Superior Court of Massachusetts,Suffolk County. NATIONAL ECONOMIC RESEARCHASSOCIATES, INC. and Marsh &McLennan Companies, Inc., Plaintiffsv.David S. EVANS, LECG Corporation, andLECG, LLC, Defendants.Civil Action No. 04-2618-BLS1.Sept. 10, 2008.

MEMORANDUM OF DECISION ANDORDER ON DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

RALPH D. GANTS, Justice.*1 On March 15, 2004, the defendant DavidS. Evans (“Evans”) resigned hisemployment as Senior Vice President andDirector of the plaintiff National EconomicResearch Associates, Inc. (“NERA”), aneconomic consulting firm, and the next daycommenced employment with thedefendants LECG Corporation and LECG,LLC (collectively, “LECG”), a competitor of NERA, performing essentially the samework he had performed at NERA. Soonthereafter, NERA (and its corporate parent,Marsh & McLennan Companies, Inc. (“M &M”)) filed the instant action against Evansand LECG, alleging:• that Evans breached a non-solicitationagreement he had entered into with NERAwhen he exercised M & M stock options(Count I);• that LECG tortiously interfered with thisnon-solicitation agreement (Count II);• that Evans breached the fiduciary duty heowed to NERA as an officer and director (Count III);• that Evans misappropriated a corporateopportunity by essentially selling his NERA practice group to LECG (CountIV); and• that LECG engaged in unfair anddeceptive acts and practices in trade or commerce, in violation of G.L. c. 93A(Count V).The defendants now move for summary judgment on all claims against them. For thereasons detailed below, the defendants'motion for summary judgment is

ALLOWED IN PART AND DENIED IN PART. BACKGROUND

In evaluating a motion for summary judgment, I must rely on facts not in disputeas well as disputed facts viewed in the lightmost favorable to the nonmoving party.

Beal v. Board of Selectmen of Hingham,

419

Mass. 535, 539 (1995). Consequently, thefacts stated below are presented in the lightmost favorable to the plaintiffs and shouldnot be misunderstood as findings of theCourt.Evans began his employment with NERA onSeptember 12, 1988 as an economicconsultant, with the title of Vice President.Before joining NERA, Evans was anassociate professor of economics atFordham University and did economicconsulting under the name of the consultingfirm he created and managed-ChicagoEconomic Research Associates (“CERA”).When he joined NERA in 1988, the onlymatters he brought with him from CERA

were a handful of employmentdiscrimination cases and perhaps oneintellectual property case, none of them for Microsoft Corporation (“Microsoft”) or VISA USA (“Visa”). During that first fall,when he was working at NERA but stillteaching at Fordham,

