## Facts

- Mercer Management Consulting, Inc. was formed by a merger involving Strategic Planning Associates, Inc. (SPA); defendants Wilde and Silverman were former SPA (later Mercer) consultants, and Dewhurst was a former Mercer employee.
- In 1982, Wilde and Silverman signed employment agreements with SPA containing one-year post-employment restrictions, including (i) not rendering competitive services to SPA’s clients or prospective clients and (ii) not hiring SPA employees.
- In 1990, after the merger, Mercer required Wilde and Silverman to sign new employment contracts containing broader restrictive covenants, including multi-year noncompetition and nonsolicitation terms, and a clause stating the 1990 agreement superseded earlier restrictions only to the extent of conflict.
- In 1993, while still employed and paid by Mercer, Wilde and Silverman incorporated a competing consulting firm (Dean & Co.) and engaged in planning activities while continuing to participate in Mercer meetings and discussions.
- Before resignation, defendants did not solicit Mercer clients or perform competitive services for those clients.
- After leaving Mercer, within one year, Wilde and Silverman performed consulting services for several Mercer clients and hired two Mercer employees to join Dean & Co.
- Mercer sued on multiple theories, including breach of fiduciary duty, breach of contract (1982 and 1990 agreements), and tortious interference; Wilde and Silverman counterclaimed for alleged unpaid contract-related payments.

## Issues

1. Whether Wilde and Silverman breached fiduciary duties by organizing and preparing a competing firm while still employed, absent pre-departure solicitation or competitive work.
2. Whether post-employment work for Mercer clients and hiring Mercer employees violated enforceable restrictive covenants, and how the 1982 and 1990 agreements interacted under the “supersede only in conflict” clause.
3. Whether defendants’ post-employment conduct constituted tortious interference with Mercer’s relationships with clients or employees independent of any contract breach.
4. Whether Wilde and Silverman proved Mercer breached a payment obligation under their contractual arrangements.

## Decision

- The court entered judgment for Mercer on claims that Wilde and Silverman breached the 1982 agreement’s one-year restrictions by servicing covered clients/prospective clients and hiring employees within the restricted period.
- The court entered judgment for defendants on Mercer’s remaining claims, including breach of fiduciary duty, asserted breaches of the 1990 agreement beyond what was established under the 1982 covenants, and tortious interference.
- The court entered judgment for Mercer on Wilde and Silverman’s counterclaim for alleged unpaid contractual payments.

## Legal Principles

- Successive employment agreements are construed together; a later agreement that supersedes earlier provisions only “in the event of conflict” leaves nonconflicting earlier restrictive covenants enforceable.
- Under District of Columbia common-law loyalty principles, employees may make pre-departure preparations to compete (including forming a corporation) if they do not compete, solicit the employer’s clients or employees, or misuse confidential information before resignation.
- General “well and faithfully” performance language is not read to prohibit lawful preparatory steps toward future competition absent clear contractual language to that effect.
- Conduct that is wrongful primarily because it violates a restrictive covenant is ordinarily treated as breach of contract; a separate tortious-interference claim requires proof of improper interference beyond ordinary competitive conduct.

## Conclusion

The court enforced the defendants’ earlier one-year post-employment covenants because they were not displaced by the later contract absent an actual conflict, found no actionable disloyalty where defendants only prepared to compete before resignation without solicitation or competitive work, rejected tort-based theories as unsupported by improper conduct beyond contract breach, and denied the defendants’ payment counterclaim for lack of proof of contractual entitlement.


Mercer Mgmt. Consulting, Inc. v. Wilde, 920 F. Supp. 219 (D.D.C. 1996)