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Hospitality Staffing Solutions, LLC v. Reyes

September 9, 2010

HOSPITALITY STAFFING SOLUTIONS, LLC, PLAINTIFF,
v.
NEONI R. REYES, DEFENDANT.



The opinion of the court was delivered by: Colleen Kollar-kotelly United States District Judge

MEMORANDUM OPINION

This action was filed on August 19, 2010, by Plaintiff Hospitality Staffing Solutions, LLC ("Plaintiff" or "HSS") against Defendant Neoni R. Reyes ("Defendant" or "Reyes"). Plaintiff alleges that Reyes, a former employee, has violated the terms of a restrictive covenant and a confidentiality agreement by competing against HSS, disseminating confidential information, and luring HSS employees to a competing company. Plaintiff seeks compensatory damages as well as injunctive relief to enjoin Reyes from continuing and future violations. Along with the Complaint, Plaintiff filed a [3] Motion for Preliminary and Permanent Injunctive Relief.*fn1 After proof of service was filed, the Court made several efforts to contact Reyes. On September 2, 2010, the Court held a conference call on the record with Reyes and counsel for Plaintiff in which the Court gave Reyes until close of business on Tuesday, September 7, 2010, to file a response to Plaintiff's Motion for Preliminary Injunction. Reyes failed to file a response by that deadline. Therefore, the Court considers the merits of Plaintiff's Motion for Preliminary Injunction without the benefit of an opposition. The Court also considers Plaintiff's [8] Motion to Expedite Discovery without the benefit of an opposition. For the reasons explained below, the Court shall GRANT-IN-PART and DENY-IN-PART Plaintiff's Motion for a Preliminary Injunction and GRANT Plaintiff's [8] Motion to Expedite Discovery.

I. BACKGROUND

Plaintiff Hospitality Staffing Solutions, LLC, is a hospitality staffing company, providing hotels and resorts with reliable workforces throughout the country, including in Washington, D.C. See Decl. of Mauricio Ramirez ("Ramirez Decl.") ¶ 1. The staffing services provided by HSS include full-time housekeeping, janitorial, stewarding, laundry, food and beverage, and grounds maintenance employees. Id. Defendant Neoni R. Reyes was an Area Supervisor for HSS. Id. ¶ 2. During his employment with HSS, Reyes played a vital role in the recruitment, placement, and management of staffing for the hospitality, hotel, and janitorial industries throughout the United States. Id.

On August 7, 2006, Reyes executed a Restrictive Covenant and a Confidentiality Agreement. Id. ¶¶ 3-4; see id., Exs. 1-2. The Restrictive Covenant provides that for a period of one year after the termination of employment, Reyes shall not "actively encourage or induce the voluntary termination of, or recruit any person(s) then employed by or associated with HSS as an employee or independent contractor for the purpose of engaging in" the business of recruitment, placement, and management of staffing for the hospitality, hotel, and janitorial industries throughout the United States. Id. ¶ 5 & Ex. 1 (Restrictive Covenant) at 1, § 1.3. The Restrictive Covenant also restricts Reyes from directly or indirectly soliciting, contacting, or calling upon any existing or prospective clients of HSS with whom Reyes had material contact during his employment with HSS for business purposes. Id. ¶ 5.

The Restrictive Covenant also provides that for a period of two years following termination of employment, Reyes "shall not disclose or make available, directly or indirectly, any of HSS' information or material . . . that may be reasonably understood . . . to be confidential and/or proprietary to HSS or to third parties to which HSS owes a duty of nondisclosure . . . to any person, concern or entity except in the proper performance of [his] duties and responsibilities as an Employee of HSS or with the prior written consent of HSS." Ramirez Decl., Ex. 1 (Restrictive Covenant), § 1.5. The Confidentiality Agreement contains similar provisions, which provides that Reyes must, upon termination, "surrender and deliver" to HSS all HSS property, including proprietary information. Id. ¶ 7. During the course of his employment with HSS, Reyes had access to HSS's confidential and proprietary information, including but not limited to HSS's trade secrets, accounting information, pricing information, billing code information, and data information regarding the rates paid to HSS's employees and/or contractors, and HSS's contacts at its client companies. Id. ¶ 8. This information is valuable, confidential, and proprietary to HSS, and is generally not known in the public domain. Id.HSS considers and treats such information as confidential and proprietary trade secrets. Id. During Reyes's employment with HSS, HSS had a contract to provide hospitality staffing to the Dupont Hotel at 1500 New Hampshire Avenue, N.W., Washington, D.C. 20036. Id. ¶ 9.

