficeMax contends that Mr. Gagne’s statements contain an “extensive amount of inadmissible hearsay” and otherwise fail to comply with the personal knowledge requirement of Rule 56(f).
Id.
at 6.
In opposing exclusion of the June 30, 2010 affidavit, the Defendants first describe the earlier OfficeMax litigation that led to the filing of the June 30, 2008, Gagne declaration.
Defs. ’ Opp’n to Mot. to Exclude
at 1-4. They then address OfficeMax’s contention that Mr. Gagne’s opinions are expert opinions, asserting that his opinions are not expert opinions but rather lay witness opinions under Federal Rule of Evidence 701.
Id.
at 5-8. Finally, the Defendants say that the June 30, 2010 Gagne declaration:
is submitted only for a very limited purpose,
ie.,
to show that, when OfficeMax sent its letter with a copy of its
Complaint
in this action to W.B. Mason’s CEO, OfficeMax was on notice that this might lead to the Defendants’ firing. Specifically, Mr. Gagne’s 2008 Affidavit informed OfficeMax that W.B. Mason required new employees like Sousa, Johnson and Steele to confirm, as a condition of their employment, that they had returned to their former employer all property and other materials concerning the former employer’s business or customers. The
Complaint
OfficeMax sent to W.B. Mason’s CEO, however, alleged (falsely) that the Defendants had violated these instructions. Defendants argue that this evidence demonstrates OfficeMax’s bad faith motive for purposes of the Defendants’ abuse of process counterclaims.
Id.
at 8-9. Regarding their failure to produce the June 30, 2008 Gagne declaration, the Defendants observe that OfficeMax already had it, and in any event, OfficeMax cannot claim any prejudice.
Id.
at 9-10.
In reply, OfficeMax says that the Defendants have not cited any authority to allow Mr. Gagne to present such “incredibly broad, wholly conclusory types of statements.”
PL’s Reply Mot. to Exclude
at 1. OfficeMax reiterates that the Court should reject the Gagne declaration insofar as it contains undesignated expert testimony and should reject the declaration insofar as it contains irrelevant lay testimony.
Id.
at 2-3. OfficeMax repeats its contention that the Court should reject the Gagne declaration because the Defendants’ failed to produce it in discovery.
Id.
at 4.
In seeking to exclude the June 30, 2008 Gagne declaration, OfficeMax is demanding a Rule 37(c) exclusion sanction. Fed.R.Civ.P. 37(c). The context of this potential exclusion is significant since in his counterclaim, Mr. Sousa’s abuse of process counterclaim is premised on OfficeMax’s alleged knowledge of W.B. Mason’s employment policy and the possibility that W.B. Mason would fire Mr. Sousa for violating its policy. Thus, the exclusion of the Gagne declaration could amount to the dismissal of his abuse of process claim.
In these circumstances, the First Circuit has cautioned against preclusion when it would carry “the force of a dismissal” and has said that the justification for preclusion “must be comparatively more robust.”
Esposito v. Home Depot U.S.A., Inc.,
590 F.3d 72, 79 (1st Cir.2009). Before preclusion in these circumstances, the Court must review:
a “host of factors, including: (1) the history of the litigation; (2) the sanctioned party’s need for the precluded evidence; (3) the sanctioned party’s jus
*206
tification (or lack of one) for its late disclosure; (4) the opponent-party’s ability to overcome the late disclosure’s adverse effects — e.g. the surprise and prejudice associated with the late disclosure; and (5) the late disclosure’s impact on the district court’s docket.
Id.
at 78 . Considering the circumstances here, the Court easily concludes that exclusion of the June 30, 3008 Gagne affidavit is not appropriate under
Esposito .
In spite of Mr. Sousa’s weak explanation for his failure to disclose his intended use of the June 30, 2008 Gagne declaration, there are three countervailing factors: 1) OfficeMax’s previous awareness of the June 30, 2008 Gagne declaration, 2) the lack of any actual prejudice to OfficeMax, and 3) the lack of an appreciable impact on the Court’s docket.
The October 28, 2010 Gagne declaration (Exhibit A) raises a different issue. Messrs. Johnson and Sousa did not designate Edmund Gagne as an expert witness and they contend that they are not submitting his October 28, 2010 declaration as expert testimony but purely as Rule 701 lay testimony.
Defs.’ Gagne Opp’n
at 5-8. OfficeMax disagrees.
OfficeMax Gagne Reply
at 2-4. The Court concludes that some of the Gagne declaration is expert testimony and some is not. The “line between expert testimony under Federal Rule of Evidence 702 ... and lay opinion testimony under Federal Rule of Evidence 701 ... is not an easy one to draw.”
United States v. Ayala-Pizarro,
407 F.3d 25, 28 (1st Cir.2005) (quoting
United States v. Colón Osorio,
360 F.3d 48, 52-53 (1st Cir.2004)).
In his October 28, 2010 declaration, Mr. Gagne asserts that W.B. Mason “does not require its sales representatives or managers to sign non-competition agreements.”
Gagne Oct. 28, 2010 Decl.
¶ 4. He explains that the office supply business is a “commodity business” and that customers are concerned with “only three things — price, prompt and accurate deliveries, and customer service.”
Id.
¶ 7. He further says that “[bjased upon my over 25 years experience, I have learned that there is little or no customer loyalty or goodwill in the office products supply industry.”
Id.
¶ 15. Mr. Gagne cites a 2000 study by United Stationers called “Vision 2000,” which arguably confirms that “customers care principally about price and service, and there is little or no customer goodwill.”
Id.
¶¶ 16-17. Mr. Gagne also states that W.B. Mason does not use customer lists and instead prefers the “cold call” method, walking down the street and calling on “every business — street by street, building by building and office by office.”
Id.
¶ 18.
Even if Mr. Gagne correctly describes W.B. Mason’s business model, the Court is dubious that Mr. Gagne’s experience can be extrapolated to the office supply business as a whole and to OfficeMax in particular. There is no evidence in this record, for example, that OfficeMax has adopted a “cold call” sales model and devalues longstanding customer-salesperson relations. Moreover, the further Mr. Gagne strays from his personal experience as a W.B. Mason salesperson to more generalized opinions about the office supply industry and how OfficeMax must operate its business, the more he sounds like an expert. Having carefully reviewed the October 28, 2010 Gagne declaration and the supporting documents, the Court rejects the portion of the declaration that is not based on his personal knowledge, including those portions based upon the Vision 2000 study.
See
Fed.R.Civ.P. 56(c)(4) (“An affidavit or declaration used to support or oppose a motion must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant
*207
or declarant is competent to testify on the matters stated.”).
The Court denies OfficeMax’s motion to exclude in part and grants it in part. It denies the motion regarding the June 30, 2008 Gagne declaration and grants the motion regarding the October 28, 2010 Gagne declaration, but only insofar as it contains expert opinions not based on Mr. Gagne’s personal knowledge.
B. Summary Judgment Standard
12
A party moving for summary judgment is entitled to judgment in its favor only “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c)(2). A fact is material if its resolution “might affect the outcome of the suit under the governing law.”
Buchanan v. Maine,
469 F.3d 158 , 166 (1st Cir.2006) (quoting
Seaboard Sur. Co. v. Town of Greenfield,
370 F.3d 215, 218-19 (1st Cir.2004)). An issue is genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.”
Id.
(quoting
Seaboard Sur. Co.,
370 F.3d at 218-19 ).
Once this evidence is supplied by the moving party, “the nonmoving party must establish a trial-worthy issue by presenting enough competent evidence to enable a finding favorable to the nonmoving party.”
ATC Realty, LLC v. Town of Kingston,
303 F.3d 91, 94 (1st Cir.2002) (quoting
LeBlanc v. Great Am. Ins. Co.,
6 F.3d 836, 842 (1st Cir.1993). However, the nonmoving party cannot meet its burden with “conclusory allegations, improbable inferences, and unsupported speculation.”
Sutliffe v. Epping Sch. Dist.,
584 F.3d 314, 325 (1st Cir.2009) (quoting
Sullivan v. City of Springfield,
561 F.3d 7, 14 (1st Cir.2009));
accord Carroll v. Xerox Corp.,
294 F.3d 231, 236-37 (1st Cir.2002). Rather, it must “present ‘enough competent evidence’ to enable a factfinder to decide in its favor on the disputed claims.”
Carroll v. Xerox Corp.,
294 F.3d 231, 236-37 (1st Cir.2002) (quoting
Goldman v. First Nat’l Bank of Boston,
985 F.2d 1113, 1116 (1st Cir.1993) (internal quotation marks omitted). The Court is then tasked with reading the record “in the light most favorable to the non-moving party, drawing all reasonable inferences in [the non-movant’s] favor.”
Merchs. Ins. Co. of N.H., Inc. v. U.S. Fid. & Guar. Co.,
143 F.3d 5, 7 (1st Cir.1998).
C. Defendants’ Motions for Summary Judgment
1. Effect of Termination on the Enforceability of the BCOP Agreement’s Noncompetition Provision
In their summary judgment motions, the Defendants all put forth the policy-based argument that “a termination without cause renders a prior noncompete unenforceable.”
Sousa and Johnson Summ. J. Mot.
at 5;
Steele Summ. J. Mot.
at 8. In support, the Defendants refer to an article by Attorney Kenneth J. Vanko in the DePaul Business & Commercial Law Journal entitled “You’re Fired!! And Don’t Forget Your Non-Compete!,” 1 DePaul Bus.
&
Com. L.J. 1 (2002), which surveys the legal landscape surrounding noncompetition agreements asserted against terminated
*208
employees.
Sousa and Johnson Summ. J. Mot.
at 5-6;
Steele Summ. J. Mot.
at 8-11.
The Defendants concede that “Maine Courts have not yet addressed this question or determined whether a termination without cause vitiates a noncompete.”
Sousa and Johnson Summ. J. Mot.
at 6;
Steele Summ. J. Mot.
at 8-9. Even so, relying on the article’s logic and “Maine’s long hostility to such noncompetition covenants,” the Defendants assert that “there can be little doubt that the Supreme Judicial Court of Maine, if presented with this question, would ... hold that these non-competes are unenforceable, as a matter of law, because OfficeMax terminated [the Defendants] without cause.”
Sousa and Johnson Summ. J. Mot.
at 10;
Steele Summ. J. Mot.
at 11. They urge the Court to “adopt the majority rule and hold that discharge without cause vitiates an employee’s territorial noncompete.”
Sousa and Johnson Summ. J. Reply
at 2;
Steele Summ. J. Mot.
at 11.
OfficeMax challenges the Defendants attempts to have the Court adopt a
per se
rule against noncompetition agreements in instances of employer-initiated terminations.
Pl.’s Opp’n to Johnson and Sousa Summ. J. Mot.
at 11-16;
Pi’s Opp’n to Steele Mot.
at 14. In doing so, OfficeMax invokes “established rules of comity” between federal and state courts, and asserts that any attempt to create such a rule here “would constitute an unjustified expansion of state law.”
Pi’s Opp’n to Johnson and Sous a Summ. J. Mot.
at 12;
Pi’s Opp’n to Steele Mot.
at 15. Challenging the Defendants’ assertion of Maine’s “long hostility to noncompetition agreements,” OfficeMax proceeds to detail instances where Maine courts have upheld noncompetition agreements or applied a more flexible, fact-specific standard.
