Preliminary injunction; employment contract; breach of restrictive covenant; non-competition clause.
By Kelly Moynihan┃Managing Editor
Plaintiff sued individual defendant a former employee of plaintiff, for an alleged breach of a restrictive covenant in an employment agreement between defendant and plaintiff. Plaintiff sought a preliminary injunction to restrain defendant from working in her current position for co-defendant, Douglas Elliman. Defendant signed two employment agreements with plaintiff during her employment. A non-competition clause in her agreements provided defendant could not work in a marketing position at any company engaged in real estate brokerage, with which she had contact with during her employment with plaintiff. The non-competition clause only applied within the borough of Manhattan for two years after the termination of defendant’s employment. Defendant was hired as Global Chief Marketing Officer for co-defendant, Douglas Elliman. The position allegedly concerned marketing for co-defendant in Florida, California and Connecticut. Douglas Elliman’s business involves residential real estate sales. Plaintiff alleged defendant worked for Douglas Elliman in Manhattan in the same business as plaintiff. To obtain a preliminary injunction, plaintiff must show, by clear and convincing evidence, “(1) likelihood of success on the merits of the pending action; (2) irreparable injury absent such relief; and (3) a balancing of equities in favor of the relief sought.” The court determined plaintiff demonstrated a likelihood of success on the merits. Defendant worked for Douglas Elliman in Manhattan two months after the termination of her employment with plaintiff, and plaintiff submitted evidence defendant worked with Douglas Elliman employees during her employment with plaintiff. Further, plaintiff showed an irreparable injury because defendant’s employment with Douglas Elliman would likely cause plaintiff a loss of proprietary information and customers because defendant’s work with both companies substantially overlapped. The court found defendant’s arguments that plaintiff provided an unpleasant workplace unavailing to balance the equities in her favor because defendant signed an express agreement not to compete in Manhattan within two years of the termination of her employment with plaintiff. The employment agreement also expressly provided for injunctive relief upon a breach of the restrictive covenant. The court partially granted plaintiff’s motion for preliminary injunction enjoining defendant from working for co-defendant, Douglas Elliman, in Manhattan during the pendency of the action. The court denied plaintiff’s motion for preliminary injunction regarding a breach of the confidentiality clause of the employment agreement. Plaintiff only submitted a spreadsheet with plaintiff’s employees’ salaries, which defendant sent to her personal email prior to the end of her employment with plaintiff. The court held this failed to show a likelihood of success on the merits that defendant breached the confidentiality provision in her new position by misappropriating plaintiff’s systems and strategies.
Town Residential LLC v. Oge, Index No. 651936/14, 7/25/14 (Bransten, J.).