Reyes's employment with HSS was terminated on or about April 16, 2010 because Reyes could not provide documentation to verify his continued right to employment in the United States. Ramirez Decl. ¶ 10. Soon thereafter, Reyes became employed with Capitol Staffing and began to actively recruit current and former HSS employees for the purpose of competing with HSS. Both HSS and Capitol Staffing directly compete for services in the same market. Id. On or about August 9, 2010, Dupont Hotel gave HSS notice of its intent to terminate its contract with HSS. Id. ¶ 11. Dupont replaced HSS with hospitality staffing provided by Reyes through Capitol Staffing. Id.

II. PROCEDURAL HISTORY

Plaintiff filed the Complaint in this action on August 19, 2010. Plaintiff's [3] Motion for Preliminary and Permanent Injunctive Relief was filed along with the Complaint. On August 27, 2010, Plaintiff filed an [5] Affidavit of Service indicating that Reyes was served on August 24, 2010, at 5:25 PM. According to the proof of service filed on the Court's docket, service was made by leaving a copy of the summons, the Complaint, and the Motion for Preliminary and Permanent Injunctive Relief with Reyes's sister, Ms. Maldanado, who stated that she resides with Reyes, at their place of residence at 10136 Allentown Road, Fort Washington, Maryland, 20744.

Shortly after Plaintiff filed this action, the Court contacted counsel for Plaintiff to determine whether Reyes had been served with the Complaint and the motion for a preliminary injunction. After Plaintiff's counsel indicated that Reyes had been served, the Court instructed Plaintiff's counsel to contact Reyes (or his attorney, if Reyes was represented by counsel) in an attempt to schedule a conference call with the Court regarding a schedule for adjudicating the motion for preliminary injunction. Plaintiff's counsel later informed the Court that he had been unsuccessful in reaching Reyes but that he had left Reyes a voicemail message on Reyes's cell phone. Plaintiff's counsel provided the Court with the telephone number he used to contact Reyes. On Thursday, August 26, 2010, the Court left a message for Reyes on his voicemail asking him to call chambers. On Friday, August 27, 2010, the Court called Mr. Reyes a second time and was able to speak to an individual who identified himself as Reyes. The Court informed Reyes of the lawsuit and the need to set up a conference call regarding Plaintiff's motion for preliminary injunction and asked when he was available. The man on the phone told the Court that he would have his attorney contact the Court on either Monday, August 30, or Tuesday, August 31. The Court told him that he needed to call that day (Friday) or at the latest on Monday. He hung up shortly thereafter without responding. He did not provide the name of his attorney. Following that phone call, the Court issued an [6] Order to Respond directing Reyes or his attorney to contact chambers by no later than 5:00 PM on Monday, August 30, 2010, for the purpose of having a conference call to set up a schedule for adjudicating Plaintiff's motion for preliminary injunction.

Reyes did not respond to the Court's [6] Order to Respond by the deadline set forth in that order. After business hours on August 30, 2010, the Court received a voicemail from D.Q.,*fn2 an individual residing at the address listed for Reyes on the Complaint. D.Q. indicated that he had received a package at his house for Mr. Neoni Reyes. On August 31, 2010, the Court returned D.Q.'s call. D.Q. told the Court on the phone that Reyes does not live at that address but speculated that he had previously lived there because he often receives mail for Reyes. D.Q. also indicated that he called Reyes using the telephone number on the FedEx delivery slip to inform him that he had a package from the Court. According to D.Q., Reyes told him that he did not want the package, that he was not going to pick it up, and that D.Q. should just throw it away.

On August 31, 2010, the Court issued an [7] Order to Respond to Motion for Preliminary Injunction. The Court noted in the order that pursuant to LCvR 65.1(c), a party's opposition to a motion for preliminary injunction is due within 7 days after service of the motion, and therefore Reyes's opposition was due on August 31, 2010. The Court noted that it had no obligation to extend this deadline nor had it received any request to do so. However, the Court ordered that Reyes could file a response to Plaintiff's motion for preliminary injunction by no later than 5:00 PM on Thursday, September 2, 2010.

On September 2, 2010, Plaintiff filed a [8] Motion to Expedite Discovery seeking to compel Defendant to respond to its First Set of Interrogatories and First Request for Production of Documents within five days of the Court's order on its motion.

Late in the afternoon on September 2, 2010, Reyes telephoned the Court. The Court arranged to get Plaintiff's counsel on the phone and conducted a teleconference with both parties on the record. Reyes indicated that he had received the Court's [7] Order to Respond to Motion for Preliminary Injunction. However, Reyes claimed that he had just returned to the United States the night before from a two-week trip to Honduras and was not aware of this lawsuit prior to his return. Reyes also indicated that his address is 13433 Greenacres Drive, Woodbridge, VA 22191, and he suggested that Ms. Maldonado is not his sister. The Court agreed to extend the deadline for Reyes to file a response to Plaintiff's Motion for Preliminary Injunction to close of business on Tuesday, September 7, 2010 and issued a written [9] Order to that effect. The Court also ordered that along with ...


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