FN1

he spent roughlyhalf of his time working on assigned casesand the other half on business development.Roughly 95 percent of the cases he workedon originated at NERA.FN1.In August 1989, Evansresigned his tenured faculty positionat Fordham but he continued to teacha course in law and economics atFordham Law School until 1995.In 1991, Evans moved to NERA'sCambridge, Massachusetts office. That year,the law firm of Heller, Ehrman, which wasrepresenting Visa, contacted RichardSchmalensee, a professor of economics atthe Massachusetts Institute of Technologyand its Sloan School of Business who wasthen working for NERA as an independentcontractor, to provide expert testimony inVisa's antitrust litigation with Sears Roebuck Corporation. Schmalensee asked Evans towork with him on this project. Beginningwith this project, Schmalensee and Evans built an ongoing relationship with Visa thatresulted in NERA performing work for Visain at least 18 projects between 1995 and2004, resulting in NERA billings to Visa of over $14.5 million. Schmalensee was anindependent contractor on many of these projects, although his involvement dwindledover time. Evans served as the NERAdirector and group leader for all of them.*2 In 1994, Evans became a Senior VicePresident of NERA and a member of itsBoard. That year, an attorney with the lawfirm of Preston Gates asked about theavailability of Schmalensee and MichaelKlass, a NERA employee, to work on a project for Microsoft. Microsoft soonretained NERA to work on the project, andSchmalensee and Klass were assigned to it.When Microsoft grew dissatisfied withKlass's performance, Schmalensee askedEvans to help out, which he did. Thisintroduction evolved into a long-termrelationship with Microsoft in which Evans between 1995 and his resignation in 2004served as the group leader and director for atleast 40 Microsoft projects, resulting in NERA billings of over $37.7 million.Roughly half of this work was litigation;Schmalensee served as a lead expert witnessin the Department of Justice's antitrust caseagainst Microsoft. The other half was policywork; Evans coordinated Microsoft'sfinancial sponsorship of various academiceconomists who performed research andwriting on matters important to Microsoft.In 2002, with Microsoft facing antitrustscrutiny from European regulators, Evansasked NERA's Madrid office for assistanceon Microsoft work. Evans soon began towork with Jorge Padilla, who had joined NERA as a full-time employee in May 2000and was based in Madrid. Together, Evansand Padilla formed what became known asthe Evans-Padilla group to develop antitrustand competition policy business in Europe.Evans and Padilla shared the origination fees paid by NERA on projects they developed jointly for their group.By 2004, largely as a result of the work hewas directing on projects for Visa andMicrosoft, roughly 25 NERA employeesworked for Evans in his own group, and

another 11 worked for Evans and Padilla inthe Evans-Padilla group. Evans was paidhandsomely by NERA for the work he performed and was bringing in. In 2003, hislast full year at NERA, NERA paid Evanstotal compensation of over $2.5 million.During Evans's employment with NERA, hewas granted various stock options by M &M. Under the Terms and Conditions of thesestock options, Evans was required to executea non-solicitation agreement if he wished toexercise them. Evans exercised stock options on four occasions, in May 1991,March 2000, May 2002, and, finally, onDecember 9, 2002. As a result of theexercise of these stock options, Evansyielded a personal profit of more than $1.0million.Under the December 9, 2002 Non-Solicitation Agreement for Exercise of Stock Options (“Non-Solicitation Agreement”),Evans agreed that, if his employment with NERA terminated for any reason other thandeath or total disability within three years of the exercise of the option, he would not:for a period or two (2) years from date of termination, directly or indirectly, ...:(a) solicit or accept business of the typeoffered by the Company during my termof employment with the Company, or perform or supervise the performance of any services related to such type of business, from or for (i) clients or prospects of the Company or its affiliateswho were solicited or serviced directly byme or where I supervised, directly or indirectly, in whole or in part, thesolicitation or servicing activities relatedto such clients or prospects; or (ii) anyformer client of the Company or itsaffiliates who was such within two (2)years prior to my termination of employment and who was solicited or serviced directly by me or where Isupervised, directly or indirectly, in wholeor in part, the solicitation or servicingactivities related to such former clients; or *3 (b) solicit any employee of theCompany who reported to me directly or indirectly to terminate his employmentwith the Company for the purpose of competing with the Company.The Non-Solicitation Agreement specificallydeclares that it “shall be construed inaccordance with the laws of the State of New York.”In the late summer or early fall of 2003,Evans met with LECG's Executive Director and its Chairman of the Board about the possibility of coming to work with LECG.The negotiations progressed to the pointthat, on January 13, 2004, Evans and LECGentered into a non-binding Term Sheet thatset forth the parties' basic understanding asto Evans's future employment with LECG.In short, he would become Vice Chairman of LECG Europe, a division that LECG wouldestablish when Evans joined them, and hewould receive $22.5 million in installmentsfor the global antitrust expert consulting practice he would develop, including $3.75million to be paid upon the commencementof his employment and another $3.75million six months later.On March 12, 2004, Evans and LECGsigned a Director Services Agreement whichset forth the final terms of their arrangement.Apart from his annual compensation, Evans