Former Laconia Harley employee can keep working

LACONIA — A local man who formerly worked for Laconia Harley-Davidson can continue servicing the iconic motorcycles at his new shop for the time being, a Belknap Superior Court judge has ruled.

Laconia Harley, located in Meredith, had asked the judge to issue a preliminary injunction against Brian Gray, who operates Brian Gray's Performance in Laconia. The dealership sought a court order requiring Gray to stop working on Harley-Davidson motorcycles at a shop he opened in late September at 670 Union Ave., in Laconia.

Laconia Harley sued Gray in October for violating the terms of a noncompete agreement.

Judge James D. O’Neill III ruled that the part of the agreement which Gray signed in 2013 – when he was employed as Laconia Harley’s service manager – barring him from working for any Harley dealer within 100 miles of the dealership for one year was unreasonably broad.

However, O’Neill did temporarily order Gray not to use any confidential information, such as customer lists, which he may have learned during his employment at Laconia Harley, as well as temporarily forbidding Gray from hiring away, or acting as a employment reference for any current Laconia Harley employee.

In a 16-page ruling handed down Jan. 15, O’Neill said the provision restricting when and where Gray could work on Harleys was “unreasonable in its geographic scope” and the prohibition from competing for new customers was also “unreasonable because the legitimate interests of (Laconia Harley) extend(s) only to those area in which (Gray) had customer contact (while employed there).

The judge also stated that Laconia Harley had offered insufficient evidence to show that the dealership had acted in good faith when it executed the noncompete agreement with Gray.

“While the facts at hand do not show bad faith,” O’Neill wrote, “the absence of proof of bad faith does not equal proof of good faith.”

“I’m happy that the judge ruled the way he did,” Gray, who left Laconia Harley last April, said of the ruling. “But I’m bummed that I had to go through the expense of this to do what I’ve been doing all my life.”

"From the onset, our intent was to ensure that Mr. Gray stood by his commitment outlined in the non-compete agreement, which was designed to protect the business we have built and the livelihood of some 40 employees at our dealership," Laconia Harley spokesman E.J. Powers said in an email. "We are pleased with the court's preliminary ruling on two of the three key provisions outlined in that agreement, which will prevent Mr. Gray from using confidential information he obtained over the decade-plus of working for our dealership and from luring valued employees away to his competing business. We are evaluating our options as to how best to move forward to deliver a fair and expeditious solution to this matter."

Elsewhere in the ruling O’Neill wrote, “Generally restrictive covenants to compete are disfavored in New Hampshire,” and he quoted from a 2005 state Supreme Court ruling which found that in New Hampshire “the law does not look with favor upon contracts in restraint of trade or competition” because they “tend to discourage industry and enterprise, prevent competition, and expose the public to the evils of monopolies.”

O’Neill also rejected Laconia Harley’s request to have the case decided on the basis of the laws of Florida, where the dealership’s parent entity, American Road Management, is based.

“While Florida may have a relationship to the transaction (of the noncompete agreement) because ARM is incorporated there, the agreement was not signed in Florida and the defendant never worked for the plaintiffs in Florida,” O’Neill stated.

The case is scheduled for a court conference on Feb. 12 when both sides are expected to propose a date for the trial, estimate how long the trial could last, and set deadlines for filing all necessary pretrial documents with the court. Any arrangements to mediate the case before trial will also be discussed.