Fowler v. Printers II, Inc.

MOTZ, Judge. This case arises out of a nonsolicitation clause in an employment contract. Appellee/cross appellant, Printers II, Inc. (“Printers”), brought this action in the Circuit Court for Montgomery County (Weinstein, J.) against its former employee, Mari-Ane Fowler (“Fowler”) and her new employer, Holladay-Tyler Printing Corporation (“HolladayTyler”). After a bench trial, the circuit court (Weinstein, J.) found that:' (1) Fowler breached her employment contract with Printers and (2) Holladay-Tyler tortiously interfered with that employment contract.

The lower court entered judgment for Printers against both Fowler and HolladayTyler in the aggregate amount of $410,976.00. ⁴⁵⁵ On appeal, appellants/eross appellees, Fowler and Holladay-Tyler, raise the following issues: 1 1. Certain restrictive covenants in the employment contract are unenforceable as a matter of law. 2. The trial court erred in finding that Holladay-Tyler tortiously interfered with the employment contract. 3. The trial court erred in its calculation of damages.

In its appeal and cross-appeal, Printers asserts: 4. The trial court improperly limited Printers’ damages. 5. The trial court erred in failing to award damages for Fowler’s solicitation of a Printers’ employee. 6. The trial court erred when, without a hearing or any findings of fact, it refused to impose sanctions on Fowler.

We affirm in most material respects, reverse one element of the damage award, and remand for further findings of fact on one ancillary issue and on the sanctions. FACTS AND PROCEEDINGS BELOW On September 19, 1988, after having her lawyer examine it, Fowler executed a written employment contract with Printers, a commercial printer doing business in the Washington metropolitan area with yearly sales in excess of $20 million. Printers determined that it wanted to have its important sales personnel under employment contracts in order to protect Printers’ client base. When she signed the contract, Fowler was given a $15,-000 raise, so that her annual salary totaled approximately $110,000.

As one of Printers’ top salespeople, Fowler achieved approximately $4 million in aggregate sales in fiscal year 1988. For more than seven months after signing the contract, Fowler accepted the higher salary and continued as an employee of Printers. At no time during her employment did she complain to Printers about the employ ⁴⁵⁶ ment contract, or in any way indicate to Printers that she felt the employment contract was invalid. In the employment contract, Fowler agreed that during the period of her employment by Printers and for one year after termination of employment, she would not disclose information concerning Printers’ business, divert or solicit any business from Printers, service or take orders from any accounts or customers of Printers or hire any employee of Printers.

The scope of the accounts/customer restriction was limited to those accounts and customers that had contact with Printers within the twelve months immediately preceding the termination date. On May 1,1989, Fowler submitted her written resignation to Printers. Her letter expressed “deep regret” at leaving Printers. At a meeting with Printers’ Vice President, in which Fowler gave him this letter of resignation, she assured him that she would not solicit or service clients of Printers and acknowledged her obligations under the contract of employment.

It appears that within hours of terminating her employment relationship with Printers, Fowler became employed by Holladay-Tyler, one of Printers’ competitors in the printing business, at a pay cut of approximately $20,000.00. On May 2, 1989, the day after her resignation from Printers and her first full day as a salesperson at Holladay-Tyler, Fowler began contacting the accounts/customers which she had serviced at Printers. Printers became aware of these solicitations and on May 8, 1989, advised Fowler in writing that such solicitations constituted a violation of her employment contract. Printers further demanded that she cease this activity.

On May 9, 1989, Printers notified, in writing, the President of Holladay-Tyler, Howard Sullivan, that Printers intended to enforce Fowler’s contract and hold Fowler and Holladay-Tyler liable for any violations of it. Indeed, Printers sent Sullivan a copy of the contract with specific reference made to the restrictive covenants contained in the contract. Neverthe ⁴⁵⁷ less, Fowler continued to solicit business from her former clients with the knowledge and encouragement of her new employer, Holladay-Tyler. In September 1989, Printers learned of these continued solicitations.