Pi’s Opp’n to Johnson and Sousa Summ. J. Mot.
at 12-16;
PI. ’s Opp’n to Steele Mot.
at 15.
The Court considered these very same arguments in
OfficeMax Inc. v. County Qwick Print, Inc.,
No. CV-10-110-B-W, 751 F.Supp.2d 221, 244-45 , 2010 WL 4473306, at *21 (D.Me. Nov. 8, 2010), and ruled that “[i]n the absence of guidance from the Maine Legislature and the Maine courts, the Court cannot accurately predict what, if presented with this question, the Maine Supreme Judicial Court would do.” It concluded that the “safer approach is to consider the circumstances of [the employee’s] termination as a factor in balancing the relative equities between the parties, but as a federal court, not to attempt to create a new rule of substantive state law.”
Id.
Absent intervening contrary authority, the Court reiterates its earlier conclusion for the same reasons.
13
Id.
2.
Effect of the Waiver of Claims and General Release on the BCOP Agreements
In their summary judgment motions, Messrs. Johnson and Sousa assert that that the general release they executed in exchange for severance pay reciprocally released them from the BCOP Agreements by OfficeMax.
Sousa and Johnson Summ. J. Mot.
at 12. Their argument partially undergirds their counterclaims for declaratory judgment to void the BCOP Agreements, and they press it again in their opposition to OfficeMax’s
*209
summary judgment motion on their declaratory judgment counterclaim.
Johnson Summ. J. Opp’n
at 11-12;
Sousa Summ. J. Opp’n
at 13.
Citing “long-standing Maine law” from
Butters v. Kane,
347 A.2d 602, 603 (Me. 1975), Messrs. Sousa and Johnson maintain that the “broad general release [in the Sousa and Johnson Release] implies a reciprocal, broad release from [OfficeMax,] absent an express reservation of rights.”
Sousa and Johnson Summ. J. Mot.
at 12. Because the Sousa and Johnson Releases lack such an express reservation, Messrs. Sousa and Johnson assert that “OfficeMax is deemed to have released all rights it had against Sousa and Johnson, including all rights under prior noncompetes” including their BCOP Agreements.
Sousa and Johnson Summ. J. Mot.
at 13.
OfficeMax attacks the argument, both in its opposition to the Defendants’ summary judgment motions and in its own summary judgment motion. OfficeMax presses two points. First, it asserts that
Butters
is limited to releases of claims arising out of past events.
Pl.’s Opp’n to Johnson and Sousa Summ. J. Mot.
at 18. According to OfficeMax, the Sousa and Johnson Releases fall outside Butters’ scope because they “expressly excluded potential claims ‘arising from events occurring after the date Associate signs this Agreement.’ ”
PL’s Opp’n to Johnson and Sousa Summ. J. Mot.
at 18 (emphasis in original).
Second, OfficeMax argues that, even accepting that the Sousa and Johnson General Releases fall within
Butters’
scope, the Defendants’ argument still fails because “an express reservation of rights in favor of OfficeMax was included in the severance agreements relating to their continuing, post-employment obligations to OfficeMax. ...”
PL’s Opp’n to Johnson and Sousa Summ. J. Mot.
at 19. OfficeMax cites Paragraph 4.c of the Sousa and Johnson Releases, which states that “This Paragraph 4.c shall in no way restrict or limit other agreements between Associate and OfficeMax relating to non-competition and/or non-solicitation of customers.”
PL’s Opp’n to Johnson and Sousa Summ. J. Mot.
at 19 (emphasis in
PL’s Opp’n to Johnson and Sousa Summ. J. Mot.).
OfficeMax reads this provision as “clearly preserving] their continuing, contractual obligations pursuant to the other agreements [the Defendants] had signed with OfficeMax concerning the issues of non-competition and/or non-solicitation of customers.”
PL’s Opp’n to Johnson and Sousa Summ. J. Mot.
at 19.
Replying to OfficeMax’s argument, Messrs. Sousa and Johnson assert that Paragraph 4.c of the Sousa Release and Johnson Release, contains “a drafting error on the part of OfficeMax,” which limits the reach of the reservation of rights clause only to that paragraph and does not otherwise affect the broad release.
Sousa and Johnson Summ. J.
Reply at 2-3.
The general release states,
inter alia,
that Messrs. Sousa and Johnson release OfficeMax from “all suits, causes of action, claims and demands, whether known or unknown, that Associate has or may have as of the date that Associate executes this Agreement ...” and includes claims of breach of contract.
Sousa Release
at 1;
Johnson Release
at 1. According to Messrs. Johnson and Sousa, their explicit release of claims against OfficeMax included the implicit release by OfficeMax of claims against them, including claims based upon the previous BCOP Agreement. The Defendants’ argument is an intricate one, and requires a brief review of Maine law.
In
Butters ,
the Maine Law Court addressed a lawsuit that arose out of a snowmobile collision between Peter Kane and Robert Butters that caused personal inju
*210
ries to Mr. Butters’ wife, Beverly, who was a passenger on Mr. Butters’ snowmobile at the time of the collision. 347 A.2d at 602 . Ms. Butters sued Mr. Kane, who impleaded Mr. Butters.
Id.
at 602-03 . While Ms. Butters’ lawsuit was pending, Mr. Kane paid Ms. Butters $25,000 in consideration, for which Mr. and Ms. Butters released Mr. Kane “from any and all claims, demand, damages, actions, causes of action or suits of any kind of nature whatsoever.”
Id.
at 603 . Following this settlement, Mr. Kane amended his complaint to seek judgment against Mr. Butters for the percentage of the $25,000 consistent with Mr. Butters’ contributory negligence in causing the accident and Ms. Butters’ injuries.
Id.
The case went to trial and a jury found that Mr. Butters was thirty percent responsible for the accident.
Id.
The Superi- or Court Justice, however, granted judgment notwithstanding the verdict, based on the release among the parties.
Id.
at 603-04 .
On appeal, the Maine Supreme Judicial Court, citing
Norton v. Benjamin,
220 A.2d 248 (Me.1966), noted that it is settled law in the state of Maine that “ jail causes of action’ ... include the right of contribution unless such right of action for contribution is expressly excepted from the terms of the release.”
Id.
at 603.
Norton ,
however, involved a mutual release and in
Butters ,
Mr. Kane had not signed the release.
Id.
The Law Court reviewed case law from other jurisdictions which, based upon various principles of equity, concluded that “unless the releasee expressly reserves his right of action against the releasor, all litigation between the parties arising out of the same cause of action is terminated whether suit is pending at the time the release is given or is subsequently asserted.”
Id.
at 604 (internal citation omitted). The Law Court adopted the rationale of these courts and “declare[d] the rule in Maine to be that the making of a settlement without any express reservation of rights constitutes complete accord and satisfaction of all claims of immediate parties to the settlement arising out of the same accident.”
Id.
Since 1975, Maine courts, both state and federal, have applied
Butters. See, e.g., N. Am. Co. for Life and Health Ins. v. Malmstrom,
No. CIV. 00-83-B-H, 2001 WL 225014 , at *2 (D.Me. March 1, 2001);
Cyr v. Cyr,
560 A.2d 1083, 1084 (Me.1989);
Snyder v. Legacy Farms, Inc. of Perham,
2002 WL 32068250 , No. CV-01-078, at *4 (Me.Super. Nov. 13, 2002). In
Cyr v. Cyr,
for example — also cited by the Defendants — the Law Court further explained its reasoning in
Butters :
Ordinary reasonable and reasoning persons occupying the position of the releasors at the time they accepted a settlement of their claim and executed the release and dismissal of their suit would think the entire matter was settled. They would not expect the releasee to pay them money in satisfaction of their claim and then sue them upon a cross-claim. No reason appears why the releasee should pay money to them when he felt
they
were actually indebted to
him.
Id.
(quoting
Mensing v. Sturgeon,
250 Iowa 918 , 97 N.W.2d 145, 151 (1959)) (emphasis in original; internal brackets omitted). It clarified that “implicit in the bargain of accord and satisfaction is a reciprocal release, by the party who has procured the express release, of any claims inconsistent with the settlement effected by the release.”
Id.
Butters’
reach is not unlimited, however, and later cases clarify that it does not address circumstances like this one where the parties had neither entered nor contemplated litigation when the general re
*211
lease was signed. In
Reed & Reed, Inc. v. Weeks Marine, Inc.,
No. 02-195-P-H, 2004 WL 256335 , at *10 (D.Me. Jan. 9, 2004), this Court held that
Butters
“cannot reasonably be interpreted to apply to releases executed in circumstances other than the settlement of litigation.” The Court noted that “[t]o adopt [the opposing] view would be to import reciprocity into every release document that does not include an explicit reservation of rights by the releasee.”
Id.
The reasoning in
Reed & Reed
is applicable here. The Sousa and Johnson releases did not relate to any ongoing litigation, or even the threat of litigation. Their purpose was precisely to avoid litigation by settling any and all potential disputes once the parties were freed from their employment relationship.
The facts in
Butters
further limit its precedential authority. As argued by OfficeMax, the general release in
Butters
settled disputes from a prior, clearly defined event.
See Pl.’s Opp’n to Johnson and Sousa Summ. J. Mot.
at 18-19;
Pl. ’s Sousa and Johnson Summ. J. Mot.
at 13;
PL’s Sousa and Johnson Summ. J. Reply
at 12. It did not profess to resolve future, unrelated events. The Law Court emphasized this point, noting that other courts view a general release as terminating “all litigation between the parties
arising out of the same cause of action ...
whether suit is pending at the time the release is given or is subsequently asserted.”
Butters,
347 A.2d at 604 (emphasis added). The Law Court did not explain that the general release terminated future litigation arising out of some other cause of action.
Cyr
is distinguishable for the same reason. It involved the sale of a business and subsequent allegations of misrepresentation and breach of warranty. The sale included a release of “any claims arising out of the mortgage and notes that the buyers had given the sellers to purchase the restaurant.”
Cyr,
560 A.2d at 1084 . By its terms, the release did not cover future transgressions by the parties unrelated to the purchase of the business.
Consistent with
Cyr ,
this Court starts with the language of the agreements:
Associate does hereby release and discharge the Company from and for all suits, causes of action, claims and demands, whether known or unknown, that Associate
has or may have as of the date that Associate executes this Agreement,
including without limitation, those arising out of, or in any way related to Associate’s employment with and termination of employment from the Company.
Sousa Release
at 1 (emphasis added);
Johnson Release
at 1 (same). By their language, the Waiver of Claims and General Releases apply only to causes of action that existed up to and including the date they were executed. The events that form the gravamen of OfficeMax’s Complaint had not yet taken place and, by the terms of the Releases, were not included.
The Court concludes that the general releases do not void the BCOP Agreements.
3. The Validity of the BCOP Agreements With Respect to Maine Public Policy
The Defendants challenge the BCOP Agreements as void as a matter of public policy. They first make this argument in their declaratory judgment counterclaims, seeking judgment that their noncompetition agreements are “void and unenforceable.”
14
Sousa Ansiver
at 4;
Johnson An
*212
swer
at 4;
Steele Answer
at 18: They press the point again in their opposition to OfficeMax’s summary judgment motions.
