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Inner-Tite Corp. v. Brozowski Mass. Superior Court 2010 Non-compete

Inner-Tite Corp. v. Brozowski Mass. Superior Court 2010 Non-compete

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Published by: gesmer on Apr 30, 2010
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I'.. . "0
-" 0 01: .! ()
COMMONWALTH OF MASSACHUSETTS
WORCESTER, 5S.
SUPERIOR COURT
CIV ACTION
NO. 2010-0156
INER-TITE CORPORATION
"s.
WILLIAM BROZOWSKI
FINDINGS OF FACT & RULINGS OF LAW
This is an action brought by Inner- Tite Corporation ("Iner- Tite") against its former
employee, William Brozowksi C'Brozowski"). Brozowski lefc the employ of
Iner:-Tite in
October 2009 and began employment with Highfeld Manufacturing Company ("Highfeld"), adirect competitor of Iner- Tite.1 Iner- Tite claims Brozowski has breached the secrecy and non-
compete agreement he signed with Inner- Tite, and has also breached his fiduciary duty to his
former employer. Brozowski denies these claims.
At the outset of
this case, Iner- Tite sought a temporar restraining order and preliminary
injunction to prohibit Brozowski from working for Highfield? Ths court issued a short order of
notice for a hearing on Inner-Tite's preliminary injunction. Brozowski did not appear at that
hearig and a preliminar injunction was issued. Subsequently, Brozowksi brought a motion to
vacate the preliminary injunction.
Acting pursuant to Mass.R.Civ.P. 65 (b) (2), this court ordered that a trial on the merits
be advanced and consolidated with a full hearng on Iner- Tite's motion for preliminar
i Higheld is a division of
Rexnord Industries, LLC.
2 Inner-Tite has not asserted any claim against Higheld, which is not a par to ths action.
Entered and Copies Mailed ~! i Lf!l6
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injunction. The case was tred without a jury, reserving those issues where a right to a jury trialhas been claimed. After trial, the parties submitted proposed findings of fact and rulings of law,
which the court has considered. To the extent they are not found by the court, they are deemed
denied.
FINDINGS OF FACT
Based upon the credible evidence introduced at tral and the reasonable inferences drawn
therefrom, the court makes the following findings of fact.
1. THE CORPORATION & THE INDUSTRY
Inner- Ti~e is a Massachusetts manufacturing corporation headquartered in Holden,
Massachusetts with over eighty employees. . Inner- Tite designs and manufacturers meter locking
devices, meter seals and mechånicaI accessories, which are sold exclusively to utility companies
both in and outside the United States. The utility companies served by Iner- TÜe include public
and private utilty companies doing business in the electric, gas, water, and telecommunication
markets. The products manufactured and sold by Iner- Tite are designed to prevent theft, and
are generally known in the industry as revenue-protection products. Based on evidence
presented by both paries, this court finds that the revenue protection industr is a highly
competitive market with only a few major competitors: Inner- Tite, Highfeld, Dewalch
Technologies, Inc.("Dewalch"), McGard LLC ("McGard"), and EJ. Brooks Company
("Brooks"). Having the largest share of the revenue-protection market, Iner- Tite is the
industr's leader.
At its Holden facility, Iner- Tite does all of its own product design, engieering,
manufactung, assembly and distribution.3 Tle company manufactures a variety of
products,
which are regularly re-designed to improve the products in order to meet the on-going needs of
3 The Holden facility, which contains its plant and administrative offices, is the only facility lner- Tite maintain.
2
 
its customers. Iner- Tite has invested suhstantial time and money into the design, development
and manufacture of its products and their improvements, including the machines necessar to
produce them. The evidence supports a finding that Iner-Tite designs and manufactuers high
quality meter locking devices and accessories. And, while meter locking devices are simplisticin appearance, and may not be considered high technology products, the court finds that Iner-
Tite employs sophisticated design, engineering and manufacturing processes in order to producerelatively low cost meter locking devices that are both cost-effective and simple for the utility
companies to use. 4
Of significance, is that all of the companies in the revenue-protection industry sellbasically the same products, the most common consisting of (a) a metal ring that clamps aroundround utility meters, such as electric meters; (b) mechanical clamps that attach to utility boxes
that house meters; and (c) valve covers for gas and water meters. These devices are then secured
by a locking mechanism, called a barrel lock. All ofthe competitors offer barrel
locks, which are
either standard or proprietary.s Customers often buy similar products from several different
competitors
at the same time and, therefore, many ofthe products offered by the
various
companies can be used interchangeably.
6 Even though a utility company may purchase revenueprotection products from a number of manufacturers, there are also times when a company wil
specify
a certain vendor as the sole approved manufacturer ("sole source") for a paricularrevenue protection product. On many occasions, Inner- Tite has been designated a sole source
, ,
provider by various utility companies.
4 Many ofInner-Tite's products have held patents. At present, Inner-Tite holds fift (50) patents and ten (10)
pending patents on its products.
5 The standard barrel
lock and key is interchangeable, regardless of which company manufactured it, while theproprietary lock has a dedicated lock and key specific to the particular utility customer.6 For example, it is not uncommon that an electric utility would buy locking rings from Iner- Tite, Highfeld and/or
any of the other companies; or for a customer to use a Highfield barel
lock (either proprietary or standard) to secure
a Highfield locking rig, an Inner- Tite locking rig or an Inner-Tite Jiff Lock
(a clamp that attaches to a utility
box).
3

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