Unable to obtain voluntary compliance with the contract terms by Fowler or Holladay-Tyler, Printers filed a two-count complaint on September 29, 1989. Printers alleged that: (1) Fowler breached her contract to Printers and (2) Holladay-Tyler intentionally interfered with that contract; Printers sought to be compensated in money damages for these wrongs. In addition, Printers sought an ex parte injunction against both appellants. On October 12, 1989, the circuit court granted the ex parte injunction, observing that it appeared that Fowler “actively solicited or attempted to solicit business from customers of Printers and that Holladay-Tyler may have intentionally participated with Ms. Fowler in breaching the terms of her employment contract.” On November 2, 1989, the circuit court issued an interlocutory injunction ordering, inter alia, that Fowler “be restrained and enjoined from attempting to solicit any business from each and every customer of Printers II, Inc. which she had serviced as an employee of Printers II, Inc. during the period of her employment.” By the same order, the court restrained and enjoined Fowler from contacting any employee of Printers “to persuade the employees to apply for employment at Holladay-Tyler.” Finally, the order restrained and enjoined Fowler from “disclosing to any person or entity any confidential proprietary information of Printers II, Inc. which she obtained during her employment.” The interlocutory injunction, by its terms, expired on May 1, 1990, and there was no further claim for equitable relief.

The grant of the interlocutory injunction was not appealed. A nine-day bench trial was held from October 22, 1990 to November 1, 1990. At trial, Printers presented voluminous documentary and testimonial evidence to demonstrate that Fowler repeatedly and intentionally violated the contract ⁴⁵⁸ and the interlocutory injunction and that Holladay-Tyler knew of, participated in, and benefitted from her actions. On December 3, 1990, Judge Weinstein issued a well reasoned written Opinion and Order.

After first carefully reviewing the above facts, 2 he found: [t]he record is replete with evidence that Ms. Fowler actively solicited business from these accounts [eight accounts which she had serviced while at Printers] by either direct submission of bids or by personal contact with the various account representatives. Reimbursable expense accounts and telephone records relating to entertainment of these clients by Ms. Fowler to HolladayTyler attested to the company’s actual knowledge of her activities. He further found that “Printers II had a protectable business interest in preventing Ms. Fowler from using the contacts she had established while at Printers II to pirate its customers. It is evident that the printing business community is close knit and highly competitive.” The court concluded that the restrictive covenants in the employment contract “were merely efforts to guard against the unprincipled and predatory tactics of competitors” and met the “test of reasonableness” based on the facts of this case.

Accordingly, the court awarded Printers $360,976.00 in damages for breach of the employment contract by Fowler and tortious interference with it by Holladay-Tyler and $50,-000.00 for damage to Printers’ reputation and good will. Printers then moved for sanctions and civil contempt and requested a hearing on its motion. On January 8, 1991, without holding a hearing, the lower court issued a short order denying Printers’ motion. The parties noted timely appeals and cross appeals from both orders.

Additional facts will be set forth within as necessary. ⁴⁵⁹ LEGAL ANALYSIS I. The Enforceability of the Restrictive Covenants in the Employment Contract Fowler and Holladay-Tyler claim that the restrictive covenants in Fowler’s employment contract with Printers are unenforceable because they “serve no legitimate interest” of Printers and because they are “overly broad.” In support of their initial argument on this point, appellants rely upon Budget Rent A Car of Washington, Inc. v. Raab, 268 Md. 478 , 303 A.2d 11 (1973) and Becker v. Bailey, 268 Md. 93 , 299 A.2d 835 (1973). Neither case aids their cause. It is true that in both the court refused to enforce restrictive covenants; however, in both, the employee was an unskilled worker, without unique skills, who did not solicit the customers of his former employer. Both cases, therefore, followed what the Becker court characterized as the “general rule” that an employer has a legitimate interest and so can enforce “restrictive covenants” only against those “employees who provide unique services, or to prevent the future misuse of trade secrets, routes, or lists of clients, or solicitation of customers.” 268 Md. at 97, 299 A.2d 835 (emphasis added).

Other cases elaborate that an employer has a protectable interest and that restraint is justified if a part of the compensated services of the former employee consisted in the creation of the good will of customers and clients which is likely to follow the person of the former employee ... restraint is not justified if the harm caused by service to another consists merely in the fact that the former employee becomes a more efficient competitor---- Silver v. Goldberger, 231 Md. 1, 7 , 188 A.2d 155 (1963) (footnote omitted) (emphasis in original). Accord, Holloway v. Faw, Casson & Co., 319 Md. 824 , 835, 572 A.2d 510 (1990). Here, there was ample evidence that part of Fowler’s services consisted in the “creation of good will” of clients who were “likely to,” and did, “follow her” when she left ⁴⁶⁰ Printers and that Fowler vigorously, repeatedly, and successfully “solicited” Printers’ customers. Thus, application of the rule relied upon in Budget and Becker , and refined in later cases, leads us to affirm the circuit court’s finding that Printers did indeed have a “legitimate interest” that was protected by the restrictive covenant.