Sousa Summ. J. Opp’n
at 13-17;
Johnson Summ. J. Opp’n
at 12-15. OfficeMax disagrees.
PI. ’s Steele Summ. J. Mot.
at 2-6, 22;
Pl.’s Sousa and Johnson Summ. J. Mot.
at 15;
PL’s Sousa and Johnson Summ. J. Reply
at 6-12,15.
Steele’s BCOP Agreement provide for a one-year restriction on the sale or distribution of services or merchandise:
For a period of 12 months after termination of my employment with [BCOP] ... (or for a period of 12 months after a final judgment or injunction enforcing this covenant), I will not ... sell or attempt to sell any services or merchandise customarily provided by [BCOP] to any prior or current [BCOP] customer which I called on at any time as a representative of [BCOP].
Steele BCOP Agreement
at 1. Messrs. Johnson and Sousa’s BCOP Agreements contain similar prohibitions:
For a period of 12 months after termination of my employment with [BCOP] ... (or for a period of 12 months after a final judgment or injunction enforcing this covenant), I will not ... engage in the sale or distribution of office supplies, office furniture or related office products or services, in any geographic territories I was assigned by BCOP in the 12 months prior to my termination of employment.
Sousa BCOP Agreement
at 1;
Johnson BCOP Agreement
at 1.
For Messrs. Johnson and Sousa, however, OfficeMax seeks more limited enforcement of the provision, asking that Messrs. Johnson and Sousa’s BCOP Agreements be enforced “to the extent [they] restraint ] [Johnson and Sousa] in the initial 12 months following their termination from competing for Plaintiffs existing customers located in the geographical territories that they worked in and managed for OfficeMax during their final twelve months of employment.”
Pl.’s Sousa and Johnson Summ. J. Mot.
at 2.
The Court considers the enforceability of the noncompetition provision “only as [OfficeMax] has sought to apply it and not as it might have been enforced on its terms.”
Brignull v. Albert,
666 A.2d 82, 84 (Me.1995). At the same time, “the party seeking enforcement cannot leave it to the court to enforce only those provisions the court deems reasonable. To do so would require the court to redraft the contract.”
Everett J. Prescott, Inc.,
390 F.Supp.2d 44, 47 (D.Me.2005).
The scope of enforcement that OfficeMax seeks is slightly narrower than the restrictions provided by the plain text of the noncompetition clause. Yet, Messrs. Sousa and Johnson protest this effective change to the BCOP Agreements, noting that in OfficeMax’s complaint and in its motion for preliminary injunction, OfficeMax sought enforcement to the full scope of the contractual language and that “this bobbing and weaving” effectively asks the court to “redraft the contract, as the evidence develops in the case.”
Sousa Summ. J. Opp’n
at 15;
Johnson Summ. J. Opp’n
at 13-14.
The Court rejects this argument. The restriction OfficeMax seeks enforced is not significantly different than the restriction
*213
described in the contractual language and, consistent with
Brignull ,
the Court considers the provisions of the Agreements that OfficeMax has “sought to apply and not as it might have been enforced on its terms.”
15
666 A.2d at 84 .
The Defendants’ challenge to the validity of the noncompetition agreements is limited to their scope relative to the business interests that OfficeMax seeks to protect. Specifically, Messrs. Sousa and Johnson say that OfficeMax’s stated justification is only to protect its trade secrets and customer goodwill. They counter that genuine issues of material fact remain as to whether OfficeMax had any goodwill and whether trade secrets and confidential information play a significant role in the industry.
Sousa Summ. J. Opp’n
at 14;
Johnson Summ. J. Opp’n
at 14-15. In support of their argument, Sousa and Johnson offer the Declaration of Edmund Gagne, which the Court has limited to his lay, not expert opinions.
16
See supra
Part II.A.3.
Def. Denis Sousa’s Opposing Statement of Material Facts
¶ 56 (Docket #162)
(Sousa
RPSMF);
Def. George Johnson’s Opposing Statement of Material Facts
¶ 52 (Docket # 167)
{Johnson
RPSMF). Mr. Gagne asserts that W.B. Mason “does not require its sales representatives or managers to sign non-competition agreements.”
Gagne Decl.
¶ 4. Mr. Gagne also states that W.B. Mason does not use customer lists and instead prefers the “cold call” method, walking down the street and calling on “every business— street by street, building by building and office by office.”
Id.
¶ 18.
In
OfficeMax v. County Qwick Print,
the Court set forth its understanding of Maine law regarding covenants not to compete:
The Maine Law Court has emphasized that, because of the potential for post-employment covenants to restrict the former employee’s ability to earn a living, “such covenants are contrary to public policy and will be enforced only to the extent that they are reasonable and sweep no wider than necessary to protect the business interests in issue.”
Chapman & Drake [v.
Harrington], 545 A.2d [645,] 646-47 [ (Me.1988) ] (quoting
Lord v. Lord,
454 A.2d 830, 834 (Me.1983) (internal quotation marks omitted)). The reasonability of a noncom-petition covenant “must ultimately be determined by the facts developed in each case as to its duration, geographic area and the interests sought to be protected.”
Id.
at 647.
In assessing the interests that OfficeMax seeks to protect, the Court notes that “protecting the employer simply from business competition is not a legitimate business interest to be advanced by such an agreement.”
Chapman & Drake,
545 A.2d at 647. “[A] covenant
*214
not to compete may be reasonable, however, when the employee during his term of employment has had substantial contact with his employer’s customers and is thereby in a position to take for his own benefit the good will his employer paid him to help develop for the employer’s business.”
Id.
at 647;
see also Roy v. Bolduc,
140 Me. 103, 103 , 34 A.2d 479, 480-81 (1943) (holding unreasonable a noncompetition agreement where the employer possessed no trade secrets and had imparted no confidential information that could have been used against the employer).
751 F.Supp.2d at 245 , 2010 WL 4473306, at *21 .
In view of these principles, Messrs. Johnson and Sousa are making a
Roy v. Bolduc
argument: if the employer has no trade secrets and no confidential information, and there has been no improper interference with prior customers, a restrictive covenant would violate public policy against “the rightful exercise of ... skill and knowledge in gaining a livelihood in ... his calling or trade.”
Roy ,
at 481. Messrs. Johnson and Sousa contend that because there is no such thing as goodwill in the office supply business, any agreement not to compete on that basis is void as against public policy.
This is a factual issue. Particularly once Mr. Gagne’s declaration is properly limited to lay testimony, there is little in the record that would justify a conclusion as a matter of law that OfficeMax has no goodwill or trade secrets to protect. The plain text of the Sousa and Johnson BCOP Agreements stipulates otherwise:
In agreeing to this restriction, I specifically acknowledge the substantial value to BCOP of my customer contracts and agree that such contacts constitute goodwill and a protectable interest of BCOP.
PI. ’s Sousa and Johnson Summ. J. Reply
at 9. Under Maine law, it is OfficeMax’s burden to demonstrate the necessity and reasonableness of the restrictive covenants and that the restrictions “sweep no wider than necessary to protect the business interests in issue.”
Chapman & Drake,
545 A.2d at 646-47. However, the reasonableness of a noncompetition covenant “must ultimately be determined by the facts developed in each case as to its duration, geographic area and the interests sought to be protected.”
Id.
at 647. The fact-based application of this legal standard makes summary judgment inappropriate for any of the Defendants on this issue.
4. Applicability of the Noncompetition Provision in Johnson’s BCOP Agreement
As regards George Johnson only, Mr. Johnson argues that his BCOP Agreement, “by its own, express terms” is enforceable only “when the termination results from something done by Johnson, and does not apply to a situation where OfficeMax terminates Johnson without cause.”
Sousa and Johnson Summ. J. Mot.
at 10. According to Mr. Johnson, the unique language of his BCOP Agreement limits the applicability of that noncompetition clause to situations where he either leaves voluntarily or is terminated for cause:
For a period of 12 months after termination of my employment with BCOP, whether such termination is voluntary or involuntary on my part....
Johnson BCOP Agreement
at 1. Specifically, the parties dispute the meaning of “involuntary
on my part,”
which is not present in the later-signed Sousa BCOP Agreement.
See Sousa BCOP Agreement
at 1.
*215
Mr. Johnson argues that the term cannot be surplusage and must have meaning. He concludes that the only logical interpretation is that the noncompete applies only “when the termination results from something done by Johnson.”
Sousa and Johnson Summ. J. Mot.
at 10. He reasons that because his termination was not the product of his own actions, it was not covered by his BCOP Agreement.
Id.
at 11. Furthermore, Mr. Johnson argues that “[t]o the extent there is any ambiguity in this clause, the clause must be construed against OfficeMax, both because it drafted the agreement, and because non-competition agreements are customarily interpreted strictly against the employer.... ”
Sousa and Johnson Summ. J. Mot.
at 11.
OfficeMax replies that Mr. Johnson is reading into the contract “hypothetical scenarios,” and reading out of the contract “the vital nature of the interests that OfficeMax is reasonably attempting to protect through the larger sentence at issue and the noncompetition clause itself.”
PL’s Opp’n to Johnson and Sousa Summ. J. Mot.
at 17. OfficeMax reasons that the broader protections granted by the “larger part of the sentence” — protecting OfficeMax from any departure by Johnson— should not be abridged by the “subordinate phrase.”
Id.
at 17-18.
“The summary judgment analysis for a breach of contract case depends upon the nature of the contract language; where the language is unambiguous, contract interpretation is a question of law for the court, where ambiguous, it is a question of fact for the jury.” Tate & Lyle Ingredients Ams., Inc. v. Trans. Dist., LLC,
746 F.Supp.2d 189, 195 (D.Me.2010)
(citing FHS Props. Ltd. P’ship v. BC Assocs.,
175 F.3d 81 , 87 n. 7 (1st Cir.1999)).
The initial determination of ambiguity is a question of law for the court. United States Liab. Ins. Co. v. Selman,
70 F.3d 684, 687 (1st Cir.1995). “[Contract language is ambiguous if the terms are inconsistent on their face, or if the terms allow reasonable but differing interpretations of their meaning.”
Rodriguez-Abreu v. Chase Manhattan Bank, N.A.,
986 F.2d 580, 586 (1st Cir.1993).
That is, a term is ambiguous if it can be reasonably understood at least two ways. Coastal Ventures v. Alsham Plaza, LLC,
2010 ME 63, ¶ 26 , 1 A.3d 416, 424 .
Here, the Court readily concludes that the language is ambiguous. The first part of the sentence describes the triggering event for the running of the twelve month period, namely “termination.” The second part of the sentence clarifies that the provision applies whether it is “voluntary or involuntary termination on my part.” “Voluntary on my part” presumably means that the noncompete agreement applies if Mr. Johnson quits. “Involuntary on my part” seems purely redundant since if it is involuntary, it must be involuntary on someone’s part, namely the person against whom the action is being taken.
The parties have reached for explanations of the phrase. One possibility is that the phrase refers to termination for cause, which would, by definition, be involuntary on the employee’s part. At oral argument, Mr. Johnson’s lawyer suggested that the phrase could also refer to a situation where Mr. Johnson’s employment is terminated should he become disabled and unable to work. Conversely, if OfficeMax became economically required to terminate Mr. Johnson — as happened here — then under this interpretation, the termination might fall outside the agreement because Mr. Johnson would have had no control over his layoff. In other words, if OfficeMax terminated Mr. Johnson involuntarily, not “on [the] part” of Mr. Johnson, Office
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Max could not hold him to the noncompetition provisions.
