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Suit claims sales exec breached non-compete

Rochester Business Journal
March 14, 2014

Calero Software LLC is trying to stop its former top sales executive from jumping to a competitor.

After giving 30 days’ notice in mid-January, Joshua Bouk, vice president of sales, scorned offers that would have made him the company’s highest paid executive, Calero claims in court papers.

Calero initially sued Bouk and his new employer, Cass Information Systems Inc., in state Supreme Court on Feb. 7. Cass had the dispute transferred to U.S. District Court in Rochester on Feb. 27.

Calero was formed last year by Clearlake Capital Partners L.P., a private equity firm based in Los Angeles and New York City,  after Clearlake acquired Veramark Technologies Inc. Calero includes Veramark; the locally based former Windstream Corp. telecom-services management subsidiary, Pinnacle; and Atlanta-based Movero Inc.

Non-compete provisions in an employment contract Bouk inked with Veramark in 2008 bar him from working for Cass for at least the next 12 months, Calero maintains in the complaint. The lawsuit asks for unspecified actual and punitive damages from Bouk and Cass and for a court order barring Bouk from working for Cass while the dispute is in court.

Bouk’s employment with Cass was set to begin within days, making the case a matter “ripe for adjudication and declaratory judgment,” Calero argued in the complaint.

Calero has its headquarters in Henrietta with some 200 employees. In 2012, Veramark’s last full year as a public company, it reported revenues of roughly $15 million.

Based in St. Louis, Cass (Nasdaq: CASS) is a $117 million company whose business includes Calero’s main product line, telecommunications expense management.  

Attorneys for Calero, Cass and Bouk were to have turned in briefs to U.S. District Judge Elizabeth Wolford this week, stating cases for and against a preliminary injunction barring Bouk from working for Cass pending the dispute’s resolution.

In answers to Calero’s initial complaint, separately filed this week and last week, Bouk and Cass deny any impropriety.

Non-compete provisions in Bouk’s employment pact with Calero are “overbroad, unduly restrictive and are not limited to protecting any legitimate interests of the plaintiff in protecting trade secrets, and are thus unenforceable under applicable law,” wrote Bouk’s attorney, Steven Cole of Leclair Korona Giordano Cole LLP.

Bouk was a 2009 Rochester Business Journal Forty Under 40 honoree. He had held the firm’s vice president of sales position for the last 18 months, Calero states in the court complaint.  

When he gave notice in January, Bouk’s base salary of $157,000—boosted by bonuses and restricted stock awards—made him one of Calero’s two highest paid officers, Calero executive chairman Kevin Wood stated in a declaration filed last week in the federal case.

Wood stated Bouk asked for a raise shortly before leaving. When the company offered to up his compensation to $290,000, Bouk held out for more. The firm then offered a pay package of more than $350,000 a year, an offer that would have made him Calero’s most highly compensated executive. Demanding more, Bouk turned that offer down as well. 

In a letter of resignation, Bouk acknowledged he signed a non-compete agreement, Calero claims in court papers. Though he said he would abide by terms forbidding him from soliciting Calero customers or poaching Calero employees, Bouk would not agree to wait 12 months before signing on with a competitor.

“I had several discussions with Bouk regarding his position with Cass,” Wood said in the federal court declaration. “I informed him of the company’s view that his employment with Cass is competitive and as such violates his employment agreement.”

According to Wood, an unmoved Bouk replied that Cass’ lawyers had analyzed his employment agreement and found the pact wanting. He stated that the firm planned to hire him and would be ready to defend him in court.

In an answer filed last week in the federal case, Cass’ lawyer, Aaron Warshaw, an employment litigator in Ogletree, Deakins, Nash, Smoak & Stewart P.C.’s New York City office, acknowledged Bouk agreed not to solicit his former customers for his new employer but denied that his hiring breached the employment agreement. 

Calero does not actually view Cass as a competitor, Warshaw maintained.

3/14/14 (c) 2014 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.


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