Of course, even a restrictive covenant that serves an employer’s “legitimate interest” can be no broader, or more restrictive, than necessary to effectuate that interest. Accordingly, we turn to appellants’ principal objection to the restrictive covenant, its alleged overbreadth. The specific portion of the employment contract to which appellants object is the following: Employee [Fowler] hereby covenants and agrees that [s]he shall not ... directly or indirectly, divert business from Employer [Printers] or solicit (or attempt to solicit) any business from, or service or take orders from (or attempt to service or take orders from), any account of Employer. For purposes of this paragraph 9, the terms “account” and “customer” shall mean, with respect to any particular date, any corporation, joint venture, partnership, individual or other entity to or for which Employer shall have sold any of its products or performed any of its services or have been paid with respect to any of its products or services, within the previous twelve (12) months, or to or for which Employer shall be in the process of producing any of its products or performing any of its services or to or for which Employer shall have submitted a bid, or be in the process of submitting a bid, to produce any of its products or to perform any of its services; provided, however, that for the twelve (12) month period following the termination of employment of Employee, the determination which persons or entities are “accounts” and “customers” shall be made (in accordance with the foregoing provisions of this sentence) as of the date of such termination of employment.

(emphasis added). Pointing to this language, particularly to the portion that is underscored, the appellants assert that ⁴⁶¹ the covenant was too broad because Fowler was prohibited “not only from contacting customers with whom she had dealt personally, but any customers or potential customers of Printers II regardless of whether Printers II had ever successfully secured business from that entity.” All parties heavily rely on Holloway v. Faw, Casson & Co., 319 Md. 324 , 572 A.2d 510 (1990). There, the Court of Appeals, in upholding a noncompetition clause in an employment contract, noted that the “enforceability of a covenant not to compete depends on the facts of a given case.” 319 Md. at 334 , 572 A.2d 510 . In Holloway , the challenged covenants provided, inter alia, that for five years after a partner left his accounting firm (“F.C.”) he would not engage in an accounting practice within a forty-five mile radius of any office of F.C. If he did so, he agreed to pay F.C., in the event any F.C. client engaged him in his new accounting practice, an amount equal to F.C.’s billings to that client for the 12 months immediately preceding the new engagement.

Id. at 326-27, 572 A.2d 510 . When a partner left and immediately joined an accounting practice within five miles of the F.C. office, taking 171 F.C. clients with him, F.C. filed suit seeking damages from its former partner. Id. at 327, 572 A.2d 510 . F.C. did not request any injunctive relief.

Id. at 328, 572 A.2d 510 . The partner counterclaimed for damages and a declaration that the covenant described above was invalid. Id. On summary judgment, the trial court declared, inter alia, that the covenant as written was unreasonable because: (1) it “could include clients who might first become F.C. clients after [the partner] left”; and (2) five years was an unreasonable duration.

Id. at 329, 572 A.2d 510 . The trial court, however, determined that it could interpret and modify the contract so that it only prohibited a partner from servicing, for three years, F.C. clients who were serviced by F.C. at the time the partner left and declared that the contract, as modified, was reasonable. Id. at 330, 572 A.2d 510 . A jury then awarded F.C. the damages provided in the contract, i.e., the prior year’s fees for all 171 clients who ⁴⁶² had been serviced by F.C. at the time the partner left and who followed the partner.

Id. at 331, 572 A.2d 510 . A divided panel of this court affirmed the circuit court “in all material respects,” id. at 331, 572 A.2d 510 , concluding that the covenant could be modified even though the modification went beyond the traditional Maryland “blue pencil” rule, i.e., “crossing out a few words with a blue pencil.” Holloway v. Faw Casson & Co., 78 Md.App. 205, 230-39 , 552 A.2d 1311 , aff'd in part, rev’d in part, 319 Md. 324 , 572 A.2d 510 (1990). In dissent, former Chief Judge Gilbert was “unable to accept the proposition that courts should rewrite contracts in order to save the parties from themselves.” 78 Md.App. at 251 , 552 A.2d 1311 . The Court of Appeals, inter alia, affirmed the award of damages, and concluded that it need not reach the “provocative questions concerning judicial power” raised by the lower courts’ holding as to the declaratory relief because it found the covenant “severable on a client by client basis.” 319 Md. at 353 , 572 A.2d 510 .