Assuming the words — involuntary on my part — refer to OfficeMax firing Mr. Johnson, then consistent with this view, it is possible that the words “on my part” are superfluous and that the entire phrase was intended to clarify that it covered voluntary, i.e. quit, terminations as well as involuntary, i.e. fired, terminations.
But see Richardson v. Winthrop Sch. Dep’t,
2009 ME 109, ¶ 9 , 983 A.2d 400, 403 (courts should strive to “avoid any interpretation that renders a provision meaningless”);
Ackerman v. Yates,
2004 ME 56, ¶ 10 , 847 A.2d 418, 422 (same);
Am. Prot. Ins. Co. v. Acadia Ins. Co.,
2003 ME 6, ¶ 12 , 814 A.2d 989, 993 (same);
Crowe v. Bolduc,
365 F.3d 86 , 97 .(1st Cir.2004) (“[A]n inquiring court should, whenever possible, avoid an interpretation that renders a particular word, clause, or phrase meaningless or relegates it to the category of mere surplusage”). Faced with two compelling constructions of the phrase “involuntary on my part,” the Court concludes that there is an ambiguity inherent in the contract.
Even if a contract is ambiguous, when there are no facts in dispute, the interpretation of a contract is a question of law for the court.
See FHS Props. Ltd. P’ship,
175 F.3d at 87 n. 7;
Canal Elec. Co. v. Westinghouse Elec. Co.,
973 F.2d 988 , 992 (1st Cir.1992) (when there are no facts in dispute, the court must interpret the words of a contract as a matter of law). At the same time, “[w]here there is an ambiguity in a written contract, and the record does not completely eliminate the possibility of an issue of material fact concerning the intent of the parties, summary judgment is inappropriate”.
Tondreau v. Sherwin-Williams,
638 A.2d 728, 730 (Me.1994). When a contract is found to be ambiguous, a court “may look to extrinsic evidence of the intent of the parties.”
Villas by the Sea Owners Ass’n v. Garrity,
2000 ME 48, ¶10 , 748 A.2d 457, 461 . Here, Mr. Johnson forcefully argues that there are no disputed facts that would clarify the parties’ intent. He notes that the parties have not located the person who drafted the Johnson contract for BCOP and there is no evidence that would assist a fact-finder in divining intent.
Although the question is a close one, the Court is leery of drawing the conclusion on a contested summary judgment record that no extrinsic evidence would assist a factfinder. For example, there is evidence that the same clause in the later Sousa BCOP Agreement does not contain the “on my part” phrase but contains otherwise identical language. A fact finder could find that fact significant or not. Similarly, the context of this agreement, the nature of the office products industry, and the circumstances of BCOP and Johnson at the time the agreement was signed may assist a fact finder to assess the intent of the parties and the meaning of the clause. As the Court is required to view the facts in the light most favorable to the nonmovant, the Court cannot conclude that there are no extrinsic facts on this record that would assist a proper determination of the parties’ intent. The Court denies George Johnson’s motion for summary judgment on this ground.
5. The Defendants’ Breach of Contract
a. Breach of the BCOP Agreement and General Release by Sousa and Johnson
Messrs. Sousa and Johnson assert that “OfficeMax has no evidence that either Sousa or Johnson has breached any provision of their respective ‘WAIVER OF CLAIMS AND GENERAL RELEASE.’ ”
Sousa and Johnson Summ. J. Mot.
at 4;
Sousa and Johnson Summ. J. Reply
at 3-
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4. Specifically, they assert that there is no evidence that they have solicited OfficeMax customers and no evidence that they used or disclosed to W.B. Mason or failed to return to OfficeMax any OfficeMax confidential information.
Sousa and Johnson Summ. J. Mot.
at 4.
OfficeMax rejects the notion that there is no “credible evidence of record, which, at a minimum, demonstrates disputed material facts regarding the unsupported assertion by Defendants’ Counsel that Defendants in no manner violated their respective noncompetition and severance agreements with OfficeMax.”
Pl.’s Opp’n to Johnson and Sousa Summ. J. Mot.
at 9. In support, OfficeMax cites the Defendants’ failure to return “their external memory devices on their final day of employment with OfficeMax, combined with forensic evidence that indicates that files on the usb drives in their possession were accessed subsequent to their employment with W.B. Mason.”
Pi’s Opp’n to Johnson and Sousa Summ. J. Mot.
at 9. OfficeMax further asserts that, even though the Defendants make a “sweeping assertion” that there “is no evidence that either Defendant solicited OfficeMax customers for W.B. Mason in violation” of the agreements, the Defendants “do not refer to any affidavit, interrogatory answer, or other supporting document for this assertion.”
Id.
at 10. Instead, OfficeMax says the Defendants rely on “a single affidavit provided by their Counsel, which ... provides no meaningful, factual support as key portions of the affidavit are inadmissible.”
Id.
OfficeMax also counters with its own motion for summary judgment as to Mr. Sousa’s violation of the confidentiality provisions in his BCOP Agreement, saying that Mr. Sousa violated paragraph 3 of his BCOP agreement and paragraph 4a of his general release by failing to return two usb drives containing OfficeMax’s confidential information, including a presentation entitled “Q2 2009 Business Review.”
PI. ’s Sousa and Johnson Summ. J. Mot.
at 6-8. Mr. Sousa in turn says that OfficeMax has not shown it suffered any harm as a result of his retention of the usb drives or presentation, has not shown that the usb drives were owned by OfficeMax, and that “[tjhere is simply no evidence from which a fact-finder could conclude that this temporary deprivation of copies of largely outdated OfficeMax sales training materials caused any cognizable injury to OfficeMax.”
Sousa Summ. J. Opp’n
at 11.
b. Confidentiality
The confidentiality provisions in Messrs. Sousa and Johnson’s BCOP Agreements and their General Releases cover nearly identical territory. The BCOP Agreements provide a non-exclusive list of confidential information
17
and provide that Messrs. Johnson and Sousa:
will not divulge such confidential information or trade secrets to any person, firm, or institution ... [and] upon termination of my employment ... will continue to treat such confidential information and trade secrets as private and privileged, and will not, either for my own purposes or as an employee of or for the benefit of any other entity or
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person, use such information or disclose it to any person, firm, or institution.
Sousa BCOP Agreement
at 1;
Johnson BCOP Agreement
at 1. The General Releases similarly require that they “forever preserve the confidentiality of all confidential and proprietary information of the Company.”
Sousa Release
at 1;
Johnson Release
at 1.
Messrs. Johnson and Sousa’s motion for summary judgment is oddly framed. Neither Mr. Johnson nor Mr. Sousa at any time says that he did not breach the confidentiality agreement. Instead, each Defendant asserts that OfficeMax “has no evidence” that he “failed to return any genuinely confidential information, that he disclosed any information to W.B. Mason, or that he used any such information.” Sousa and Johnson SMF ¶¶7, 14. For support, the Defendants cite OfficeMax’s Answers to Interrogatories 10 and 11.
Id.
Interrogatory 10 and OfficeMax’s response states:
State the basis of the statement in your Preliminary Injunction Motion at page 2 that:
“[I]t is clear that neither Sousa nor Johnson have returned all of OfficeMax’s confidential information ... which undoubtedly they are using to the competitive disadvantage of OfficeMax.”
In your response, state the following:’
(a) Identify the “confidential information” you contend Sousa has not returned to OfficeMax;
RESPONSE: OfficeMax contends that Sousa has not returned all “confidential information” previously provided to him. This includes information which OfficeMax believes Sousa saved to various thumb / flash drives that he connected to his laptop computer. Details concerning such are set forth in the Declaration of Jayson Sullivan, dated February 19, 2010, which was previously served.
(b) Describe in detail all information and evidence you have that Sousa is “using [this confidential information] to the competitive disadvantage of OfficeMax;”
RESPONSE: OfficeMax objects to Interrogatory 10(b) because it seeks information protected by the attorney work product doctrine. OfficeMax also objects to Interrogatory 10(b) because this request is premature and unfairly prejudicial based upon the ongoing discovery process.
(c) Describe in detail the investigation you conducted before making this allegation, including everything you did to satisfy your obligations under Rule 11 of the Fed. Rules Civ. Pro.
RESPONSE: OfficeMax objects to interrogatory No. 10(c) because it seeks information protected by the attorney work product doctrine, the attorney client privilege, and because it seeks information not relevant to discovery.
PI. ’s Resp. to Def. Denis Sousa’s First Set of Inter, to PI.
at 12. Interrogatory 11 states:
State the basis of the statement in your Preliminary Injunction Motion at page 25 that:
“Additionally, upon information and belief, both Sousa and Johnson have used or disclosed to W.B. Mason OfficeMax’s confidential information in violation of their agreements with OfficeMax.”
Id.
at 12-13. OfficeMax objected to each subpart of Interrogatory 11, asserting that the interrogatory was 1) premature and unfairly prejudicial; 2) sought information protected by the attorney work product doctrine; or 3) sought information not relevant for discovery.
Id.
There is no sug
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gestión that OfficeMax ever supplemented these responses.
OfficeMax’s responses to these Interrogatories reflect the contentious nature of this litigation. If OfficeMax’s responses came before the Court as a part of a discovery dispute, the Court would again take a dim view of OfficeMax’s frivolous objections and failure to supplement its responses. However, as framed, OfficeMax’s responses do not support the Sousa / Johnson statements of material fact 7 and 14 because the OfficeMax responses are either non-responsive or objections.
Furthermore, OfficeMax’s response to the Sousa/Johnson statements of material fact is also unusual. It objects to these paragraphs on the ground that they do not assert a fact but state a legal conclusion and seek “to invade the attorney work product.” Resp. to Sousa and Johnson SMF ¶¶ 7, 14. The Court overrules these objections. In addition, OfficeMax does not actually deny the allegations. Rather, in each response it refers the Court to certain exhibits.
Id.
For statement of material fact 7, OfficeMax states:
Subject to and without waiving its stated objections,
see
Exhibit H, OfficeMax’s objections and responses in its Supplemental Response to Interrogatory No. 2, No. 5;
see also,
Exhibit B, Declaration of Jayson Sullivan.
Id.
¶ 7. For statement of material fact 14, OfficeMax states:
Subject to and without waiving its stated objections, see Exhibit I, OfficeMax’s objections and responses in its Supplemental Response to Interrogatory No. 2, No. 5;
see also,
Exhibit B, Declaration of Jayson Sullivan (discussing issues concerning the access of data files from a memory drive subsequent to Johnson’s employment with OfficeMax); Exhibit C, Declaration of David Tillotson (discussing Johnson’s contact of OfficeMax customers he serviced during his employment with OfficeMax).
Id.
¶ 14. OfficeMax never filed its own statement of additional material facts in response to the Johnson-Sousa statements of facts, so the Court is left with this unsatisfactory record.
