Judge Issues Consent Judgment against MTC in favor of BHS

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Battery Handling Systems, Inc. obtains a consent judgment and injunction requiring Materials Transportation Company to honor a former employee’s non-compete, non-disclosure and non-solicitation obligations.

BHS

BHS

According to the pleadings, Mr. Stoneman’s employment agreement with BHS prohibited him from working for a competitor or soliciting BHS customers for three years after leaving BHS.

Battery Handling Systems, Inc. (BHS) on September 9, 2014, obtained a consent judgment and injunction against its competitor, Materials Transportation Company (MTC), prohibiting MTC from hiring BHS’s former National Accounts Manager, James Stoneman. The consent judgment and injunction also prohibits Mr. Stoneman from working for any other direct competitor of BHS, and requires both MTC and Mr. Stoneman to send quarterly updates confirming their compliance with the agreed terms. The entry of the judgment concluded more than five months of litigation between BHS, MTC and Mr. Stoneman, in the case styled Battery Handling Systems, Inc. v. James Stoneman, et al., case number 4:14-CV-00782-CEJ, filed in the U.S. District Court for the Eastern District of Missouri.

According to the pleadings, Mr. Stoneman’s employment agreement with BHS prohibited him from working for a competitor or soliciting BHS customers for three years after leaving BHS. It also prohibited Mr. Stoneman from disclosing BHS’s trade secrets and other confidential information. BHS initiated the lawsuit when it learned that Mr. Stoneman had accepted employment with MTC with more than a year remaining on the restrictive period. In its complaint, BHS alleged that MTC had knowingly conspired with Mr. Stoneman to breach his employment agreement, and also that MTC had fraudulently represented Mr. Stoneman’s employment status in order to avoid BHS’s enforcement efforts. BHS sought both an injunction and monetary damages.

In a statement from its COO and EVP, Jim Huber, BHS indicated that this lawsuit was about more than just MTC’s hiring of Mr. Stoneman. “This is the third time that MTC has hired one of BHS’s former employees in violation of a non-compete agreement. It was and is important that MTC, as one of our direct competitors, understand that these agreements are enforceable and that BHS will enforce them in order to protect its trade secrets.” According to Mr. Huber, the terms of the consent judgment reflect that new understanding. “In addition to obtaining an injunction consistent with the terms of the employment agreement’s original requirements, BHS also was able to recover all of the attorneys’ fees it incurred in bringing this action ($120,000.00). BHS believes the resolution of this dispute will serve to preclude similar disputes in the future.”

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Katy Cortinovis
BHS
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