We have outlined the relevant facts, procedural history, and holdings in Holloway in some detail because understanding them is pivotal to understanding the parties’ arguments in the case at hand. The parties devote a great deal of time and energy to arguing whether the covenant here is severable, as the Holloway covenant was. Although Printers does assert briefly that the covenant is not too broad, it devotes most of its attention to attempting to demonstrate that any invalidity is “severable” on a “client by client” basis; it does not urge that the contract be rewritten, except for a possible “blue pencil” change. Appellants, on the other hand, claim that the damages awarded by the circuit court cannot stand because the covenant is too broad and, unlike the covenant in Holloway, is not “severable” on a “client by client basis” without rewriting it, which they assert is not permitted.

This emphasis by the parties here on the severability portion of the Holloway opinion, see 319 Md. at 351-354 , 572 A.2d 510 , is difficult to understand. Severability on a ⁴⁶³ “client by client” basis was discussed in Holloway only in determining the validity of the declaratory relief granted there; no issue of the validity of declaratory or injunctive relief is raised here. 3 All that Printers requested at trial, and all that the circuit court granted, was a money judgment. Thus, the Holloway discussion as to severability on a “client by client” basis is irrelevant here. 319 Md. at 353 , 572 A.2d 510 . The Court of Appeals in Holloway did, however, also consider the question of whether the covenant was too broad to permit grant of the money judgment.

That discussion clearly is relevant here. In considering the money judgment, the Holloway court noted that some courts in other jurisdictions had held similar noncompetition clauses “too broad because the term ‘clients,’ might include persons who no longer use the firm’s services at the time the employee leaves ... or ... persons who first become clients after the employee leaves” or persons for whom the departing employee did not “actually render cervices.” 319 Md. at 345 , 572 A.2d 510 . It then held [f]rom the standpoint of the money judgment against Holloway, the questions raised by these cases are not presented here, 319 Md. at 345 , 572 A.2d 510 (emphasis added). The Holloway court reached this conclusion because the employee in Holloway “acknowledged that each person as to whom a claim for damages was made” was a client of F.C. whom the employee himself “had served” when previously employed there.

Id. Precisely the same reasoning is applicable here. That is, Fowler acknowledged that each client “as to whom a claim for damages was made” — eight specific ⁴⁶⁴ clients — was a client of Printers whom Fowler herself “served” when she worked at Printers. Accordingly, as in Holloway, because Printers sought, and the lower court awarded, only money damages relating to clients actually served by the employee, here Fowler, questions as to the breadth of the contract beyond this breach are “not presented here.” 4 Moreover, if these questions were before us, we believe that the covenant here would be enforceable for reasons not discussed in, or relevant to, the clause in Holloway.

The covenant here, unlike that in Holloway, is not a noncompetition clause. It does not bar Fowler, at any time, from working for a competitor of Printers, even in the same geographic area as Printers, and even on behalf of a Printers’ account or client. It simply prohibits Fowler, for one year, from soliciting business from Printers’ “accounts and clients.” Nonsolicitation clauses, in some respects more restrictive than that at issue here, have been upheld in Maryland. In Tuttle v. Riggs-Warfield-Roloson, Inc., 251 Md. 45, 47-49 , 246 A.2d 588 (1968), a covenant prohibiting an insurance agent’s representative, for two years after termination, from “engaging either directly or indirectly in any insurance activities with customers” of its former employer, ⁴⁶⁵ was held valid and enforceable.

In Gill v. Computer Equip. Corp., 266 Md. 170, 180 , 292 A.2d 54 (1972), the court upheld a covenant prohibiting the employee, for two years after termination, from working for, or servicing the products of, any manufacturer which had been “represented by” his former employer “during all or any part” of the year preceding termination. 5 The duration of both covenants was twice as long as the covenant at issue here, and in Tuttle the covenant prohibited the employee from “engaging ... in any insurance” activities with his former employer’s clients and was held to be violated even without any proof of solicitation of clients. See also Hebb v. Stump, Harvey & Cook, Inc., 25 Md.App. 478, 481 , 334 A.2d 563 , cert. denied, 275 Md. 749 (1975). Thus, in both Tuttle and Gill , the Court of Appeals upheld nonsolicitation clauses that prohibited an employee from soliciting not just customers of his former employer, for whom the employee had worked, but rather all customers of his former employer.