The record is inadequate for a number of reasons. First, the Defendants placed the issue before the Court in an oblique fashion; they have not filed an affidavit saying they did not disclose confidential information but have only challenged OfficeMax to produce evidence that they did so. In turn, OfficeMax did not point to specific evidence that rebuts the Defendants’ claims; instead OfficeMax generally referred the Court to interrogatory responses and unspecified portions of affidavits. OfficeMax’s response violates the local rule. D. Me. Loe. R. 56(c) (stating that the opposing statement “shall admit, deny or qualify the facts”), 56(f) (stating that an assertion of fact “shall be followed by a citation to the specific page or paragraph of identified record material supporting the assertion”). Then, OfficeMax requested and received additional time to produce direct evidence of a violation and produced none.
18
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Furthermore, OfficeMax’s references do not clarify the evidence that it contends generates a genuine issue of material fact. OfficeMax’s “objections and responses” in its Supplemental Response to Interrogatories 2 and 5 are wholly unilluminating.
Pl.’s Opp’n to Johnson and Sousa Summ. J. Mot.
Attach. 8, 9. The supplemental response to Interrogatory 2 alleges only that the harm OfficeMax suffered as a result of Mr. Sousa’s conduct includes the loss of Mr. Steele and two other sales employees in Vermont, and other harm “which cannot be readily quantified” without deposing the Defendants and five other non-party witnesses. None of this amounts to evidence of a breach of confidentiality and, in fact, admits to a lack of evidence.
Id.
The response to Interrogatory 5 lists a series of paragraphs within the Release Agreement that OfficeMax contends the Defendants violated and then refers to a long series of documents, none of which is before the Court.
Id.
The entire sequence is curious. If Mr. Johnson and Mr. Sousa deny violating the confidentiality provisions of the agreements, it is odd that they would not have filed an affidavit to that effect in support of their motion for summary judgment and if they admit the violations, it is odd that OfficeMax would not have supplemented its summary judgment pleadings to that effect.
19
The Court has been left by the parties to slog through a mire of incompíete answers, reflexive objections, and local rule violations.
20
Even amid this confusion, the record — viewed in the light most favorable to OfficeMax — supports the conclusion that both George Johnson and Denis Sousa were exposed to and possessed OfficeMax confidential information. Tom Polcaro, OfficeMax’s Regional Vice President, explained that both Mr. Sousa and Mr. Johnson were “regularly exposed to an extensive amount of OfficeMax information that is highly confidential and/or proprietary.”
PL’s Opp’n to Johnson and Sousa Summ. J. Mot.
Attach. 13 ¶¶ 16, 17
(Polcaro Decl.).
This information included OfficeMax’s sales and pricing strategies, its marketing strategies and practices, its profit margins, its strengths and vulnerabilities in servicing customers, and the identity and purchasing history and future needs of OfficeMax’s customers.
Id.
¶ 10, 17.
Additionally, as regards OfficeMax’s claims against Denis Sousa, Jayson Sullivan — Senior Security Engineer, Enterprise Information Security Management for OfficeMax — states that an external memory device attached to Mr. Sousa’s laptop was not returned to OfficeMax and contained a file entitled “Business Review Q2 2009 Maine Final.ppt,” which was accessed on December 3, 2009.
PL’s Opp’n to Johnson and Sousa Summ. J. Mot.
Attach. 2 ¶¶ 11-12
(Sousa Johnson Sullivan Decl.).
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Peeking through the fog of litigation, the Court concludes that there exist questions of fact as to Messrs. Sousa and Johnson’s possession of OfficeMax confidential information. The much more difficult question is whether the parties’ documents have raised a genuine issue of material fact as to whether either Mr. Johnson or Mr. Sousa breached the agreement by divulging or using confidential information. There is no direct evidence on this issue. The only question is whether OfficeMax has raised a triable issue by establishing that these Defendants possessed confidential information after they left OfficeMax employment; in other words, whether a fact finder could infer that the reason they accessed OfficeMax confidential information after they left employment with OfficeMax was to use it against OfficeMax. In this context, the line is between drawing forbidden “improbable inferences,”
Sutliffe,
584 F.3d at 325 , and drawing permissible “reasonable inferences in [OfficeMax’s] favor,”
Merchs. Ins. Co. of N.H. v. U.S. Fid. and Guar. Co.,
143 F.3d 5, 7 (1st Cir.1998).
After carefully reviewing the parties’ submissions, the Court concludes that OfficeMax has made an evidentiary showing sufficient to generate a genuine issue of material fact as to Denis Sousa’s use of confidential information in violation of the BCOP Agreement and General Release, but has not made the same evidentiary showing as to George Johnson. Even though Mr. Sousa posits an innocent explanation for his actions, the Sullivan Declaration contains evidence that Mr. Sousa accessed OfficeMax confidential information after he left OfficeMax employment and a jury could infer that the reason he accessed it was to use it. The same evidence is simply not in this record as against Mr. Johnson. The Sullivan declaration does not implicate Mr. Johnson and there is no other evidence in this record that confirms he did so. Accordingly, a fact finder would not have an evidentiary basis on which to conclude that Mr. Johnson violated the confidentiality provisions of the Agreement.
At the same time, the Court concludes that summary judgment cannot be granted in favor of OfficeMax as to Mr. Sousa’s violation of the confidentiality provisions.
See PL’s Sousa and Johnson Summ. J. Mot.
at 6-8. The record is simply not sufficiently developed to conclude that Mr. Sousa’s retention of two usb drives of unknown origin constitute a breach of contract. First, the ownership of the usb drives remains a matter of dispute. Furthermore, the Court agrees with Mr. Sousa that OfficeMax has not shown any damage as a result of Mr. Sousa’s retention of the information — a necessary element of a breach of contract claim.
See In re Hannaford Bros. Co. Customer Data Sec. Breach Litig.,
2010 ME 93, ¶ 8 , 4 A.3d 492, 495-96 (“[A]ctual injury or damage is an element of both negligence and breach of contract claims.”). Moreover, it remains a question of fact as to whether — assuming Mr. Sousa’s retention of the information— such actions would constitute a breach of a material contract term.
See Frost v. Me. Dep’t. of Transp.,
No. Civ.A. CV-02-237, 2005 WL 3340215 , at *9 (Me.Super. Oct. 7, 2005) (“[T]he plaintiff bears the burden of proof in establishing (1) a breach of material contract terms; (2) causation; and (3) damages.”). It is unclear what the “return” of digital data means in this context since OfficeMax has not said that it did not already possess a copy of the information on the usb drives. Viewed in the light most favorable to Mr. Sousa, a “return” of the data may have involved emailing OfficeMax a copy of something it already possessed. Whether this would constitute a material breach is a matter for the jury.
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The Court therefore grants in part George Johnson’s and denies in full Denis Sousa’s and OfficeMax’s motions for summary judgment on the claim of breach of confidentiality provisions.
c. Noncompetition
OfficeMax and Messrs. Johnson and Sousa filed dueling motions for summary judgment on whether there is a genuine issue of material fact concerning the alleged violation of the noncompetition provisions in the BCOP Agreements and General Releases. The noncompetition provisions are similar. Messrs. Johnson and Sousa’s BCOP Agreements prohibit “[f]or a period of 12 months after termination [from] BCOP ... engage[ing] in the sale or distribution of office supplies, office furniture, or related office products or services, in any geographic territories I was assigned by BCOP in the 12 months prior to my termination of employment.”
Sousa BCOP
Agreement at 1;
Johnson BCOP Agreement
at 1. The General Releases prohibit “solicit[ing] or attempt[ing] to solicit customers or prospective customers on which Associate called for OfficeMax for the purpose of selling or distributing products or services similar to or competitive with those sold or distributed by OfficeMax.”
Sousa Release
at 3;
Johnson Release
at 3. The major substantive difference between the BCOP Agreement and the General Release is the temporal scope; the BCOP Agreement lasts “[f]or a period of 12 months after termination [from] BCOP,” while the General Release prohibits competition “during the period which severance is paid.”
Sousa BCOP
Agreement at 1;
Johnson BCOP Agreement
at 1;
Sousa Release
at 3;
Johnson Release
at 3.
In connection with its opposition to the Defendants’ summary judgment motion, OfficeMax’s evidence of George Johnson’s violation of the noncompetition clauses is the Declaration of David Tillotson, Key Account Manager for OfficeMax, who states that various OfficeMax customers told him that, after June 1, 2010, they received sales calls from Mr. Johnson on behalf of W.B. Mason. Specifically, Mr. Tillotson asserts that Mr. Johnson made sales calls to Elliot Hospital, New London Hospital, Catholic Medical Center, Concord Hospital and Colby Sawyer College.
PL’s Opp’n to Johnson and Sousa Summ. J. Mot
Attach. 3 ¶¶ 10-13
(Tillotson Decl.).
Mr. Tillotson also provided an email chain in July 2010 between Mr. Johnson and Helen Sieburg of Colby Sawyer College discussing sales by W.B. Mason of “Aspen 100 paper.”
Id.
¶ 12;
Tillotson Decl.
Attach. A.
OfficeMax has provided evidence for a reasonable jury to find Mr. Johnson competed with OfficeMax after June 1, 2010. This is sufficient to create issues of material fact as to whether he violated the noncompetition provision in his BCOP Agreement, which was effective for one year after the date of his termination— October 13, 2010. However, the noncom-petition provision in George Johnson’s General Release was effective only for the 26 weeks during which he received severance pay — until April 13, 2010. Proof of competition after June 1, 2010, is insufficient to create issues of material fact of violations before April 13. The Court grants George Johnson’s motion for summary judgment as regards OfficeMax’s claims under the noncompetition provision of his General Release and denies the motion as regards the BCOP Agreement.
Regarding OfficeMax’s allegations of Denis Sousa’s violation of the noncom-petition provisions, the Court also finds that there are genuine issues of material fact sufficient to deny summary judgment as regards his BCOP Agreement but also
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as to his general release. OfficeMax refers to its supplemental response to Messrs. Johnson and Sousa’s Interrogatory No. 5, which in turn refers to the Declaration of Megan Babb, previously submitted in support of OfficeMax’s motion for a preliminary injunction. Resp. to Sousa and Johnson SMF ¶ 7;
Mot. for Prelim. Inj.
Attach. 4
(Babb Decl.).
Ms. Babb, a Business Development Manager for OfficeMax who previously worked for W.B. Mason, states that she observed Mr. Sousa attend weekly sales meetings in December 2009, learned of sales proposals that Mr. Sousa was working on at that time, and heard him at one point remark, “It’s good to be here, we’re going to kick OfficeMax’s butt!”
Babb Decl.
¶¶ 6-7. Ms. Babb’s observations are sufficient to create issues of fact as to Mr. Sousa’s competition with OfficeMax, both under his BCOP Agreement and his General Release.
The Court turns to whether OfficeMax is entitled to summary judgment in its claims of breach of these agreements. In addition to those arguments that they asserted in their motion for summary judgment, Messrs. Sousa and Johnson offer a number of additional arguments: first, that OfficeMax has not authenticated George Johnson’s BCOP Agreement,
Johnson Summ. J. Opp’n
at 7-8; second, that OfficeMax has no evidence that Mr. Johnson’s solicitation of its customers was the proximate cause of harm to OfficeMax,
id
at 8-9; and third, that the BCOP agreements are void as against public policy,
id
12-16.
