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processors. The Plaintiff had authorized
Superior Court of Massachusetts.
MERCHANT BUSINESS SOLUTIONS,
LLC dba Merchants Bankcard Systems
v.
Jonathan D. ARST.
No. 06067.
Feb. 14, 2006.
MEMORANDUM OF DECISION ON
PLAINTIFF'S MOTION FOR A
PRELIMINARY INJUNCTION
RICHARD F. CONNON, Justice.
*1 This matter comes before the Court on a
motion by the Plaintiff, Merchant Business
Solutions, LLC (Merchant) seeking
preliminary injunctive relief against the
Defendant Jonathan D. Arst.
BACKGROUND
In October of 2004, the Plaintiff Merchant
Business Solutions hired the Defendant
Jonathan Arst, promising that during the
first year of employment he could earn
upwards to $100,000. Within the year, the
Defendant earned approximately $13,000
and was dismissed by the Plaintiff who now
seeks an injunction prohibiting the
Defendant from a career in sales by virtue of
a non-compete agreement that was executed
at the beginning of his employment.
The Plaintiff in its Independent Sales Agent
Agreement acknowledged that it currently
possessed certain recruiting and sales
contracts and registrations known as ISO
Agreements with MasterCard International,
VISA and First National Bank of Omaha, as
well as other financial transaction
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Defendant and Defendant had accepted full
responsibility of controlling all of
Defendant's own business activities,
including but not limited to all contracts of
vendors, suppliers, et cetera. However, at no
time should Defendant or any of Defendant's
agents be in contact either directly or
indirectly with the banks and/or processors
unless otherwise directed by the Plaintiff. As
part of the Independent Sales Agreement,
there was contained under clause number 7,
titled “Non-Competition” that Defendant
acknowledged the importance of
maintaining the absolute confidentiality or
information relating to the Plaintiff's
business and agrees not to disclose to
anyone other than the Plaintiff the trade
secrets and confidential proprietary
information of the Plaintiff, included but not
limited to this agreement, all devices,
processes, records, business relationships,
lists or other data pertaining to customers,
distributors or suppliers, formulas,
improvements and any other such
information regarding the operation of the
Plaintiff's business. Under 7.2 that
Defendant agrees that during the term of
Defendant's relationship with Merchant that
Defendant shall not without the Plaintiff's
express prior written consent directly or
indirectly engage in any activity which is or
may be competitive with or which might
place Defendant in a competing position to
that of the Plaintiff in any activity where the
Plaintiff does business. Under clause 7.4,
Defendant agrees that in the event
Defendant voluntarily or involuntarily
violates any of the provisions contained in
this non-competition agreement, as herein
stated, then the Plaintiff shall be
immediately entitled to injunctive relief
against Defendant, whether damages, real or
actual, can be proved. Furthermore, the
Plaintiff shall be entitled to any and all
reasonable attorneys fees or court costs
incurred as a result of any action against
Defendant for such action. Under clause 7.5,
the provisions within this non-compete
provision are void if the Plaintiff violates
terms of this agreement and fails to remedy
such violation within 60 days after being
notified per section 15 herein. This is the
agreement that was signed by Jonathan Arst
as the Independent Sales Agent. The
Agreement was not signed by the Plaintiff.
*2 Shortly after his involuntary termination
from the Plaintiff, the Defendant involved
himself in a competing business,
establishing his own company, where he
was designed as president.
DISCUSSION
In order to prevail on its request for a
preliminary injunction, the Plaintiff bears
the burden of showing its likelihood of
success on the merits; that it will suffer
irreparable harm if the injunctive relief
sought is not granted; and that its harm,
without the injunction, outweighs any harm
to the Defendant from him being enjoined.
GTE Products Corp. v. Stewart, 414 Mass.
721, 722-23 (1993); Packaging Industry
Group, Inc. v. Cheney, 380 Mass. 609, 616-
17 (1980). Before assaying these issues, it is
appropriate to canvas the relevant elements
of the Massachusetts law dealing with the
enforcement of non-competition agreements.
Employee covenants not to compete
generally are enforceable only to the extent
that they are necessary to protect the
legitimate business interests of the
employer. Novelty Bias Binding Company v.
Shevrin, 342 Mass. 714 (1961). Such
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legitimate business interests might include
trade secrets, other confidential information
or the good will of the employer that was
acquired through dealings with its
customers. See All Stainless, Inc. v. Colby,
364 Mass. 773 (1974). Protection of the
employer from ordinary competition,
however, is not a legitimate business interest
and a covenant not to compete designed
solely for that purpose will not be enforced.
Richmond Brothers, Inc. v. Westinghouse
Broadcasting Company, Inc., 357 Mass.
106, 111 (1970).
A non-competition agreement to be
enforceable also must be reasonable in
geological scope and length of time, in other
words, must be reasonable in time and
space. See Blackwell v. E.M. Helides, Jr.,
Inc., 368 Mass. 225, 228; Becker College of
Business Administration and Secretarial
Science v. Gross, 281 Mass. 355 (1933).
Here, the protection for the Plaintiff was that
the agent or the Defendant for a period of
two years would not compete with the
Plaintiff. However, the agreement itself has
no geological limits. An unlimited, country-
wide area, or the area where the Plaintiff
does business, is simply not acceptable. The
net effect would be that the Defendant
would be enjoined from competing with the
Plaintiff within the Continental United
States and beyond.
The Court must also consider and balance
the harm to the Plaintiff from failure to grant
the injunctive relief it seeks. Contracts like
the one before me here, “are scrutinized with
particular care because they are often the
product of unequal bargaining power and
because the employee is likely to give scant
attention to the hardship he may suffer later
on through the loss of his livelihood.” Sentry
Insurance v. Firnstin, 14 Mass.App.Ct. 706
(1982). The burden is on the Plaintiff to
show that the non-competition part of the
agreement is necessary to achieve some
protectable purpose other than a mere shelter
from ordinary competition. See Richmond
Brothers, Inc. v. Westinghouse Broadcasting
Corp., 357 Mass. 106 (1970). It would
appear that all the Plaintiff is seeking is to
prevent the Defendant from ordinary
competition. In considering all of the
circumstances before this Court, the
Defendant is an employee of some eleven
months who earned a salary of
approximately $13,000, had a customer base
of approximately 30 customers, all the non-
competition agreement achieved was to
protect Plaintiff from ordinary competition.
Moreover, the Defendant signed the
Merchants Bankcard Independent Sales
Agreement; however, the agreement was not
signed by Merchant Business Solutions,
LLC. Additionally, it would appear from the
documentation that was submitted by the
Plaintiff that the Defendant was an
employee of Tender Corp. LLC, with a
location at East Falmouth, Massachusetts,
and not an employee of the Plaintiff
Merchants Business Solutions.

*3 For all these reasons, the Plaintiff's

Motion for a Preliminary Injunction is
DENIED.

Mass.Super.,2006.
Merchant Business Solutions, LLC v. Arst
Not Reported in N.E.2d, 2006 WL 696582
(Mass.Super.)

END OF DOCUMENT

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