Accordingly, Tuttle and Gill would appear to dispose of appellants’ claims that the covenant here is unreasonably broad because it bars Fowler from soliciting a Printers’ customer or account, even though Fowler did not work on that account or for that customer. The covenant here, however, is in one respect broader than those considered in Tuttle and Gill . It prohibits Fowler from soliciting business from any entity for which Printers “shall have submitted a bid,” or is in “the process of submitting a bid” in the previous twelve months. If this provision were determined to be unnecessarily broad, it could be eliminated simply by excising, by “blue pencil,” that portion of the restrictive covenant which is underlined above.

See supra at p. 459. Such “blue pencil” excision of offending contractual language without supplementation or rearrangement of any language is entirely in accord with ⁴⁶⁶ Maryland law. See, e.g., MacIntosh v. Brunswick, 241 Md. 24, 27-31 , 215 A.2d 222 (1965); Tawney v. Mutual System of Maryland, 186 Md. 508, 521 , 47 A.2d 372 (1946); Hebb v. Stump, Harvey & Cook, 25 Md.App. at 491 , 334 A.2d 563 . Appellants do not argue to the contrary.

Indeed, they devote ten pages in their briefs to argument that the “blue pencil rule is, and should continue to be, the law in Maryland.” Nor do they define that rule any differently than we do; rather, they describe the rule as follows: “the court takes its pen and draws a line through the offending restriction. If the covenant is still enforceable after the applicable language is removed, then the remaining portions of the contract are enforceable.” II. Tortious Interference with the Employment Contract Appellants further assert that the lower court erred in finding that Holladay-Tyler tortiously interfered with the restrictive covenant in the employment contract between Printers and Fowler. Tortious interference with an existing contract has long been recognized as a cause of action in Maryland.

See Gore v. Condon, 87 Md. 368, 376 , 39 A. 1042 (1898) (“a man who induces one of two parties to a contract to break it, intending thereby to injure the other or to obtain a benefit for himself, does the other an actionable wrong”). This tort has five elements: (1) existence of a contract between plaintiff and a third party; (2) defendant’s knowledge of that contract; (3) defendant’s intentional interference with that contract; (4) breach of that contract by the third party; and (5) resulting damages to the plaintiff. See K & K Management v. Lee, 316 Md. 137, 155-156 , 557 A.2d 965 (1989); Vane v. Nocella, 303 Md. 362 , 383 n. 6, 494 A.2d 181 (1985); Wilmington Trust Co. v. Clark, 289 Md. 313, 329 , 424 A.2d 744 (1981); Restatement (Second) of Torts, §§ 766, 766A, 767 (1981). As discussed above, there was a valid, enforceable covenant that restricted Fowler from soliciting the customers of Printers.

Moreover, there was abundant evidence that this covenant was breached by Fowler and that Holla ⁴⁶⁷ day-Tyler knew of the covenant. Furthermore, as discussed infra, the trial court’s holding that damages resulted to Printers because of Holladay-Tyler’s conduct was not clearly erroneous. Thus, there was sufficient evidence to support the first, second, fourth and fifth elements of the tort. Although not phrased precisely this way, appellants’ essential claims are that: (1) there was insufficient evidence to prove the third element of the tort; and (2) even if all elements were proved, Holladay-Tyler’s conduct was justified.

Specifically, appellants assert that Holladay-Tyler did not interfere with the employment contract because it did not induce Fowler to breach it; it simply hired a competitor’s employee. 6 They point to the fact that no Maryland court has ever held a new employer to have tortiously interfered with an employee’s contract with a former employer as evidence that such conduct is not wrongful but rather entirely justified competition. Because these claims are so interconnected, we consider them together. It is well established that a defendant may avoid liability for tortious interference with a contract by proving that its conduct was justified or excused in some way. Sharrow v. State Farm Mutual, 306 Md. 754, 764-65 , 511 A.2d 492 (1986).

