EarthWeb v. Schlack

Mark Schlack (defendant) worked for EarthWeb, Inc. (EarthWeb) (plaintiff) in New York for one year as one of its 10 vice presidents. EarthWeb operated websites that provided acquired or licensed content, products, and services from third parties to information-technology (IT) professionals. The business of providing online content for websites was highly fluid and dynamic. Schlack determined what content would be placed on EarthWeb’s website and collaborated with departments that handled marketing, advertising, and technology issues. However, Schlack did not have access to highly confidential information such as source codes or advertiser lists, and he did not interact with EarthWeb’s senior officers. Schlack’s permanent residence was in Massachusetts, so he spent two to three days each week in a New York hotel. After a year, Schlack resigned so that he could accept an employment offer in Massachusetts for International Data Group Inc. (IDG), which planned to combine four of its online publications and three of its websites into one new website. IDG envisioned providing original content for IT professionals written by its staff of almost 300 journalists. The employment agreement that Schlack had signed with EarthWeb contained a confidentiality clause and a noncompete clause, which provided that Schlack could not work for another company within one year whose primary business provided a listing of technology available from third parties, a web store, or a web-based reference library to IT professionals. EarthWeb sought an injunction to prevent Schlack from starting employment or disclosing EarthWeb’s trade secrets. The United States District Court for the Southern District of New York granted a temporary restraining order.