The Court has already addressed the Defendants’ third contention — that the BCOP agreements violate public policy— and has concluded that there remain questions of fact as to the reasonableness of the restrictions.
See supra
Part II.C.3. As to Johnson’s first argument — that OfficeMax has failed to authenticate his BCOP Agreement — Johnson cites
Carmona v. Toledo,
215 F.3d 124, 131 (1st Cir.2000), which says that “[t]o be admissible at the summary judgment stage, documents must be authenticated by and attached to an affidavit that meets the requirements of Rule 56(e).”
Johnson Summ. J. Opp’n
at 7. The 2010 Amendments to Rule 56 move the substance of Rule 56(e), as cited by the First Circuit in
Aponte-Rosario,
to subsection (c)(4). The commentary to the 2010 explains:
Subdivision (e)(4) carries forward some of the provisions of former subdivision (e)(1). Other provisions are relocated or omitted.
The requirement that a sworn or certified copy of a paper referred to in an affidavit or declaration be attached to the affidavit or declaration is omitted as unnecessary
given the requirement in subdivision (c)(1)(A) that a statement or dispute of fact be supported by materials in the record.
Fed.R.CivP. 56 advisory committee’s note to 2010 Amendments, Subdivision (c) (emphasis added).
The Court concludes that OfficeMax satisfied
Carmona
by the Declaration of Tracy Lentz, which authenticates the BCOP Agreement as “a true and accurate copy of the document that I maintain for OfficeMax in the aforementioned file cabinet relating to George H. Johnson.”
PI. ’s Reply to Def. Denis Sousa’s Opposing Statement of Material Facts (Doc. No. 162) and Def. George Johnson’s Opposing Statement of material Facts (Doc. No. 167) Pi’s Reply to Defs).’
RPSMF) Attach. 1 ¶5
(Lentz Decl.).
21
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Turning to Messrs. Johnson and Sousa’s second argument, that OfficeMax cannot show proximate cause, George Johnson admits that he contacted OfficeMax customers at least as early as “the week of June 14, 2010, eight (8) months after he was fired.”
Johnson
RPSMF ¶ 37;
Johnson Summ. J. Opp’n
at 2. According to Mr. Johnson, he “has called upon several OfficeMax customers, but very few of those customers have switched any of their business to W.B. Mason,” allegedly because his role at OfficeMax meant that “it had been several years since Johnson had been a sales representative with day-to-day contact with customers.”
Johnson Summ. J. Opp’n at S; Johnson
RPSMF ¶¶ 38, 49. Similarly, Denis Sousa admits to contacting one of OfficeMax’s former customers at least as early as “mid-July 2010, more than nine (9) months after they were fired by OfficeMax.”
Sousa
RPSMF ¶ 25.
Messrs. Johnson and Sousa target OfficeMax’s evidence of causation for OfficeMax’s loss of Dartmouth College as a customer.
Johnson Summ. J. Opp’n
at 5-6;
Pl.’s Reply to Defs.’
RPSMF ¶56. They say that OfficeMax’s loss of Dartmouth was the result of a successful proposal by W.B. Mason that “offered [Dartmouth] significant up front money and held all core pricing for 3 years,” and not because they “sat in on one meeting with Dartmouth’s independent consultants” who were evaluating OfficeMax’s and W.B. Mason’s sales proposals. RPSMF ¶ 25;
Johnson Summ. J. Opp’n
at 5;
Sousa Summ. J. Opp’n
at 8. The Defendants assert that “OfficeMax has presented no record evidence whatsoever that Dartmouth awarded this contract to W.B. Mason because [the Defendants] sat in on one meeting with Dartmouth’s independent consultants.”
Sousa Summ. J. Opp’n
at 8.
Johnson Summ. J. Opp’n
at 6. OfficeMax, on the other hand, says that Dartmouth College had no intention of switching its supplier until it met with W.B. Mason representatives, including Messrs. Johnson and Sousa, on July 10, 2010.
PI. ’s Sousa and Johnson Summ. J. Reply
at 17. According to OfficeMax, the facts “admit[ ] of one conclusion,” that Johnson and Sousa’s “intimate knowledge of [Dartmouth’s] office supply needs” gave W.B. Mason an unfair advantage and resulted in OfficeMax’s loss of the client.
PI. ’s Sousa and Johnson Summ. J. Reply
at 18.
Mr. Johnson also targets OfficeMax’s evidence of causation for its loss of Catholic Medical Center and Hypertherm as OfficeMax customers.
Johnson Summ. J. Opp’n
at 6;
Johnson
RPSMF ¶ 65; PR
Johnson
RPSMF 56. As to the former, he says that it was already buying from W.B. Mason before his first contact and that there is no evidence that it left OfficeMax because of him.
Johnson Summ. J. Opp’n
at 6. Regarding the latter, Mr. Johnson points to sales records allegedly showing that Hypertherm switched its business to W.B. Mason in February 2010, at least four months before Mr. Johnson first contacted it.
Id.
Ultimately, whether Messrs. Johnson and Sousa are responsible for OfficeMax’s loss of Dartmouth, Catholic Medical Center and Hypertherm as clients is a matter of fact for the jury.
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In short, there are sufficient material facts in dispute to preclude summary judgment for OfficeMax on this point. The Court denies OfficeMax’s motion for summary judgment on the BCOP noncompetition agreement as regards both Defendants and as regards Mr. Sousa’s General Release.
6. Breach of the BCOP Agreement by John Steele
Echoing Messrs. Sousa and Johnson’s arguments, John Steele asserts that there is no evidence of breach of contract. First, he asserts that OfficeMax cannot “prove it had a contract with the Defendant, that the Defendant breached the contract, and that the Plaintiff suffered damages as a result of the breach.”
Steele Summ. J. Mot.
at 7. Maintaining that “OfficeMax has not produced any assignment of [the Steele BCOP Agreement] nor has it produced any corporate records or other documents to prove that it is a corporate successor” to BCOP, Mr. Steele challenges not only the evidence of breach, but whether OfficeMax is even party to the Steele BCOP Agreement.
Id.; Steele Summ. J. Reply
at 1-2,
Steele Supp. Summ. J. Reply
at 1-2.
Second, Mr. Steele asserts — as did Messrs. Sousa and Johnson — that there is no evidence that he impermissibly solicited customers or that he took, used or disclosed OfficeMax’s confidential information.
Steele Summ. J. Mot.
at 7-8;
Steele Summ. J. Reply
at 2-4,
Steele Supp. Summ. J. Reply
at 2-6. Third, Mr. Steele argues that “OfficeMax has no evidence that it has incurred any damages as a result of Steele’s alleged breach.”
Steele Summ. J. Mot.
at 8;
Steele Summ. J. Reply
at 3-4.
OfficeMax presses its belief that there exist genuine issues of material fact as to Steele’s alleged breach of his “obligations” to OfficeMax.
Pl.’s Opp’n to Steele Mot.
at 10. First, OfficeMax cites Mr. Steele’s discussions with W.B. Mason before his departure from OfficeMax and his alleged attempts on his final day at OfficeMax to print an Excel spreadsheet containing customer and sales information and phone calls that he supposedly made to OfficeMax customers.
Id.
at 11;
PL’s Supp. Opp’n to Steele Mot.
at 2-3. Second, OfficeMax cites Mr. Steele’s post-resignation conduct, specifically, his retention of twenty-four boxes of OfficeMax information and the alleged use of his knowledge of OfficeMax profit margins when quoting prices to prospective W.B. Mason customers.
PL’s Supp. Opp’n to Steele Mot.
at 7-10.
a. Assignment of the Steele BCOP Contract
Challenging Mr. Steele’s contention that OfficeMax has not proven it is a successor-in interest to BCOP, OfficeMax submitted the Certificate of Amendment of Certificate of Incorporation for BCOP. The certificate states in part that “The name of this corporation [formerly BCOP] is OFFICEMAX CONTRACT, INC.”
PL’s Opp’n to Steele Mot.
Attach. 13. This is sufficient to defeat Mr. Steele’s assertion in his summary judgment motion that there is no evidence of assignment of the BCOP Agreement to OfficeMax.
22
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b. Noncompetition
OfficeMax states in its summary judgment motion against Mr. Steele that it is no longer “alleging that Steele has violated the noncompetition provision (i.e., Paragraph 4) of his agreement with OfficeMax.” The Court grants Mr. Steele’s motion for summary judgment on this issue.
c. Confidentiality
The confidentiality provision in Mr. Steele’s BCOP Agreement is identical to the Johnson and Sousa Agreement.
See supra
Part II.BJ.b. The lynchpin of the claimed violation of this provision is that Mr. Steele possessed OfficeMax confidential information and that he then disclosed or used it.
Viewed in the light most favorable to OfficeMax, the evidence of Mr. Steele’s actual possession of OfficeMax confidential information is more than enough to raise a triable issue. Interrogatory responses and a declaration by Jayson Sullivan demonstrate that on November 23, 2009 — John Steele’s final day at OfficeMax-he opened and attempted to print a spreadsheet that had been emailed to him on November 18, 2009, by Ms. Deneen Morotta, OfficeMax’s District Sales Manager.
23
Pl.’s Interrog. Resp. at 5;
Pi’s Opp’n to Steele Mot.
Attach. 6 ¶¶ 10-12
(Steele Sullivan Decl).
The spreadsheet contained data including some under the column labels: “CUST (number),” “CUSTNAME,” and “ROLLING 12 MTH SALES.”
Steele Sullivan Decl.
¶ 10. At deposition, Mr. Steele acknowledged that the document was “going to be my customer file, my new list of people I would be waiting on,” that he printed the document, and that he took the document home with him.
Dep. of John Steele
136:24-25, 124:1-10 (Docket # 124)
(Steele Dep.).
According to OfficeMax, Mr. Steele acknowledged at deposition that he had discussed moving to W.B. Mason before his vacation, and OfficeMax says that “Steele has no legitimate reason to print [the spreadsheet] or otherwise use it on November 23, 2009, as the evidence is clear that on or before November 23, 2009, Steele had already decided to leave OfficeMax.”
Pi’s Supp. Opp’n to Steele Mot.
at 4. Mr. Steele disputes OfficeMax’s allegations and explains that when he arrived at OfficeMax on November 23 he had not decided to leave OfficeMax. The inference is that he did not print the list to retain confidential information, but simply because his supervisor, Deneen Morotta, had emailed it to him.
OfficeMax’s version of events raises a genuine issue of material fact as to whether Mr. Steele had already resolved to leave OfficeMax when he printed the list. Moreover, even if Mr. Steele had not decided to accept W.B. Mason’s offer, he acknowledged that he was in discussions with W.B. Mason and it is a fair inference that he printed and retained the customer list as a precaution. Further, after Mr. Steele left OfficeMax, he retained twenty-four boxes of OfficeMax information for a week. Although Mr. Steele explains that the delay in returning the boxes was due to the
*227
Thanksgiving holiday and the time it took to collect all of the materials that he had accumulated during his eighteen years at OfficeMax, again viewing the evidence in the light most favorable to OfficeMax, there is sufficient evidence from which a jury could conclude that his week-long retention of confidential information amounted to a violation of the confidentiality provision.
Steele Supp. Summ. J. Reply
at 4.