Restatement (Second) of Torts, § 768 and its comments address the question of when competition constitutes justification. Section 768 provides as follows: ⁴⁶⁸ (1) One who intentionally causes a third person not to enter into a prospective contractual relation with another who is his competitor or not to continue an existing contract terminable at will does not interfere improperly with the other’s relation if (a) the relation concerns a matter involved in competition between the actor and the other and (b) the actor does not employ wrongful means and (c) his action does not create or continue an unlawful restraint of trade and (d) his purpose is at least in part to advance his interest in competing with the other. (2) The fact that one is a competitor of another for the business of a third person does not prevent his causing a breach of an existing contract with the other from being an improper interference if the contract is not terminable at will. Thus, if a contract is terminable at will, as this contract arguably is, 7 a competitor who induces breach of it to serve his own competitive purpose does not interfere improperly unless the competitor employs wrongful means or creates a restraint of trade.

Comment i to § 768 addresses the precise situation involved here: An employment contract, however, may be only partially terminable at will. Thus it may leave the employment at the employee’s option but provide that he is under a continuing obligation not to engage in competition with his former employer. Under these circumstances a defendant engaged in the same business might induce the ⁴⁶⁹ employee to quit his job, but he would not be justified in engaging the employee to work for him in an activity that would mean violation of the contract not to compete. (emphasis added.) This comment clarifies two matters significant to resolution of this case.

First, contrary to appellants’ claims, a former employer can recover from a new employer for tortiously interfering with an employee’s covenant not to compete. A number of cases have so held. See, e.g., Barnes Group, Inc. v. C & C Products, 716 F.2d 1023 (4th Cir.1983); Mixing Equipment Co. v. Philadelphia Gear, Inc., 436 F.2d 1308 (3d Cir.1971); Premix, Inc. v. Zappitelli, 561 F.Supp. 269 (N.D.Ohio 1983); Koehler v. Cummings, 380 F.Supp. 1294 (M.D.Tenn.1971); Certified Laboratories of Texas v. Rubinson, 303 F.Supp. 1014 (E.D.Pa.1969); United Laboratories, Inc. v. Kuykendall, 322 N.C. 643 , 370 S.E.2d 375 (1988); Mills v. Murray, 472 S.W.2d 6, 13 (Mo.App.1971); Morgan’s Home Equipment Corp. v. Martucci, 390 Pa. 618 , 136 A.2d 838 (1957). The second important point crystallized in this comment is that a new employer need not actively induce an employee to quit her job.

Nor must a new employer even have knowledge of the restrictive covenant in the employee’s previous contract, when it hires her, in order to incur liability for tortious interference with that covenant. Rather, the central question is whether, upon learning of the restrictive covenant that binds its new employee, the new employer nevertheless “engages the employee to work for him in an activity that would mean violation of the contract not to compete.” Compare Arabesque Studios v. Academy of Fine Arts, 529 S.W.2d 564 (Tex.Civ.App. 5 Dist.1975) (no evidence that new employer was aware of continuing breach of non-compete clause and so no liability for tortious interference with it) with Mattison v. Johnston, 152 Ariz. 109 , 730 P.2d 286 (App.1986) (even though new employer did not induce beauty salon employee to breach at will employment relationship, grant of summary judgment to new employer reversed because it was alleged that new employ ⁴⁷⁰ er had interfered with restrictive covenant). See also Island Air, Inc. v. Les La Bar, 18 Wash.App. 129 , 566 P.2d 972, 980 (1977) (“Disregard for a valid restrictive covenant cannot be endorsed”). This principle — that inducement to breach the employment contract is not necessary for the tort if a new employer knowingly “engages the employee to work for it in an activity which would mean a violation of the contract not to compete” — is entirely in accord with the approach to the third element of the tort taken by the Court of Appeals.

The Court has noted with approval the position set forth in the Restatement of Torts that there is “no technical requirement as to the kind of conduct” that is needed to constitute interference with contract; moreover, it is “not necessary to show a third party was induced to break the contract.” Sharrow, 306 Md. at 767 , 511 A.2d 492 {quoting Restatement (Second) of Torts § 766, comment k). Rather, any act by defendant which is “wrongful or unlawful ... done intentionally without cause or excuse,” which is “ ‘for the indirect purpose of injuring the plaintiff, or of benefitting the defendant at the expense of the plaintiff/ ” will constitute tortious interference. Sharrow, 306 Md. at 764-65 , 511 A.2d 492 (quoting Knickerbocker Co. v. Gardiner Co., 107 Md. 556, 565 , 69 A. 405 (1908)). See also Orfanos v. Athenian, 66 Md.App. 507, 522 , 505 A.2d 131 (1986); W. Prosser, Law of Torts § 129, at 991 (5th ed. 1971) (“actual inducement is not necessarily required at all ... interference with contract may be quite sufficient for liability, provided always that the interference was unjustified”).

