Superior Court of Massachusetts, Suffolk County
1995 WL 579679
David Hamburger (defendant) began working full-time at Ace Wire and Burlap, Inc. (Ace), his family’s business, in 1984. Ace was controlled by David’s father, Joseph Hamburger (defendant), and David’s uncle, Jacob Hamburger (Ted) (plaintiff). Joseph and Ted had a strained relationship. David gained more and more responsibility at the company, ultimately becoming sales manager and general manager. With his help, Ace’s customer base and total sales doubled. Ted was resentful of David’s rise at the company and made several attempts to remove him, which failed due to Joseph’s intervention. Ted made it clear that if Joseph died before he did, David would be fired. Unhappy and unsure of his future, David met with one of Ace’s suppliers and discussed starting his own business to compete with Ace. The supplier loaned David $50,000 in early May 1993, and David promptly leased space for his new company. On May 13, 1993, David resigned from Ace without notice. He then incorporated his new business, hired Ace’s bookkeeper, and began calling Ace’s customers, a large number of whom followed David to the new company. Ted sued David and Joseph, alleging that David’s financing and lease agreements were made during David’s employment with Ace, in violation of his duty of loyalty. He also alleged that David obtained and used Ace’s customer list with Joseph’s assistance, in violation of their duty of loyalty to Ace.
Rule of Law
Holding and Reasoning (Fremont-Smith, J.)
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