Finally, Steele admitted at deposition that he had access to, and did occasionally access OfficeMax’s profit margin for the OfficeMax customer he was servicing:
Q. When you were at OfficeMax, were you informed periodically of gross profit margin for accounts you were managing?
A. It was something you could look up in the computer.
Q. Did you ever do that?
A. Yes.
Steele Dep.
100:24-101:5.
Mr. Steele’s retention of confidential information, alone, does not necessarily violate the confidentiality provision; he must also use the information. The Court carefully reviewed OfficeMax’s assertions of direct proof of Mr. Steele’s use of confidential information and views the evidence as weak at best. As with Messrs. Johnson and Sousa, the question is whether a reasonable factfinder could infer use from possession. Again, despite Mr. Steele’s denials and innocent explanations, the Court concludes that a factfinder could reasonably infer that he took the confidential OfficeMax information to use it. OfficeMax has pointed to the nature of the information Mr. Steele possessed, the volume of information he possessed, the circumstances of his possession, the timing of his possession, the delay in its return, and the manner of his leaving. These facts would permit, but not compel, an inference of use, and are sufficient to create a triable issue.
The Court denies John Steele’s motion for summary judgment on whether he breached the confidentiality provisions of his Agreements.
D. Summary Judgment Against John Steele’s Counterclaims under OfficeMax’s Compensation Plan
In Counts I through III of his counterclaims, John Steele alleges breach of contract (Count I), fraud (Count II) and violation of the Maine Timely and Full Payment of Wages Law (Count III). These three counterclaims are based on what he says are underpayments OfficeMax made by misleading its employees as to the proper calculation of their compensation.
Steele Answer and Countercls.
at 13-17. Specifically, a portion of Mr. Steele’s compensation was a base salary and a portion was tied to the revenue generated by his sales. Counts I through III of Mr. Steele’s counterclaims address the revenue-based portion of his compensation.
1. Breach of Contract
The first question is whether the Compensation Plan should be viewed through the contractual lens urged by Mr. Steele’s counterclaim Count I. OfficeMax strenuously argues that the Compensation Plan is not a contract, and that “Steele, therefore, had no contractual rights to a bonus, much less a bonus determined in any specific manner.”
Pl.’s Steele Summ. J. Mot.
at 3. In the alternative, OfficeMax reasons that, viewing the Compensation Plan as a contract, its terms explicitly provide the manner of the incentive calculation, and negate Mr. Steele’s arguments.
PI. ’s Steele Summ. J. Mot.
at 3.
The Court does not reach the latter argument as it is convinced that the Compensation Plan is not a contract and does
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not lend itself to a breach of contract claim. The Compensation Plan goes to great lengths to make clear it is not a contract, and contains explicit language to that point. For example, under the heading “Am I guaranteed to receive any payment under the plan?,” the Compensation Plan explains, “No.... This document is designed only to communicate the basic provision of the plan and should not be construed as a contract between any participant and OfficeMax.”
Steele Dep.
Attach. 1 at 16
(Compensation
Plan);
PI. ’s Statement of Material Facts in Support of Mot. for Summ. J. on Countercls. Of Def. Steele
¶ 14 (Docket # 123)
(PI. ’s Steele
SMF);
Def. John Steele’s Opposing Statement of Material Facts
¶ 14 (Docket # 173)
(Steele
RPSMF) (admitting that the Compensation Plan contained such language). Again, under the heading “Does my participation in the plan guarantee my employment?,” the Compensation Plan says, “No.... The plan is not and should not be thought of as a contract of employment.”
Compensation Plan
at 18. Moreover, Mr. Steele admits that he signed an acknowledgment stating “I have read, understand, and agree to the terms of this Relationship Sales Associate Incentive Plan (“plan”) and understand that
neither it nor any other written or verbal communication alters the status of my employment to anything other than at-will or otherwise creates a contract of employment.” Steele Dep.
Attach. 2 (emphasis added);
PI. ’s Steele SMF
¶ 16;
Steele
RPSMF ¶ 16.
These statements conclusively settle the issue. Nonetheless, even if such explicit disclaimers did not exist, other provisions in the document would render it a contractual nullity. “Under Maine law, ‘a reservation to either party of an unlimited right to determine the nature and extent of his performance renders his obligation too indefinite for legal enforcement, making it, as it is termed, merely illusory.’”
Millien v. Colby Coll., 2005
Me 66, ¶ 9, 874 A.2d 397, 402 (quoting
Corthell v. Summit Thread Co.,
132 Me. 94, 99 , 167 A. 79, 81 (1933));
Goodman v. President and Trs. of Bowdoin Coll.,
135 F.Supp.2d 40, 54 (D.Me.2001). In Millien, the Maine Supreme Judicial Court upheld a ruling that a college student handbook setting forth the college’s disciplinary system did not constitute a binding contract because the college reserved the right to unilaterally alter the terms without notice to the students.
Id.
So too, OfficeMax’s Compensation Plan is replete with such invalidating reservations. In at least eight separate headings, and footnoted at the bottom of every page, the plan reserves the right to change the plan in whole or in part at any time at OfficeMax’s sole discretion. For example, under the Frequently Asked Questions heading, “Can the plan be changed or terminated?,” the plan explains, “Yes. OfficeMax, in its sole discretion, may amend or terminate the plan at any time for any reason without notice.”
Compensation Plan
at 18. Similar reservations are listed under descriptions of the “Payment Formula, Overview,”
id.
at 4; Sales Quota,
id.
at 4-5; Margin Quota,
id.
at 5; On Target Earnings,
id.;
Calculation of Sales,
id.
at 9; and Calculation of Margin,
id.
Although the indefiniteness created by an unlimited reservation clause may be cured by other contractual language such as a “good faith clause” or reasonableness language that limits the reserving party’s right to define its term, such language is not present in the Compensation plan.
See Goodman,
135 F.Supp.2d at 54 . OfficeMax could hardly have been more explicit. The Compensation Plan is not a contract and was not intended to be a contract, and under Maine law, it cannot be construed as a contract. See
Millien,
2005
*229
Me 66, ¶ 9, 874 A.2d at 402 . A breach of contract claim cannot be maintained without a contract to breach. The Court thus grants OfficeMax’s motion for summary-judgment against Mr. Steele’s Count I.
2. Fraud
The elements of a claim of fraud are well-settled:
To sustain a fraud claim, a party must show: (1) that the other party made a false representation (2) of a material fact (3) with knowledge of its falsity or in recMess disregard of whether it is true or false (4) for the purpose of inducing him to act in reliance upon it, and (5) he justifiably relied upon the representation as true and acted upon it to his damage.”
Darling v. Western Thrift & Loan,
600 F.Supp.2d 189, 197 (D.Me.2009);
accord Darling v. Indymac Bancorp, Inc.,
Civil No. 6-123-B-W, 2008 WL 3539518 , at *8 (D.Me. Aug. 12, 2008);
Guiggey v. Bombardier,
615 A.2d 1169, 1173 (Me.1992);
Diversified Foods, Inc. v. First Nat’l Bank of Boston,
605 A.2d 609, 615 (Me.1992). Mr. Steele bears the burden to prove the claim of fraudulent misrepresentation by “clear and convincing evidence.”
Me. Eye Care Assocs., P.A. v. Gorman,
2008 ME 36, ¶ 12 , 942 A.2d 707, 711 .
Mr. Steele’s counterclaim alleges that when OfficeMax promulgated its compensation plan, it “expressly and impliedly represented that the plan ... would be implemented in accordance with its express terms and would be implemented in a fair and good faith manner.”
Steele Answer and Countercls.
¶ 8. Mr. Steele further claims that OfficeMax expressly or implicitly represented that the “costs” it used to calculate his gross profit margins and gross profit dollars “were in fact the real costs charged to OfficeMax by its suppliers for the products that Steele sold.”
Id.
at 8. Mr. Steele asserts that OfficeMax had a duty to disclose to him that the “costs” used for calculating gross profit margins and dollars “were not OfficeMax’s real costs.”
Id.
¶ 10.
OfficeMax protests it made no false representations. It says it never represented the “cost” was the “actual” or “true” cost, but only the cost listed in the item file. Further, the plan allows OfficeMax to “change its basis for calculating margins in its sole discretion” so Mr. Steele could have no basis to rely on a particular cost.
PI. ’s Steele Smnm. J. Mot.
at 4.
Mr. Steele counters by referring to the Merriam Webster Dictionary definition of “margin” as “the difference which exists between net sales and the cost of merchandise sold....”
Steele Summ. J. Opp’n
at 10- 11. He says that he learned through discovery in this action “that OfficeMax did not use its ‘cost of merchandise’ in calculating Steele’s margin, but rather used dramatically inflated costs, which were determined by OfficeMax based upon a slew of random factors and events.”
Id.
at 11. Regarding the language in the Sales Incentive Plan, Mr. Steele characterizes its contents as permitting OfficeMax “to cheat when calculating Steele’s margin.”
Id.
Mr. Steele goes on to say that even if the document were interpreted to favor OfficeMax on this point, the Plan was not issued until July 1, 2008, “so [it] could not have had any impact on Steele’s compensation ... before that date.”
Id.
at 11- 12. Moreover, Mr. Steele observes that OfficeMax itself contends that the Plan was not a contract “so it is unclear how the provisions of the ‘Plan’ could contractually bar Steele’s claims.”
Id.
The language of the Incentive Plan does not support Mr. Steele’s fraud
*230
claim.
24
The Incentive Plan creates both sales quotas and margin quotas for each salesperson and these are “the Incentive measures for the plan.”
Pi’s Steele SMF
¶ 12 (providing that OfficeMax “will establish sales quotas and margin quotas for each participant”). After the end of each month or quarter, OfficeMax promises to “review the Incentive measures, the applicable quota, and your performance, and determine the Incentive (if any) payable under this plan.” Under the Plan, “[s]ales and margin performance in excess of assigned quotas is rewarded with more pay.”
Compensation Plan
at 3. OfficeMax warns, however, that it may “at any time establish different payment frequency or crediting periods or different incentive measures, quotas or incentive calculation formulas.”
PI. ’s Steele SMF
¶ 12. Further, OfficeMax may “unilaterally change quotas at any time during the plan year.”
Id.
at 13.
The Incentive Plan contains a straightforward definition of “sales” as the dollar amount of merchandise sold to a customer, not including shipping and handling charges, state and local taxes, or other non-merchandise items or the gross amount of money paid by customers to OfficeMax on account of sales.
Id.
at ¶¶ 25, 26. This definition is not disputed. Instead, the dispute focuses on the calculation of “margin”:
The OfficeMax sales ledger (S/L) method will be used to calculate profit margin dollars. The sales cost method of determining margins is determined by the cost that has been loaded in the contract for a customer if the sales are on contract or item file cost if the sale is off contract. The company can change its basis for calculating margins in its sole discretion.
Compensation Plan
at 9. Under this provision, the profit “Margin” is a function of an item’s cost, which may be determined in one of two ways.
PI. ’s Steele SMF
¶¶ 27, 29;
Steele
RPSMF ¶¶ 27, 29. First, if a customer has contracted to purchase an item, the cost is that listed in the contract.
