On March 3, 2020, Massachusetts Premier Soccer LLC, doing business as Global Premier Soccer (“GPS”), filed a complaint in the US District Court for the District of Massachusetts, alleging that two of its former management-level employees engaged in a scheme to divert business away from GPS to a competitor, Surf Club. GPS asserts claims for false advertising and promotion under the Lanham Act, tortious interference with contractual relations and prospective economic advantage, breach of non-competition and non-solicitation agreements, civil conspiracy, unfair and deceptive practices under Massachusetts and South Carolina law, and common law unfair competition.

GPS and Surf Club are both in the business of developing and growing youth soccer programs through clubs in North America and abroad. The complaint states that while GPS has operated youth soccer programs on the east coast for many years, Surf Club was mostly a west coast operation looking to take its shot at expanding to the east coast. The individual defendants, Luke Krawczyk and Andrew Prosser, were management-level employees at GPS who each signed non-competition and non-solicitation agreements that GPS alleges they subsequently violated by leaving to work for Surf Club. More specifically, GPS alleges that, in order to level the playing field for Surf Club in east coast markets, the defendants teamed up and boosted Surf Club’s business by diverting employees, coaches, and customers away from GPS through wrongful, unfair, and deceptive actions. For example, GPS claims that Krawczyk converted several GPS social media pages into Surf Club pages, allowing Surf Club to wrongfully trade on GPS’s goodwill and confusing customers about the source of the content on those pages. GPS also claims that Prosser instructed a subordinate to delete his email account, in violation of a litigation hold, and that around the time Prosser left GPS, he sent an email promotion regarding the launch of a Surf Club affiliate, despite knowing that the email’s audience included GPS customers or prospects. GPS claims that Surf Club was complicit in Krawczyk’s and Prosser’s misconduct, and that Surf Club wrongfully benefited as a result.

GPS claims that the defendants’ actions resulted in the loss of goodwill and profits, for which it seeks compensatory damages, multiple damages, and injunctive relief to bar the defendants’ from continuing to falsely advertise, violate non-competition and non-solicitation agreements, and engage in unfair competition.

As a tangential matter, the complaint also mentions that in October 2019, agents from the Department of Homeland Security executed a search warrant at a facility used by GPS in Waltham, Massachusetts. The investigation focused on activities of certain individuals who allegedly “conspired to obtain visas for foreign youth soccer coaches by falsely holding them out as camp counselors or professional scouts.”

This will be an interesting case to follow, particularly as the individual defendants attempt to justify their actions while working for GPS and their transitions to Surf Club.