In suits by a former employer against a subsequent employer, courts have held that a variety of factors, no one of which alone is controlling, contributes to the decision as to whether a new employer has committed “wrongful acts” for the purpose of benefitting itself at the expense of the old employer and so tortiously interfered with a restrictive covenant. Among those factors are whether the new employer hired the employee knowing of the restrictive covenant; whether the new employer capitalized on certain ⁴⁷¹ accounts or information held by the employee but protected by a restrictive covenant; whether the new employer encouraged the employee to contact the customers of the old employer; whether, after injunctive relief was awarded against the employee, the new employe# itself solicited business from the old employer’s customers; and, generally, whether the new employer acquiesced in or benefitted from the wrongs of the new employee. See Barnes Group, Inc. v. C & C Products, 716 F.2d at 1027 -28 n. 5; Mixing Equipment Co. v. Philadelphia Gear, Inc., 436 F.2d at 1314-1315 ; Koehler v. Cummings, 380 F.Supp. at 1310 ; Certified Laboratories of Texas v. Rubinson, 303 F.Supp. at 1025 ; United Laboratories, Inc. v. Kuykendall, 370 S.E.2d at 386-388 . See also Group Ass’n Plans, Inc. v. Colquhoun, 466 F.2d 469, 471 (D.C.Cir.1972) (“A company which knowingly participates in, encourages, and accepts the benefits of, acts of unfair competition committed by a person against a former employer is liable for those acts”); American Republic Insurance Co. v. Union Fidelity Insurance Co., 295 F.Supp. 553, 556 (D.Or.1968) (same); Bancroft-Whitney Co. v. Glen, 64 Cal.2d 327 , 49 Cal.Rptr. 825, 844-45 , 411 P.2d 921, 940-41 (1966) (new employer that “cooperated” with an employee in his breach of fiduciary duty to former employer and “received the benefits” thereof, cannot “disclaim the burden” of liability).

All of these factors but the first are present in the case at hand. It is true that here the new employer, HolladayTyler, hired the employee, Fowler, without knowledge of the restrictive covenant in Fowler’s contract with her former employee, Printers. Within five working days, however, Holladay-Tyler was notified in writing of the covenant and expressly warned that Fowler was to cease and desist from violating its terms, or she and Holladay-Tyler would be held responsible for any resulting damages. Thus, Holladay-Tyler was on formal written notice of the nonsolicitation clause prior to deciding to subsidize and/or assist Fowler in violating it.

In light of this notice, HolladayTyler had a variety of legitimate options: it could have ⁴⁷² discharged Fowler; it could have sought the legal release of Fowler from the restrictive covenant; or it could have permitted her to continue work, but only within the scope of her contract with Printers. Instead, Holladay-Tyler, for the entire year covered by the nonsolicitation clause, encouraged and subsidized Fowler in contacting Printers’ customers, socializing with them, and cultivating new business relationships akin to those which they had with Printers. Thus, it determined to assist and subsidize Fowler knowing that her activities violated the nonsolicitation clause. Moreover, after Fowler was specifically enjoined by the circuit court from contacting Printers’ customers, Holladay-Tyler not only solicited those customers itself, it also continued to assist and subsidize Fowler in her efforts to socialize with and cultivate them.

In sum, there was evidence from which the trial court could have found that Holladay-Tyler’s conduct was “wrongful or unlawful” and done for the indirect purpose of benefitting itself at the expense of Printers. Sharrow, 306 Md. at 764-66 , 511 A.2d 492 . Additionally, the evidence supported the conclusion by the lower court that HolladayTyler engaged Fowler to work for it “in an activity that would mean violation” of the nonsolicitation clause. Restatement (Second) of Torts § 768, comment i.

Thus, the trial court did not err in holding that Holladay-Tyler tortiously interfered with the nonsolicitation covenant.

III

The Correctness of the Damages Awarded: 8 1. Lost Profits The measure of damages for breach of contract under Maryland law is that set forth in Sloane, Inc. v. House & Associates, 311 Md. 36, 42 , 532 A.2d 694 (1987): the injured party has a right to damages based on his expectation interest as measured by