Pi’s Steele SMF
¶ 30;
Steele
RPSMF ¶ 30. Second, if the cost is “off contract,” the cost is determined “by reference to an ‘item file cost.’ ”
PI. ’s Steele SMF
¶ 31;
Steele
RPSMF ¶ 31. OfficeMax says, and Mr. Steele has admitted, that the “item file cost” is “a cost assigned to each item sold by OfficeMax that is standard across the entire OfficeMax organization and can be referenced by OfficeMax sales employees such as Steele by calling up that cost in OfficeMax’s system at any time.”
Pi’s Steele SMF
¶ 32;
Steele
RPSMF ¶ 32.
Nevertheless, Mr. Steele alleges that OfficeMax’s method of determining “off contract” cost was fraudulent.
Steele Answer and Comiereis,
at 15;
Steele
RPSMF ¶ 54. Mr. Steele says that he “understood that his Gross Profit Margin and Gross Profit Dollars were determined by subtracting from the prices products were sold to his customers the costs of those products to OfficeMax.”
Steele
RPSMF ¶ 53. He goes on to say that he “learned of specific instances where the ‘costs’ of the products listed in OfficeMax’s computer system were different than the cost figures he learned from OfficeMax’s vendors.”
Id.
Mr. Steele says that OfficeMax never “disclosed to Steele that his Gross Profit Margins and Gross Profit Dollars were calculated using ‘costs’ which were greatly inflated — thus driving down
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Steele’s Gross Profit Margins and Gross Profit Dollars.”
Id.
at ¶ 54. He alleges that during discovery, he found out that the “ jcosts’ used by OfficeMax were randomly inflated by a variety of factors, which again were never disclosed to Steele” and that OfficeMax admitted that “these ‘cost’ numbers were often inflated by as much as 17%.”
Id.
Mr. Steele asserts that OfficeMax “overstated the cost of goods sold by Steele by more than $350,000 and this caused his margin number to be 23.5% rather than the actual 30%.”
Id.
at ¶ 55.
The Court agrees with OfficeMax that, even viewing the Compensation Plan in the light most favorable to Mr. Steele, OfficeMax made no false representations of any material fact. On careful inspection, the Court concludes that OfficeMax’s promises in the Compensation Plan — at least as regards the margin for off-contract sales— are illusory. The contrast between costs delineated in the customer contract and off contract costs illustrates this point. For costs that are inserted in the customer contract, a salesperson could turn to the contract itself, find the figure, and check OfficeMax’s calculation. However, for off-contract costs, the Compensation Plan provides only that the “item file cost” will determine the margin. The Compensation Plan does not define “item file cost” but the parties have agreed that it is a cost that OfficeMax assigns and that is standard throughout the Country. The Compensation Plan makes it clear that OfficeMax can “change its basis for calculating margins in its sole discretion.”
If Mr. Steele discovered that the off-contract costs were not based on the item file, then he could claim that OfficeMax was defrauding him. But Mr. Steele cannot base a fraud claim upon the method by which OfficeMax calculates the “item file cost”; the Compensation Plan gives Mr. Steele no reason to believe that OfficeMax will adopt a particular method of calculation or even that if it adopts one method, it could not arbitrarily change it without violating the terms of the Plan.
Mr. Steele’s real objection is that this Compensation Plan does not comport with his notions (or a dictionary definition) of gross profit margins. However, as regards item file cost, the Compensation Plan gave him no reason to conclude that dictionary definitions would apply. The Court agrees with Mr. Steele that the Compensation Plan has an Alice In Wonderland quality to it.
25
For purposes of the Compensation Plan, OfficeMax is clearly the master of the meaning of the words. It alone determined how to calculate the item file cost and could “change its basis for calculating margins in its sole discretion” at any time.
Compensation Plan
at 9. Mr. Steele had no reason to think otherwise.
OfficeMax made no false representations to Mr. Steele as regards the calculation of item file cost. The Compensation Plan expressly provides no protection to OfficeMax salespeople.
26
Whether this is fair is
*232
one thing. Whether it is fraudulent is another. The Court grants OfficeMax summary judgment on John Steele’s fraudulent misrepresentation claim against OfficeMax.
3. Violation of the Maine Timely and Full Payment of Wages Law
John Steele’s final claim relating to OfficeMax’s actions under its compensation plan is brought under the Maine Timely and Full Payment of Wages Law, 26 M.R.S. §§ 626 and 626-A. Section 626 requires that “[a]n employee leaving employment must be paid in full within a reasonable time after demand at the office of the employer where payrolls are kept and wages are paid.... ” Section 626 further defines a “reasonable time” as “the earlier of either the next day on which employees would regularly be paid or a day not more than 2 weeks after the day on which the demand is made.”
Id.
According to Mr. Steele, OfficeMax violated this law because, “[b]y secretly and fraudulently using inflated ‘cost’ figures in calculate[ing] Steele’s compensation, OfficeMax has failed and refused to pay Steele his wages when due.... ”
Steele Answer and Comiereis,
at 16. Section 626-A provides penalties of $100 to $500 for each violation of section 626.
OfficeMax makes three arguments in favor of summary judgment on Mr. Steele’s section 626 claim. First, it says that Steele did not meet the statute’s requirements on how and where to file a dispute.
PL’s Steele Summ. J. Mot.
at 5-6. Second, it says that the wages Mr. Steele seeks are properly regarded as bonuses, not covered by the statute, and that in any event, recovery under section 626 is governed by the compensation plan, which OfficeMax may adhere to at its discretion.
Id.
at 6-9. Third, OfficeMax argues that Mr. Steele’s claims are barred by the statute of limitations, express contractual provisions, waiver, laches and equitable estoppels.
Id.
at 10-14.
The Court turns to OfficeMax’s first argument: that any claim falling under section 626 fails because “[t]here is no record evidence that Steele ever made a demand of any kind for unpaid wages, much less a demand at the OfficeMax office where payrolls are kept and wages are paid,” as is required by the statute.
PL’s Steele Summ. J. Mot.
at 5. Mr. Steele responds that his counterclaim provides the requisite demand for wages, and that “[t]here is not the remotest suggestion in either the statute or the case law that a pre-filing demand is required to maintain a suit for unpaid wages.”
Steele Summ. J. Opp’n
at 12-13.
The Court agrees with Mr. Steele. “Section 626 does not define ‘demand,’ nor does it specify that the demand must be ... made at a particular time.”
Burke v. Port Resort Realty Corp.,
1999 ME 138, ¶ 9 , 737 A.2d 1055, 1059 . A lawsuit is a demand in its sharpest form and OfficeMax “cannot seriously contest” that it was not on notice that Mr. Steele was pressing a section 626 statutory claim for unpaid wages.
27
Id.
When viewed in the light
*233
most favorable to Mr. Steele, service of process on OfficeMax is sufficient in the Court’s view to generate a factual question as to whether he complied with the requirement that the demand be filed “at the office of the employer where payrolls are kept and wages are paid.”
28
26 M.R.S. § 626.
The Court rejects OfficeMax’s second argument — that Mr. Steele seeks recovery of a bonus, which falls outside the scope of the statute. Preliminarily, there is at least a genuine issue of material fact as to whether an incentive payment to Mr. Steele under the Compensation Plan should be characterized as a “bonus.”
29
OfficeMax asserts that “Steele was paid on a combination of base salary and potential bonuses,”
PI.
’s
Steele SMF
¶ 8, and in support, cites his deposition where he acknowledged that his allegations concerned the “potential impact on your bonus related compensation, not the part of [his] compensation that was fixed.”
Steele Dep.
163:14-18. Mr. Steele denies that his compensation package included a “bonus,” and refers to OfficeMax’s compensation plan for 2008.
Steele
RPSMF ¶8. The 2008 compensation plan explains that “[a] portion of the total targeted compensation of each of the eligible positions is tied to sales performance measures established by OfficeMax....”
Compensation Plan
at 3. It speaks primarily in terms of “target incentives” and “On Target Earnings,”
id.
at 5-6, occasionally using other words such as “targeted compensation,” or “pay,”
id.
at 3, all of' which are consistent with additional commissions.
In any event, the Court need not dwell on the precise terminology since the applicability of section 626 does not turn on whether Steele’s compensation is labeled a “bonus” or an “incentive.” The Maine Supreme Judicial Court has emphasized that section 626 is intended to be read broadly in accordance with its protective purposes.
See Burke v. Port Resort Realty Corp.,
1999 ME 138, ¶ 9 , 737 A.2d 1055, 1059 (“The purpose of section 626 is to ‘provide a broad guarantee of prompt payment of wages to all employees on
*234
termination.’ ” (quoting
Community Telecomms. Corp. v. Loughran,
651 A.2d 373, 376 (Me.1994))). The statute provides that “[a]n employee leaving employment “must be paid
in
full” within a reasonable time after demand.” 26 M.R.S. § 626 (emphasis supplied). Thus, in accordance with
Burke’s
directive, this Court holds that “incentives” of the sort described in OfficeMax’s compensation plan fall within the ambit of section 626.
See Burke,
1999 ME 138, ¶ 8 , 737 A.2d at 1059 (treating a “commission” as a “wage” under section 626);
Purdy,
663 A.2d at 28 (including earned commissions within the definition of wages and rejecting the employer’s argument that section 626 is limited to hourly wage employees);
Cmty. Telecomm. Corp. v. Loughran,
651 A.2d 373, 376 (Me.1994) (stating that “broad definition of wages to include commissions is in keeping with the protective purpose of the act”).
OfficeMax presses the additional point that, even if section 626 covers “bonuses,” recovery under the law is limited to what is provided under the compensation plan which, according to OfficeMax, is determined at its sole discretion.
Pi’s Steele Summ. J. Mot.
at 8-9. Quoting
Warner v. Atkinson Freight Lines Corp.,
350 F.Supp.2d 108, 119 (D.Me.2004), OfficeMax explains that “the Maine Wage Payment Statutes themselves do not entitle plaintiffs to receive any particular amount of money.”
Pi’s Steele Summ. J. Mot.
at 8. OfficeMax reasons that if the compensation plan is not viewed as a contract, then Mr. Steele is not entitled to recover anything under section 626, and if the compensation plan is viewed as a contract, then he still is not entitled to any recovery “because the Incentive Plan also leaves it to OfficeMax’s unilateral discretion as to the terms by which bonus payments are made, or indeed, whether bonus payments are made at all.”
Id.
at 9. “Under Maine law, ‘the employment agreement, not section 626, governs how wages are earned and, if specified, when wages are to be paid.’ ”
Warner,
350 F.Supp.2d at 119 (quoting
Bernier v. Merrill Air Eng’rs,
2001 ME 17, ¶ 9 , 770 A.2d 97, 101 );
see also Burke,
1998 ME 193, ¶ 5 , 714 A.2d at 839 ;
Purdy,
663 A.2d at 28-29;
Rowell v. Jones & Vining, Inc.,
524 A.2d 1208, 1210-11 (Me.1987). The Court has already concluded that the compensation plan is not a contract or employment agreement. This is not fatal to a claim under section 626 since the Supreme Judicial Court has previously affirmed payment under section 626 even where payment was not premised on either a contract or employment agreement.
See Bernier,
2001 ME 17, ¶¶ 2, 9 , 770 A.2d at 100-101 (affirming a ruling granting treble damages under section 626 for commissions that were promised in a mem

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/2476007. Public record. Not legal advice.