Excellence Cmty. Mgmt. v. Gilmore
Annotate this CaseKrista Gilmore was employed by Excellence Community Management (ECM), an LLC, and signed an employment agreement containing restrictive covenants. The owners and operators of ECM later sold 100 percent of their membership interest in the LLC to First Services Residential Management Nevada (FSRM). Thereafter, Gilmore’s employment with ECM terminated, and Gilmore began working for Mesa Management, LLC. ECM sent Gilmore a cease-and-desist letter alleging that Gilmore violated her employment agreement by contacting ECM’s clients and soliciting them to hire Mesa. ECM filed a complaint seeking damages and injunctive relief against Gilmore and Mesa (collectively, Respondents). The district court denied ECM’s motion for a preliminary injunction, concluding that the agreement was not assignable to FSRM without Gilmore consenting to the assignment. The Supreme Court affirmed, holding (1) the sale of 100 percent of the membership interest in an LLC does not affect the enforcement of an employee’s employment contract containing a restrictive covenant because such a sale does not create a new entity, and therefore, ECM may enforce a restrictive covenant in Gilmore’s employment contract without Gilmore’s consent of assignment; but (2) ECM failed to show that it would suffer irreparable harm for which compensatory damages were not an adequate remedy if the district court did not enter a preliminary injunction.
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