Hayes Wins $6 Million from Jobot and Former Hayes Employees

Jobot's big loss contrasts with earlier win against Allegis

Following two and a half years of litigation, a federal court in Miami has awarded Hayes Medical Staffing more than $6 million in damages against Jobot and three former Hayes employees: Allison Patierno, Amy Eichelberg, and Scott Simon. The 66-page Order, attached below, finds that Eichelberg and Simon violated their noncompete and nondisclosure obligations and that Patierno, a Jobot manager and herself a former Hayes employee, was liable for facilitating the breaches.

In April 2023, Hayes filed suit against Eichelberg and Simon, along with Jobot and Jobot manager Patierno, alleging breach of contract, interference with restrictive covenants, and misuse of confidential business information. Eichelberg and Simon had resigned from Hayes and joined Jobot despite non-compete clauses prohibiting competing employment for 12 months from their termination dates. The Complaint asserted that before leaving, the pair emailed confidential spreadsheets containing sensitive client and candidate data to personal accounts and later used that information to solicit Hayes’ clients.

Jobot has a history of aggressively pursuing its competitor’s sales and recruiting personnel and is not shy about it. As reported here by Staffing Legal News when this case was first filed, Jobot’s website touted: "At Jobot, we are disrupting the recruiting and staffing space by … hiring experienced recruiters who believe in providing the best possible service to their clients and candidates."

 Jobot’s "raiding" strategy has been successful on occasion, most notably with its recent big court wins in Maryland against Allegis/TekSytems, as reported here by Staffing Legal News. However, the Hayes ruling demonstrates the potential downside of this aggressive approach. In the words of the Hayes court:

The evidence is abundantly clear. Jobot was building a new locums division, and it intentionally procured two of Hayes’s top locums recruiters to ensure the division’s success. The evidence also suggests that, once outside counsel got involved, Patierno and Jobot attempted damage control. But the damage had already been done. Hayes’s Confidential Business Information had been disclosed to Jobot to Hayes’s detriment.

Additionally, despite Jobot’s legal counsel reviewing Simon’s and Eichelberg’s Employment Agreements with them at the start of their employment with Jobot, Jobot and Patierno placed Simon and Eichelberg in the locums division on the Locumotives Team. Thus, despite their knowledge about restrictions on their employment, Jobot and Patierno placed Simon and Eichelberg on the very team doing locums placements where they attended locums team meetings and received locums team communications. From the outset of their non-compete period, Jobot assigned Simon and Eichelberg to the very team in direct competition with Hayes headed by a former Hayes employee whom Hayes had trained to do locums work.

Jobot clearly intended to hire both Simon and Eichelberg based on their massive success in locums recruiting for Hayes, notwithstanding the terms of their noncompetes. Jobot’s VP Rodrigues expressly instructed Jobot’s Chief Growth Officer to move Simon’s final interview with CEO Golledge “up to ASAP” because “[t]his is going to be one of the best locums hires ever!” Rodrigues continued in stating, “the one year non-compete is not great, but we should hire him anyway.” Jobot did just that. Patierno also used her Hayes connection with Simon to solicit and recruit Simon for her locums team at Jobot knowing full well that Simon was subject to the same restrictions she had during and after her employment with Hayes.

The evidence at trial also showed that Eichelberg and Simon retained Hayes’s confidential spreadsheets after joining Jobot and used them to solicit Hayes’s clients and employees, even after receiving cease-and-desist letters reminding them of their obligations.

The court awarded Hayes a total of $6,037,532 in damages, including $3.1 million in lost revenue from clients who moved to Jobot and nearly $2.9 million in lost profits tied to the termination of an exclusivity agreement with a large client. All defendants were held jointly and severally liable, meaning that each of them can be pursued individually for the full award. Of course, Jobot will be writing the check, assuming the award survives an appeal.

The ruling enforced the noncompete and time tolling provisions in the employment agreements, prospectively barring Eichelberg and Simon from competing with Hayes for one year and from soliciting Hayes’s clients and employees for two years. They are also permanently prohibited from using Hayes’s confidential information. The Court asked for further briefing on awarding attorney’s fees, and it is likely that a whopping legal bill will be added to the damages award.

The case illustrates there are states and circumstances where non-compete agreements are fully enforceable under the right facts. The misappropriation and use of client and candidate lists is an aggravating factor in these cases and clearly was an important component here.

A tale of two cases

What explains Jobot's inconsistent outcomes in the Allegis and Hayes cases? Mainly, it was the facts. In the two unsuccessful cases brought by Allegis, the violations were minor, even trivial. Importantly, Allegis was not "cut and bleeding," that is, no real harm ensued from the employees' conduct, as noted by SLN:

It seems that Allegis, in its enthusiasm to combat perceived raiding of employees by Jobot, overreached by bringing these two weak cases against individual employees. The hallmark of each case is that no actual harm, such as lost clients, actually ensued. Situations like this are often handled out of court by formal or informal agreements between the parties. A lawsuit brings higher stakes for all sides.

Once the Allegis overreaching became apparent from the evidence, the courts surely became more receptive to Jobot's argument that Allegis' restrictive covenants were ineffective. Of note, these were the same contract terms that Allgis had successfully enforced in many earlier noncompete cases.

In contrast, the misconduct of the Jobot workers in the Hayes case was serious, brazen, and caused actual harm. At the end of the day, Staffing Legal News is grateful to Jobot for demonstrating the full spectrum of positive and adverse outcomes when litigating over restrictive covenants.